Document:

Form of Advances and Security Agreement

 Exhibit 10.1 
  
 

 
  
 ADVANCES AND SECURITY AGREEMENT

  
 This ADVANCES AND SECURITY AGREEMENT (this
“Agreement”), dated as of the earlier of the date of execution by the Bank (as hereinafter defined) and [Insert latest date for execution], is entered into between [Insert Name of Borrower], a [Insert type of organization
and whether organized under federal or state law], having its principal place of business at [Insert Address] (the “Borrower”) and the Federal Home Loan Bank of Atlanta, a corporation organized and existing under
the laws of the United States, having its principal office at 1475 Peachtree Street, N.E., Atlanta, Georgia 30309 (the “Bank”). 
  
 WHEREAS, the Borrower desires from time to time to participate in the Bank’s credit programs under the terms of this Agreement, and the Bank is
authorized to extend credit to the Borrower pursuant to the provisions of the Federal Home Loan Bank Act, as now and hereafter amended, modified, supplemented or restated (the “Act”), and the regulations and guidelines of the
Federal Housing Finance Board (the “Board”) or any successor entity, as now and hereafter in effect, including all amendments, modifications, supplements and restatements thereto or thereof (collectively, the
“Regulations”); 
  
 WHEREAS, the Bank
requires that extensions of credit by the Bank be secured pursuant to this Agreement, and the Borrower and any Obligor (as hereinafter defined) joined to this Agreement from time to time, as provided herein, agree to provide the security the Bank
requests in accordance with this Agreement; and 
  
 WHEREAS, the
Borrower and each other Obligor acknowledges, understands and agrees that (a) the Bank shall not have any obligation or commitment (under this Agreement, the Credit and Collateral Policy, or otherwise) to approve any application by the Borrower for
Advances, Credit Products, Derivative Transactions, or Other Products, (b) the terms and conditions of any Advances, Credit Products, Derivative Transactions, or Other Products which the Bank may make or issue, except for any such terms and
conditions specified in a Confirmation, may change after the date made or issued, in connection with a modification to the Bank’s Credit and Collateral Policy as provided in Section 6.01 of this Agreement, and (c) the Bank, in its sole
discretion, may modify the Credit and Collateral Policy from time to time after the date of this Agreement and need not obtain any further consent from any Obligor in order for those modifications to become binding upon each Obligor. 
  
 NOW THEREFORE, the Borrower and the Bank agree as follows: 
  
 ARTICLE I: DEFINITIONS 
  
 Section 1.01 Definitions. As used herein, the following terms
shall have the following meanings: 
  
 (A)
“Advances” means any and all loans or other similar extensions of credit, heretofore, now or hereafter granted by the Bank to, on behalf of, or for the account of, the Borrower. 
  

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 (B) “Affiliate” means an affiliate of the Borrower which (i) has been accepted by
the Bank, in its sole discretion, as a person which may pledge collateral to the Bank and otherwise support the obligations of the Borrower to the Bank hereunder and (ii) has entered into a Joinder Agreement. The Affiliate and the Borrower are
hereinafter jointly referred to as the “Obligors.” 
  
 (C) “Application” means an application or other writing, in such form or forms as shall be specified by the Bank from time to time, by which the Borrower requests an Advance or a Credit Product, and by which an
Obligor requests a Derivative Transaction or an Other Product. 
  
 (D) “Borrowed Money” means, with respect to any Person, without duplication (a) all indebtedness for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (c) that portion of obligations with respect to capital leases that is properly classified as a liability on a balance sheet in conformity with GAAP, (d) any obligations of such Person issued or
assumed as the deferred purchase price of property or services purchased by such Person (other than trade debt incurred in the ordinary course of business and due within six months of the incurrence thereof or evidenced by a note or other
instrument), (e) all Borrowed Money of others secured by (or for which the holder of such Borrowed Money has an existing right, contingent or otherwise, to be secured by) any lien on, or payable out of the proceeds of production from, any property
or asset owned, held or acquired by such Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person, (f) all guaranty obligations of such Person in respect of
any Borrowed Money of any other person, (g) the maximum amount of all standby letters of credit issued or bankers’ acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the
extent unreimbursed), (h) the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product plus any accrued interest thereon, and (i) the
Borrowed Money of any partnership or unincorporated joint venture in which such Person is a general partner or joint venturer. 
  
 (E) “Borrowing Documents” means this Agreement (as amended by any and all Joinder Agreements and any and all Collateral Pledge
Amendments), all Applications, all Confirmations, and all Supplemental Documentation. 
  
 (F) “Capital Stock” means all of the capital stock in the Bank held by the Borrower and all payments which have been or hereafter are made on account of subscriptions to and all unpaid
dividends on such capital stock. 
  
 (G)
“Collateral” means (i) all property, including the products and proceeds thereof, heretofore assigned, transferred or pledged to the Bank by any Obligor as collateral for an Advance, a Credit Product, a Derivative
Transaction, an Other Product or any other Liability prior to the date hereof and (ii) all Capital Stock, Deposits, Residential First Mortgage Collateral, Commercial Mortgage Collateral, Multifamily Mortgage Collateral, Government and Agency
Securities Collateral, HELOC and Second Mortgage Collateral, Other Securities Collateral and Other Collateral, including 

  

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the products and proceeds thereof, which is now or hereafter pledged to the Bank pursuant to Section 3.01 hereof or any Joinder Agreement. 
  
 (H) “Collateral Maintenance Level” means the
aggregate dollar amount equal to such percentage(s) as the Bank may specify from time to time of all Liabilities (1) for Advances and Credit Products; (2) with respect to Derivative Transactions for which an Obligor is required to maintain
Collateral; and (3) with respect to any Other Product or under any Borrowing Documents. The Bank may increase or decrease the Collateral Maintenance Level at any time as provided in the Credit and Collateral Policy, and such increase or decrease, as
specified by the Bank, will apply to all existing as well as after-arising Liabilities. 
  
 (I) “Collateral Pledge Amendment” means a Collateral Pledge Amendment, substantially in the form attached hereto as Exhibit B, whereby the Obligors and the Bank have agreed to amend the
collateral pledge provisions of Section 3.01 (ii) hereof as provided therein. 
  
 (J) “Commercial Mortgage Collateral” means all notes, bonds, instruments, mortgages, deeds of trust, deeds to secure debt, security agreements, policies and certificates of insurance,
guarantees, evidences of recordation, applications, underwriting materials, surveys, appraisals, approvals, permits, notices, opinions of counsel, loan servicing data and all other electronically stored and written records or materials relating to
fully-disbursed loans held by any Obligor secured by a first lien on property improved by one or more commercial buildings, together with all rights and interests associated with such loans and documents, including all legal, beneficial, residual
and servicing rights, and any endorsements or assignments thereof. 
  
 (K) “Confirmation” means a confirmation, in such form or forms as the Bank may generate from time to time, by which the Bank agrees to, confirms and provides any additional terms with respect to any Advance, Credit
Product, Derivative Transaction, or Other Product. 
  
 (L)
“Credit and Collateral Policy” means the policies and procedures of the Bank governing the administration of its credit and other programs, including the requirements for maintenance of collateral to secure extensions of
credit by the Bank, as any such policies and procedures may be amended, supplemented, restated or otherwise modified from time to time hereafter, in accordance with Section 6.01. 
  
 (M) “Credit Products” means any and all commitments or obligations under which the Bank agrees to
make payments on behalf of or for the account of the Borrower, including letters of credit, guarantees or other arrangements intended to facilitate transactions between the Borrower and third parties, or under which the Bank enters into a credit or
financial accommodation, agreement or other arrangement with the Borrower, irrespective of whether the Bank’s obligation is contingent or conditional. 
  
 (N) “Deposits” means all deposit accounts maintained by any Obligor with the Bank, all money, cash, checks, drafts,
notices, bills, bills of exchange and bonds deposited therein or credited thereto, any increases, renewals, extensions, substitutions and replacements thereof, whether or not deposited in any such deposit account and all statements, certificates,
passbooks and instruments representing any such deposit account. 
  

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 (O) “Derivative Transactions” means all interest rate swaps, all interest rate
caps, floors and collars, all currency exchange transactions, all options and all similar transactions entered into between the Bank and any Obligor. 
  
 (P) “GAAP” means generally accepted accounting principles. 
  
 (Q) “Government and Agency Securities Collateral” means mortgage-backed securities (including
participation certificates) issued by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association, obligations guaranteed by the Government National Mortgage Association, and obligations issued or guaranteed by the United
States or an agency thereof. 
  
 (R) “HELOC and Second
Mortgage Collateral” means all notes, bonds, instruments, mortgages, deeds of trust, deeds to secure debt, security agreements, policies and certificates of insurance or guarantees, evidences of recordation, applications, underwriting
materials, surveys, appraisals, approvals, permits, notices, opinions of counsel and loan servicing data and all other electronically stored and written records or materials relating to home equity lines of credit held by any Obligor, loans held by
any Obligor secured by a junior lien on one-to-four unit single-family dwellings, or other similar loans held by any Obligor which have not been fully disbursed, together with all rights and interests associated with such loans and documents,
including all legal, beneficial, residual and servicing rights, and any endorsements or assignments thereof. 
  
 (S) “Joinder Agreement” means a joinder agreement, substantially in the form attached hereto as Exhibit A, whereby an Obligor has
agreed in writing to be primarily, jointly and severally liable for all obligations of all of the Obligors to the Bank under this Agreement and to pledge Collateral satisfactory to the Bank as security for such obligations. 
  
 (T) “Lendable Collateral Value” means an amount equal
to such percentage as the Bank shall from time to time, in its sole discretion, ascribe in the Credit and Collateral Policy to the market value or unpaid principal balances (as the Bank may specify or define) of Qualifying Collateral. 
  
 (U) “Liabilities” means all fees, expenses,
obligations, liabilities or indebtedness of any Obligor to the Bank, due or to become due, direct or indirect, absolute or contingent, joint or several, now existing or hereafter at any time created, arising or incurred, under this Agreement, any
Application, Confirmation, Supplemental Documentation, Advance, Derivative Transaction, Credit Product, Other Product or Deposit, including any overdrafts or other charges in connection therewith, or under any other obligation for any other service
provided by the Bank, including any obligations under indemnification provisions in any agreement or document between any Obligor and the Bank, and any renewal, extension or substitution of any such obligations, liabilities and indebtedness,
including reasonable attorneys’ fees of the Bank in the collection thereof and the enforcement of any remedies with respect to any Collateral therefor. 
  
 (V) “Material Adverse Effect” means (a) a material adverse effect upon the business, operations, properties, assets or condition
(financial or otherwise) of any Obligor, or (b) the impairment of the ability of any Obligor to perform its obligations under any Borrowing Document to which it is a party or of Bank to enforce any Borrowing Document or collect any of the
Liabilities. In determining whether any individual event would result in a Material Adverse Effect, 

  

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notwithstanding that such event does not of itself have such effect, a Material Adverse Effect shall be deemed to have occurred if the cumulative effect of
such event and all other then existing events would result in a Material Adverse Effect. In determining whether an event would result in a Material Adverse Effect on any Affiliate, a Material Adverse Effect shall be deemed to have occurred with
respect to such Affiliate if the effect of such event would result in a Material Adverse Effect on the Borrower and such Affiliate, taken as a whole. 
  
 (W) “Multifamily Mortgage Collateral” means all notes, bonds, instruments, mortgages, deeds of trust, deeds to secure debt,
security agreements, policies and certificates of insurance, guarantees, evidences of recordation, applications, underwriting materials, surveys, appraisals, approvals, permits, notices, opinions of counsel, loan servicing data and all other
electronically stored and written records or materials relating to the fully-disbursed loans held by any Obligor secured by a first lien on property improved by one or more multifamily buildings, together with all rights and interests associated
with such loans and documents, including all legal, beneficial, residual and servicing rights, and any endorsements or assignments thereof. 
  
 (X) “Obligors” means, collectively, the Borrower and any Affiliate joined hereunder as provided herein. 
  
 (Y) “Other Collateral” means such items of personal
property, other than Capital Stock, Deposits, Residential First Mortgage Collateral, Commercial Mortgage Collateral, Multifamily Mortgage Collateral, Government and Agency Securities Collateral, HELOC and Second Mortgage Collateral, and Other
Securities Collateral, that are offered by any Obligor as Collateral and are specifically accepted by the Bank as Collateral; provided, Other Collateral may from time to time include specific items of Residential First Mortgage Collateral,
Commercial Mortgage Collateral, Multifamily Mortgage Collateral and HELOC and Second Mortgage Collateral which are identified and offered by an Obligor as Collateral and are specifically accepted by the Bank as Collateral. 
  
 (Z) “Other Products” means all products and services,
other than an Advance, Credit Product or Derivative Transaction, offered by the Bank to any Obligor from time to time, including correspondent banking services, mortgage purchase programs and affordable housing and community investment products and
services. 
  
 (AA) “Other Securities Collateral”
means securities (other than Government and Agency Securities Collateral) representing unsubordinated interests in, or collateralized by first lien security interests in, both the interest and principal payments on first lien residential
mortgages. 
  
 (BB) “Person”
means an individual, partnership, corporation, trust, joint venture, joint stock company, limited liability company, association, unincorporated organization, governmental authority, or any other entity. 
  
 (CC) “Qualifying Collateral” means Collateral, other
than Capital Stock and Deposits, which is eligible as collateral to support the origination of Advances, Credit Products, Derivative Transactions and Other Products under the terms and conditions of the Act, the Regulations and the Credit and
Collateral Policy, and which satisfies such other requirements for lending as may be established by the Bank. 
  

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 (DD) “Residential First Mortgage Collateral” means all notes, bonds, instruments,
mortgages, deeds of trust, deeds to secure debt, security agreements, policies and certificates of insurance or guarantees, evidences of recordation, applications, underwriting materials, surveys, appraisals, approvals, permits, notices, opinions of
counsel and loan servicing data and all other electronically stored and written records or materials relating to fully-disbursed loans held by any Obligor secured by a first lien on one-to-four unit single family dwellings, together with all rights
and interests associated with such loans and documents, including all legal, beneficial, residual and servicing rights, and any endorsements or assignments thereof. 
  
 (EE) “Supplemental Documentation” means any document, agreement or other writing (other than this
Agreement) between the Bank and an Obligor relating to Deposits, Advances, Credit Products, Derivative Transactions and Other Products, including reimbursement agreements, mortgage purchase documents, wire transfer agreements, automated
clearinghouse agreements, agreements related to the loans held for sale program, International Swap Dealers Association (“ISDA”) master agreements, schedules to ISDA
master agreements and credit support annexes to ISDA master agreements. 
  
 Section 1.02 Other Definitional Provisions. References to “Sections,” “Subsections” and “Exhibits” shall be to Sections, Subsections and Exhibits, respectively, of this Agreement
unless otherwise specifically provided. Any of the terms defined in Section 1.01 may, unless the context otherwise requires, be used in the singular or the plural depending on the reference. In this Agreement, “hereof,” “herein,”
“hereto,” “hereunder” and the like mean and refer to this Agreement as a whole and not merely to the specific section, paragraph or clause in which the respective word appears; words importing any gender include the other gender;
references to “writing” include printing, typing, lithography, facsimile, electronic and other means of reproducing words or other data in a tangible visible form; the words “including,” “includes” and
“include” shall be deemed to be followed by the words “without limitation”; references to agreements and other contractual instruments shall be deemed to include subsequent amendments, assignments, and other modifications
thereto, but only to the extent such amendments, assignments and other modifications are not prohibited by the terms of this Agreement; references to Persons include their respective permitted successors and assigns or, in the case of governmental
Persons, Persons succeeding to the relevant functions of such Persons; and all references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations. 
  
