Document:

EX-10.1

Ex. 10.1

NEITHER THE ISSUANCE AND SALE OF THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE
OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933 OR
(B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A OR OTHER EXEMPTION UNDER SAID ACT.

THE TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS PROHIBITED EXCEPT IN ACCORDANCE WITH THE
SECURITIES ACT OF 1933, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION.

VIASPACE INC.

SENIOR SECURED CONVERTIBLE PROMISSORY NOTE

$12,000.00 January 29, 2014

FOR VALUE RECEIVED, VIASPACE INC., a Nevada corporation (“Company”), promises to pay to Kevin
Schewe (“Holder”), or its registered assigns, in lawful money of the United States of America the
principal sum of TWELVE THOUSAND Dollars ($12,000.00), or such other amount as shall equal the
outstanding principal amount hereof, together with interest from the date of this Note on the
unpaid principal balance at a rate equal to six percent (6.0%) per annum, computed on the basis of
the actual number of days elapsed and a year of 365 days. Unless converted into Common Stock of
Company as set forth in Section 3 and/or Section 8 below, all unpaid principal, together with any
then unpaid and accrued interest, shall be due and payable on the earlier of (i) January 29, 2016
(the “Maturity Date”), (ii) upon prepayment of all amounts due and payable under this Note in
accordance with the terms hereof, or (iii) when, upon or after the occurrence of an Event of
Default (as defined below), such amounts are declared due and payable by Holder or made
automatically due and payable in accordance with the terms hereof. Immediately prior to the
issuance of this Note by Company, Holder acknowledges that it has delivered to Company the sum of
TWELVE THOUSAND Dollars ($12,000.00) reflecting the principal amount under this Note.

This Note is one of a series of notes (the “Notes”) having like tenor and effect (except for
variations necessary to express the name of the holder, the principal amount of each of the Notes
and the date on which each Note is funded) in an aggregate principal amount of up to $1,000,000
issued or to be issued by Company on or about the period from September 2012 to August 2017 (or
such other period as agreed upon by the Company and the Holder) pursuant to the terms of a Loan
Agreement, dated as of September 30, 2012, by and between Company and the Holder (or his designees)
of the Notes (the “Loan Agreement”). The Notes shall rank equally without preference or priority
of any kind over one another, and all payments on account of principal and interest with respect to
any of the Notes shall be applied ratably and proportionately on the outstanding Notes on the basis
of the principal amount of the outstanding indebtedness represented thereby.

The following is a statement of the rights of Holder and the conditions to which this Note is
subject, and to which Company by issuance of this Note, and Holder by the acceptance of this Note,
agree:

1. Definitions. As used in this Note, the following capitalized terms have the
following meanings:

(a) “Common Stock” shall mean the Company’s Common Stock, par value $0.001.

(b) “Collateral” has the meaning given in Section 4 hereof.

(c) “Company” includes the corporation initially executing this Note and any Person which
shall succeed to or assume the obligations of Company under this Note.

(d) “Conversion Notice” has the meaning given in Section 8(e) hereof.

(e) “Conversion Period” shall mean the period from the date of the Note and ending on the
Maturity Date.

(f) “Conversion Price” has the meaning given in Section 8(b) hereof

(g) “Event of Default” has the meaning given in Section 6 hereof.

(h) “Holder” shall mean the Person specified in the introductory paragraph of this Note or any
Person who shall at the time be the registered holder of this Note. “Holders” shall mean the
Persons collectively specified in the introductory paragraph of this Note and the other Notes or
any Persons who shall at the time be the registered holders of this Note and the other Notes.

(i) “Majority Holders” shall mean Holders holding a majority of the aggregate principal amount
of the Notes then outstanding.

(j) “Note” shall mean this Senior Secured Convertible Promissory Note.

(k) “Obligations” shall mean and include all loans, advances, debts, liabilities and
obligations owed by Company to Holder of every kind and description, now existing or hereafter
arising under or pursuant to the terms of this Note including, all interest, fees, charges,
expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable to and payable by
Company hereunder.

(l) “Person” shall mean and include an individual, a partnership, a corporation (including a
business trust), a joint stock company, a limited liability company, an unincorporated association,
a joint venture or other entity or a governmental authority.

(m) “Prepayment Amount” has the meaning given in Section 3 hereof

(n) “Prepayment Notice” has the meaning given in Section 3 hereof.

(o) “Sale Transaction” shall mean a transaction or series of related transactions involving
(i) the consolidation or merger of Company with another Person, (ii) a sale of all or substantially
all of the assets of Company, (iii) a purchase, tender or exchange offer that is accepted by the
holders of more than the 50% of the outstanding shares of capital stock of Company, (iv) the
consummation of a stock purchase agreement or other business combination with another Person
whereby such other Person acquires more than the 50% of the outstanding capital stock of Company.

(p) “Securities Act” has the meaning given in Section 5(b) hereof.

(q) “Loan Agreement” has the meaning in the second introductory paragraph of this Note.

(r) “Successor Entity” has the meaning given in Section 10 hereof.

Capitalized term not otherwise defined shall have the meaning set forth in the Loan Agreement.

2. Interest. Unless converted into Common Stock of Company as set forth in Section 8
below, or unless prepaid or converted as set forth in Section 3 below, accrued interest on this
Note shall be payable on the Maturity Date.

3. Prepayment. During the Conversion Period, Company may, at any time and from time
to time, prepay all or any portion of the principal due under this Note, together with accrued
interest, without penalty. Company shall effect such prepayment by providing Holder twenty (20)
days written notice prior to the date of such prepayment (such notice, a “Prepayment Notice”)
indicating the amount of principal and accrued interest Company desires to prepay (the “Prepayment
Amount”). Notwithstanding the foregoing, Holder shall have 10 days following receipt of such
Prepayment Notice to notify Company in writing of its election to convert the Prepayment Amount
into shares of Common Stock, in which case such Prepayment Amount shall be converted into shares of
Common Stock in accordance with the conversion procedures set forth in Section 8(e) hereof
(provided that, with respect to conversions effected pursuant to this Section 3, any references to
the Conversion Amount in Section 8(e) shall refer to the Prepayment Amount). Should Holder elect
to convert the Prepayment Amount into shares of Common Stock, the number of shares of Common Stock
into which such Prepayment Amount will be converted shall be determined by dividing the Prepayment
Amount by the then applicable Conversion Price.

4. Security Interest. As security for the payment and performance of the Obligations
under this Note and the other Notes, Company hereby grants to the holder of this Note and of the
other Notes a first lien security interest in all of Company’s right, title and interest in, to and
under all of its personal property, wherever located and whether now existing or owned or hereafter
acquired or arising, including all accounts, chattel paper, commercial tort claims, deposit
accounts, documents, equipment (including all fixtures), general intangibles, intellectual property
(including all patents and patent applications, all copyrights and applications for copyright, all
state (including common law), federal and foreign trademarks, service marks and trade names, and
applications for registration of such trademarks, service marks and trade names, and all trade
secrets), instruments, inventory, investment property, letter-of-credit rights, money and all
products, proceeds and supporting obligations of any and all of the foregoing (collectively, the
“Collateral”). Notwithstanding the foregoing, the security interest granted herein shall not
extend to any property, rights or licenses to the extent the granting of a security interest
therein would be contrary to applicable law.

5. Representations and Warranties of Holder. Holder represents and warrants to Company
as follows:

(a) Binding Obligation. Holder has full legal capacity, power and authority to execute
and deliver this Note and to perform his obligations hereunder. This Note is a valid and binding
obligation of Holder, enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or affecting the enforcement of
creditors’ rights generally and general principles of equity.

(b) Securities Law Compliance. Holder has been advised that this Note has not been
registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state
securities laws and, therefore, cannot be resold unless they are registered under the Securities
Act and applicable state securities laws or unless an exemption from such registration requirements
is available. Holder is aware that Company is under no obligation to effect any such registration
with respect to this Note, or the Common Stock issuable or issued pursuant to the conversion of
this Note, or to file for or comply with any exemption from registration. Holder has not been
formed solely for the purpose of making this investment and is purchasing this Note for its own
account for investment, not as a nominee or agent, and not with a view to, or for resale in
connection with, the distribution thereof. Holder has such knowledge and experience in financial
and business matters that Holder is capable of evaluating the merits and risks of such investment,
is able to incur a complete loss of such investment and is able to bear the economic risk of such
investment for an indefinite period of time.

(c) Accredited Investor. Holder is an “accredited investor” within the meaning of SEC
Rule 501 of Regulation D of the Securities Act, as presently in effect.

(d) Restricted Securities. Holder understands that this Note is a “restricted
security” under the federal securities laws inasmuch as it is being acquired from Company in a
transaction not involving a public offering and that under such laws and applicable regulations
such Note may be resold without registration under the Securities Act only in certain limited
circumstances. In the absence of an effective registration statement covering the Note or an
available exemption from registration under the Securities Act, the Note must be held indefinitely.
Holder represents that it is familiar with SEC Rule 144, and understands the resale limitations
imposed thereby and by the Securities Act.

(e) Access to Information. Holder acknowledges that Company has given Holder access
to the corporate records and accounts of Company and to all information in its possession relating
to Company, has made its officers and representatives available for interview by Holder, and has
furnished Holder with all documents and other information required for Holder to make an informed
decision with respect to the purchase of this Note.

6. Events of Default. The occurrence of any of the following shall constitute an
“Event of Default” under this Note:

(a) Failure to Pay. Company shall fail to pay (i) when due any principal or interest
payment on the due date hereunder or (ii) any other payment required under the terms of this Note
on the date due, and (in either case) such payment shall not have been made within twenty (20) days
of Company’s receipt of Holder’s written notice to Company of such failure to pay;

(b) Failure to Perform. Company fails to perform any obligation under this Note and
does not cure that failure within twenty (20) days of Company’s receipt of Holder’s written notice
to Company of such failure to perform; or

(c) Voluntary Bankruptcy or Insolvency Proceedings. Company shall (i) apply for or
consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a
substantial part of its property, (ii) be unable, or admit in writing its inability, to pay its
debts generally as they mature, (iii) make a general assignment for the benefit of its or any of
its creditors, (iv) be dissolved or liquidated, (v) become insolvent (as such term may be defined
or interpreted under any applicable statute), (vi) commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such
relief or to the appointment of or taking possession of its property by any official in an
involuntary case or other proceeding commenced against it, or (vii) take any action for the purpose
of effecting any of the foregoing; or

(d) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment
of a receiver, trustee, liquidator or custodian of Company or of all or a substantial part of the
property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization
or other relief with respect to Company or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced and an order for relief entered or
such proceeding shall not be dismissed or discharged within thirty (30) days of commencement.

7. Rights of Holder upon Default. Upon the occurrence or existence of any Event of
Default (other than an Event of Default referred to in Sections 6(c) and 6(d)) and at any time
thereafter during the continuance of such Event of Default, the Majority Holders may, by written
notice to Company, declare all outstanding Obligations payable by Company under the Notes to be
immediately due and payable without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived. Upon the occurrence or existence of any Event of Default
described in Sections 6(c) and 6(d), immediately and without notice, all outstanding Obligations
payable by Company under the Notes shall automatically become immediately due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are hereby expressly
waived. In addition to the foregoing remedies, upon the occurrence or existence of any Event of
Default, Holder may exercise any other right power or remedy permitted to him by law, either by
suit in equity or by action at law, or both.