 ARTICLE II: ADVANCES AGREEMENT 
  
 Section 2.01 Documentation. Subject to Section 6.03 hereof, the
Borrower may apply to the Bank for Advances, Credit Products, Derivative Transactions and Other Products in accordance with the Credit and Collateral Policy. The final terms of any Advance, Credit Product, Derivative Transaction or Other Product
shall be conclusively established by this Agreement and any Confirmation and Supplemental Documentation related thereto. Any Obligor shall be estopped from asserting any claim or defense with respect to the terms of any Confirmation or other
Supplemental Documentation that is not required to be signed by the Borrower applicable to any Advance, Credit Product, Derivative Transaction or Other Product unless, within the earlier of (i) any time period specified in any Confirmation or
Supplemental Documentation relating thereto and (ii) five (5) business days of receipt of the final documents relating to such product or service, the Borrower delivers to the Bank a written notice specifying the disputed term(s) or condition(s) of
the Advance, Credit Product, Derivative Transaction or Other Product. Upon the request of the Bank, 

  

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or as provided in the Credit and Collateral Policy, the Borrower shall sign and deliver to the Bank a promissory note or notes and such other Supplemental
Documentation in such form as the Bank may reasonably require evidencing any Advance, Credit Product, Derivative Transaction or Other Product. Unless otherwise agreed by the Bank in writing, all Advances shall be made by crediting the
Borrower’s demand deposit account(s) with the Bank. All Borrowing Documents shall be deemed to have been executed and delivered in Atlanta, Georgia, and all payments made under the Borrowing Documents shall be deemed to have been made in
Atlanta, Georgia. The Bank’s obligation to fund any portion of any approved Advance, issue any approved letter of credit, guaranty or financial accommodation relating to a Credit Product or continue under any Derivative Transaction or Other
Product shall be subject to (i) continuing compliance by the Obligors with the terms and provisions of this Agreement (ii) there having occurred no Event of Default hereunder and (iii) the continuing satisfaction by the Obligors of the credit and
collateral considerations of the Bank and the eligibility requirements and policies prescribed in the Act, the Regulations and the Credit and Collateral Policy. 
  

Section 2.02 Repayment of Liabilities. Each Obligor agrees, jointly and severally, to repay all Liabilities in accordance with this
Agreement, the Credit and Collateral Policy and the terms and conditions of the Confirmation and Supplemental Documentation evidencing such Liabilities. Interest shall be paid on all Liabilities at the times specified by the Bank in the Credit and
Collateral Policy and in the Confirmation or Supplemental Documentation and shall be charged for each day that such Liabilities are outstanding at the rate applicable to such Liabilities. Each Obligor shall pay to the Bank, immediately and without
demand, interest on any past due principal of and interest on any Liabilities at an interest rate which is the greater of (i) the rate applicable to such Liabilities plus one percent or (ii) the rate in effect and being charged by the Bank from time
to time on overdrafts on demand deposit accounts of its members, but in no event more than any applicable limit established by the Regulations (the “Default Rate”). The Borrower shall ensure that, on any day on which any
payment is due to the Bank with respect to any Liabilities, whether by maturity, prepayment or acceleration, the Borrower’s demand deposit account(s) with the Bank has an available balance in an amount at least equal to the amounts then due and
payable to the Bank, and the Borrower hereby authorizes the Bank to debit the Borrower’s demand deposit account(s) with the Bank for all amounts due and payable with respect to any Liabilities and for all other amounts due and payable
hereunder. In the event that the available balance in the Borrower’s demand deposit account(s) is insufficient to pay such due and payable amounts, the Bank may, without notice to or request from any Obligor, apply any other deposits, credits,
or monies of any Obligor then in the possession of the Bank to the payment of amounts due and payable. Each Obligor agrees that, in the event that any such debit results in any of the Borrower’s accounts with the Bank being overdrawn, the
Obligor shall immediately reimburse the Bank for such overdraft amount and pay overdraft charges thereon at the Default Rate, in addition to any minimum fees for overdrafts imposed by the Bank from time to time. All payments with respect to
Liabilities shall be applied first to any fees or charges applicable thereto and to interest due thereon, in such order as the Bank may determine, and then to any principal amount thereof that is then due and payable. 
  
 Section 2.03 Payment of Prepayment Charges. All prepayment fees
and charges described in the Credit and Collateral Policy, or in any Application, Confirmation or Supplemental Documentation, shall be payable at the time of any voluntary or involuntary payment of all or part of the principal of any Liabilities
prior to the originally scheduled maturity thereof, including without limitation payments that are made as a part of a liquidation of any Obligor or that become due by operation of law or as a result of an acceleration pursuant to Section 5.02
hereof, whether such 

  

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payment is made by any Obligor, by a conservator, receiver, liquidator or trustee of or for any Obligor, or by any successor to or any assignee of any
Obligor. 
  
 Section 2.04 Compliance with the Credit and
Collateral Policy. Each Obligor hereby agrees to comply at all times with the Credit and Collateral Policy. 
  
 ARTICLE III: SECURITY AGREEMENT 
  
 Section 3.01 Creation of Security Interest. As security for all Liabilities, the Borrower hereby assigns, transfers, and pledges to the Bank, and grants to the Bank a security interest in, (i) all
property assigned, transferred or pledged by the Borrower to the Bank as collateral securing Liabilities and other obligations of the Borrower as of the date hereof, (ii) except as otherwise provided in a Collateral Pledge Amendment, all of the
Capital Stock, Deposits, Residential First Mortgage Collateral, Commercial Mortgage Collateral, Multifamily Mortgage Collateral and HELOC and Second Mortgage Collateral now or hereafter owned by the Borrower and (iii) all of the Government and
Agency Securities Collateral, Other Securities Collateral, and Other Collateral, specifically identified by the Borrower to the Bank as Collateral and accepted by the Bank, and all proceeds and products of any items of the Collateral described in
clauses (i) through (iii) above. In addition, as security for all Liabilities, each Affiliate will assign, transfer and pledge to the Bank, and grant to the Bank a security interest in, the Collateral set forth in its Joinder Agreement. 

 
 Section 3.02 Representations and Warranties Concerning
Collateral. Each Obligor represents and warrants to the Bank, as of the date hereof, the date of each Advance, Credit Product, Derivative Transaction or Other Product, and the date of delivery of each collateral report required under Section
3.06(A) hereof, as follows: 
  
 (A) The Obligor owns and has
marketable title to the Collateral pledged by it hereunder and has the right and authority to grant a security interest in such Collateral and to subject all of such Collateral to this Agreement; 
  
 (B) The information given from time to time by the Obligor as to each item of
Collateral pledged by it hereunder is true, accurate and complete in all material respects; 
  
 (C) The Obligors own Qualifying Collateral with a Lendable Collateral Value at least equal to the Collateral Maintenance Level; 
  

(D) The lien of the Residential First Mortgage Collateral, Commercial Mortgage Collateral and Multifamily Mortgage Collateral on the real property
securing such Collateral is a first, prior and perfected lien under applicable law; 
  
 (E) The Obligor has not conveyed or otherwise created, and there does not otherwise exist, any participation interest or other direct, indirect, legal, or beneficial interest, lien or encumbrance in any Collateral on
the part of any Person other than the Bank and the Obligor, except that the Obligor may sell or otherwise dispose of Collateral not necessary to meet the requirements of Section 3.03(A), and not otherwise reported to the Bank as Qualifying
Collateral for purposes of meeting the requirements of Section 3.03(A); provided, however, any sale of Collateral to a person controlling, controlled by or in common control with any Obligor, except to any other Obligor that also pledges such
Collateral to the Bank, must be at fair market value and on terms and conditions that are fair and reasonable to such Obligor; 
  

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 (F) To the best knowledge of the Obligor, after reasonable inquiry, no account debtor or other obligor
owing any obligation to the Obligor with respect to any Qualifying Collateral necessary to meet the collateral maintenance requirement in Section 3.03(A) hereof, or otherwise reported to the Bank as Qualifying Collateral for purposes of meeting the
requirements of Section 3.03(A), has or shall have any defenses, offsetting claims, or other rights affecting the right of the Obligor or the Bank to enforce the terms of such Qualifying Collateral, and no defaults (or conditions that, with the
passage of time or the giving of notice or both, would constitute a default) exist under any such Qualifying Collateral; provided, however, that promptly upon discovery by the Bank or the Obligor of any such defenses, offsetting claims,
rights affecting the rights of the Obligor or the Bank to enforce the terms of such Qualifying Collateral, or any defaults (or conditions that, with the passage of time or the giving of notice or both, would constitute a default), in addition to any
other remedies of the Bank under this Agreement, the Obligor shall replace such items of Collateral not in compliance with the provisions of this Section 3.02(F) with an equal amount of Qualifying Collateral meeting all requirements of this
Agreement and the Credit and Collateral Policy; and 
  
 (G) To the
best knowledge of the Obligor, after reasonable inquiry, no part of any real property or interest in real property that is included within the Collateral contains or is subject to the effects of toxic or hazardous materials or other hazardous
substances (including those defined in the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, 42 U.S.C. §9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. §1801 et seq.; the Resource
Conservation and Recovery Act, 42 U.S.C. §6901 et seq.; and in the regulations adopted and publications promulgated pursuant to said laws) the presence of which could reasonably subject the Bank to any liability under applicable state or
Federal law or local ordinance either at any time that such property is pledged to the Bank or upon the enforcement by the Bank of its security interest therein. 
  
 Section 3.03 Collateral Maintenance Requirement. 
  
 (A) The Obligors shall at all times maintain Qualifying Collateral which has a Lendable Collateral Value that is at least
equal to the Collateral Maintenance Level. At any time the Obligors fail to maintain such Qualifying Collateral, as reasonably determined by the Bank, in addition to any other remedies of the Bank under this Agreement, the Obligors agree to assign,
transfer and pledge, and grant to the Bank a security interest in, such additional amounts of Collateral as may be deemed necessary by the Bank for its protection in accordance with Section 10(d) of the Act. 
  
 (B) All documents and other matters pertaining to the Qualifying Collateral
necessary to meet the requirements of Section 3.03(A), or otherwise reported to the Bank as Qualifying Collateral for purposes of meeting the requirements of Section 3.03(A), must be satisfactory to the Bank and, if not, the Bank may refuse to
accept such Qualifying Collateral or may assign such Qualifying Collateral a Lendable Collateral Value less than the Lendable Collateral Value otherwise applicable under the Credit and Collateral Policy. 
  
 (C) No Obligor shall assign, pledge, transfer, create any lien, encumbrance
or security interest in, sell, or otherwise dispose of any Collateral; provided, however, (i) an Obligor may sell or otherwise dispose of Collateral not necessary to meet the requirements of Section 3.03(A) and not otherwise reported to the
Bank as Qualifying Collateral for purposes of meeting the requirements of Section 3.03(A), so long as (A) no Event of Default has occurred and is continuing and (B) any sale of Collateral to a person controlling, controlled by or in common control
with any Obligor, except 

  

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to any other Obligor that also pledges such Collateral to the Bank, is made at fair market value and on terms and conditions that are fair and reasonable to
such Obligor, and (ii) upon the written request of the Obligors, the Bank will agree to release such Collateral as shall be mutually agreeable to the Bank and the Obligors so long as such Collateral to be released is not necessary to meet the
requirements of Section 3.03(A) and not otherwise reported to the Bank as Qualifying Collateral for purposes of meeting the requirements of Section 3.03(A). 
  
 Section 3.04 Holding of Collateral. 
  
 (A) Each Obligor shall hold any Collateral in its possession in such manner as reasonably identifies the security interest of the Bank and as the Bank
shall further direct. 
  
 (B) Except for Collateral required to be
delivered to the Bank or its custodian as required hereunder, Collateral shall be held by each Obligor in its possession (except as otherwise provided herein) in trust for the benefit of, and subject to the direction, and control of, the Bank and
shall be physically safeguarded by the Obligor in accordance with reasonable commercial procedures. To the extent that any Obligor enters into any custodial arrangement with respect to the Collateral, the Obligor shall notify the Bank in writing of
such arrangement, shall provide the Bank with copies of all agreements evidencing such arrangement, which shall be satisfactory to the Bank in all respects, and shall cause such agreements to provide that the custodian holds the Collateral for the
benefit of the Bank and no other person and that the custodian shall accept instructions from the Bank with respect to the Collateral. Without limitation of the foregoing, each Obligor shall take all action necessary or desirable to protect and
preserve the Collateral and the Bank’s interest therein, including, the collection of payments under all mortgages and under any insurance, assuring that all mortgages are serviced in accordance with the standards of a reasonable and prudent
mortgagee and compliance with all requirements with respect to the Collateral set forth in the Credit and Collateral Policy. 
  
 (C) Any Collateral which is a security or other investment property shall be delivered to the Bank, together with such assignments, powers and other
documents as the Bank shall require in connection with its perfected, first-priority security interest in such Collateral. With respect to any uncertificated securities pledged to the Bank as Collateral hereunder, the delivery requirements contained
in this Agreement shall be satisfied by the transfer of a perfected, first-priority security interest in such securities to the Bank, such transfer to be effected in such manner and to be evidenced by such documents as shall be reasonably specified
by the Bank. 
  
 Section 3.05 Delivery of Collateral.

  
 (A) Promptly upon the Bank’s written request, or as
provided in the Credit and Collateral Policy, the Obligors shall deliver to the Bank, or to a custodian designated by the Bank, such Qualifying Collateral as may be necessary so that the Lendable Collateral Value of Qualifying Collateral held by the
Bank, or such custodian, meets or exceeds the Collateral Maintenance Level at all times. Collateral delivered to the Bank shall be endorsed and assigned, as appropriate, in such form as reasonably specified by the Bank and together with such
information with respect to such Collateral as the Bank shall request. 
  
 (B) Each Obligor agrees to pay to the Bank such reasonable fees and charges as may be assessed by the Bank to cover the Bank’s overhead and other costs relating to the receipt, holding 

  

 10 

 
and redelivery of Collateral and other reasonable expenses, disbursements and advances incurred or made by the Bank in connection therewith (including the
reasonable compensation and the expenses and disbursements of any custodian, consultant or appraiser that may be appointed by the Bank hereunder, and the agents and legal counsel of the Bank and of such custodian). 
  
 Section 3.06 Collateral Reports; Access to Collateral.

  
 (A) At the times provided in the Credit and Collateral
Policy, and promptly after any additional requests by the Bank, each Obligor shall deliver to the Bank such information, reports, verification reviews and schedules with respect to the Collateral, the Qualifying Collateral and compliance with this
Agreement and the Credit and Collateral Policy as provided in the Credit and Collateral Policy, or as the Bank shall request, all in form and substance as prescribed by the Bank. 
  
 (B) Each Obligor shall provide the Bank with such financial reports and other information relating to such Obligor’s
financial condition as the Bank may reasonably request. 
  
 (C)
Each Obligor shall give the Bank, its agents and representatives access at reasonable times and locations to the Collateral, and to such Obligor’s books and records of account relating to such Collateral, for the purpose of the Bank or its
agents and representatives examining, verifying or reconciling the Collateral and such Obligor’s reports to the Bank thereon. At the Bank’s request, the Obligors shall make any or all documents and information pertaining to the Collateral
available to the Bank, its agents and representatives at reasonable times and locations for their inspection and approval. Each Obligor shall make adequate working facilities available to the Bank, its agents and representatives for purposes of such
verifications and reviews. Reasonable fees and charges may be assessed to the Obligors by the Bank to cover overhead and other costs relating to such verifications and reviews, including, any costs and expenses of third parties engaged by the Bank
for such purposes. 
  