8. Conversion.

(a) Conversion. Holder shall have the right to convert, at any time during the
Conversion Period, all or any portion of the principal amount, together with any unpaid and accrued
interest, then outstanding under this Note into fully paid and non-assessable shares of Common
Stock at a conversion price per share equal to the Conversion Price (as defined below). The number
of shares of Common Stock into which such principal and interest then outstanding under this Note
will be converted shall be determined by dividing the amount of principal, together with all unpaid
and accrued interest, then outstanding under this Note to be converted (the “Conversion Amount”) by
the Conversion Price.

(b) Conversion Price. Subject to Section 8(c), the “Conversion Price” shall be equal
to 80% of the Average Trading Price as reported by the principal trading exchange on which the
Company’s Common Stock is traded for the twenty (20) trading days preceding the date of the Note.

(c) Adjustments to Conversion Price. The Conversion Price shall be subject to
proportional adjustments for stock splits, stock dividends, combinations, consolidations,
reclassifications and the like.

(d) Conversion Procedure. Before Holder shall be entitled to convert the Conversion
Amount then outstanding under this Note into shares of Common Stock, Holder shall surrender this
Note at the office of this Company, and shall give written notice (a form of which is attached to
this Note, the “Conversion Notice”) to Company at its principal corporate office, of the election
to convert the same and shall state therein the total Conversion Amount. Company shall not be
obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion
unless (i) Holder executes and delivers to Company the Conversion Notice for the converted shares
and (ii) this Note is delivered to Company. Company shall, as soon as practicable after such
delivery, issue and deliver certificates (bearing such legends as are required by applicable state
and federal securities laws in the opinion of counsel to Company and required by this Note and the
Loan Agreement), representing the number of fully paid and non-assessable shares of the Common
Stock into which the Conversion Amount will be converted in accordance with the provisions herein,
and a new promissory note having like tenor as this Note for the principal amount and interest then
outstanding under this Note that are not being so converted. Any conversion pursuant to this
Section 8 shall be deemed to have been made immediately prior to the close of business on the date
of Company’s receipt of the Conversion Notice, so that the rights of Holder under this Note to the
extent of the Conversion Amount shall cease at such time and Holder shall be treated for all
purposes as having become the record holder of such shares of Common Stock at such time.

(e) Fractional Shares; Effect of Conversion. No fractional shares shall be issued
upon conversion of this Note. In lieu of Company issuing any fractional shares to Holder upon the
conversion of this Note, Company shall pay to Holder an amount equal to the product obtained by
multiplying the Conversion Price by the fraction of a share not issued pursuant to the previous
sentence. Upon conversion of this Note in full and the payment of the amounts specified in this
Section 9(f), Company shall be forever released from all its obligations and liabilities under this
Note.

(f) Reservation of Stock Issuable Upon Conversion. Company shall at all times reserve
and keep available out of its authorized but unissued shares of Common Stock solely for the purpose
of effecting the conversion of this Note such number of its shares of Common Stock as shall from
time to time be sufficient to effect the conversion of this Note.

9. Reserved

10. Effect of Sale Transaction. Upon the occurrence of any Sale Transaction, the
Successor Entity (as defined below) shall succeed to, and be substituted for the Company (so that
from and after the date of such Sale Transaction, the provisions of this Note referring to the
“Company” shall refer instead to the Successor Entity), and may exercise every right and power of
the Company and shall assume all of the obligations of the Company under this Note with the same
effect as if such Successor Entity had been named as the Company herein. Upon consummation of the
Sale Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be
issued upon conversion of this Note at any time after the consummation of the Sale Transaction, in
lieu of the shares of the Common Stock purchasable upon the conversion of the Notes prior to such
Sale Transaction, such shares of common stock (or other securities, cash, assets or other property)
of the Successor Entity. The provisions of this Section shall apply similarly and equally to
successive Sale Transactions and shall be applied without regard to any limitations on the
conversion of this Note. As used in this Section 10, “Successor Entity” means the Person, which
may be the Company, formed by, resulting from or surviving any Sale Transaction, or the parent
entity of such Person, as applicable.

11. Successors and Assigns. Subject to the restrictions on transfer described in
Sections 12 and 13 below, the rights and obligations of Company and Holder of this Note shall be
binding upon and benefit the successors, assigns, heirs, administrators and transferees of the
parties.

12. Waiver and Amendment. Any term of this Note may be amended or waived only with
the written consent of Company and the Majority Holders; provided, however, that any such amendment
or modification which by its terms would not apply equally to all holders of the Notes shall not be
applicable to any holder whose rights under the Notes would be adversely affected by such amendment
or modification in a different manner than other holders thereof without such adversely affected
holder’s written consent.

13. Transfer of this Note or Securities Issuable on Conversion Hereof. With respect
to any offer, sale or other disposition of this Note or securities into which such Note may be
converted, Holder will give written notice to Company prior thereto, describing briefly the manner
thereof, together with a written opinion of Holder’s counsel, or other evidence if reasonably
satisfactory to Company, to the effect that such offer, sale or other distribution may be effected
without registration or qualification (under any federal or state law then in effect). Upon
receiving such written notice and reasonably satisfactory opinion, if so requested, or other
evidence, Company, as promptly as practicable, shall notify Holder that Holder may sell or
otherwise dispose of this Note or such securities, all in accordance with the terms of the notice
delivered to Company. If a determination has been made pursuant to this Section 12 that the
opinion of counsel for Holder, or other evidence, is not reasonably satisfactory to Company,
Company shall so notify Holder promptly after such determination has been made. Each Note thus
transferred and each certificate representing the securities thus transferred shall bear a legend
as to the applicable restrictions on transferability in order to ensure compliance with the
Securities Act, unless in the opinion of counsel for Company such legend is not required in order
to ensure compliance with the Securities Act. Company may issue stop transfer instructions to its
transfer agent in connection with such restrictions. Subject to the foregoing, transfers of this
Note shall be registered upon registration books maintained for such purpose by or on behalf of
Company. Prior to presentation of this Note for registration of transfer, Company shall treat the
registered Holder hereof as the owner and Holder of this Note for the purpose of receiving all
payments of principal and interest hereon and for all other purposes whatsoever, whether or not
this Note shall be overdue and Company shall not be affected by notice to the contrary.

14. Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and will be deemed to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one business day after deposit with an overnight
courier service, in each case properly addressed to the party to receive the same. The addresses
and facsimile numbers for such communications shall be to the respective addresses or facsimile
numbers of the parties as set forth in the Loan Agreement, or at such other address or facsimile
number as such parties shall have furnished in writing.

15. Usury. In the event any interest is paid on this Note which is deemed to be in
excess of the then legal maximum rate, then that portion of the interest payment representing an
amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied
against the principal of this Note.

16. Waivers. Company hereby waives notice of default, presentment or demand for
payment, protest or notice of nonpayment or dishonor and all other notices or demands relative to
this instrument.

17. Governing Law and Forum. This Note and all actions arising out of or in
connection with this Note shall be governed by and construed in accordance with the laws of the
State of Colorado, United States of America, without regard to the conflicts of law provisions of
the State of Colorado, or of any other state. All disputes or controversies relating to or arising
from this Note shall be adjudicated in the state and federal courts located in the state of
Colorado. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION
WITH RESPECT TO THIS NOTE AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER. The Convention on Contracts for the International Sale of Goods shall not apply to this
Note.

[Remainder of Page Intentionally Left Blank]

1

IN WITNESS WHEREOF, Company has caused this Note to be issued as of the date first written
above and Holder agrees to the terms and conditions of this Note.

VIASPACE INC.

By: /S/ CARL KUKKONEN

Name: Carl Kukkonen

Its: CEO

KEVIN SCHEWE

/S/ KEVIN SCHEWE

NOTICE OF CONVERSION

(To be executed by the Registered Holder in order to convert the Note)

The undersigned hereby elects to convert $12,000.00 of the principal and $ 0 of the
interest due on the Note issued by VIASPACE Inc. on January 29, 2014 into Shares of Common Stock of
VIASPACE Inc. (the “Borrower”) according to the conditions set forth in such Note, as of the date
written below.

Date of Conversion:       January 29, 2014      

Conversion Price:      $0.0101      

Shares To Be Delivered:      1,188,119      

Signature:      /S/ KEVIN L. SCHEWE       

Print Name:       Kevin L. Schewe—

Address:      400 Indiana St., Suite 220, Golden, CO 80401      

2EX-4.1

FEDERAL HOME LOAN BANK

OF CINCINNATI

CAPITAL PLAN

As amended through November 25, 2013.

1

TABLE OF CONTENTS

Page

	 	 	 	 	 
	ARTICLE I PURPOSE
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	ARTICLE III BANK DIRECTOR DESIGNATIONS AND ELECTIONS
	 	 	5	 
	 