 (D) If any Obligor becomes aware or has
reason to believe that the Lendable Collateral Value of such Obligors’ Qualifying Collateral has fallen below the Collateral Maintenance Level, that a contingency exists which with the lapse of time could result in such Obligors’ failure
to meet the Collateral Maintenance Level, or any event has occurred which could reasonably be expected to have a Material Adverse Effect on such Obligor, such Obligor shall immediately notify the Bank. 
  
 (E) Each Obligor shall notify the Bank prior to (i) any change in such
Obligor’s name, charter or other such similar organizational documents filed with any governmental entity, jurisdiction of organization, or form of organization and (ii) any event that could result in a change in such Obligor’s
“location” as defined in the Uniform Commercial Code. 
  
 Section 3.07 Additional Documentation; Further Assurances. 
  
 (A) Each Obligor shall, or the Bank may, in lieu of the Obligor, make, execute, record and deliver such agreements, financing statements, notices, assignments, listings, powers, and other documents with respect to the
Collateral and the Bank’s first-priority security interest therein and in such form as the Bank may reasonably require. Each Obligor shall, upon request of the Bank, immediately take such actions as the Bank shall deem necessary or appropriate
to perfect the Bank’s first-priority security interest in the Collateral or otherwise to obtain, preserve, protect, enforce or collect the Collateral or the proceeds thereof. 
  

 11 

 (B) The Bank may from time to time hereafter require any Obligor to provide representations, warranties,
and undertakings, in addition to those contained herein, reasonably related to the securing, perfecting, maintaining or enforcing of the Bank’s rights and interests in the Collateral. 
  
 Section 3.08 Bank’s Responsibilities as to Collateral. The
Bank’s duty as to the Collateral shall be solely to use reasonable care in the custody and preservation of the Collateral in its possession, which shall not include any steps necessary to preserve rights against prior parties nor the duty to
send notices, perform services, or take any action in connection with the management of the Collateral. The Bank shall not have any responsibility or liability for the form, sufficiency, correctness, genuineness or legal effect of any instrument or
document constituting a part of the Collateral, or any signature thereon or the description or misdescription, or value of property represented, or purported to be represented, by any such document or instrument. Each Obligor agrees that any and all
Collateral may be removed by the Bank from the state or location where situated, and may be subsequently dealt with by the Bank as provided in this Agreement. 
  

Section 3.09 Bank’s Rights as to Collateral; Power of Attorney. At any time or times, at the expense of the Obligors, the Bank may
in its discretion, before the occurrence of an Event of Default as defined in Section 5.01 hereof in the case of (A), (C), (E), (F) or (H) below, or after the occurrence of an Event of Default in the case of (B), (D), (G) or (I) below, in its own
name or in the name of its nominee or of any Obligor, do any or all things and take any and all actions that are pertinent to the protection of the Bank’s interest hereunder and are lawful under applicable law, so long as such rights are
exercised in good faith and in a commercially reasonable manner, including, but not limited to, the following: 
  
 (A) Terminate any waiver, consent or forbearance given in connection with this Agreement; provided, however, any Event of Default which may result
as a consequence of the termination of any such waiver, consent or forbearance shall not be deemed to have occurred unless such Event of Default has not been cured within three days following the termination of such waiver, consent or forbearance;

  
 (B) Notify obligors on any Collateral to make payments or
render performance thereon directly to the Bank; 
  
 (C) Endorse
any Collateral in any Obligor’s name; 
  
 (D) Enter into any
extension, compromise, settlement, or other agreement relating to or affecting any Collateral; 
  
 (E) Take any action any Obligor is required to take or which is otherwise reasonably necessary to file a financing statement, take possession of Collateral as described in Section 3.05(A) of this Agreement, obtain
control of Collateral or otherwise perfect a security interest in any or all of the Collateral. 
  
 (F) Take any action any Obligor is permitted to take in connection with the Collateral that is pertinent to the protection of the Bank’s interest
hereunder, to the same extent as if the Bank were the originator of the Collateral; 
  

 12 

 (G) Take control of any funds or other proceeds generated by the Collateral and use the same to reduce
Liabilities as they become due; 
  
 (H) Cause the Government and
Agency Securities Collateral and the Other Securities Collateral to be transferred to its name or the name of its nominee; and 
  
 (I) Cause the Collateral to be transferred to its name or the name of its nominee. 
  
 Each Obligor hereby appoints the Bank as its true and lawful attorney, for and on behalf of the Obligor and in its name, place and stead, to
prepare, execute and record endorsements and assignments to the Bank of all or any item of Collateral, giving or granting to the Bank, as such attorney, full power and authority to do or perform every lawful act necessary or proper in connection
therewith as fully as the Obligor might or could do. Each Obligor hereby ratifies and confirms all that the Bank shall lawfully do or cause to be done by virtue of this special power of attorney. This special power of attorney is granted for a
period commencing on the date hereof and continuing until the discharge of all Liabilities and all obligations of the Obligors hereunder regardless of any default by any Obligor, is coupled with an interest, and is irrevocable for the period
granted. This special power of attorney may be exercised only in accordance with the terms and provisions of this Agreement. 
  
 Section 3.10 Proceeds of Collateral. Each Obligor, as the Bank’s agent, shall collect all payments when due on all Collateral. If the
Bank so requires, after the occurrence of an Event of Default, each Obligor shall hold such collections separate from its other monies in one or more designated cash collateral accounts maintained at the Bank and apply them to the reduction of
Liabilities as they become due; otherwise, the Bank consents to the Obligors’ use and disposition of all such collections. 
  
 ARTICLE IV: ADDITIONAL REPRESENTATIONS, 
 WARRANTIES AND COVENANTS 
  
 Section 4.01
General Representations and Warranties by the Obligors. Each Obligor hereby represents and warrants that, as of the date hereof, the date of each Advance, Credit Product, Derivative Transaction or Other Product, and the date of delivery
of each collateral report required under Section 3.07(A) hereof: 
  
 (A) Such Obligor is not, and neither the execution of nor the performance of any of the transactions or obligations of such Obligor under this Agreement shall, with the passage of time, the giving of notice or otherwise, cause such Obligor
to be: (i) in violation of its charter or articles of incorporation, by-laws, the Act or the Regulations, any other law or administrative regulation, or any court decree, which could reasonably be expected to have a Material Adverse Effect on such
Obligor; or (ii) in default under or in breach of any indenture, contract or other instrument or agreement to which such Obligor is a party or by which it or any of its property is bound, which default or breach could reasonably be expected to have
a Material Adverse Effect on such Obligor; 
  
 (B) Such Obligor
has full corporate power and authority and has received all corporate and governmental authorizations and approvals (including those required under the Act and the Regulations) as may be required to enter into and perform its obligations under this
Agreement and to obtain any Derivative Transaction or Other Product, and the Borrower has full corporate power 

  

 13 

 
and authority and has received all corporate and governmental authorizations and approvals (including those required under the Act and the Regulations) as
may be required to borrow each Advance and to obtain each Credit Product, Derivative Transaction and Other Product; 
  
 (C) The information given by such Obligor herein or in any Application, Confirmation or Supplemental Documentation, or in any other written statement made
in connection with transactions contemplated thereunder, is true, accurate and complete in all material respects; 
  
 (D) The name, location (as defined in the Uniform Commercial Code) and corporate form of such Obligor is, and for the lesser of its entity existence or
the four months prior to the date of this Agreement has been, the same as set forth in the opening paragraph of this Agreement or in a Joinder Agreement; 
  
 (E) All financial statements concerning such Obligor which have been furnished to the Bank or will hereafter be furnished to the Bank pursuant to this
Agreement or any Joinder Agreement, have been or will be prepared in accordance with GAAP consistently applied (except as disclosed therein) and do or will present fairly the financial condition of the entities covered thereby as at the dates
thereof and the results of their operations for the periods then ended, subject to, in the case of unaudited financial statements, the absence of footnotes and year-end adjustments; 
  
 (F) Since the date of the most recent audited financial statements of such Obligor referred to in Section 4.01 (E) above,
there have been no events or changes in facts or circumstances affecting such Obligor which individually or in the aggregate have had or could reasonably be expected to have a Material Adverse Effect on such Obligor; 
  
 (G) (i) Such Obligor is not the subject of any review or audit by any
governmental or regulatory investigation concerning the violation or possible violation of any law (except for routine examinations in connection with which no violation or possible violation has been identified by such governmental or regulatory
entity) which could reasonably be expected to result in any Material Adverse Effect on such Obligor and (ii) there are no judgments outstanding against such Obligor or affecting any property of such Obligor, nor is there any action, charge, claim,
demand, suit, proceeding, petition, governmental investigation or arbitration now pending or, to the best knowledge of such Obligor after due inquiry, threatened against or affecting such Obligor or any property of such Obligor which could
reasonably be expected to result in any Material Adverse Effect on such Obligor; 
  
 (H) To such Obligor’s best knowledge, after reasonable investigation, none of the proceeds of any Advance (or other credit extension hereunder) will be used in connection with any “reportable
transaction” within the meaning of Treasury Regulation Section 1.601 l-4(b) or in connection with any “potentially abusive tax shelter” within the meaning of Section 6112(b) of the Internal Revenue Code of 1986, as amended; and

  
 (I) Each Borrowing Document is and will remain
(notwithstanding any amendment thereto occurring after the date of this Agreement) the legally valid and binding obligation of such Obligor, enforceable in accordance with its terms. 
  

 14 

 Section 4.02 General Covenants by the Obligors. Until the termination of this Agreement and
the indefeasible satisfaction in full of all of the Liabilities: 
  
 (A) To the extent that the Borrower relies upon the Lendable Collateral Value of Qualifying Collateral owned by an Affiliate in obtaining or maintaining any Advance (or other extension of credit under the Borrowing Documents), the Borrower
will use, directly or indirectly, all of the proceeds of such Advance (or other extension of credit) in a manner that shall result in such Affiliate receiving valuable consideration, fair value, fair consideration and reasonable equivalent value in
exchange for the pledging of such Qualifying Collateral to the Bank; and 
  
 (B) Each Obligor will (a) comply with (i) the requirements of all applicable laws, rules, regulations and orders of any governmental authority (including, laws, rules, regulations and orders relating to taxes,
employer and employee contributions, securities, employee retirement and welfare benefits, environmental protection matters, employee health and safety and credit protection, anti-predatory and fair lending) as now in effect and which may be imposed
in the future in all jurisdictions in which such Obligor is now doing business or may hereafter be doing business and (ii) the obligations, covenants and conditions contained in all binding contracts of such Obligor, as applicable, other than those
laws, rules, regulations, orders and provisions of such contracts the noncompliance with which could not be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect, and (b) maintain or obtain all licenses,
qualifications and permits now held or hereafter required to be held by such Obligor, for which the loss, suspension, revocation or failure to obtain or renew, could reasonably be expected to have, either individually or in the aggregate, a Material
Adverse Effect. This subsection shall not preclude any Obligor from contesting any taxes or other payments, if they are being diligently contested in good faith in a manner which stays enforcement thereof and if appropriate expense provisions have
been recorded in conformity with GAAP. 
  
 ARTICLE V: DEFAULT;
REMEDIES 
  
 Section 5.01 Events of Default.
Each of the following events shall constitute an Event of Default hereunder: 
  
 (A) Failure of any Obligor to pay when due any interest on or principal of any liabilities; or 
  
 (B) Failure of any Obligor to perform any promise or obligation or to satisfy any condition or liability contained herein, or in any Application,
Confirmation or Supplemental Documentation, or the occurrence of a default or an event of default under any Supplemental Documentation; or 
  
 (C) Any representation, statement, covenant or warranty made or furnished in any manner to the Bank by or on behalf of any Obligor in connection with this
Agreement or any Application, Confirmation, Supplemental Documentation, Liabilities or Collateral was false in any material respect when made or furnished; or 
  

(D) The issuance of any tax, levy, seizure, attachment, garnishment, levy of execution, or other process with respect to the Collateral which has not
been stayed within 60 days after the issuance thereof; or 
  
 (E)
Any suspension of payment by any Obligor to any creditor of sums due under or the occurrence of any event which results in another creditor having the right to accelerate the maturity 

  

 15 

 
of any indebtedness of any Obligor under any security agreement, indenture, loan agreement, or comparable undertaking which could reasonably be expected to
have a Material Adverse Effect on any Obligor; or 
  
 (F)
Appointment of a conservator, receiver, or similar official for any Obligor or any subsidiary of any Obligor, of any Obligor’s property, entry of a judgment or decree adjudicating any Obligor or any subsidiary of any Obligor insolvent or
bankrupt or an assignment by any Obligor or any subsidiary of any Obligor for benefit of creditors; or 
  
 (G) Sale by any Obligor of a material part of such Obligor’s assets or the taking of any other action by any Obligor to liquidate or dissolve; or

  
 (H) Termination for any reason of the Borrower’s
membership in the Bank, failure of the Borrower to comply with the stock purchase requirements of the Bank in effect from time to time, or the Borrower’s ceasing to be eligible to become a member of the Bank or any Obligor ceasing to be
eligible to pledge Collateral or support the obligations of the Borrower hereunder under the Act, the Regulations or the Credit and Collateral Policy; or 
  
 (I) Merger, consolidation or other combination of any Obligor with an entity that is not a member of the Bank if the nonmember entity is the surviving
entity; or 
  
 (J) Any Obligor or any of its respective directors,
executive officers or senior officers is criminally indicted or convicted of or under a felony or a crime, each of which involves fraud against or in relation to such Obligor, and such indictment or conviction could reasonably be expected to have a
Material Adverse Effect on such Obligor; or 
  
 (K) Any event
which could reasonably be expected to have a Material Adverse Effect on any Obligor. 
  
 For purposes of Section 5.01 (G), “material part” means a sale of assets (in one or a series of transactions) by any Obligor, other than in the ordinary course of such Obligor’s business, in any given fiscal
year, the book value of which exceeds an amount equal to such Obligor’s TIER 1 capital, or if TIER 1 capital is not available, total capital as determined by such Obligor’s, or the Borrower’s, primary regulator, at the close of the
immediately preceding fiscal year. 
  
 Section 5.02
Acceleration; Other Remedies. Upon the occurrence of an Event of Default, in addition to any other remedies provided herein, in any Supplemental Documentation or at law or in equity, the Bank may at its option, by a notice to the
Borrower, declare all or any part(s) of the Liabilities and accrued interest thereon, including any prepayment fees or charges which are applicable thereto, to be immediately due and payable, without presentment, demand, protest, or any further
notice. Furthermore, upon the occurrence of an Event of Default, the Bank shall have all of the rights and remedies provided by applicable law, which shall include, but not be limited to, all of the remedies of a secured party under the Uniform
Commercial Code as in effect in the State of Georgia. In addition, the Bank may take immediate possession of any of the Collateral or any part thereof wherever the same may be found. The Bank may sell, assign and deliver the Collateral or any part
thereof at public or private sale for such price as the Bank deems appropriate without any liability for any loss due to decrease in the market value of the Collateral during the period held. The Bank shall have the right to purchase all or part of
the Collateral at such sale. If the Collateral 

  

 16 

 
includes insurance or securities which will be redeemed by the issuer upon surrender, or any accounts or deposits in the possession of the Bank, the Bank may
realize upon such Collateral without notice to any Obligor. If any notification of intended disposition of any of the Collateral is required by applicable law, such notification shall be deemed reasonable and properly given if given as provided by
applicable law or in accordance with Section 6.06 hereof at least ten days before any such disposition. The proceeds of any sale shall be applied in the order that the Bank, in its sole discretion, may choose, subject to applicable law. Each Obligor
agrees that the Bank may exercise any and all of its rights of setoff upon the occurrence of an Event of Default. Notwithstanding any other provision hereof, upon the occurrence of any Event of Default at any time when all or part of the Liabilities
shall be the subject of a guarantee by a third party for the Bank’s benefit, and there shall be other outstanding obligations of any Obligor to the Bank that are not so guaranteed, but that are secured by the Collateral, then any sums realized
by the Bank from the Collateral, or from any other collateral pledged or furnished to the Bank by any Obligor under any other agreement, shall be applied first to the satisfaction of such other nonguaranteed obligations and then to such
Obligor’s guaranteed obligations hereunder. Each Obligor agrees to pay all the costs and expenses of the Bank in the collection of the liabilities and enforcement of the Bank’s rights and remedies in case of default, including, reasonable
attorneys’ fees. The Bank shall, to the extent required by law, apply any surplus, after (i) payment of the Liabilities, (ii) provision for repayment to the Bank of any amounts to be paid or advanced under Other Credit Products, and (iii)
payment of all costs of collection and enforcement, to the claims of person(s) legally entitled thereto, with any remaining surplus paid to the Borrower. Each Obligor shall be liable to the Bank for any deficiency remaining. 
  
 Section 5.03 Certain Provisions as to Sale of Collateral. The
Bank may, from time to time after the occurrence of an Event of Default, attempt to sell certain Collateral by means of a private placement. In so doing, the Bank may restrict the bidders and prospective purchasers to those who will represent and
agree that they are purchasing for investment only and not for distribution or otherwise impose restrictions deemed appropriate by the Bank for the purpose of complying with the requirements of applicable securities laws. The Bank may solicit offers
to buy such Collateral, for cash or otherwise, from a limited number of investors deemed by the Bank to be responsible parties who might be interested in purchasing such Collateral. If the Bank solicits offers from not less than three such
investors, then the acceptance by the Bank of the highest offer obtained therefrom (whether or not three offers are obtained) shall be deemed to be a commercially reasonable method of disposing of the Collateral. 
  
 ARTICLE VI: MISCELLANEOUS 
  
 Section 6.01 Changes to Credit and Collateral Policy. The Bank
reserves the right to amend, supplement, restate or otherwise modify the Credit and Collateral Policy (each, a “Policy Modification”) at any time, in its sole discretion, without the consent of any Obligor, and each Obligor
hereby (i) acknowledges and agrees that this Agreement shall be deemed to have been amended by each such Policy Modification, (ii) acknowledges and agrees that each such Policy Modification shall apply to all Advances, Credit Products, Derivative
Transactions and Other Products (whether outstanding on the date of such Policy Modification or issued after the date thereof) and (iii) agrees to be bound by each and every Policy Modification occurring on, prior to, or after the date of this
Agreement. Each Policy Modification shall become effective immediately upon adoption by the Bank; provided, however, no Event of Default shall occur as a result of any Policy Modification until 90 days after the effective date of such
Policy Modification. The Bank shall provide notice of any Policy Modification in writing, which may include by electronic mail, to the 

  

 17 

 
Borrower no later than 30 days after the effective date of such Policy Modification; provided, however, such notice shall be deemed effective when
given by the Bank, whether or not actually received by the Borrower. Notwithstanding the provisions of this section, the Bank shall not amend, supplement, restate or otherwise modify the terms and conditions of any Advance, Credit Product,
Derivative Transaction or Other Product specified in a Confirmation, without the consent of the Borrower. 
  
 Section 6.02 Assignment. Each Obligor hereby gives the Bank the full right, power and authority to pledge or assign to any party all or part
of the Liabilities, together with all or any part of the Collateral, as security for consolidated Federal Home Loan Bank obligations issued pursuant to the provisions of the Act or for any other purpose authorized by the Act, the Regulations or the
Federal Housing Finance Board. In case of any such pledge or assignment, the Bank shall have no further responsibility with respect to Collateral transferred to the pledgee or assignee. The Obligors may not (whether voluntarily, involuntarily, by
operation of law or otherwise) assign or transfer any of their rights or obligations hereunder or with respect to any Advance, Credit Product, Derivative Transaction or Other Product without the express prior written consent of the Bank. The Bank
may at any time, upon notice to the Borrower and subject to applicable law, sell, assign, grant participations in, or otherwise transfer to any other person, firm or corporation, including another Federal Home Loan Bank, all or part of the
Liabilities outstanding hereunder. Each Obligor hereby acknowledges and agrees that any such disposition shall give rise to a direct obligation of the Obligor to such assignee, participant or transferee. Each Obligor hereby authorizes the Bank and
each assignee, participant or transferee, in case of default by any Obligor hereunder, to proceed directly, by right of setoff, banker’s lien, or otherwise, against any assets of any Obligor which may at the time of such default be in the
respective hands of the Bank or any such assignee, participant or transferee. Each Obligor further agrees that the Bank may furnish any information pertaining to any Obligor which is in the possession of the Bank to any prospective assignee,
participant or transferee to assist it in evaluating such assignment, participation or transfer provided that any non-public information reasonably designated in writing to the Bank by any Obligor as constituting non-public information shall be
furnished to such prospective assignee, participant or transferee on a confidential basis. Nothing contained herein shall be deemed to grant to any third party any rights hereunder. 
  
 Section 6.03 Discretion of the Bank to Grant or Deny Advances. Nothing contained herein or in any documents
describing the Bank’s credit program and credit policies, including the Credit and Collateral Policy, shall be construed as an agreement or commitment on the part of the Bank to grant Advances or enter into Credit Products, Derivative
Transactions or Other Products. No Obligor, except the Borrower, shall have any right to apply to the Bank for Advances or Credit Products. The right and power of the Bank in its discretion to either grant or deny any Advance, Credit Product,
Derivative Transaction or Other Product requested hereunder is hereby expressly reserved. The determination by the Bank of Lendable Collateral Value and the Collateral Maintenance Level shall not constitute a determination by the Bank that the
Borrower may obtain Advances, Credit Products, Derivative Transactions or Other Products in amounts up to such Lendable Collateral Value and Collateral Maintenance Level. 
  
 Section 6.04 Amendment; Waivers. No modification, amendment or waiver of any provision of this Agreement
(other than the provisions of the Credit and Collateral Policy incorporated by reference herein) or consent to any departure therefrom shall be effective unless in a writing executed by a responsible officer of the party against whom such change is
asserted and 

  

 18 

 
shall be effective only in the specific instance and for the purpose of which given. No notice to or demand on any Obligor in any case shall entitle any
Obligor to any other or further notice or demand in the same, or similar or other circumstances. Any forbearance, failure or delay by the Bank in exercising any right, power or remedy hereunder shall not be deemed to be a waiver thereof, and any
single or partial exercise by the Bank of any right, power or remedy hereunder shall not preclude the further exercise thereof. Every right, power and remedy of the Bank shall continue in full force and effect until specifically waived by the Bank
in writing. 
  
 Section 6.05 Consent to Jurisdiction.
In any action or proceeding brought by the Bank or any Obligor in order to enforce any right or remedy under this Agreement, the parties hereby consent to, and agree that they will submit to, the nonexclusive jurisdiction of the United States
District Court for the Northern District of Georgia or, if such action or proceeding may not be brought in Federal court, the jurisdiction of the courts of the State of Georgia located in the City of Atlanta. 
  
 Section 6.06 Notices. Except as provided in the last sentence
of this Section, any written notice, advice, request, consent or direction given, made or withdrawn pursuant to this Agreement shall be in writing, and shall be given by first class mail, postage prepaid, by telecopy or other facsimile transmission,
or by private courier or delivery service. All non-oral notices shall be deemed given when actually received at the principal office of the Bank or when actually given in the case of notices by the Bank to the Borrower (for all Obligors). All
notices shall be designated to the attention of the president and chief executive officer of the Bank and to an office or section of the Borrower if the Borrower has made a request for the notice to be so addressed. Any notice by the Bank to the
Borrower pursuant to Section 3.06 hereof may be oral and shall be deemed to have been duly given to and received by the Borrower at the time of the oral communication. 
  
 Section 6.07 Signatures of Obligors. For purposes of this Agreement, documents shall be deemed signed by each
Obligor when a signature (electronic or manual) of an authorized signatory or an authorized facsimile thereof appears on the document. The Bank may rely on any signature (electronic or manual) or facsimile thereof which reasonably appears to the
Bank to be the signature of an authorized person, including signatures appearing on documents transmitted electronically to and reproduced mechanically at the Bank. The Secretary or an Assistant Secretary of each Obligor shall from time to time
certify to the Bank on forms provided by the Bank the names and specimen signatures of the persons authorized to apply on behalf of the Borrower to the Bank for Advances and commitments for Advances and otherwise act for and on behalf of the
Obligors in accordance with this Agreement. The Obligors shall promptly notify the Bank of any changes to such certifications, and until receipt of such notice, the Bank shall be authorized to rely on the authorizations in such current
certifications. Such certifications are incorporated herein and made a part of this Agreement and shall continue in effect until expressly revoked or amended in writing by the Obligors, notwithstanding that subsequent certifications may authorize
additional persons to act for and on behalf of the Obligors. 
  
 Section 6.08 Applicable Law; Severability. In addition to the terms and conditions specifically set forth herein and in any Application, Confirmation or Supplemental Documentation, this Agreement and all Advances, Credit
Products, Derivative Transactions and Other Products shall be governed by the statutory and common law of the United States and, to the extent Federal law incorporates or defers to state law, the laws (exclusive of the choice of law provisions) of
the State of Georgia. Notwithstanding the foregoing, the Uniform Commercial Code as in effect in the State 

  

 19 

 
of Georgia shall be deemed applicable to this Agreement and any Application, Confirmation and Supplemental Documentation and to any Advance, Credit Product,
Derivative Transaction or Other Product and shall govern the attachment and perfection of any security interest granted hereunder or thereunder. In the event that any portion of this Agreement, or any Application, Confirmation or Supplemental
Documentation, conflicts with applicable law, such conflict shall not affect other provisions of this Agreement or such Application, Confirmation or Supplemental Documentation, which may be given effect without the conflicting provision, and to this
end the provisions of this Agreement and any Application, Confirmation and Supplemental Documentation are declared to be severable. 
  
 Section 6.09 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns
of the Obligors and the Bank. 
  
 Section 6.10 Entire
Agreement. This Agreement, together with any Confirmation or Supplemental Documentation, and any amendments or addenda thereto executed by the Bank and the Obligors, embody the entire agreement and understanding between the parties hereto
relating to the subject matter hereof and supersedes all prior agreements between such parties that relate to such subject matter. If, prior to the date of this Agreement, the Borrower and the Bank have entered into an Agreement for Advances and
Security Agreement with Blanket Floating Lien (as amended) or an Advances, Specific Collateral Pledge and Security Agreement (each, a “Prior Agreement”), then this Agreement shall amend and restate the Prior Agreement in its
entirety as the date hereof. 
  
 Section 6.11
Attorneys’ Fees. Each Obligor agrees to pay all charges and expenses incurred by Bank (including reasonable attorneys’ fees and expenses) in connection with the administration of the Borrowing Documents, any investigation by
Bank in respect of any Borrowing Document, the enforcement, protection or preservation of any right or claim of Bank, the termination of this Agreement or any other Borrowing Document, the termination of any liens of Bank on the Collateral, or the
collection of any amounts due under the Borrowing Documents. 
  
 Section 6.12 Indemnification of the Bank. Each Obligor hereby indemnifies and agrees to defend (with counsel acceptable to the Bank) and hold harmless the Bank and each of its directors, officers, agents and employees (each,
an “Indemnitee”) from and against any liability, loss, cost or expense (including reasonable attorneys’ fees and expenses) incurred in connection with any claim, damage, suit, arbitration, action, proceeding,
investigation or pre-filing settlement discussion or negotiation, whenever taking place, and suffered by any one or more of the Indemnitees (collectively, “Losses”) or in which any one or more of the Indemnitees may ever be
or become involved (whether as a party, witness or otherwise), in connection with, or in any way relating to, any Liability, this Agreement, any Borrowing Document, any Advance, any Credit Product, any Derivative Transaction, or any Other Product
and any Loss (a) arising from any Obligor’s failure to observe, perform or discharge any of its covenants, obligations, agreements or duties under this Agreement or any other Borrowing Document, (b) arising from the breach of any of the
representations or warranties contained in any Borrowing Document, (c) relating to claims of any Person with respect to any Collateral, or (d) arising from any Obligor’s failure to comply with any federal, state, or local statute, regulation,
ordinance or other provision of law; provided, an Indemnitee shall not be indemnified for Losses to the extent they result solely from the gross negligence or willful misconduct of such Indemnitee. Notwithstanding any contrary provision in 

  

 20 

 
any Borrowing Document, obligations of each Obligor under this Section 6.12 shall survive the payment in full of the Liabilities and the termination of this
Agreement. 
  
 [Signatures appear on following page.]

  

 21 

 IN WITNESS WHEREOF, Borrower and Bank have caused this Agreement to be signed in their names by their
duly authorized officers as of the date first above mentioned. 
  
 [INSERT FULL
CORPORATE NAME OF BORROWER] 
  

					
		
	By:	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 
		
	By:	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 
	
	FEDERAL HOME LOAN BANK OF ATLANTA
		
	By:	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 
		
	By:	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

 22 

 FEDERAL HOME LOAN BANK OF ATLANTA 
  
 BORROWER ACKNOWLEDGEMENT 
 AND NOTARIZATION 
  

					
	STATE OF 	  	 	  	 
	 	  	 	  	  
 } ss

	County of 	  	 	  	 

  
 On this
      day of
                                        
        , before me personally came
                                        
             and
                                        
                        , to me known, who being by me duly sworn, did depose and state that they are the
                                        
                     and
                                        
         of [Insert name of Borrower] (the “Borrower”); and that they are signing their names thereto in my presence by order of the Board of Directors or other governing body
of the Borrower and that said
                                        
                     and
                                        
                     acknowledge the execution of said instrument to be the voluntary act and deed of the Borrower. 
  

	
	
	  
	Notary Public Signature

  

			
		
	Notary Public in and	 	 

			
	for the State of 	 	 

  
 (NOTARY PUBLIC’S SEAL)

  

			
		
	My commission expires: 	 	 

  

 23 

 Form Only-Not for Execution 
  
 EXHIBIT A 
  
 Form of Affiliate Joinder Agreement 
  
 THIS JOINDER AGREEMENT (the “Agreement”), dated as of [Insert Date], is
among [Insert Name of Affiliate], a [Insert Type of Organization and Jurisdiction of Organization], having its principal place of business at [Insert Address] (“Affiliate”), [Insert Name of
Borrower] (“Borrower”) and the Federal Home Loan Bank of Atlanta (“Bank”). The Affiliate wishes to provide
security and credit support to the Borrower under the Advances and Security Agreement, dated as of [Insert Date of Agreement], between the Borrower and the Bank (the “Advances and Security
Agreement”). The Bank has agreed to accept such security and credit support of Affiliate subject to the terms and conditions of this Agreement. All of the defined terms in the Advances and Security Agreement are
incorporated herein by reference. 
  