	 	 	 	 
	1.Designation of Directorships
	 	 	5	 
	 
	 	 	 	 
	2.Number of Votes
	 	 	5	 
	 
	 	 	 	 
	ARTICLE IV MEMBERS OF THE BANK
	 	 	5	 
	 
	 	 	 	 
	1.In General
	 	 	5	 
	 
	 	 	 	 
	2.Additional Eligibility Requirements for Qualified Thrift Lenders
	 	 	6	 
	 
	 	 	 	 
	3.Limited Exemption for Community Financial Institutions
	 	 	6	 
	 
	 	 	 	 
	4.Ownership Rights
	 	 	6	 
	 
	 	 	 	 
	ARTICLE V BANK CAPITAL REQUIREMENTS
	 	 	6	 
	 
	 	 	 	 
	1.Total Capital Requirements
	 	 	6	 
	 
	 	 	 	 
	2.Risk-Based Capital Requirement
	 	 	6	 
	 
	 	 	 	 
	3.Credit Risk Capital Requirement
	 	 	7	 
	 
	 	 	 	 
	4.Market Risk Capital Requirement
	 	 	7	 
	 
	 	 	 	 
	5.Operations Risk Capital Requirement
	 	 	7	 
	 
	 	 	 	 
	ARTICLE VI CAPITAL STOCK
	 	 	7	 
	 
	 	 	 	 
	1.Issuance of Stock
	 	 	7	 
	 
	 	 	 	 
	2.Allocation of Class B Stock
	 	 	8	 
	 
	 	 	 	 
	3.[Intentionally left blank
	 	 	9	 
	 
	 	 	 	 
	4.Minimum Investment by Members.
	 	 	9	 
	 
	 	 	 	 
	5.Dividends.
	 	 	12	 
	 
	 	 	 	 
	6.Transfer of Capital Stock
	 	 	14	 
	 
	 	 	 	 
	7.Redemption and Repurchase of Capital Stock.
	 	 	14	 
	 
	 	 	 	 
	8.Termination of Membership.
	 	 	16	 
	 
	 	 	 	 
	9.Consolidation of Members.
	 	 	18	 
	 
	 	 	 	 
	10.Failure to Meet Capital Requirements
	 	 	19	 
	 
	 	 	 	 
	11.Capital Impairment
	 	 	20	 
	 
	 	 	 	 
	12.Bank’s Discretion to Suspend Redemption
	 	 	20	 
	 
	 	 	 	 
	13.Transition Provision
	 	 	20	 
	 
	 	 	 	 
	ARTICLE VII LIQUIDATION OR MERGER OF THE BANK
	 	 	20	 
	 
	 	 	 	 
	ARTICLE VIII PERIODIC REVIEW AND AMENDMENT
	 	 	21	 
	 
	 	 	 	 
	1.Periodic Review
	 	 	21	 
	 
	 	 	 	 
	2.Amendment
	 	 	21	 
	 
	 	 	 	 
	ARTICLE IX MISCELLANEOUS
	 	 	21	 
	 
	 	 	 	 
	1.Prompt Compliance: Use of Member Demand Deposit Accounts
	 	 	21	 
	 
	 	 	 	 
	2.Maintenance and Interpretation of the Plan
	 	 	22	 
	 
	 	 	 	 
	3.Errors Discovered in Capital Stock Calculations
	 	 	22	 
	 
	 	 	 	 
	4.Liquidation of Claims Against a Member
	 	 	22	 
	 
	 	 	 	 
	5.Calculation of Time Periods
	 	 	22	 
	 
	 	 	 	 
	6.Limitation on Discretion
	 	 	22	 
	 
	 	 	 	 
	7.Good Faith Determination
	 	 	22	 
	 
	 	 	 	 
	ARTICLE X RESTRICTED RETAINED EARNINGS
	 	 	22	 
	 
	 	 	 	 
	1.Definitions Applicable to This Article X of the Capital Plan.
	 	 	23	 
	 
	 	 	 	 
	2.Establishment of Restricted Retained Earnings.
	 	 	25	 
	 
	 	 	 	 
	3.Limitation on Dividends, Stock Purchase and Stock Redemption.
	 	 	27	 
	 
	 	 	 	 
	4.Termination of Retained Earnings Capital Plan Amendment Obligations.
	 	 	28	 
	 
	 	 	 	 
	SCHEDULE A –Membership Stock Requirements
	 	 	28	 

Capital Plan of the

Federal Home Loan Bank of Cincinnati

ARTICLE I

PURPOSE

The purpose of this Capital Plan is to provide for the governance and the regulation of the
capital structure of the Federal Home Loan Bank of Cincinnati, consistent with the requirements of
the Federal Home Loan Bank Act, as amended, and the Regulations of the Federal Housing Finance
Agency under that Act.

ARTICLE II

DEFINITIONS

“Act” means the Federal Home Loan Bank Act, as amended, 12 U.S.C. § 1421, et seq.

“Activity Stock” means the actual number of shares of Class B Stock owned by a Member and used
to capitalize, as applicable, the Member’s three types of Mission Asset Activity with the Bank.

“Activity Stock Account” means the account maintained by the Bank on the Bank’s books and
records for each Member, which account reflects the actual number of shares of Activity Stock owned
by the Member.

“Bank” means the Federal Home Loan Bank of Cincinnati.

“Bank Excess Stock” means the total par value (or resulting number of shares) of Class B Stock
owned by all Members minus the sum of (i) the par value of Class B Stock allocated by the Bank to
the Members’ Membership Stock Accounts, (ii) the total of the par value of Class B Stock resulting
from multiplying each type of Members’ Mission Asset Activity by its applicable Maximum Allocation
Percentage, (iii) the par value of shares of Member Excess Stock which are reserved for Members’
exclusive use as provided in Section VI.5.c. and (iv) the par value of shares of Member
Excess Stock which are the subject of outstanding Redemption and Withdrawal Notices.

“Bank’s Board” means the Board of Directors of the Federal Home Loan Bank of Cincinnati.

“Cancellation Fee” means the fee the Bank charges a Member when the Member cancels a
Redemption Notice pursuant to Section VI.7.d. or a Withdrawal Notice pursuant to
Section VI.8.b. or when a Redemption Notice automatically is cancelled pursuant to
Section VI.7.e. of this Capital Plan.

“Cancellation Notice” means the written notice, substantially in the appropriate form
prescribed by the Bank from time to time, given to the Bank by any Member to cancel a Redemption
Notice or a Withdrawal Notice, as the case may be.

“Capital Plan” means this Capital Plan.

“Capital Requirements” means the minimum permissible capital-to-assets ratios to be maintained
by the Bank under the Finance Agency’s capital rule.

“Charges Against the Capital of the Bank” means an other than temporary decline in the Bank’s
total equity that causes the value of total equity to fall below the Bank’s aggregate capital stock
amount.

“Class B Stock” means the Class B Stock issued under this Capital Plan to the Members of the
Bank.

“Director” means the Director of the Federal Housing Finance Agency.

“Effective Date” means December 30, 2002.

“Excluded Mission Asset Activity” means the aggregate of the current unpaid principal balance
and the current dollar amount of mandatory delivery contracts under the Mortgage Purchase Program
purchased or traded, and recorded on the books and records of the Bank, as of the earlier of (i)
the Effective Date; or (ii) a date determined by the Bank in its sole discretion. Notwithstanding
any other provision of this Capital Plan, a Member’s Excluded Mission Asset Activity shall be
disregarded in all allocations of shares of Class B Stock to that Member’s Membership Stock,
Activity Stock and Member Excess Stock Accounts and in any calculation of that Member’s Required
Shares of Membership Stock and Activity Stock. No Member shall be required to purchase any shares
of the Bank’s capital stock to capitalize its Excluded Mission Asset Activity.

“Finance Agency” means the Federal Housing Finance Agency, successor to the Federal Housing
Finance Board, or any successor thereto.

“GAAP” means accounting principles generally accepted in the United States of America.

“Maximum Allocation Percentage” means for each Member and for each type of Mission Asset
Activity, the highest permissible percentage (as established pursuant to Section
VI.4.a.iii.) of the Member’s par value of Class B Stock in its Activity Stock Account allocated
to support that type of Mission Asset Activity.

“Maximum Dollar Amount” means the maximum par value of Bank Excess Stock that may be
designated by the Bank to capitalize the total of all types of a single Member’s Mission Asset
Activity.

“Member” means an institution that has been approved for membership in the Bank and has
purchased the requisite number of shares of Class B Stock to satisfy such institution’s Membership
Stock Account.

“Member Excess Stock” means the total par value (or resulting number of shares) of Class B
Stock owned by any Member minus the sum of (i) the par value of Class B Stock allocated by the Bank
to the Member’s Membership Stock Account; and (ii) the total of the par value of Class B Stock
resulting from multiplying each type of the Member’s Mission Asset Activity by its applicable
Maximum Allocation Percentage. If this calculation results in a negative number, the Bank shall,
for internal bookkeeping purposes only, show a negative number of shares of Excess Stock for the
Member; however, the Member’s Member Excess Stock Account shall reflect that the Member actually
owns no shares of Member Excess Stock.

“Member Excess Stock Account” means the account maintained by the Bank on the Bank’s books and
records for each Member, which account reflects the actual number of shares of Member Excess Stock
owned by the Member.

“Membership Stock” means the actual number of shares of Class B Stock owned by each Member as
is required to become a Member or to maintain membership status with the Bank.

“Membership Stock Account” means the account maintained by the Bank on the Bank’s books and
records for each Member, which account reflects the actual number of shares of Membership Stock
owned by the Member.

“Minimum Allocation Percentage” means for each Member and for each type of Mission Asset
Activity, the lowest permissible percentage (as established pursuant to Section
VI.4.a.iii.) of the Member’s par value of Class B Stock owned and in its Activity Stock Account
allocated to support that type of Mission Asset Activity.

“Mission Asset Activity” means the following three types of Member activity: (i) the unpaid
principal balance of advances, (ii) funds and rate advance commitments and (iii) the unpaid
principal balance of purchases of mortgage loans and mandatory delivery contracts under the
Mortgage Purchase Program, in each case as held on the books and records of the Bank. Mission
Asset Activity does not include Excluded Mission Asset Activity.

“Permanent Capital” means the retained earnings of the Bank, determined in accordance with
GAAP, plus the amount paid-in for the Bank’s Class B Stock.

“Protected Excess Stock” means the portion of each Member’s “Member Excess Stock” (as
determined in Section VI.7.b) that is shielded from a Bank-initiated repurchase of stock,
excluding any stock subject to an outstanding Redemption or Withdrawal Notice.

“Redemption Notice” means the written notice, substantially in the form prescribed by the Bank
from time to time, required to be submitted by a Member intending to redeem shares of its Class B
Stock. Unless it has been cancelled, a Redemption Notice shall become effective at the end of its
Redemption Period.

“Redemption Period” means the five- (5-) year period beginning on the date a Redemption Notice
is received by the Bank.

“Regulations” means the Code of Federal Regulations Title 12 — Banks and Banking, Chapters IX
“Federal Housing Finance Board” and XII “Federal Housing Finance Agency.” Reference to any
particular Section of the Regulations means that Section as it may be amended from time to time or
such other applicable successor Section, rule, order or procedure then in effect.

“Required Shares” means the total number of shares of Class B Stock actually owned by a Member
pursuant to this Capital Plan in the Member’s Membership Stock Account and Activity Stock Account
and shall not include any shares of Member Excess Stock or Bank Excess Stock.

“Risk-Based Capital Requirement” means the dollar-amount sum of the Bank’s credit risk, market
risk, and operations risk, to be measured by the Bank in accordance with the Act, the Regulations
and any applicable rulings of the Finance Agency.

“Stock Dividend” means the dividends declared by the Bank’s Board and paid to Members in the
form of additional shares of Class B Stock.

“Total Assets” means a Member’s total assets as disclosed by the Member pursuant to applicable
industry standard regulatory reporting requirements.

“Withdrawal Notice” means the written notice, substantially in the form prescribed by the Bank
from time to time, required to be submitted by a Member intending to withdraw as a Member of the
Bank. Unless it has been cancelled, a Withdrawal Notice shall become effective at the end of its
Withdrawal Period.

“Withdrawal Period” means the five- (5-) year period beginning on the date a Withdrawal Notice
is received by the Bank.

ARTICLE III

BANK DIRECTOR DESIGNATIONS AND ELECTIONS

1. Designation of Directorships. The Bank’s Board shall consist of thirteen (13)
directors or such other number of directors as the Finance Agency may determine from time to time.
A majority of the directors shall be member directors and the remaining directors shall be
independent directors (as each such term is defined in the Act). In no event shall the independent
directors comprise less than two-fifths of all of the directors. Each Member shall be entitled to
vote with respect to those member directors designated by the Finance Agency to represent the state
in which such Member is organized and/or located, and each member director shall be elected by a
plurality of such votes. Independent directors shall be elected by a plurality of the votes of the
Members at large.

2. Number of Votes. In an election of directors, each Member located in the state to
be represented by a member director, or in the case of the election of an independent director each
Member, shall be entitled to cast one vote for each Required Share of Class B Stock determined by
the Bank to be owned by the Member based upon its position as of December 31 of the preceding
calendar year; provided, however, that the number of votes any Member may cast for any one
directorship shall not exceed the average number of the Required Shares determined by the Bank to
be owned by all Members located in the Member’s state, based upon each Member’s position as of
December 31 of the preceding calendar year.

ARTICLE IV

MEMBERS OF THE BANK

1. In General. Any building and loan association, savings and loan association,
cooperative bank, homestead association, insurance company, savings bank, community development
financial institution, or insured depository institution (as defined in Section 1422 of the Act)
shall be eligible to be or become a Member of the Bank, provided such institution:

a. is already a Member of the Bank in good standing; or

b. is duly organized under the laws of (i) the United States, (ii) the states of
Kentucky, Ohio or Tennessee or (iii) such other states as are located within the Bank’s
district; and

c. is subject to inspection and regulation under the banking laws, or under similar
laws, of the state in which it is organized and/or located, or of the United States, or, in
the case of a community development financial institution, is certified as such under the
Community Development Banking and Financial Institutions Act of 1994; and

d. makes such home mortgage loans as, in the judgment of the Finance Agency, are
long-term loans (except that in the case of a savings bank, this Section IV.1.d.
shall apply only if, in the judgment of the Finance Agency, such savings bank’s time
deposits, as defined in Section 19 of the Federal Reserve Act, warrant making such loans);
and

2. Additional Eligibility Requirements for Qualified Thrift Lenders. An insured
depository institution that was not a Member on January 1, 1989 may become a Member only if it:

a. has at least ten percent of its total assets in residential mortgage loans or, for
an institution that commences initial business operations after January 1, 1989, meets this
requirement within one year after the commencement of operations;

b. has a financial condition such that advances may be safely made to such institution;
and

c. the character of its management and its home-financing policy are consistent with
sound and economical home financing.

3. Limited Exemption for Community Financial Institutions. An insured depository
institution that is also a community financial institution and that meets the requirements set
forth in Sections IV.2.b. and IV.2.c. need not satisfy the requirement set forth in
Section IV.2.a.

4. Ownership Rights. The Bank’s retained earnings, surplus, undivided profits, and
equity reserves are owned by the holders of the Bank’s Class B Stock. Each such item is allocated
to those holders according to each holder’s proportionate share of total Class B Stock. The
holders’ interest in such items will be realized at the time the Bank is liquidated, or
periodically as declared by the Bank through dividend (pursuant to Section VI.5.b.) and/or
capital distributions, and then only to such holders as are currently holding shares of Class B
Stock in proportion to each holder’s then current Class B Stock holdings.

ARTICLE V

BANK CAPITAL REQUIREMENTS

1. Total Capital Requirements. The Bank shall maintain at all times: (a) total
capital in an amount at least equal to four percent (4%) of the Bank’s total assets; and (b) a
leverage ratio of total capital to total assets of at least five percent (5%) of the Bank’s total
assets. For purposes of determining the leverage ratio, total capital shall be computed by
multiplying the Bank’s Permanent Capital by one hundred fifty percent (150%) and adding to the
product thereof all other components of capital. The Bank acknowledges the Finance Agency may from
time to time adjust the Capital Requirements, and if it does so, this Section V.2. shall be
deemed to automatically be amended to reflect the same.

2. Risk-Based Capital Requirement. The Bank shall maintain at all times Permanent
Capital in an amount at least equal to the sum of its credit risk capital requirement, its market
risk capital requirement, and its operations risk capital requirement, calculated in accordance
with the rules and Regulations of the Finance Agency.

3. Credit Risk Capital Requirement. The Bank’s credit risk capital requirement shall
be equal to the sum of the Bank’s credit risk capital charges for all assets, off-balance sheet
items and derivative contracts in compliance with the rules and Regulations of the Finance Agency.

4. Market Risk Capital Requirement. The Bank’s market risk capital requirement shall
equal the sum of: (i) the market value of the Bank’s portfolio at risk from movements in interest
rates, foreign exchange rates, commodity prices, and equity prices that could occur during periods
of market stress, where such market value of the Bank’s portfolio at risk is determined using an
internal market risk model approved by the Finance Agency; and (ii) the amount, if any, by which
the Bank’s current market value of total capital is less than eighty-five percent (85%) of the
Bank’s book value of total capital, where: (A) the current market value of the total capital is
calculated by the Bank using the internal market risk model approved by the Finance Agency; and (B)
the book value of total capital is the same as the amount of total capital reported by the Bank to
the Finance Agency under Section 932.7 of the Regulations.

5. Operations Risk Capital Requirement. Except as approved by the Finance Agency, the
Bank’s operations risk capital requirement shall at all times equal thirty percent (30%) of the sum
of the Bank’s credit risk capital requirement and market risk capital requirement.

ARTICLE VI

CAPITAL STOCK

1. Issuance of Stock. The capital stock of the Bank may be issued only in accordance
with Section 931.2 of the Regulations and only to Members of the Bank and may be held only by
Members and, as provided in Section VI.8.d., former Members of the Bank. The Bank shall
initially issue one class of capital stock, Class B Stock, as such stock is defined by the Act.
There shall be no Class A Stock, as such stock is defined in the Act, or subclasses of Class B
Stock issued. Subject to Section III.2, all shares of Class B Stock shall have the same
rights and preferences. Each share of Class B Stock shall be issued at a par value of One Hundred
Dollars ($100) per share. The Bank shall be entitled to issue an unlimited number of shares of
Class B Stock. Any shares of Class B Stock which are repurchased, redeemed or otherwise reacquired
by the Bank shall be deemed cancelled and subsequently may be reissued. The Bank reserves the
right to authorize the issuance of Class A Stock and/or subclasses of Class B Stock, subject to
Finance Agency approval. A Member shall not be permitted to purchase shares of Class B Stock other
than as set forth in this Capital Plan. Shares of the Bank’s capital stock shall not be
certificated, but rather held in book entry form on the records of the Bank. The Bank shall serve
as transfer agent for all shares of its capital stock on its capital stock register.

2. Allocation of Class B Stock. Each Member’s Class B Stock shall be allocated by the
Bank to one (1) of three (3) distinct accounts: a Membership Stock Account, an Activity Stock
Account, and a Member Excess Stock Account. Each share of Class B Stock may be allocated to only
one (1) of the three (3) distinct accounts at a time; and a Member’s total number of shares of
Class B Stock shall be determined by adding the number of shares of Class B Stock in each of the
Member’s three (3) distinct accounts. Additionally, each share of Class B Stock allocated to a
Member’s Activity Stock Account may be allocated to only one (1) of the three (3) distinct types of
Mission Asset Activity at a time. Shares may be reallocated from time to time among the types of
Mission Asset Activity as the Member’s activity changes. A Member’s shares of Class B Stock
(whether acquired on the Effective Date or later acquired through purchase or by Stock Dividend)
shall be first allocated to its Membership Stock Account. Once a Member’s Membership Stock Account
requirement is satisfied, the Member’s remaining Class B Stock shall be next allocated to its
Activity Stock Account, and then to its Member Excess Stock Account. Transfers made between and
among the accounts for any particular Member shall be made by the Bank based upon the following
rules:

a. Membership Stock Account. Membership Stock is the actual number of shares
of Class B Stock owned by a Member as required to become a Member of or to retain membership
status in the Bank. The number of shares of a Member’s Class B Stock allocated to the
Member’s Membership Stock Account shall be calculated as a percentage, or range of
percentages, of the Member’s Total Assets and shall be determined by the Bank yearly or more
frequently as directed by the Bank’s Board, in accordance with Section VI.4.a.

b. Activity Stock Account. Activity Stock is the actual number of shares of
Class B Stock owned by a Member and used to capitalize (in whole or in part) the Member’s
Mission Asset Activity with the Bank. The number of shares of Class B Stock allocated to a
Member’s Activity Stock Account at any time shall ensure that, for each type of Mission
Asset Activity, the ratio of the par value of the Member’s Activity Stock to that type of
Member’s Mission Asset Activity is at least as large as its applicable Minimum Allocation
Percentage, and no larger than its applicable Maximum Allocation Percentage. For each type
of Mission Asset Activity, the Minimum Allocation Percentage and the Maximum Allocation
Percentage may be adjusted by the Bank’s Board to facilitate compliance with the Bank’s
Capital Requirements as specified in the Act and the Regulations or as directed by the
Finance Agency.

c. Member Excess Stock Account. A Member’s Member Excess Stock is the total
par value of Class B Stock owned by the Member minus the sum of (i) the par value of Class B
Stock allocated by the Bank to the Member’s Membership Stock Account, and (ii) the total of
the par values of Class B Stock that results from multiplying each type of the Member’s
Mission Asset Activity by its applicable Maximum Allocation Percentage. If a Member’s
Member Excess Stock is a positive number, the Member actually owns Member Excess Stock equal
to such positive number. If a Member’s Member Excess Stock is a negative number, the Member
actually owns no excess stock and is, by definition, utilizing some portion of the Bank
Excess Stock to capitalize its Mission Asset Activity.

d. Timing of Transactions. All transactions affecting the Bank’s capital stock
made on the books and records of the Bank shall be made and deemed effective at the end of
the applicable business day.

3. [Intentionally left blank.]

4. Minimum Investment by Members.

a. Required Shares. Each Member shall own at all times its Required Shares of
Class B Stock. There are two components to Required Shares: Membership Stock and Activity
Stock.

(i) Required Shares of Membership Stock. The sum of the Membership
Stock of all Members shall capitalize the Bank’s investment securities and minimum
liquidity (as determined by the Bank). The number of shares of a Member’s Class B
Stock allocated to the Member’s Membership Stock Account shall be calculated on the
basis of the Member’s Total Assets within a range of declining percentages from no
more than three-tenths of one percent (0.30%) to no less than three-hundredths of
one percent (0.03%), subject, however, to a minimum Membership Stock investment
requirement of no less than One Thousand Dollars ($1,000) or more than Fifty
Thousand Dollars ($50,000) and a maximum Membership Stock investment requirement of
no less than Twenty-Five Million Dollars ($25,000,000) or more than Two Hundred
Million Dollars ($200,000,000). The Bank’s Board of Directors may set different
applicable percentages and different minimum and maximum Membership Stock investment
requirements within each of the foregoing ranges, as illustrated on Schedule A to
this Capital Plan. The amounts set from time to time shall be subject to periodic
review and adjustment as determined by the Bank’s Board. The initial range of
percentages and initial minimum and maximum Membership Stock investment requirements
in effect as of the effective date of this amended Section VI.4.a.i. shall
be fifteen-hundredths of one percent (0.15%) to three hundredths of one percent
(0.03%), and One Thousand Dollars ($1,000) and One Hundred Million Dollars
($100,000,000)*, respectively. Any change to such percentages or maximum or minimum
Membership Stock investment requirement shall be announced with at least thirty (30)
days prior written notice to all Members before implementation of the change.