 Accordingly, the Borrower
and the Affiliate hereby agree as follows with the Bank: 
  

	 	1.	The Affiliate hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the Affiliate shall be deemed to be a party to the Advances and Security Agreement
and an “Obligor” as provided therein and shall have all of the obligations of an Obligor thereunder as if it had executed the Advances and Security Agreement originally; provided, however, the Affiliate may not apply to the Bank for direct
Advances, Credit Products, Derivative Transactions or Other Products. The Affiliate hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Advances and Security Agreement,
including, all of the representations, warranties and affirmative and negative covenants of an Obligor set forth therein. 

  

	 	2.	Without limiting the generality of the foregoing terms of paragraph 1, the Affiliate hereby jointly and severally, together with all other Obligors, guarantees to the Bank the
prompt payment and performance of the Liabilities in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof and agrees that if any of such Liabilities are not
paid or performed in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise), the Affiliate shall, jointly and severally together with all other Obligors, promptly pay and perform the same, without any
demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Liabilities, the same shall be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration or
otherwise) in accordance with the terms of such extension or renewal. 

  

	 	3.	As security for all Liabilities, the Affiliate hereby assigns, transfers and pledges to the Bank, and grants to the Bank a security interest in, the following Collateral:

  
 (i) All property assigned,
transferred or pledged by the Affiliate to the Bank as collateral securing Liabilities and other obligations of the Obligors as of the date hereof, (ii) all of the Residential First Mortgage Collateral, Commercial Mortgage Collateral, Multifamily
Mortgage Collateral, HELOC and Second Mortgage 

 Form Only-Not for Execution 
  

 
Collateral, Government and Agency Securities Collateral, Other Securities Collateral, and Other Collateral, now or hereafter owned by the Affiliate,
specifically identified on Exhibit “A” attached hereto and incorporated herein, or any substitute Exhibit “A” that may be provided by the Affiliate to the Bank, as Qualifying Collateral and accepted by the Bank after the date
hereof, and (iii) all proceeds and products of any items of the Collateral described in clauses (i) and (ii) above. 
  

	 	4.	The Affiliate shall furnish the following to the Bank: 

  
 (i) Within 90 days after the end of each fiscal year of the Affiliate, the Affiliate’s audited consolidated and consolidating balance
sheet and related statement of operations, shareholders’ equity and cash flows as of the end of and for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by
nationally-recognized independent accountants (without qualification or exception) that such financial statements present fairly in all material respects the financial condition and results of operations of the Affiliate in accordance with GAAP.

  
 (ii) Within 45 days after the end of each
fiscal quarter of the Affiliate, the Affiliate’s consolidated and consolidating balance sheet and related statement of operations, shareholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods (or, in the case of the balance sheet, as of the end) of the previous fiscal year, all certified by the Affiliate’s
chief financial officer as presenting fairly in all material respects the financial condition and results of operations of the Affiliate in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes. 

 
 (iii) Together with the audited annual financial
statements delivered pursuant to clause (i) above, and together with the quarterly financial statements delivered pursuant to clause (ii) above, the Affiliate shall deliver to the Bank a certificate of its chief financial officer, in form and
substance satisfactory to the Bank, (a) stating that such officer has reviewed the relevant terms of the Borrowing Documents, and has made (or caused to be made under such officer’s supervision) a review of the transactions and conditions of
the Affiliate from the beginning of the accounting period covered by the income statements being delivered to the date of the certificate, and that such review has not disclosed the existence during such period of any fact, event or circumstance
that constitutes an Event of Default or that is then, or with the passage of time or giving of notice or both, could become an Event of Default, and if any such condition or event existed during such period or now exists, specifying the nature and
period of existence thereof and what action the Affiliate has taken or proposes to take with respect thereto; and (b) certifying and demonstrating that the Affiliate remains solvent as of the date of such certificate. 
  
 (iv) Promptly thereafter, copies of all notices, reports,
correspondence and other materials filed by the Affiliate with any governmental authority, and any other information known to the Affiliate which could reasonably be expected to have a Material Adverse Effect on the operations, business, or
financial condition of the Affiliate. 
  

 -2- 

 Form Only-Not for Execution 
  

	 	5.	Notwithstanding any provision to the contrary contained herein or in the Advances and Security Agreement, to the extent the obligations of the Affiliate shall be adjudicated to be
invalid or unenforceable for any reason (including, because of any applicable state or federal law relating to fraudulent conveyances or transfers) then the obligations of the Affiliate hereunder shall be limited to the maximum amount that is
permissible under applicable law (whether federal or state and including, the United States Bankruptcy Code). 

  

	 	6.	The Affiliate agrees that to the extent that any Obligor shall make a payment or a transfer of an interest in any property to the Bank, which payment or transfer or any part thereof
is subsequently invalidated, declared to be fraudulent or preferential, or otherwise is avoided, and/or required to be repaid to any Obligor, the estate of any Obligor, a trustee, receiver or any other party under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such avoidance or repayment, the obligation or part thereof intended to be satisfied shall be revived and continued in full force and effect as if said payment had not been made.

  

	 	7.	The liability of the Affiliate hereunder is exclusive and independent of any other security for the Liabilities; a separate action or actions may be brought and prosecuted against
the Affiliate whether or not action is brought against any other guarantor or Obligor and whether or not any other guarantor or Obligor is joined in any such action or actions; and the Affiliate’s liability hereunder shall not be affected or
impaired by (a) any direction as to application of payment by any Obligor or by any other party, or (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the Liabilities, or (c) any
payment on or reduction of any such other guaranty or undertaking, or (d) any dissolution, termination or increase, decrease or change in personnel by any Obligor, or (e) any payment made to the Bank on the Liabilities which the Bank repays to any
Obligor pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and the Affiliate waives any right to the deferral or modification of its obligations hereunder by reason of any such
proceeding. 

  

	 	8.	The Affiliate authorizes the Bank without consent of the Affiliate or notice or demand (except as shall be required by applicable statute and cannot be waived), and without
affecting or impairing its liability hereunder, from time to time to (a) make additional Advances to the Borrower, and enter into agreements for Credit Products and Other Products and Derivative Transactions with the Borrower, (b) change the terms
of the Liabilities or any part thereof, solely with the consent of the Borrower, (c) take and hold security from any other guarantor or any other party for the payment of this guaranty or the Liabilities and exchange, enforce waive and release any
such security, and apply such security and direct the order or manner of sale thereof as the Bank in its discretion may determine and (d) release or substitute any one or more endorsers, guarantors or Obligors. 

  

 -3- 

 Form Only-Not for Execution 
  

	 	9.	It is not necessary for the Bank to inquire into the capacity or powers of any Obligor or the Affiliate or the officers, directors, members, partners or agents acting or purporting
to act on its behalf, and any Liabilities made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder. 

  

	 	10.	The Affiliate waives any rights (except as shall be required by applicable statute and cannot be waived) to require the Bank to (i) proceed against any Obligor, any other guarantor
or any other party, (ii) proceed against or exhaust any security held from any Obligor, any other guarantor or any other party, or (iii) pursue any other remedy in the Bank’s power whatsoever. The Affiliate waives any defense based on or
arising out of any defense of any Obligor, any other guarantor or any other party other than payment in full of the Liabilities, including, any defense based on or arising out of the disability of any Obligor, any other guarantor or any other party,
or the unenforceability of the Liabilities or any part thereof from any cause, or the cessation from any cause of the Liability of any Obligor other than payment in full of the Liabilities. The Bank may, at its election, foreclose on any security
held by the Bank by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the Bank may have
against any Obligor or any other party, or any security, without affecting or impairing in any way the liability of the Affiliate hereunder except to the extent the Liabilities have been paid. The Affiliate waives any defense arising out of any such
election by the Bank, even though such election operates to impair or extinguish any right of reimbursement or subrogation of other right or remedy of the Affiliate against any Obligor or any other party or any security. 

  
 The Affiliate waives all presentments, demands for performance, protests and
notices, including, notices of nonperformance, notice of protest, notices of dishonor, notices of acceptance of this guaranty, and notices of the existence, creation or incurring of new or additional Liabilities. The Affiliate assumes all
responsibility for being and keeping itself informed of the other Obligors’ financial condition and assets, and all other circumstances bearing upon the risk of nonpayment of the Liabilities and the nature, scope and extent of the risks which
the Affiliate assumes and incurs hereunder, and agrees that the Bank shall not have any duty to advise the Affiliate of information known to it regarding such circumstances of risks. 
  
 AFFILIATE HEREBY EXPRESSLY WAIVES AND SURRENDERS ANY DEFENSE TO ITS LIABILITY UNDER THIS AGREEMENT BASED UPON ANY OF THE
FOREGOING ACTS, OMISSIONS, AGREEMENTS, WAIVERS OR MATTERS AND EXPRESSLY WAIVES THE BENEFITS OF O.C.G.A. §§10-7-2, 10-7-21, 10-7-22, 10-7-23 AND 10-7-24. IT IS THE PURPOSE AND INTENT OF THIS AGREEMENT THAT THE OBLIGATIONS OF AFFILIATE
HEREUNDER SHALL BE ABSOLUTE AND UNCONDITIONAL UNDER ANY AND ALL CIRCUMSTANCES. 
  
 The Affiliate hereby agrees it shall not exercise, and irrevocably waives, any rights of subrogation which it may at any time otherwise have as a result of this guaranty (whether contractual, under Section 509 of the
United States Bankruptcy Code, or 

  

 -4- 

 Form Only-Not for Execution 
  

 
otherwise) to the claims of the Bank against the Obligors or any other guarantor of the Liabilities (collectively, the “Other
Parties”) and all contractual, statutory or common law rights of reimbursement, contribution or indemnity from any Other Party which it may at any time otherwise have as a result of this guaranty. The Affiliate hereby further agrees not
to exercise any right to enforce any other remedy which the Bank now has or may hereafter have against any Other Party, any endorser or any other guarantor of all or any part of the Liabilities and any benefit of, and any right to participate in,
any security or collateral given to or for the benefit of the Bank to secure payment of the Liabilities. 
  

	 	11.	The Affiliate hereby grants to the Bank a continuing security interest in, and a right of set off against any and all right, title and interest of the Affiliate in and to its
Collateral. 

  

	 	12.	The Affiliate acknowledges and confirms that it has received a copy of the Advances and Security Agreement and has reviewed and understands such Advances and Security Agreement.

  

	 	13.	The Borrower and the Affiliates hereby agree that the Liabilities shall have the priority in right and remedy over any indebtedness or other obligations, whenever made and however
evidenced, by such Borrower or Affiliate to the Borrower or any other Affiliate (“Intercompany Indebtedness”). The Borrower hereby subordinates the lien securing any Intercompany Indebtedness and any security arrangements
with respect to Intercompany Indebtedness to the lien of this agreement securing the Liabilities. 

  

	 	14.	Each Obligor hereby represents and warrants that, as of the date hereof, the date of each Advance, Credit Product, Derivative Transaction or Other Product, and the date of delivery
of each collateral report required under Section 3.07(A) of the Advances and Security Agreement: 

  
 (i) (a) The Affiliate has received valuable consideration, fair value, fair consideration or reasonably equivalent value for entering into
this Agreement and (b) the performance by the Affiliate of its obligations hereunder shall not render the Affiliate insolvent, reduce the Affiliate’s capital to an unreasonably small amount or reduce the Affiliate’s assets to an amount
less than that necessary to conduct its business, or cause the Affiliate to have incurred debts (or to have intended to have incurred debts) beyond its ability to pay such debts as they mature. 
  
 (ii) Either (a) the Borrower directly owns 100% of the
voting and other equity interests in the Affiliate (provided, however, that any such Affiliate which is a real estate investment trust (a, “REIT”) may issue preferred equity to employees of the Borrower or such Affiliate in
an amount not to exceed that which is necessary to qualify as a REIT under the Internal Revenue Code of 1986, as amended) and each certificate evidencing such voting and other equity interests contain a legend as set forth below prohibiting the
transfer thereof in violation of this provision, or (b) the Affiliate directly owns 100% of the voting and other equity interests in the Borrower and each certificate evidencing such voting and other equity interests contain a 

  

 -5- 

 Form Only-Not for Execution 
  

 
legend as set forth below prohibiting the transfer thereof in violation of this provision. 
  
 Form of Legend: 
  
 THE [SHARES] [MEMBERSHIP INTERESTS] [PARTNERSHIP INTERESTS] REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, ASSIGNED, CONVEYED, PLEDGED OR OTHERWISE
TRANSFERRED IN VIOLATION OF SECTION 14(ii) OF THAT CERTAIN JOINDER AGREEMENT DATED AS OF                     ,
         AMONG [AFFILIATE], [BORROWER] AND THE FEDERAL HOME LOAN BANK OF ATLANTA, AS THE SAME MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME. ANY PURPORTED SALE,
ASSIGNMENT, CONVEYANCE, PLEDGE OR OTHER TRANSFER OF [SHARES] [MEMBERSHIP INTERESTS] [PARTNERSHIP INTERESTS] IN VIOLATION OF SAID AGREEMENT SHALL BE VOID AB INITIO AND OF NO FORCE OR EFFECT.] 
  
 (iii) The Affiliate is not liable for Borrowed Money to any
Person, except the Bank and the Borrower. 
  
 (iv) The Collateral Pledged by the Affiliate hereunder was previously owned by the Borrower and was transferred to the Affiliate subject to the pre-existing security interest of the Bank. The Affiliate acknowledges that the consent of the
Bank was required prior to such transfer and that in consideration of such consent and in exchange therefor, the Affiliate hereby agrees and confirms that the security and collateral interest of the Bank in the Collateral shall secure all existing
and future Liabilities, however and whenever arising. 
  

	 	15.	Until the termination of this Agreement and the indefeasible satisfaction in full of all of the Liabilities: 

  
 (i) The Affiliate will not incur or permit to exist any
liability for Borrowed Money to any Person, except the Bank and the Borrower. 
  
 (ii) The Affiliate will not directly or indirectly: (a) amend, modify or waive any term or provision of its organizational documents, including its articles of incorporation, certificates of designations pertaining to
preferred stock, by-laws, partnership agreement or operating agreement unless required by law; (b) enter into any transaction of merger or consolidation; (c) liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution); or (d)
acquire by purchase or otherwise all or any substantial part of the business or assets of any other Person. 
  
 (iii) The Affiliate will not directly or indirectly enter into or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any management, consulting, investment banking, advisory or other similar services) with any affiliate of the Affiliate (other than the Borrower) or 
  

 -6- 

 Form Only-Not for Execution 
  

 
with any director, officer or employee of any Obligor, except (a) transactions in the ordinary course of and pursuant to the reasonable requirements of the
business of the Affiliate and upon fair and reasonable terms which are no less favorable to the Affiliate than would be obtained in a comparable arm’s length transaction with a Person that is not an affiliate of the Affiliate, and (b) payment
of reasonable compensation to directors, officers and employees for services actually rendered to the Affiliate. 
  

	 	16.	The Borrower confirms that all of its obligations under the Advances and Security Agreement are, and upon Affiliate becoming a party to such Advances and Security Agreement shall
continue to be, in full force and effect. The parties hereto confirm and agree that immediately upon Affiliate becoming a party to the Advances and Security Agreement the term “Liabilities,” as used in the Advances and Security Agreement,
shall include all obligations of the Affiliate from time to time under the Advances and Security Agreement. 

  

	 	17.	The Affiliate agrees that at any time and from time to time, upon the written request of the Bank, it will execute and deliver such further documents and do such further acts and
things as the Bank may reasonably request in order to effect the purposes of this Agreement. 