* The Maximum Membership Stock requirement was reduced by Board of
Directors’ action to Twenty-Five Million Dollars ($25,000,000) effective November 28th,
2011. The previous Maximum Membership Stock requirement was Fifty Million Dollars ($50,000,000)
and became effective August 16th, 2010.

If the number of shares of Class B Stock a Member is required to hold in
its Membership Stock Account decreases, such shares shall be first allocated to the
Member’s Activity Stock Account, up to the applicable Maximum Allocation Percentages
as applied to each type of the Member’s Mission Asset Activity. Any remaining
            shares of Class B Stock shall then be allocated to the Member’s Excess Stock
Account. If the number of shares of Class B Stock a Member is required to hold in
its Membership Stock Account increases, such additional shares shall be allocated
from the Member’s Excess Stock Account to the Member’s Membership Stock Account.
If, at the time of such increase, the Member has no or an insufficient amount of
Member Excess Stock to satisfy its Membership Stock Account requirement or there is
insufficient amount of Bank Excess Stock, or the Bank is not then in compliance with
the requirements of this Capital Plan, the Act or the Regulations, the Member shall
be required to purchase (on the effective date of the change specified in the
notice) additional shares of Class B Stock to satisfy its Membership Stock Account
requirement. A Member may not utilize any other Member’s portion of Bank Excess
Stock or its own Activity Stock to satisfy its Membership Stock Account requirement.

(ii) New Member Membership Stock Purchase Requirement. From the date
of approval of an institution’s membership application by the Bank, the institution
shall be granted sixty (60) calendar days in which to purchase the number of shares
of Class B Stock necessary to satisfy its Membership Stock Account. The institution
may not, however, engage in any Mission Asset Activity with the Bank until the
institution has purchased all of its Required Shares.

(iii) Required Shares of Activity Stock The number of shares of Class
B Stock allocated to a Member’s Activity Stock Account at any time shall ensure
that, for each type of Mission Asset Activity, the ratio of the par value of the
Member’s Activity Stock to that type of the Member’s Mission Asset Activity is at
least as large as its applicable Minimum Allocation Percentage and no larger than
its applicable Maximum Allocation Percentage. For types i and ii of a Member’s
Mission Asset Activity, the Minimum Allocation Percentage shall be two percent (2%)
and the Maximum Allocation Percentage shall be four percent (4%); and for type iii
of a Member’s Mission Asset Activity, the Minimum Allocation Percentage shall be
zero percent (0%) and the Maximum Allocation Percentage shall be four percent (4%).
Such percentages may be periodically adjusted between one percent (1%) and six
percent (6%), inclusive, for types i and ii of the Member’s Mission Asset Activity,
and between zero percent (0%) and six percent (6%), inclusive, for type iii of the
Member’s Mission Asset Activity as determined by the Bank’s Board, with at least
thirty (30) days prior written notice to all members.

The number of shares of Class B Stock a Member shall hold in its Activity Stock
Account may fluctuate with the Member’s Mission Asset Activity. An increase in any
type of a Member’s Mission Asset Activity first shall be capitalized, pursuant to
Section VI.4.b., by a reallocation of the Member’s Member Excess Stock (to
the extent the Member holds a sufficient number of shares of Member Excess Stock and
provided there are sufficient shares of Bank Excess Stock available) to the Member’s
Activity Stock Account at the appropriate Maximum Allocation Percentage for that
type of Mission Asset Activity. In such an event, the Member shall not be permitted
to purchase additional shares of Class B Stock; and the Member’s Member Excess Stock
Account shall be reduced by the number of shares of Member Excess Stock reallocated
to its Activity Stock Account. To the extent a Member has an insufficient number of
            shares of Member Excess Stock to capitalize all of an increase to its Mission Asset
Activity, the portion of the incremental Mission Asset Activity not so capitalized
by the Member’s Activity Stock shall be capitalized by Bank Excess Stock at the
appropriate Maximum Allocation Percentage for that type of Mission Asset Activity
pursuant to Section VI.4.b. In such an event, the Member shall not be
permitted to purchase additional shares of Class B Stock, and the amount of Bank
Excess Stock shall be reduced by the number of shares allocated from the Member’s
Member Excess Stock and by the number of additional shares of other Members’ portion
of the Bank Excess Stock used to capitalize the incremental Mission Asset Activity.
If the Bank has insufficient Bank Excess Stock, in the Bank’s sole discretion, to
permit utilization of the Bank Excess Stock to capitalize all or a portion of a
Member’s incremental Mission Asset Activity, the Member, regardless of whether it
holds Member Excess Stock, shall be required to purchase (on the effective date of
the change specified in the notice) additional shares of Class B Stock, at the
appropriate Maximum Allocation Percentage for that type of Mission Asset Activity,
to capitalize the portion of the incremental Mission Asset Activity not capitalized
with Bank Excess Stock.

If, after a decrease in a Member’s Mission Asset Activity, the number of shares of
Class B Stock in the Member’s Activity Stock Account is less than the number
required to capitalize the Member’s remaining Mission Asset Activity at the
applicable Maximum Allocation Percentages for the different types of Mission Asset
Activity, the number of shares of Class B Stock in the Member’s Activity Stock
Account shall not change. If, after a decrease in a Member’s Mission Asset
Activity, the number of shares in the Member’s Activity Stock Account is greater
than the number required to capitalize the Member’s remaining Mission Asset Activity
at the applicable Maximum Allocation Percentages for the different types of Mission
Asset Activity, the extra shares shall be allocated to the Member’s Member Excess
Stock Account.

b. Bank Excess Stock. Bank Excess Stock is the total par value of Class B Stock
owned by all Members minus the sum of (i) the par value of Class B Stock allocated by the
Bank to the Members’ Membership Stock Accounts, (ii) the total of the par values of Class B
Stock resulting from multiplying each type of Members’ Mission Asset Activity by its
applicable Maximum Allocation Percentage, (iii) the par value of shares of Member Excess
Stock which are reserved for Members’ exclusive use as provided in Section VI.5.c.
and (iv) the par value of shares of Member Excess Stock which are the subject of outstanding
Redemption and Withdrawal Notices. Other Members’ portions of Bank Excess Stock may not be
utilized, under any circumstances, to satisfy a Member’s Membership Stock Account. Each
Member’s Member Excess Stock (not otherwise reserved for its exclusive use or excluded from
Bank Excess Stock because it is the subject of an outstanding Redemption or Withdrawal
Notice) shall be pooled into Bank Excess Stock and made available to all Members to
capitalize Mission Asset Activity at a rate equal to the applicable Maximum Allocation
Percentage for each type of Mission Asset Activity. If at any time the Bank, in its sole
discretion, has determined that Bank Excess Stock may not be used to capitalize incremental
Mission Asset Activity, or if any of the Bank’s Capital Requirements are not satisfied, a
Member (regardless of whether the Member has shares of Class B Stock allocated to its Member
Excess Stock Account) seeking to capitalize an increase in its Mission Asset Activity shall
be required to purchase an additional amount of Class B Stock at a rate at least equal to
the applicable Maximum Allocation Percentage of the type of Member’s incremental Mission
Asset Activity. With respect to utilization of Bank Excess Stock by the Members, the
following shall apply:

(i) Percentage Limitation. Each Member must at all times retain in its
own Activity Stock Account a number of shares of Class B Stock sufficient to satisfy
the Minimum Allocation Percentages for each type of Mission Asset Activity then
engaged in by the Member. If a Member is at the Minimum Allocation Percentage for a
type of Mission Asset Activity and desires to increase that type of Mission Asset
Activity and is not at the applicable Minimum Allocation Percentage for the other
type(s) of Mission Asset Activity, the Member’s Activity Stock will be reallocated
from the other type(s) of Mission Asset Activity to the respective Minimum
Allocation Percentage(s). If such reallocation does not provide sufficient Class B
Stock to support the Member’s increased Mission Asset Activity, the Member shall be
required to purchase additional shares of Class B Stock in an amount that will
maintain the applicable Minimum Allocation Percentage.

(ii) Maximum Dollar Amount. No Member may use more than Two Hundred
Million Dollars ($200,000,000) (exclusive of the par value of the Member’s Member
Excess Stock Account) of available Bank Excess Stock as the Maximum Dollar Amount.
If a Member reaches the Maximum Dollar Amount and desires to increase its Mission
Asset Activity, the Member shall be required to purchase additional shares of Class
B Stock, at the applicable Maximum Allocation Percentage for the specific type of
Mission Asset Activity, to capitalize that type of incremental Mission Asset
Activity. The Bank shall retain sole discretion to adjust the Maximum Dollar Amount
from time to time.

5. Dividends.

a. In General. The Bank may pay dividends on its capital stock only out of
previously retained earnings or current net earnings (as determined by the Bank in
accordance with GAAP). The Bank’s Board shall determine the dividend rates.

b. Scheduled Dividend Payments. Dividends shall be paid at the Bank’s
discretion to Members based upon the average total number of shares of Class B Stock
actually owned by a Member during the period for which the distribution is to be made. The
number of shares of Class B Stock actually owned by a Member in such period shall be
determined based upon the number of days or the percentage of the period each share of Class
B Stock was owned by the Member (regardless of whether the Member holds such share on the
date the dividend is paid). Dividends, if declared and paid, shall be paid quarterly,
except as otherwise declared by the Bank’s Board, and shall be noncumulative. Dividends
earned in respect of any given period shall be paid on such schedule as shall be determined
from time to time by the Board. Dividends may be paid in the form of additional shares of
Class B Stock, in cash, in any combination thereof, or in such other form as the Bank may
determine at the time of such dividend distribution.

c. Period of Exclusive Use. Stock Dividends paid shall be first allocated to a
Member’s Membership Stock Account. If, after a Member’s Membership Stock Account is
satisfied, the Member has additional shares of Class B Stock resulting from a Stock
Dividend, the Bank shall allocate such additional shares to the Member’s Activity Stock
Account to the extent the Member’s Mission Asset Activity is capitalized by the Member’s
Activity Stock at less than the Maximum Allocation Percentage. If, after a Member’s
Membership Stock Account is satisfied and the total number of shares in its Activity Stock
Account satisfies the Maximum Allocation Percentages for each type of the Member’s Mission
Asset Activity, the Member has additional shares of Class B Stock resulting from a Stock
Dividend, such shares shall be allocated to the Member’s Member Excess Stock Account. A
Member receiving such Stock Dividends, and having incremental shares of Class B Stock in its
Member Excess Stock Account as a result of such Stock Dividends, shall have, for the three-
(3)- month period immediately following the Stock Dividend payment, exclusive rights to
utilize such Stock Dividends to capitalize the Member’s (and only the Member’s) incremental
Mission Asset Activity.

d. Limitation of Issuance. The Bank shall not, under any circumstances,
declare or pay any dividends on its capital stock if in doing so (and taking into account
the effect of any such dividend) the Bank would fail to meet any of its Capital
Requirements. Nor shall the Bank declare any dividend on its capital stock if (i) the Bank
is not then in compliance with any one or more of its Capital Requirements; or (ii) the Bank
determines that to do so would create a safety and soundness issue for the Bank.

e. Dividends Made In Error. If any dividends are paid in error by the Bank in
contravention of Section VI.5.d., the Members receiving such dividends shall return
to the Bank all such dividends within thirty (30) calendar days of written notification by
the Bank. In requiring the return of such distributions, the Bank shall incur no liability
to its Members.