  

	 	18.	This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute one contract.

  

	 	19.	This Agreement shall be governed by and construed and interpreted in accordance with the laws (exclusive of the choice of law provisions) of the State of Georgia.

  
 [Signatures appear on following page.]

  

 -7- 

 Form Only-Not for Execution 
  

 IN WITNESS WHEREOF, each of the Borrower, the Affiliate and the Bank has caused this Agreement to be
duly executed by its authorized officers, as of the day and year first above written. 
  

					
	[BORROWER]
			
	 By: 
	 	 	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

					
			
	 By: 
	 	 	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

					
	[AFFILIATE]
			
	 By: 
	 	 	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

					
			
	 By: 
	 	 	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

					
	FEDERAL HOME LOAN BANK OF ATLANTA
			
	 By: 
	 	 	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

					
			
	 By: 
	 	 	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

 -8- 

 Form Only-Not for Execution 
  

 Attach Collateral Description 
 for Joinder Agreement 
 as Exhibit “A” 
  

 -9- 

 Form Only-Not for Execution 
  

 EXHIBIT B 
  
 Form of Collateral Pledge Amendment 
  
 THIS COLLATERAL PLEDGE AMENDMENT (the “Amendment”), dated as of [Insert Date], is among [Insert Name
of Affiliate] (“Affiliate”), [Insert Name of Borrower] (“Borrower” and together with the Affiliate, “Obligors”) and the Federal Home Loan Bank of Atlanta
(“Bank”). The Obligors and the Bank wish to amend Section 3.01 of the Advances and Security Agreement, dated as of [Insert Date of Agreement], between the Borrower and the Bank, as amended by a Joinder Agreement, dated as of
[Insert Date of Joinder], among the Obligors and the Bank (the “Advances and Security Agreement”). All of the defined terms in the Advances and Security Agreement are incorporated herein by reference. 
  
 Accordingly, the Obligors and the Bank hereby agree as follows: 

 
 ***CHOOSE ONLY ONE OF THE FOLLOWING ALTERNATIVES FOR 
 SECTION 1*** 
  

	 	[1.	Section 3.01 of the Advances and Security Agreement is hereby amended as follows: 

  
 The Collateral marked below is hereby removed and deleted in its entirety from the pledge of Collateral by the
Obligors to the Bank pursuant to Section 3.01(ii) of the Advances and Security Agreement: 
  

									
	 	  	 	  	 Bank:

	  	 Borrower:

	  	 Affiliate:

	 ̈	  	Residential First	  	 	  	 	  	 
	 	  	Mortgage	  	By:                                   
 	  	By:                                   
 	  	By:                                   
 
	 	  	Collateral	  	Title:                                	  	Title:                                	  	Title:                                
					
	 ̈	  	Multifamily	  	 	  	 	  	 
	 	  	Mortgage	  	By:                                   
 	  	By:                                   
 	  	By:                                   
 
	 	  	Collateral	  	Title:                                	  	Title:                                	  	Title:                                
					
	 ̈	  	HELOC and	  	 	  	 	  	 
	 	  	Second	  	By:                                   
 	  	By:                                   
 	  	By:                                   
 
	 	  	Mortgage	  	Title:                                	  	Title:                                	  	Title:                                
	 	  	Collateral	  	 	  	 	  	 
					
	 ̈	  	Commercial	  	 	  	 	  	 
	 	  	Mortgage	  	By:                                   
 	  	By:                                   
 	  	By:                                   
 
	 	  	Collateral	  	Title:                                	  	Title:                               	  	Title:                                

  
 ***OR***

  
 [To the extent that a category has been previously deleted,
and the parties now want to grant such a pledge] 
  

 -1- 

 Form Only-Not for Execution 
  

	 	[1.	Section 3.01 of the Advances and Security Agreement is hereby amended as follows: 

  
 As security for all Liabilities, each Obligor hereby assigns, transfers and pledges to the Bank, and grants to the
Bank a security interest in, all of the Collateral marked below: 
  

									
	 	  	 	  	 Bank:

	  	 Borrower:

	  	 Affiliate:

	 ̈	  	Residential First	  	 	  	 	  	 
	 	  	Mortgage	  	By:                                   
 	  	By:                                   
 	  	By:                                   
 
	 	  	Collateral	  	Title:                                	  	Title:                                	  	Title:                                
					
	 ̈	  	Multifamily	  	 	  	 	  	 
	 	  	Mortgage	  	By:                                   
 	  	By:                                   
 	  	By:                                   
 
	 	  	Collateral	  	Title:                                	  	Title:                                	  	Title:                                
					
	 ̈	  	HELOC and	  	 	  	 	  	 
	 	  	Second Mortgage	  	By:                                   
 	  	By:                                   
 	  	By:                                   
 
	 	  	Collateral	  	Title:                                	  	Title:                                	  	Title:                                
					
	 ̈	  	Commercial	  	 	  	 	  	 
	 	  	Mortgage	  	By:                                   
 	  	By:                                   
 	  	By:                                   
 
	 	  	Collateral	  	Title:                                	  	Title:                                	  	Title:                                

  
 Each Obligor
acknowledges and agrees that such Collateral will be treated as Collateral for all purposes under the Advances and Security Agreement, and that such Collateral shall be subject to all of the terms and conditions thereof. 
  

	 	2.	The Borrower hereby acknowledges and agrees that, except as expressly provided below, at any time required in the Credit and Collateral Policy, it will assign, transfer and pledge
to the Bank, and grant to the Bank a security interest in, all of the Borrower’s Residential First Mortgage Collateral, Multifamily Mortgage Collateral, HELOC and Second Mortgage Collateral, and Commercial Mortgage Collateral. Notwithstanding
the previous sentence, the Borrower shall not be required to assign, transfer, pledge to the Bank, or grant to the Bank a security interest in, all of the Borrower’s Residential First Mortgage Collateral, Multifamily Mortgage Collateral, HELOC
and Second Mortgage Collateral, and Commercial Mortgage Collateral, so long as, at such time provided in the Credit and Collateral Policy, and at all times thereafter, the Borrower meets each of the following conditions: 

  

	 	•	 	Total assets of the Borrower exceed $250,000,000,000; and 

  

	 	•	 	The ratio of Liabilities to total assets of the Borrower does not exceed 10 percent. 

  

	 	3.	This Amendment may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute one contract.

  

 -2- 

 Form Only-Not for Execution 
  

	 	4.	This Amendment shall be governed by and construed and interpreted in accordance with the laws of the State of Georgia. 

  
 [Signatures appear on following page.] 
  

 -3- 

 Form Only-Not for Execution 
  

 IN WITNESS WHEREOF, each of the Borrower, the Affiliate and the Bank has caused this Amendment to be
duly executed by its authorized officers, as of the day and year first above written. 
  

					
	[BORROWER]
			
	 By: 
	 	 	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

					
			
	 By: 
	 	 	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

					
	[AFFILIATE]
			
	 By: 
	 	 	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

					
			
	 By: 
	 	 	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

					
	FEDERAL HOME LOAN BANK OF ATLANTA
			
	 By: 
	 	 	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

					
			
	 By: 
	 	 	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

 -4-Credit and Collateral Policy

 Exhibit 10.2 
 CREDIT AND COLLATERAL POLICY 
 CREDIT LIMIT 
 The Bank establishes a credit limit for each borrower. The credit limit is referred to in terms
of a percentage of the borrower’s total obligations to the Bank (including the face amount of outstanding letters of credit, the principal amount of outstanding advances and the total exposure of the Bank to the borrower under any derivative
contract) to its total assets. Generally, this limit shall not exceed 50 percent. However, the Credit and Member Services Committee of the Bank’s Board of Directors, or a successor committee or other appropriate committee empowered by the Board
of Directors, may approve a higher limit in its discretion. 
 The Bank determines the credit limit of a borrower, in its sole and absolute discretion, by
evaluating a wide variety of factors, including, but not limited to, the borrower’s overall creditworthiness and collateral management practices. Set forth below, for illustrative purposes only, are typical minimum eligibility requirements for
higher credit limits. This list is not exhaustive, however, and the Bank, in its sole discretion, may impose other requirements in individual cases. 
 Credit limits of 30 percent or less are generally approved by Bank management in the Credit and Collateral Services department. Credit limits in excess of 30 percent must be approved by the Bank’s Credit and Collateral Committee. In
connection with approving a specified credit limit, the Bank may ask for additional information relating to the borrower, including, but not limited to, its liquidity management policies and alternative funding sources. 
 A borrower’s eligibility for a credit limit in excess of 30 percent is subject to its meeting each of the following requirements: 
  

	 	•	 	Composite CAMELS rating of 1 or 2 (including an Asset Quality component rating of 1 or 2) 

  

	 	•	 	If CAMELS rating is older than 12 months, LACE® rating of C+ or better 

  

	 	•	 	Satisfactory Collateral Verification Review (CVR)1 in the prior 12 months 

 In addition to the preceding requirements, a borrower’s eligibility for a credit limit in
excess of 40 percent is subject to its meeting each of the following requirements: 
  

	 	•	 	Ability to provide the Bank with sufficient periodic loan level detail for pledged mortgage collateral 

  

	 	•	 	Either (i) the borrower has a class of equity registered with the Securities and Exchange Commission (SEC) traded on a national exchange or a rating assigned to the Borrower by
one of the Nationally Recognized Statistical Rating Organizations (NRSROs), (ii) the borrower is a significant subsidiary of a company which meets the requirements of clause (i), or (iii) the borrower agrees to pledge as collateral to the
Bank securities with a Lendable 

  

	1	Refer to the Collateral Verification Review section of this Guide for additional information 

 Collateral Value (LCV) equal to the principal amount of all obligations to the Bank that exceeds 40
percent of the borrower’s total assets 
 Certain borrowers that are part of a larger financial institution and meet the following requirements are
eligible for a credit limit in excess of 50 percent, subject to approval by the Bank’s Credit and Collateral Committee: 
  

	 	•	 	The borrower is wholly-owned, directly or indirectly, by an entity (Parent) whose primary regulator is the Federal Reserve Board of Governors or the Office of Thrift Supervision

  

	 	•	 	The Parent is registered with the SEC, has a class of equity securities traded on a national exchange, has total assets in excess of $100,000,000,000 and is rated A (or equivalent)
or better by each of the NRSROs 

  

	 	•	 	The borrower’s current CAMELS rating is 2 or better 

  

	 	•	 	The borrower has pledged Qualifying Collateral with a Lendable Collateral Value (LCV) equal to the Collateral Maintenance Level that consists entirely of Residential First Mortgage
Collateral, Securities, Bank Deposits or Cash 

  

	 	•	 	The total obligations of the borrower to the Bank are equal to no more than 20 percent of the total consolidated assets of the Parent 

  

	 	•	 	The borrower has granted to the Bank a security interest in all of the Residential First Mortgage Collateral owned by the borrower 

  

	 	•	 	The borrower provides to the Bank at such intervals as required by the Bank such loan level detail with respect to the Residential First Mortgage Collateral as necessary for the
Bank to grant an LCV for such collateral equal to 90 percent of its market value 

 CONVERTIBLE ADVANCE PROGRAM LIMIT 
 The Bank has established a limit on the amount of Convertible advances available to each borrower. Generally, Convertible advances may not exceed 15 percent of the
borrower’s total assets.2 Convertible advances that are no longer subject to conversion are excluded from the
limit. 
 The Bank has established criteria for the consideration of an exception to the 15 percent Convertible advances limit. The Bank shall only consider
for the exception any borrower that is at or near the 15 percent Convertible advances limit. A borrower that meets the following criteria shall qualify for consideration of a maximum limit on Convertible advances of up to 20 percent of the
borrower’s total assets: 
  

	 	•	 	Composite CAMELS rating of 1 or 2 

  

	 	•	 	Core capital (less the net present value of outstanding Convertible advances) greater than 5 percent of total assets 

  

	 	•	 	Two-quarter return on assets, before extraordinary items, equal to or greater than .80 percent of total assets 

  

	 	•	 	Non-current assets plus other real estate owned less than 1 percent of total assets 

 In the event the borrower fails to meet one or more of these criteria, the borrower will not be eligible to request additional Convertible advances until the percentage of Convertible advances to total assets is below
15 percent. Additionally, the borrower will have to be re-approved for a Convertible advance limit higher than the Bank’s standard 15 percent limit once it meets the criteria outlined above. 
 PREPAYMENT POLICY 
 Any advance with an
interest rate that is fixed during any period or interval normally shall be subject to a prepayment fee in the event of full or partial repayment of advance principal prior to maturity or the expiration of any interim interest rate period. The
prepayment provisions applicable to each advance shall be set forth in the confirmation for that advance. 
 Adjustable Rate Credit Advances

 Adjustable Rate Credit (ARC) advances normally shall be subject to a flat fee of 25 basis points per annum. Prior to funding, a borrower may elect
to purchase an option to prepay an ARC advance on any interest-reset date without a fee. 
  

	2	CAMELS 3 rated members are subject to a 10 percent of assets limit on Convertible advances, and CAMELS 4 and 5 rated members may not access Convertible advances. De
novo institutions are limited to Convertible advances not in excess of 50 percent of such institution’s credit availability with the Bank. 

 Fixed Rate Advances 
 Fixed rate advances (other than Affordable Housing Program (AHP) and Economic Development and Growth Enhancement Program (EDGE) fixed rate advances) normally shall be subject to a non-symmetrical prepayment fee equal to the present value of
the daily lost cash flow to the Bank, based upon the difference between the contract rate on the advance and the rate for a new advance of the same type with the same remaining maturity; discounted at the current offering rate. For advances granted
prior to May 23, 1994, the rate used to calculate the prepayment fee shall be the posted rate on the date of prepayment for advance amounts between $1 million and $4,999,999. If a fixed rate advance was granted on or after May 23, 1994,
and it was eligible for cost-based pricing, the rate used to calculate the prepayment fee shall be the posted rate on the date of prepayment that corresponds to the original advance amount. 
 The minimum prepayment fees for fixed rate advances (other than AHP and EDGE fixed rate advances) shall be as follows: 
  

			
	 1.      If the remaining maturity of the advance is 12 months or less.
	  	The greater of the present value-based fee or 12.5 advance basis points per annum on the prepaid amount.
		
	 2.      If the remaining maturity of the advance exceeds 12 months.
	  	The greater present value-based fee or a flat fee of 25 basis points on the prepaid amount

 The calculation of the prepayment fee for any fixed rate Principal Reducing Credit advances (including those under
AHP and EDGE) shall take into account future scheduled principal reductions. 
 AHP advances granted after January 1, 1998 and EDGE advances granted
before March 25, 2005, shall be subject to a prepayment fee equal to the present value of the daily lost cash flow to the Bank, based upon the difference between the cost of funds originally used to calculate the interest subsidy incorporated
into the advance and the rate for a new unsubsidized fixed rate advance of comparable size with the same remaining maturity, discounted at the current offering rate. For an illustration of how this prepayment fee is calculated, please see Example #
1 below. 
 EDGE advances granted on or after March 25, 2005 shall be subject to a prepayment fee equal to the present value of the daily lost cash flow
to the Bank, based upon the difference between the rate, as of the date of the EDGE advance, for an unsubsidized fixed rate advance of comparable size with the same maturity and the rate, as of the date of prepayment, for a new unsubsidized fixed
rate advance of comparable size with the same remaining maturity, discounted at the current offering rate. For an illustration of how this prepayment fee is calculated, please see Example # 2 below. 
 All prepayment requests received after 11 a.m. (Eastern time) for advances with remaining maturities up to 12 months, or after 3 p.m. (Eastern time) on the previous
business day, for advances with remaining maturities greater than 12 months, may be deferred until the following day. 