6. Transfer of Capital Stock. Any stock issued by the Bank shall be tradable and
transferable only between the Bank and its Members. Any transfer shall be undertaken only in
accordance with Section 931.6 of the Regulations. Upon application of the Member as set forth
below and the approval of the Bank, a Member may transfer any number of shares of Class B Stock
actually held in the Member’s Excess Stock Account to another Member of the Bank or to an
institution that has been approved for and has satisfied all the conditions of membership in the
Bank other than the purchase of Required Shares. Such transfers shall be made at the par value of
One Hundred Dollars ($100) per share. The Bank shall serve as transfer agent for the Class B
Stock.

A Member wishing to transfer all or a portion of its Member Excess Stock to another Member
must submit a request in writing to the Bank at least thirty (30) days prior to the date the
transfer is desired to take place (“Transfer Request”). The Transfer Request shall include: (1)
the names of the Members wishing to consummate the transfer; (2) the number of shares of Class B
Stock to be transferred; (3) the desired date of transfer; (4) a brief statement as to the
reason(s) for the transfer; and (5) the authorized signature of each party to the proposed
transaction indicating its respective desire to execute the transfer. Upon receipt of the Transfer
Request, the Bank shall evaluate the request and, no later than the third business day prior to the
date of transfer, in its sole discretion, either approve or disapprove the transfer.

7. Redemption and Repurchase of Capital Stock.

a. Redemption of Member Excess Stock. A Member may request that the Bank
redeem all or any portion of the Member’s shares of Class B Stock, without affecting the
Member’s membership status, by submitting a Redemption Notice to the Bank. The Redemption
Notice shall state the number of shares of Class B Stock targeted for redemption, and a
Member may not have more than one Redemption Notice outstanding at any time covering the
same shares of Class B Stock. Until the shares are redeemed, or earlier repurchased
pursuant to Section VI.7.b., a Member shall continue to receive dividends on the
            shares of Class B Stock targeted for redemption. Subject to Sections VI.10., 11. and
12., at the end of the Redemption Period (unless the Redemption Notice has been
cancelled), the Bank shall redeem, in accordance with Section VI.7.c., all of the
            shares of Class B Stock covered by the Redemption Notice that are Member Excess Stock on the
date the Redemption Notice becomes effective. If the Bank is unable to redeem all or any
portion of those shares of Class B Stock at the end of the Redemption Period because of
restrictions set forth in this Capital Plan, the Act or the Regulations, the Bank may redeem
the shares, without further notice or waiting period, when and as permitted by this Capital
Plan and, if applicable, permitted or required by the Finance Agency. If at any time the
Bank is able to redeem some, but not all, of the shares of Class B Stock that are covered by
effective Redemption Notices, the Bank shall honor the redemption requests on a first
come/first served basis, based upon the date and time such Redemption Notices were marked
received by the Bank.

b. Repurchase of Member Excess Stock. Subject to Sections VI.10., 11. and
12., the Bank shall have the right at any time to repurchase, in accordance with
Section VI.7.c., all or any portion of its Members’ Member Excess Stock, above their
Protected Excess Stock. Any such repurchase shall be at the sole discretion of the Bank and
shall be initiated by giving each affected Member no less than five (5) calendar days’ prior
written notice. If and when the Bank determines to repurchase Member Excess Stock, the Bank
shall first purchase any shares of Class B Stock for which Redemption Notices have become
effective but have not been fully honored, in the order in which those Redemption Notices
became effective. To the extent the Bank has determined to repurchase more shares of Class
B Stock, it then shall repurchase those shares for which Redemption Notices have been filed
but not yet become effective, in the order in which those Notices were filed. In the event
the Bank determines to repurchase more shares of Class B Stock than are currently covered by
outstanding Redemption Notices, the Bank shall repurchase the additional shares from each
Member having a positive number of shares in its Member Excess Stock Account after removing
each Member’s applicable Protected Excess Stock, in proportion to the total number of shares
of Class B Stock then allocated to each Member’s Excess Stock Account after removing each
Member’s applicable Excess Stock. Protected Excess Stock shall be the greater of a)
twenty-five percent (25.0%) of a Member’s Required Shares or b) fifteen thousand (15,000)
            shares of Member Excess Stock with a par value of One Million Five-Hundred Thousand Dollars
($1,500,000). The Protected Excess Stock percentage and numerical levels may be set from
time to time and shall be subject to periodic review and adjustment as determined by the
Bank’s Board of Directors in their sole discretion within the aforesaid ranges. The range
of percentages and levels of Protected Excess Stock shall be zero percent (0.0%) to thirty
percent (30.0%), and the numerical level range shall be between zero and thirty thousand
(30,000) shares of Member Excess Stock with a maximum par value of Three Million Dollars
($3,000,000).

c. Redemption and Repurchase Price. All redemptions and repurchases of shares
of Class B Stock shall be made by the Bank in immediately available funds at the par value
of One Hundred Dollars ($100) per share. Once a share is redeemed or repurchased, pursuant
to Sections VI.7.a. and VI.7.b. and subject to Section VI.5.b., the Member’s
rights and privileges and the Bank’s obligations with respect to such share shall
immediately terminate and the Member shall be deemed to have surrendered the share to the
Bank.

d. Cancellation of Redemption Notice. A Member shall have five (5) calendar
days from the date the Bank receives a Redemption Notice from the Member to submit a
Cancellation Notice to the Bank and to cancel that Redemption Notice without penalty or fee.
If a Member desires to cancel a Redemption Notice after the five (5) calendar day grace
period has expired, the Member may do so by providing a Cancellation Notice to the Bank, but
the Bank shall charge a Cancellation Fee, as a percent of the par value of the Class B Stock
referenced in the Redemption Notice, based upon the year in which the Redemption Notice is
cancelled according to the following schedule: two percent (2%) in the first year, three
percent (3%) in the second year, four percent (4%) in the third year, five percent (5%) in
the fourth year, and six percent (6%) in the fifth year. To be effective, the Cancellation
Notice must be received by the Bank before the Redemption Notice to which it relates becomes
effective and before the Bank repurchases the shares of stock referenced in the Redemption
Notice. From time to time, the Bank’s Board, in its sole discretion, may waive the
Cancellation Fee if it has a bona fide business purpose for doing so and the waiver is
consistent with Section 1427(j) of the Act or may change the Cancellation Fee schedule to
reduce all or any portion of the Fee.

e. Automatic Cancellation of Redemption. A Member’s Redemption Notice shall
automatically be cancelled to the extent the Bank is prevented from redeeming any Class B
Stock which is the subject of the Notice within five (5) business days after the end of the
Redemption Period because the Member would fail to maintain its minimum investment in the
stock of the Bank after such redemption. The automatic cancellation of a Member’s
Redemption Notice shall have the same effect as if the Member had cancelled its Redemption
Notice pursuant to Section VI.7.d., including the applicability of the Cancellation
Fee specified therein.

8. Termination of Membership.

a. Voluntary Withdrawal. Any Member may initiate its withdrawal from
membership in the Bank by filing a Withdrawal Notice with the Bank. Within ten (10)
calendar days of receiving such Withdrawal Notice, the Bank shall forward a copy of the
Withdrawal Notice to the Finance Agency. During the Withdrawal Period, the Member shall be
entitled to dividends, voting rights, and other membership rights commensurate with
continuing stock ownership. Subject to Section VI.8.d. and Sections VI.10., 11.
and 12., and provided that the Withdrawal Notice has not been cancelled in accordance
with Section VI.8.b., at the expiration of the Withdrawal Period, (a) the
institution’s membership in the Bank shall terminate, (b) the Bank shall redeem, in
immediately available funds at their par value (less any obligations due and owing by the
institution to the Bank), the shares of Class B Stock owned by the institution on the date
the Withdrawal Notice was filed and (c) the institution shall not be entitled to any other
rights or privileges accorded to Members; provided, however, that the institution may
receive dividends earned pursuant to Section VI.5.b., to the extent that those
dividend payments exceed any such obligations due and owing to the Bank. If the Bank is
unable to redeem the shares of Class B Stock at the end of the Withdrawal Period because of
restrictions set forth in this Capital Plan, the Act or the Regulations, the Bank may redeem
the shares, without further notice or waiting period, when and as permitted by this Capital
Plan and, if applicable, permitted or required by the Finance Agency. If at any time the
Bank is able to redeem some, but not all, of the shares of Class B Stock subject to
Withdrawal Notices, the Bank shall honor the Withdrawal Notices on a first come/first served
basis, based upon the date and time such Withdrawal Notices became effective. The
Withdrawal Period shall automatically commence for any additional shares of Class B Stock
acquired by the institution (by purchase or in the form of Stock Dividends) after the date
the Withdrawal Notice initially was filed on the date the additional shares are received.
In its sole discretion, the Bank may repurchase such after-acquired shares from time to
time, provided that they are not required to support any indebtedness of the institution to,
or business transaction of the institution with, the Bank.

b. Cancellation of Withdrawal Notice. A Member shall have thirty (30) calendar
days from the date the Bank receives the Member’s Withdrawal Notice to submit a Cancellation
Notice to the Bank and to cancel the Withdrawal Notice without penalty or fee. If a Member
desires to cancel a Withdrawal Notice after the thirty (30) calendar day grace period has
expired, the Member may do so by providing a Cancellation Notice to the Bank, but the Bank
shall charge a Cancellation Fee, as a percent of the par value of the Class B Stock
referenced in the Withdrawal Notice, based upon the year in which the Withdrawal Notice is
cancelled according to the following initial schedule: two percent (2%) in the first year,
three percent (3%) in the second year, four percent (4%) in the third year, five percent
(5%) in the fourth year, and six percent (6%) in the fifth year. To be effective, the
Cancellation Notice must be received by the Bank before the Withdrawal Notice becomes
effective. From time to time, the Bank’s Board, in its sole discretion, may waive the
Cancellation Fee if it has a bona fide business purpose for doing so and the waiver is
consistent with Section 1427(j) of the Act or may change the Cancellation Fee schedule to
reduce all or any portion of the Fee. The Bank’s Board may, in its sole discretion,
establish a Cancellation Fee applicable to Withdrawal Notices that is different than the
Cancellation Fee applicable to Redemption Notices.