 Example #1 
 Assume a borrower obtains a fixed rate AHP advance having the original terms set forth below: 
  

					
	Date of advance	  	—	  	June 1, 2005
	Principal amount	  	—	  	$100,000
	Scheduled maturity	  	—	  	5 years
	Contract interest rate	  	—	  	2.00 percent
	Bank’s cost of funds on June 1, 2005	  	—	  	4.00 percent
	Payment terms	  	—	  	No amortization prior to maturity, interest payable annually

 If, on June 1, 2009, the borrower were to prepay the entire $100,000 advance in full, and the
Bank’s offering rate as of that date for a new unsubsidized fixed rate advance of comparable size with the same remaining maturity (i.e., one year) were 3.00 percent, then the amount of the prepayment fee would be $985.11, calculated as set
forth below: 
 Lost cash flow = {$100,000 * [0.04 - 0.03]} = $1,000 
 Present value (as of prepayment date) of $1,000 lost cash flow, discounted on a daily basis at an annual rate of 3.00 percent = $985.11 
 Example #2 
 Assume a borrower
obtains a fixed rate EDGE advance having the original terms set forth below: 
  

					
	Date of advance	  	—	  	June 1, 2005
	Principal amount	  	—	  	$100,000
	Scheduled maturity	  	—	  	5 years
	Contract interest rate	  	—	  	2.00 percent
	Bank’s unsubsidized market rate on June 1, 2005	  	—	  	4.25 percent
	Payment terms	  	—	  	No amortization prior to maturity, interest payable annually

 If, on June 1, 2009, the borrower were to prepay the entire $100,000 advance in full, and the
Bank’s offering rate as of that date for a new unsubsidized fixed rate advance of comparable size with the same remaining maturity (i.e., one year) were 3.00 percent, then the amount of the prepayment fee would be $1,231.39, calculated as set
forth below: 
 Lost cash flow {$100,000 * [0.0425 - 0.03]} = $1,250 
 Present value (as of prepayment date) of $1,250 lost cash flow, discounted on a daily basis at an annual rate of 3.00 percent = $1,231.39 

 Structured Advances with Embedded Options 
 Prepayment fees for structured advances with embedded options (i.e., Convertible advances) shall be the inverse of the value of any hedging instruments entered into by the Bank in connection with the funding of the
advance, as detailed in the confirmation for the advance. 
 Daily Rate Credit Advances 
 There are no prepayment fees for Daily Rate Credit advances. 

 CREDIT AND COLLATERAL MATRIX 
 The Credit and Collateral Matrix (Matrix) is one of the tools used by the Bank to implement a risk-focused approach to credit and collateral underwriting and monitoring.
The Bank assigns each borrower a Matrix category according to the relative amount of credit and/or collateral risk such borrower poses to the Bank. A borrower’s Matrix category is the primary factor the Bank uses in determining the
borrower’s eligibility to pledge certain types of eligible collateral, its method of pledging collateral, and the scope and frequency of its CVRs. 
 

 

 COLLATERAL MONITORING AND COMPLIANCE 
 Each borrower is responsible for monitoring its compliance with the Bank’s collateral requirements at all times. The Bank’s CVR process, discussed in detail
below, supplements this responsibility. A borrower must secure all advances with Qualifying Collateral3 at all
times. The borrower’s collateral position must be in compliance with the requirements of the Credit and Collateral Policy, prior to the funding of an advance. Accordingly, each borrower should establish sufficient Qualifying Collateral prior to
participating in the Bank’s credit programs. 
 The Bank reserves the right to accept, reject or ascribe such value to eligible collateral as deemed
necessary or appropriate to protect the security interest of the Bank, based upon the borrower’s creditworthiness, the quality of the collateral, or other factors. The Bank must be able to perfect its security interest in all collateral and
shall, as appropriate, file UCC-1 financing statements on collateral pledged to the Bank. 
 COLLATERAL VERIFICATION
REVIEWS 
 Periodically, the Bank, or any entity retained by the Bank, will review the collateral pledged to the Bank to make sure that the
collateral reported to the Bank is Qualifying Collateral. The Bank also analyzes the borrower’s documentation and administration processes and controls. The Bank may require such verification through one or both of the following: 
  

	 	•	 	On-Site Verification Review (OVR) conducted at the physical premises of the borrower 

  

	 	•	 	Remote Verification Review (RVR) conducted at centralized locations using copies of documents in the borrower’s files 

 The Bank determines the frequency and type of CVR required for a particular borrower based on its evaluation of various risk factors including, but not limited to:

  

	 	•	 	The amount of the Bank’s exposure to the borrower 

  

	 	•	 	Potential concerns regarding the borrower’s asset quality 

  

	 	•	 	The borrower’s ratio of advances-to-assets 

  

	 	•	 	The amount of collateral pledged by the borrower 

  

	 	•	 	The borrower’s prior CVR results 

  

	3	See Qualifying Collateral section of the Policy. 

 EXCEPTION RATES FOR COLLATERAL VERIFICATION
REVIEWS AND EXTRAPOLATION 
 The Bank has established exception rates for CVRs to assist in evaluating and
managing the potential risks that may exist in a borrower’s pledged collateral portfolios. The CVR exception rate is used to determine the frequency of future CVRs, in conjunction with the other factors described above. 
 The relevant loan portfolio for which a borrower is unable to resolve exceptions noted during a CVR will be extrapolated. Through the extrapolation process, the Bank
reduces the amount of a borrower’s eligible collateral based on the exception rate of each loan portfolio reviewed. The Bank considers an exception material if it would hinder the Bank’s ability to either perfect its security interest in
the loan or sell the loan in the event of liquidation. 
 QUALIFYING COLLATERAL 
 The Bank’s Advances and Security Agreement requires each borrower to maintain at all times Qualifying Collateral that has a Lendable Collateral Value (LCV) at least
equal to the Collateral Maintenance Level.4 Qualifying Collateral means collateral eligible to secure advances and
other credit products by the Bank to the borrower. The borrower’s capital stock and deposits in a deposit account do not constitute Qualifying Collateral. 
 Qualifying Collateral includes the following types of whole mortgage loans: Residential First Mortgage Collateral, Multifamily Mortgage Collateral, Home Equity Lines of Credit (HELOCs) and Second Mortgage Collateral, and Commercial Mortgage
Collateral. In order for the mortgage collateral to serve as Qualifying Collateral, it must meet each of the following requirements: 
  

	 	•	 	It has not been identified as held for sale by the borrower (except exclusively to support advances under the Loans Held For Sale program) 

  

	 	•	 	It does not secure an indebtedness on which any director, officer, employee, attorney or agent of the borrower or the Bank is personally liable 

  

	 	•	 	It is not currently past due more than 30 days 

  

	 	•	 	It has not been classified as substandard, doubtful, or loss by the borrower’s regulator or its management 

  

	 	•	 	The borrower on the underlying loan collateral is a legal resident of the United States 

 A borrower pledging mortgage collateral must maintain, at all times, possession of the original note and a copy of the recorded mortgage for such collateral. Loans may be held by a third-party custodian subject to
terms and conditions acceptable to the Bank, as outlined in the Advances and Security Agreement. 
  

	4	See Collateral Maintenance Level and Lendable Collateral Value sections. 

 Additionally, any mortgage loan for which any of the legal documents are missing or which demonstrate inconsistencies,
errors or omissions that could impact the credit quality of the collateral, or the Bank’s ability to perfect its security interest in the collateral, may not be included in the pool of Qualifying Collateral. The additional requirements for each
type of mortgage collateral to constitute Qualifying Collateral are set forth below. 
 Residential First Mortgage Collateral 
 Residential First Mortgage Collateral consists of fully-disbursed (not a construction loan or line of credit), whole first mortgages and deeds of trusts, secured by a
first lien on improved one-to-four unit single-family dwellings, including condominiums, planned unit developments (PUDs), town homes and manufactured/mobile homes, so long as such homes are treated as real estate under applicable state law, as
demonstrated by an ALTA Form 7 endorsement to a title insurance policy, an acceptable legal opinion or other evidence acceptable to the Bank. 
 For
Residential First Mortgage Collateral to constitute Qualifying Collateral, it must meet each of the following criteria: 
  

	 	•	 	The loan is wholly-owned by the borrower and is free and clear of all liens and encumbrances, including any participation interests 

  

	 	•	 	The loan documents are under the control of the borrower 

  

	 	•	 	The loan has a signed borrowing resolution if the obligor is a corporation, partnership, limited liability corporation, etc. 

  

	 	•	 	The current loan-to-value ratio is less than or equal to 100 percent of the value of the underlying real estate collateral, including the value of any other loans secured by such
real estate collateral (Note: To the extent that two or more loans secured by the same underlying collateral exceed the 100 percent loan-to-value ratio, the Bank may accept one or more of such loans as Qualifying Collateral as long as the accepted
loans do not exceed such ratio) 

  

	 	•	 	The loan collateral is not cross-collateralized with any loan not pledged to the Bank 

  

	 	•	 	The underlying loan transaction conforms to the requirements of the Bank’s Guidelines to Promote Responsible Lending, as described herein 

 Multifamily Mortgage Collateral 
 Multifamily Mortgage
Collateral consists of fully disbursed (not a construction loan or line of credit) first mortgage loans, secured by improved residential multifamily (5 or more units) real estate. 
 For Multifamily Mortgage Collateral to constitute Qualifying Collateral, it must meet each of the following criteria: 
  

	 	•	 	The loan is owned by the borrower and is free and clear of all liens and encumbrances (except for minority, non-controlling participating interests) 

  

	 	•	 	The loan documents are under the control of the borrower 

	 	•	 	The loan has a signed borrowing resolution if the obligor is a corporation, partnership, limited liability corporation, etc. 

  

	 	•	 	The loan is not guaranteed by any entity that retains control in the event of default (e.g., Small Business Administration (SBA), United States Department of Agriculture (USDA),
etc.) 

  

	 	•	 	The loan is not secured by a leasehold interest, unless the ground lease is subordinate to the mortgage, and the remaining lease term is equal to or greater than the loan term

  

	 	•	 	The current loan-to-value ratio is less than or equal to 85 percent of the value of the underlying real estate collateral, including the value of any other loans secured by such
real estate collateral (Note: To the extent that two or more loans secured by the same underlying collateral exceed the 85 percent loan-to-value ratio, the Bank may accept one or more of such loans as Qualifying Collateral as long as the accepted
loans do not exceed such ratio) 

  

	 	•	 	The loan collateral is not cross-collateralized with any loan not pledged to the Bank 

 Commercial Mortgage Collateral 
 Commercial Mortgage Collateral consists of fully disbursed (not a construction
loan or line of credit) first mortgages, secured by improved office, retail, hotel/motel or industrial/warehouse properties. 
 For Commercial Mortgage
Collateral to constitute Qualifying Collateral, it must meet each of the following criteria: 
  

	 	•	 	The loan is owned by the borrower and is free and clear of all liens and encumbrances (except for minority, non-controlling participation interests) 

  

	 	•	 	The loan documents are under the control of the borrower 

  

	 	•	 	The loan has a signed borrowing resolution if the obligor is a corporation, partnership, limited liability corporation, etc. 

  

	 	•	 	The loan is not guaranteed by any entity that retains control in the event of default (e.g., SBA, USDA, etc.) 

  

	 	•	 	The loan is not secured by a leasehold interest, unless the ground lease is subordinate to the mortgage and the remaining lease term is equal to or greater than the loan term

  

	 	•	 	The current loan-to-value ratio is less than or equal to 85 percent of the value of the underlying real estate collateral, including the value of any other loans secured by such
real estate collateral (Note: To the extent that two or more loans secured by the same underlying collateral exceed the 85 percent loan-to-value ratio, the Bank may accept one or more of such loans as Qualifying Collateral as long as the accepted
loans do not exceed such ratio) 

  

	 	•	 	The loan collateral is not cross-collateralized with any loan not pledged to the Bank 

  

	 	•	 	The loan is not secured by a Special Purpose Property, as described in Appendix C. 

 Home Equity Lines of Credit (HELOC) and Second Mortgage Collateral 
 HELOC/Second Mortgage Collateral consists of home equity lines of credit and second mortgages, secured by residential real property on which a 1-4 unit single-family
dwelling is located, including condominiums, PUDs, town homes and manufactured/mobile homes, so long as such homes are treated as real estate under applicable state laws, as demonstrated by an ALTA Form 7 endorsement to a title insurance policy, an
acceptable legal opinion or other evidence acceptable to the Bank. 
 For HELOC/Second Mortgage Collateral to constitute Qualifying Collateral, it must meet
each of the following criteria: 
  

	 	•	 	The loan is wholly-owned by the borrower and is free and clear of all liens and encumbrances, including any participation interests 

  

	 	•	 	The loan documents are under the control of the borrower 

  

	 	•	 	The combined loan balance (first and second mortgage) does not exceed 100 percent of the value of the underlying real estate collateral, including the value of any other loan
secured by such real estate collateral 

  

	 	•	 	The loan collateral is not cross-collateralized with any loan not pledged to the Bank 

  

	 	•	 	The loan secures a first or second lien on the underlying real estate collateral 

  

	 	•	 	The mortgage is to a borrower that is an individual or individuals 

  

	 	•	 	The underlying loan transaction conforms to the requirements of the Bank’s Guidelines to Promote Responsible Lending, as described herein 

 BANK DEPOSIT COLLATERAL OR CASH 
 A borrower’s deposit in the Bank constitutes Qualifying Collateral only if held in a segregated, blocked account pledged to the Bank. Cash held in the
borrower’s deposit account does not constitute Qualifying Collateral. The Bank’s lien on the borrower’s deposit accounts shall not include any monies held in connection with a custodial mortgage account. 
 SECURITIES 
 The following types of securities
constitute Qualifying Collateral. 
 Government and Agency Securities Collateral 
 Treasury (i.e., debt instruments issued by the U.S. Treasury): 
  

	 	•	 	Treasury Bill – A short-term, discounted government debt instrument with a maturity of one year or less 

	 	•	 	Treasury Note – A medium-term government debt instrument, issued at par, with a maturity of one to 10 years 

  

	 	•	 	Treasury Bond – A long-term government debt instrument, issued at par, with a maturity of at least 10 years 

 Agency (i.e., securities issued by certain institutions and government sponsored enterprises (e.g., Fannie Mae, Freddie Mac, FHLBanks, Ginnie Mae): 
  

	 	•	 	Discount Note – An unsecured general corporate obligation, issued at a discount that has an original term of less than one year 

  

	 	•	 	Debenture Note or Bond – An unsecured note or bond that has an original term of one year or more 

  

	 	•	 	Agency Mortgage-Backed Security (MBS) Passthrough – A debt instrument that is collateralized by a pool of residential or multifamily real estate loans. The mortgage payments of
the individual real estate assets are used to pay principal and interest on the bond 

  

	 	•	 	Agency Collateralized Mortgage Obligation (CMO) or Real Estate Mortgage Investment Conduit (REMIC) – A type of mortgage-backed security that pays a specified share of the cash
flows from an underlying mortgage pool 

  

	 	•	 	SBA pool – A debt instrument issued by the SBA, a government agency, which is collateralized by SBA-guaranteed loans 