c. Involuntary Withdrawal. The Bank’s Board may terminate the membership of
any institution that (i) fails to comply with any requirement of this Capital Plan, the Act
or any Regulation prescribed under the Act, in effect from time to time, (ii) becomes
insolvent or otherwise subject to the appointment of a conservator, receiver, or other legal
custodian under federal law or state law applicable to the institution, or (iii) would
jeopardize the safety or soundness of the Bank if it were to remain a Member. The
institution’s membership in the Bank shall terminate as of the date the Bank’s Board acts,
at which time a five- (5-) year redemption period for the shares of Class B Stock owned by
the institution on that date shall commence and after which the institution shall not be
entitled to any rights or privileges accorded to Members; provided, however, the institution
may receive dividends earned pursuant to Section VI.5.b. until its Class B Stock is
redeemed. At the end of the redemption period provided for in this Section VI.8.c.,
and subject to Section VI.8.d., the Bank shall redeem, in immediately available
funds at their par value (less any obligations due and owing by the institution to the
Bank), the shares of Class B Stock owned by the institution on the date the institution’s
membership in the Bank terminated. A five- (5-) year redemption period shall automatically
commence for any shares of Class B Stock acquired by the institution as Stock Dividends
after the date on which the institution’s membership in the Bank terminated. In its sole
discretion, the Bank may repurchase such after-acquired shares from time to time, provided
that they are not required to support any indebtedness of the institution to, or business
transaction of the institution with, the Bank.

d. Additional Conditions Relating to Withdrawal. A Member’s voluntary
withdrawal pursuant to Section VI.3.a. or Section VI.8.a., or involuntary
withdrawal pursuant to Section VI.8.c., as a Member of the Bank shall be effective
as of the applicable date specified in each such Section and, thereafter, regardless of any
            shares of the Bank’s capital stock still held (as contemplated by the following sentence),
the Member shall no longer be a Member and shall have no rights accorded to Members other
than as are specified in the applicable Section. Notwithstanding the provisions of those
Sections or any other provision of this Capital Plan, the Bank shall not redeem or
repurchase shares of Class B Stock from an institution that has withdrawn from membership in
the Bank, or that otherwise has had its membership in the Bank terminated, to the extent
that those shares are required to support, at up to the Maximum Allocation Percentage in
effect from time to time and applicable to the type of Mission Asset Activity, any
indebtedness of the institution to, or business transaction of the institution with, the
Bank until after such indebtedness or business transaction has been extinguished or settled.

For purposes of determining the number of shares of Class B Stock required to support
an institution’s remaining indebtedness to or business transactions with the Bank, all
            shares of Membership Stock held by the institution on the effective date of withdrawal, as
well as all shares subsequently received as Stock Dividends, shall be classified as Activity
Stock. In particular, but without limitation, this Section VI.8.d. shall operate so
that if a receiver or similar liquidating entity or legal custodian has been appointed for a
Member and/or its assets, and the Bank has terminated the Member’s and/or the entity’s
membership, the Member’s and/or entity’s Membership Stock obligation on the effective date
of termination shall be zero, and all such Membership Stock shall by operation of this
Section VI.8.d. be automatically converted to Activity Stock.

e. Rejoining After Divestiture of All Shares of Stock. Except as provided
herein, and notwithstanding any other provision of the Act, an institution that divests all
            shares of stock in the Bank or any other Federal Home Loan Bank may not, after such
divestiture, acquire shares of the Bank before the end of a five (5) year period beginning
on the date of the completion of such divestiture, except as provided in Section
VI.9; provided, however, that if the divestiture was made prior to December 31, 1997,
such institution may acquire shares of the Bank at any time after that date, subject to the
Act and approval by the Bank and the Finance Agency.

9. Consolidation of Members.

a. Consolidation of Members of the Bank. Upon consolidation of two or more
Members of the Bank into one institution operating under the charter of one of the
consolidating institutions, the transfer of Class B Stock owned by the disappearing
institution(s) to the consolidated institution shall be deemed approved by the Bank. All
            shares of Class B Stock shall be allocated to the consolidated institution’s stock accounts
pursuant to Section VI.2. hereof and any share of Class B Stock thereby in such
consolidated institution’s Member Excess Stock Account may be redeemed in a manner
consistent with the terms and conditions of this Capital Plan.

b. Consolidation of a Member into a Member of Another Federal Home Loan Bank.
If a Member is consolidated with and into a member of a Federal Home Loan Bank other than
the Bank, and, after the consolidation, the Member is to operate under the charter of the
consolidated institution, the Member’s membership in the Bank shall terminate upon
cancellation of its charter; provided, however, that if more than eighty percent (80%) of
the assets of the consolidated institution are derived from the assets of the disappearing
Member, then the consolidated institution shall continue to be a Member of the Bank. In the
event of a termination as provided in this Section VI.9.b., liquidation of the
Member’s shares of Class B Stock shall be in accordance with the Act and Section 925.29 of
the Regulations.

c. Consolidation of a Member into a Non-Member. If a Member is consolidated
with and into an institution that is not a member of any Federal Home Loan Bank, the
Member’s membership in the Bank shall terminate upon cancellation of the Member’s charter.
In the event that the consolidated institution has its principal place of business within
the District of the Bank, the consolidated institution shall have sixty (60) calendar days
after the cancellation of the Member’s charter to notify the Bank that the consolidated
institution intends to apply for membership in the Bank. The consolidated institution shall
then have sixty (60) calendar days from the aforementioned notice to apply for membership in
the Bank. Prior to membership approval for the consolidated institution, the disappearing
institution may continue to hold any outstanding Bank advances and shares of Class B Stock,
and the consolidated institution shall have the rights associated with such shares of Class
B Stock. The consolidated institution shall, within sixty (60) calendar days of its
approval for membership status, purchase shares of Class B Stock as necessary to satisfy the
Member’s Membership Stock Account and Activity Stock Account requirements. If the
consolidated institution does not apply for membership, or if its application for membership
is denied, then the liquidation of any outstanding indebtedness owed to the Bank and the
redemption of the Member’s shares of Class B Stock shall be carried out in accordance with
the Act and Section 925.29 of the Regulations.

10. Failure to Meet Capital Requirements. Notwithstanding any other provision of this
Capital Plan, the Bank may not redeem or repurchase any shares of its capital stock if the Bank is
not then in compliance with any one or more of its Capital Requirements or if, as provided in
Section 931.7(c) of the Regulations, following the redemption or repurchase, the Bank would fail to
meet any of its Capital Requirements or the Member would fail to maintain its minimum investment in
the capital stock of the Bank as required by the Regulations and this Capital Plan.

11. Capital Impairment. In accordance with Section 931.8(a) of the Regulations, the
Bank may not and shall not redeem or repurchase any capital stock without the prior written
approval of the Finance Agency, if the Finance Agency or the Bank’s Board has determined that the
Bank has at the time of such proposed redemption or repurchase incurred, or is likely to incur,
losses that result in, or are likely to result in, Charges Against the Capital of the Bank. This
prohibition shall apply even if the Bank is in compliance with its Capital Requirements, and shall
remain in effect for however long the Bank continues to incur such Charges, or until the Finance
Agency determines such Charges are not expected to continue, or otherwise in accordance with the
Act, the Regulations and any applicable rulings of the Finance Agency.

12. Bank’s Discretion to Suspend Redemption. In accordance with Section 931.8(b) of
the Regulations, the Bank, upon the approval of the Bank’s Board, or a subcommittee thereof, may
suspend the redemption of any of the Bank’s stock if the Bank reasonably believes that the
continued redemption of stock would cause the Bank to fail to meet its Capital Requirements, would
prevent the Bank from maintaining adequate capital against potential risk that may not be
adequately reflected in its Capital Requirements, or would otherwise prevent the Bank from
operating in a safe and sound manner. The Bank shall notify the Finance Agency within two business
days of the date of its decision to suspend the redemption of stock, informing the Finance Agency
of the reasons for the suspension and of the Bank’s strategies and timeframes for addressing the
conditions that led to the suspension. The Finance Agency may require the Bank to re-institute the
redemption of stock. The Bank shall 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 VI.12. 13. Transition Provision. The Bank shall comply with the minimum
leverage and risk-based capital requirements specified in Sections 932.2 and 932.3 of the
Regulations, respectively, and each Member shall comply with the minimum stock investment
established in this Capital Plan, as of the Effective Date of this Capital Plan. Any Member who
immediately prior to the Effective Date does not have sufficient Bank stock to exchange for new
Class B Stock on the Effective Date to meet its minimum stock investment requirements as set forth
in this Capital Plan shall, pursuant to Section VI.3., of this Capital Plan, bring itself
into compliance with such requirements as of the Effective Date.

ARTICLE VII

LIQUIDATION OR MERGER OF THE BANK

In the event that the Bank is liquidated, or is merged or otherwise consolidated with another
Federal Home Loan Bank, the rights and obligations of the Members shall be as follows: (A) If the
Bank is merged or otherwise consolidated into another Federal Home Loan Bank (an “FHLBank”), the
Members shall have the option (after reasonable notice) to (1) receive par value for each share of
Class B Stock then owned by the Members; provided, however, that (i) the Bank first meets its
financial obligations to all non-Member creditors of the Bank (excluding the purchasing FHLBank
and/or the FHLBank into which the Bank is to be merged) and (ii) the Bank retains sufficient
reserve funds to accommodate reasonable debts that may arise or accrue after the date of the merger
or consolidation (excluding debts related to the merger); (2) remain Members of the FHLBank into
which the Bank is merged by converting or exchanging shares of Class B Stock for the stock of the
surviving FHLBank and by satisfying the terms and conditions set by the surviving FHLBank and the
Bank for such conversion or exchange, subject to the rights and obligations of Members of such
surviving FHLBank; or (3) accept such other terms and conditions as may be presented to the Members
at the time of the merger and/or consolidation. (B) If another FHLBank is merged or consolidated
into the Bank, Members’ rights and obligations with respect to their Class B Stock shall continue
to be as outlined in this Capital Plan as such Capital Plan may be modified and/or restated from
time to time. (C) If the Bank is liquidated, the assets of the Bank shall be distributed as then
directed by the Bank’s Board in compliance with this Capital Plan, the Act, the Regulations and any
applicable rulings of the Finance Agency.

The provisions of this Article VII are subject to the right of the Finance Agency otherwise to
liquidate, merge or consolidate the Bank in accordance with the authority granted to the Finance
Agency by the Act and the Regulations.

ARTICLE VIII

PERIODIC REVIEW AND AMENDMENT

1. Periodic Review. The Bank’s Board shall monitor and adjust, as necessary, the
numbers of shares of Class B Stock required to be held in Members’ Membership Stock Accounts and
Activity Stock Accounts to ensure that the amounts invested are sufficient to allow the Bank to
comply with its Capital Requirements. In addition, to maintain prudent capitalization and ongoing
compliance with the Act and the Regulations, the Bank’s Board shall review the Bank’s Capital Plan
at least once every calendar year to determine whether any amendments are required. Pursuant to
and consistent with the Act and the Regulations of the Finance Agency, the Bank shall amend this
Capital Plan as set forth in Section VIII.2. herein to effectuate any changes deemed
necessary.

2. Amendment. The Bank’s Board may, from time to time, adopt amendments to this
Capital Plan. All amendments shall be submitted to and approved by the Finance Agency before such
amendments will be effective. After receipt of approval from the Finance Agency, such amendments
shall be effective fifteen (15) days after the mailing or electronic posting of notice to the
Members, unless another date is specified in the notice.

ARTICLE IX

MISCELLANEOUS

1. Prompt Compliance: Use of Member Demand Deposit Accounts. Each Member shall
comply promptly with the terms and conditions of this Capital Plan and with any changes thereto
that may be adopted by the Bank from time to time, including any changes that may lead to an
increase in the number of a Member’s Required Shares. On or before the effective date of any such
change, the Member shall place sufficient immediately available funds in its demand deposit account
with the Bank to cover any necessary purchase of additional Required Shares. In order to
effectuate prompt compliance, the Bank is authorized to issue stock in the name of a Member and to
withdraw appropriate payment from the Member’s demand deposit account.

2. Maintenance and Interpretation of the Plan. The President of the Bank and/or his
designees shall have the right and the responsibility to (a) establish operating procedures for
implementation and maintenance of this Capital Plan and (b) interpret any issues that may arise
with respect to the application of the Capital Plan and its effect on any one or more Members of
the Bank in a manner consistent with the Act, the Regulations and any applicable rulings of the
Finance Agency.

3. Errors Discovered in Capital Stock Calculations. In the event that any inadvertent
error(s) are discovered regarding calculations made in reference to a Member’s Required Shares
and/or its Member Excess Stock, the Bank shall immediately correct such errors and make such
adjustments as are warranted to remedy the discovered error(s).

4. Liquidation of Claims Against a Member. Claims of the Bank against a Member,
including claims for any applicable prepayment fees or penalties resulting from prepayment of
advances prior to stated maturity, shall be liquidated in an orderly manner, as determined by the
Bank.

5. Calculation of Time Periods. Except for time periods related to the calculation
and payment of dividends, whenever any time period specified in this Capital Plan ends on a day on
which the Bank is not open for business, the time period shall be deemed to end on the following
business day.

6. Limitation on Discretion. Any discretion granted to the Bank’s Board under this
Capital Plan shall be limited by applicable authority accorded to the Finance Agency pursuant to
the Act and the Regulations.

7. Good Faith Determination. The Board of Directors of the Bank certifies that it has
made a good faith determination that the Bank will be able to implement this Capital Plan and that
the Bank will be in compliance with its regulatory total capital requirement and its regulatory
risk-based capital requirement after this Capital Plan is implemented.

ARTICLE X

RESTRICTED RETAINED EARNINGS

The provisions of Sections 1 through 4 of this Article X shall become
effective upon, and only upon, the occurrence of the Interim Capital Plan Amendment Implementation
Date as defined in this Retained Earnings Capital Plan Amendment. Until the Restriction
Termination Date, in the event of any conflict between Sections X.1. through X.4. and the
remainder of this Capital Plan, the applicable terms of Sections X.1. through X.4. shall
govern and shall be interpreted in a manner such that the restrictions set forth therein are
supplementary to, and not in lieu of, the requirements of the remainder of this Capital Plan.

1. Definitions Applicable to This Article X of the Capital Plan.

As used in this Article X, the following capitalized terms shall have the following meanings.
Other capitalized terms used but not defined in this Article X, shall have the meanings set forth
in Article II of this Capital Plan.

“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.

“Agreement” means the Joint Capital Enhancement Agreement adopted by the FHLBanks on the
Agreement Effective Date and amended on the date on which the Finance Agency 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 Agreement Effective Date.

“Agreement Effective Date” means February 28, 2011.

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

“Automatic Termination Event” means (i) a change in the Act or another applicable statute,
occurring subsequent to the Agreement Effective Date, that will have the effect of creating a new,
or higher, assessment or taxation on the net income or capital of the FHLBanks, or (ii) a change in
the Act, another applicable statute, or the Regulations, occurring subsequent to the Agreement
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.

“Automatic Termination Event Declaration Date” means the date specified in Section
X.1.a.i. or X.1.a.ii. of this Capital Plan.

“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 FHLBank System Consolidated Obligations
for which it is the primary obligor.

“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 statement, in which at
least two-thirds (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.

“Dividend” means a distribution of cash, stock or other property to a Stockholder with respect
to its holdings of capital stock.

“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).

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

“FHLBank 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, 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.

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

“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.

“Quarterly Net Income” means the amount of net income of the Bank for a calendar quarter
calculated in accordance with GAAP, after deducting the Bank’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.

“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.

“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.

“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 Agreement 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.

“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.

“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 X.4. of this Capital Plan.

“Retained Earnings” means the retained earnings of the Bank calculated pursuant to GAAP.

“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
this Article X to the Capital Plan.

“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.

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

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

2. Establishment of Restricted Retained Earnings.

a. 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.

b. Funding of Account.

(i) 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.

(ii) 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
X.2.b.iv. below, its Special Contribution Amount) to its Restricted Retained
Earnings.

(iii) 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: (A) 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; (B)
to the extent that its cumulative calendar year-to-date net income is negative at
the end of such quarter (x) 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 account at the end of such quarter is zero, and (y)
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 (C) 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 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.

(iv) 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 X.2.b.iii.A. and
X.2.b.iii.B.x. 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:
(A) the allocations made using the Special Contribution Amount; and (B) 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 X.2.b.iii.B.y. 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: (x) 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 (y) the Bank in subsequent quarters shall revert to paying at
least the Regular Contribution Amount.

(v) 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 subsection (iii) above is not a reallocation).

(vi) 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.

3. Limitation on Dividends, Stock Purchase and Stock Redemption.

a. General Rule on Dividends. From the REFCORP Termination Date through the
Restriction Termination Date, the Bank may not pay Dividends, or otherwise reallocate funds
(except as expressly provided in Section X.2.b.v., and further provided that a
reduction in the Restricted Retained Earnings account following a Net Loss pursuant to
Section X.2.b.iii. is not a reallocation), 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.

b. 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 Finance Agency falls below the Bank’s aggregate paid-in amount of capital stock.

4. Termination of Retained Earnings Capital Plan Amendment Obligations.

a. Notice of Automatic Termination Event.

(i) 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 Finance Agency)
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: (A) the date the specific
statutory change takes effect; or (B) 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 written notice to all of the
other FHLBanks, at least two-thirds (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 Finance Agency 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 Finance Agency, or is delivered to the Finance Agency by another
FHLBank pursuant to the terms of its capital plan, an Automatic Termination Event
Declaration Date shall be deemed to occur (except as provided in section
X.4.a.iii.

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 two-thirds (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 Finance
Agency that the specific statutory or regulatory change constitutes an Automatic
Termination Event. Such request must be filed with the Finance Agency 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.

(ii) Action by Finance Agency. The Bank may request a determination
from the Finance Agency 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 X.4.a.i.

If within 60 calendar days after the Bank delivers such a request to the Finance
Agency, or another FHLBank delivers such a request pursuant to its capital plan, the
Finance Agency 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
X.4.a.iii). The date of the Automatic Termination Event Declaration Date shall
be as of the expiration of such 60 calendar day period (except as provided in
Section X.4.a.iii) no matter on which day prior to the expiration of the 60
calendar day period the Finance Agency has provided its written determination.

If the Finance Agency fails to make a determination within 60 calendar days after an
FHLBank delivers such request to the Finance Agency, 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 subsection X.4.a.iii.); provided,
however, that the Finance Agency may make a written request for information from
that FHLBank, and toll such 60 calendar day period from the date that the Finance
Agency transmits its request until that FHLBank delivers to the Finance Agency
information responsive to its request.

If within 60 calendar days after an FHLBank delivers to the Finance Agency 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 Finance Agency 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.

(iii) Proviso as to Occurrence of Automatic Termination Event Declaration
Date. In no case under this Section X.4.a. may an Automatic Termination
Event Declaration Date be deemed to occur prior to: (A) the date the specific
statutory change takes effect; or (B) the date an interim final rule or final rule
effecting the specific regulatory change is published in the Federal Register.

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

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

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

(ii) 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 Finance Agency: (A) the date of the Automatic
Termination Event Declaration Date shall be an Allocation Termination Date; and (B)
one year from the date of the Automatic Termination Event Declaration Date shall be
a Restriction Termination Date.

(iii) Deletion of Operative Provisions of Retained Earnings Capital Plan
Amendment. Without any further action by the Bank or the Finance Agency, on the
Restriction Termination Date, this Article X of the Capital Plan shall be deleted.

Capital Plan of the Federal Home Loan Bank of Cincinnati

Schedule A Relating to Section VI.4.a.i.: Membership Stock

Illustrative Allocations of Membership Stock Among Members

	•	 	The total amount of required Membership Stock shall be determined by the Bank and
shall be allocated among Members based on a range of percentages applied to each Member’s
Total Assets, subject, however, to a minimum Membership Stock investment requirement of no
less than One Thousand Dollars ($1,000) or more than Fifty Thousand Dollars ($50,000) and a
maximum Membership Stock investment requirement of no less than Twenty-Five Million Dollars
($25,000,000) or more than Two Hundred Million Dollars ($200,000,000).

	•	 	Illustrative minimum and maximum Membership Stock investment requirements follow:

Minimum — $1,000 (One Thousand Dollars)

Maximum — $100,000,000 (One Hundred Million Dollars)*

* The Maximum Membership Stock requirement was reduced by Board of
Directors’ action to Twenty-Five Million Dollars ($25,000,000) effective November 28th,
2011. The previous Maximum Membership Stock requirement was Fifty Million Dollars ($50,000,000)
and became effective August 16th, 2010. The current investment requirement for any
Member with Total Assets in excess of $16.7 billion will be limited by the Maximum.

	•	 	The range of percentages shall vary inversely with the amount of each Members’ Total
Assets. Such percentages shall vary from three-tenths of one percent (0.30%) to
three-hundredths of one percent (0.03%).

	•	 	An illustrative range of percentages follows:

	 	 	 
	Total Amount of

Member’s Assets

(Dollars in Billions)

	 	

Percentage for Membership

Stock Allocation
	$0 — $25

	 	0.15 percent
	Greater than $25 to $50

	 	0.10 percent
	Greater than $50 to $75

	 	0.07 percent
	Greater than $75 to $100

	 	0.05 percent
	Greater than $100

	 	0.03 percent

	•	 	The amount of Membership Stock computed from applying the range of percentages is
cumulative. For example, a Member with Total Assets of $60.0 billion shall be required to
hold Membership Stock as the sum of (i) the first $25.0 billion of Total Assets at a rate of
0.15 percent, (ii) the next $25.0 billion of Total Assets at a rate of 0.10 percent, and (iii)
the last $10.0 billion of Total Assets at a rate of 0.07 percent. Such Member would be
required to hold $69.5 million of Membership Stock.*

	•	 	If the maximum Membership Stock requirement is $100.0 million and the range of percentages
is as given in the illustration above, any Member with Total Assets of $125.0 billion or
greater would be required to hold the maximum of $100.0 million in Membership Stock.

Provision for Determination of Membership Stock Amount

The examples above are illustrative only. As specified in Article VI, Section 4.a.i.,
the actual range of percentages and minimum and maximum Membership Stock investment requirements
shall be announced by the Bank’s Board of Directors with at least thirty (30) days prior written
notice to all Members.

2

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