 Private Label Non-Agency MBS 
 Private label non-agency MBS
constitute Qualifying Collateral if they are rated AA (or equivalent) or better. 
 Asset Backed Securities Secured by HELOC/Second Mortgage Loan
Collateral 
 The senior tranche of private label and agency securities backed by home equity loans and lines of credit constitutes Qualifying
Collateral if it is rated AAA (or equivalent) and a market price and prospectus is readily obtainable. 
 INELIGIBLE
SECURITIES 
 Securities that do not constitute Qualifying Collateral include, but are not limited to: 
  

	 	•	 	Agency or non-agency security tranche types: 

  

	 	•	 	Interest Only (IO) 

  

	 	•	 	Principal Only (PO) 

  

	 	•	 	Inverse Floaters (INV) 

  

	 	•	 	Accrual Bonds (Z tranche) 

  

	 	•	 	Residual 

	 	•	 	Municipal Bonds (except to the extent such bonds otherwise qualify as MBS) 

  

	 	•	 	Subordinate or Mezzanine 

  

	 	•	 	Corporate Bonds 

  

	 	•	 	Commercial Paper 

  

	 	•	 	Preferred and Common Stock 

  

	 	•	 	Any security for which pricing is not readily available to the Bank 

 COLLATERAL MAINTENANCE LEVEL AND LENDABLE COLLATERAL VALUE 
 A borrower must maintain sufficient Qualifying Collateral, when discounted to the LCV, in an amount equal to at least 100 percent of the outstanding amounts of all advances and other extensions of credit. This is the
Collateral Maintenance Level. The Bank reserves the right to specify such other percentage for any borrower as it may deem necessary in the case of such borrower from time to time. 
 The Bank assigns an LCV to pledged Qualifying Collateral. This is a discount to its otherwise prescribed value. For each collateral type and pledging method, the Bank discounts the unpaid principal balance (UPB),
market value (MV), or other defined value of the pledged collateral, as determined by the Bank, to calculate the amount that may be borrowed against the pledged collateral (the LCV). The Bank reserves the right to adjust the discount applied to the
pledged collateral for any borrower as it may deem necessary in the case of such borrower from time to time. The current LCVs for Qualifying Collateral are provided below in the section entitled “Lendable Collateral Value for Qualifying
Collateral.” 
 COLLATERAL REPORTING AND PLEDGE METHODS 
 The Advances and Security Agreement provides for a pledge by the borrower of its entire portfolio of Residential First Mortgage Collateral, Multifamily Mortgage
Collateral, HELOC and Second Mortgage Collateral, and Commercial Mortgage Collateral to secure advances under the Agreement. However, a Matrix 1 or 2 borrower may be exempted from pledging Multifamily Mortgage Collateral, Commercial Mortgage
Collateral and HELOC and Second Mortgage Collateral on a blanket basis, upon request of the borrower. A borrower may be exempted from the requirement to provide a blanket lien on its Residential First Mortgage Collateral, or it may be permitted to
pledge only specific loans within any other mortgage collateral portfolio, only upon specific approval by the Bank. 
 Matrix 1 and 2 Members

 A Matrix 1 or 2 borrower that has pledged Residential First Mortgage Collateral pursuant to a blanket lien must submit a Qualifying Collateral
Report (QCR) on a quarterly basis within 30 days of each calendar quarter end. The Bank, in its sole discretion, may require more frequent reporting. 

 The LCV for Residential First Mortgage Collateral pledged pursuant to a blanket lien by a Matrix 1 or 2 borrower shall be
80 percent of the unpaid principal balance of such collateral. 
 The LCV for Residential First Mortgage Collateral pledged pursuant to a blanket lien by a
Matrix 1 or 2 borrower that provides additional loan level detail shall be 90 percent of the market value of such collateral, as determined by the valuation model utilized by the Bank, in its sole discretion. 
 The Bank requires a Matrix 1 or 2 borrower that has been approved to provide a specific pledge of individual loans in its Residential First Mortgage Collateral portfolio
to submit, at a minimum, quarterly status updates for such specifically pledged loan collateral. The Bank shall ascribe an LCV of 85 percent of the market value for such specifically pledged Residential First Mortgage Collateral. 
 Reduced Title Documentation 
 The Bank generally requires that
in order for Residential First Mortgage Collateral to be Qualifying Collateral such collateral must include post-closing lien verification, such as title insurance, title opinion or post-closing title search. To the extent that a Matrix 1 or 2
borrower has not conducted a post-closing lien verification for any Residential First Mortgage Collateral. The Bank, in its discretion, may accept such collateral as Qualifying Collateral, but shall reduce the LCV for such collateral by an
additional ten percent from the otherwise applicable LCV for such collateral. Matrix 3 and 4 borrowers must perform post-closing lien verification for all Residential First Mortgage Collateral in order for such collateral to be Qualifying
Collateral. 
 Matrix 1 or 2 borrowers must specifically identify all Residential First Mortgage Collateral without post-closing lien verification to the
Bank and provide any additional information with respect to such collateral as the Bank may require. Prior to acceptance by the Bank as Qualifying Collateral, the borrower must perform post-closing title searches on at least 50 of the loans which
did not originally include post-closing title searches. If more than 10 percent of such sample indicates that the lien of the borrower is not first priority, the Bank reserves the right to further reduce the LCV on such collateral, or to refuse to
accept such collateral as Qualifying Collateral. 
 Any Residential First Mortgage Collateral without post-closing lien verification must contain the
following, at a minimum: lien search performed within 45 days of loan closing, borrower affidavit stating no liens exist on the property other than those disclosed in the pre-closing title search; and payoff statements and evidence satisfactory to
the Bank of payment of all liens disclosed in the pre-closing lien search. In addition, the credit score for the purchaser of the real estate associated with such Residential First Mortgage Collateral must exceed 680 and the loan-to-value ratio for
such Residential First Mortgage Collateral must be less than 80 percent. 
 Matrix 3 and 4 Borrowers 
 The Bank considers a borrower falling into Matrix category 3 or 4 less creditworthy. A Matrix 3 or 4 borrower must provide the Bank with a blanket pledge on all types of
Qualifying Collateral unless (1) such borrower has total assets in excess of $250,000,000,000 and (2) the ratio of such borrower’s liabilities to the Bank to such borrower’s total assets does not exceed 10 percent. The Bank, in
its discretion, may not require such a blanket pledge from a Matrix 3 or 4 borrower with at least a CAMELS 3 rating. A Matrix 3 or 4 borrower may also be required to provide increased collateral 

 
detail or delivery of collateral, in the sole discretion of the Bank. Any Matrix 1 or 2 borrower that becomes a Matrix 3 or 4 borrower in the future shall
become immediately subject to the provisions governing Matrix 3 or 4 borrowers. 
 A Matrix 3 or 4 borrower must provide a quarterly or monthly QCR within 30
days of each calendar quarter end or month end, as applicable and, in the Bank’s sole discretion, may be required to provide increased collateral detail or deliver collateral. A borrower with a CAMELS rating of 4 or 5 must deliver its
collateral and must provide monthly loan status updates (within the timeframe specified in “Status Reports” below). 
 The LCV for Matrix 3
borrowers pledging Residential First Mortgage Collateral shall be 75 percent of the unpaid principal balance. The LCV for Matrix 4 borrowers pledging Residential First Mortgage Collateral shall be 67 percent of the unpaid principal balance or lower,
in the Bank’s sole discretion. This constitutes an effective Collateral Maintenance Level of 150 percent. 
 Delivery of Physical Collateral
Documents 
 The Bank may require the delivery of pledged mortgage collateral at such times as a borrower falls into Matrix 3 or 4, or such other
times as deemed desirable by the Bank. The Bank requires delivery at all times of securities, cash, and participation certificates pledged to the Bank as collateral. 
 Status Reports 
 A borrower required to specifically identify or deliver collateral must submit to the Bank, at
such times as the Bank may request, a status report with respect to the borrower’s collateral, prepared in form and substance acceptable to the Bank. The status report shall be a written report covering such matters regarding the collateral as
the Bank may require, including listings of mortgages and unpaid principal balances thereof, and certifications concerning the status of payments on mortgages and of taxes and insurance on property securing mortgages. The borrower must submit the
status report to the Bank within 30 days of each calendar quarter end or month end, as applicable. 
 COLLATERAL
REQUIREMENTS FOR LESS CREDITWORTHY BORROWERS 
 The Bank reserves the right to
manage the credit and collateral requirements for less creditworthy borrowers on a case-by-case basis, including adjusting the LCV and Collateral Maintenance Level for such borrowers. 
 A borrower is deemed less creditworthy if, in the Bank’s sole discretion and based on its credit underwriting, the borrower’s financial condition has deteriorated or the borrower’s Matrix category is 3
or 4. 
 The collateral requirements applicable to all CAMELS 4 or 5 rated borrowers, and in the Bank’s sole discretion, other less creditworthy
borrowers, are each of the following: 
  

	 	•	 	The borrower must deliver collateral to the Bank 

	 	•	 	The borrower must provide monthly QCR and loan status updates, and in the Bank’s sole discretion, it may be required to provide increased collateral detail or deliver
collateral 

  

	 	•	 	The borrower may be required to secure existing advances with Bank deposits and/or eligible government and agency securities 

  

	 	•	 	The borrower may be required to collateralize any existing prepayment fees 

  

	 	•	 	The borrower must acceptably collateralize the Bank’s potential exposure arising from its use of the Bank’s cash management services 

 USE OF OTHER REAL ESTATE RELATED COLLATERAL TO
SECURE ADVANCES 
 The Bank has established a limit on the amount of Other Real Estate Related Collateral (ORERC) that may
be utilized by a borrower for purposes of satisfying a borrower’s Collateral Maintenance Level. That limit is 15 percent of the borrower’s total assets. ORERC includes Commercial Mortgage Loans and HELOCs and Second Mortgage Loans.
Borrowers that meet each of the following eligibility criteria may utilize ORERC as Qualifying Collateral (subject to the above limit): 
  

	 	•	 	The borrower’s Matrix category is 1 or 2, or, in the Bank’s discretion, has a CAMELS 3 rating 

  

	 	•	 	The borrower provides a blanket lien on all ORERC, or it receives the Bank’s approval not to provide such a blanket lien 

  

	 	•	 	To the extent a CVR has not been performed on the ORERC loan portfolio to be utilized, the Bank may impose additional discounts to the LCV for such collateral

 LENDABLE COLLATERAL VALUE FOR QUALIFYING
COLLATERAL 
 The following charts outline the LCV for specific types of Qualifying Collateral: 
  

							
	 Cash
	  	 Pledging
Method
	  	 LCV
 %
	  	 Comments

	 Cash
	  	Delivery	  	100	  	

  

							
	 Government and Agency Securities Collateral*
	  	 Pledging
Method
	  	 LCV
 % MV
	  	 Comments

	 U.S. Treasury bills, notes, bonds
 FHLBank bonds and discount notes
 Fannie Mae bonds and notes
 Fannie Mae mortgage-backed securities
 Freddie Mac participation
certificates
 Freddie Mac bonds and notes
 Ginnie Mae pass-through securities
 Ginnie Mae bonds and notes
	  	Delivery	  	97	  	Pricing must be available from the Bank’s pricing service.
	 Agency CMOs and REMICs
	  	Delivery	  	97	  	
	 SBA Trust Certificates
	  	Delivery	  	97	  	Subject to Bank’s acceptance.

  

							
	 Other Securities Collateral*
	  	 Pledging
Method
	  	 LCV
 % MV
	  	 Comments

	 Private-Label mortgage-backed securities
	  	Delivery	  	90	  	Must be rated AA (or equivalent) or higher by S&P, Moody’s or Fitch. Not all are eligible
	 Private-Label CMOs and REMICs
	  	Delivery	  	90	  	Pricing must be available from the Bank’s pricing service. Not all are eligible
	 HELOC/Second Mortgage-backed Securities
	  	Delivery	  	90	  	Must be rated AAA (or equivalent) or higher by S&P, Moody’s or Fitch. Pricing must be available from the Bank’s pricing service. Not all eligible.

  

	*	Derivatives or stripped mortgage-backed securities are not considered eligible collateral. 

									
	 First Mortgage Collateral
	  	 Matrix
Category
	  	 Pledging
 Method
	  	 LCV**
 %
	  	 Comments

	 Residential First Mortgage Collateral
	  	1, 2	  	Blanket	  	80 of UPB	  	
		  	1, 2	  	Blanket with loan level detail	  	90 of MV	  	
		  	1, 2	  	Specific	  	85 of MV	  	
		  	3	  	Blanket	  	75 of UPB	  	
		  	4	  	Blanket	  	67 of UPB	  	
	 Multifamily Mortgage Collateral
 (five or more units)
	  	All	  	Blanket	  	50 of UPB	  	

  

	**	The LCV may be expressed as an “overcollateralization” requirement (i.e., 150 percent in the case of a Matrix 4 borrower) and may be lower for particular borrowers in the
Bank’s sole discretion. 

  

									
	 Other Real Estate
 Related Collateral
	  	 Matrix
Category
	  	 Pledging
 Method
	  	 LCV
 % UPB
	  	 Comments

	 Home Equity Lines of Credit and Second Mortgage Collateral
	  	1, 2	  	Blanket	  	50	  	
		  	3, 4	  	 Not eligible
 to pledge
	  		  	
	 Commercial Mortgage Collateral
	  	1, 2	  	Blanket	  	50	  	Property type eligibility is subject to Bank’s acceptance.
		  	3, 4	  	Not eligible to pledge	  		  	
		  		  		  		  	

 AFFILIATE COLLATERAL POLICY 
 An affiliate of a borrower may pledge collateral on behalf of the borrower, provided that the borrower, affiliate and any intermediate holding company have executed an
Affiliate Joinder Agreement satisfactory to the Bank. The Bank may accept an affiliate’s pledge of collateral under this policy subject to each of the following conditions: 
  

	 	•	 	The borrower’s Matrix category is 1 or 2 or, in the Bank’s discretion, has a CAMELS 3 rating 

  

	 	•	 	The affiliate is 100 percent owned directly or indirectly by the borrower (Note: In the event the affiliate is a REIT, the borrower may sell non-voting stock in the affiliate to
other investors in an amount acceptable to the Bank, so that the affiliate structure meets the requirements of a REIT) 

  

	 	•	 	The affiliate has no outside debt or other liabilities for borrowed money 

  

	 	•	 	The affiliate collateral was previously owned by the borrower and pledged to the Bank prior to being transferred to the affiliate, or such affiliate collateral is purchased with the
proceeds of sales of collateral originally meeting the requirements of the first clause in this bullet point 

	 	•	 	The borrower and the affiliate comply with the Bank’s documentation and other requirements 

 In the Bank’s sole discretion, collateral pledged by an affiliate may be subject to an additional collateral discount of no more than 20 percent and no less than 5 percent, if one or more of the following
conditions exist: 
  

	 	•	 	The borrower is downgraded to Matrix 3 or 4 

  

	 	•	 	The borrower’s reliance on affiliate collateral is greater than 50 percent of its outstanding advances 

 COLLATERAL REQUIREMENTS FOR INSURANCE COMPANIES AND DE
NOVO INSTITUTIONS 
 Insurance Companies 
 Insurance companies borrowing from the Bank are subject to each of the following additional requirements: 
  

	 	•	 	Only Residential First Mortgage Collateral and securities are permitted as Qualifying Collateral 

  

	 	•	 	Securities pledged as Qualifying Collateral shall be subject to a lower LCV than that applied to securities pledged by other borrowers 

 Insurance companies may enter into pledged account agreements to perfect the Bank’s security interest in securities collateral. 
 De Novo Institutions 
 A de novo institution is one that has
been in operation for less than two years and does not meet certain other requirements summarized later in this section. A de novo institution may apply for advances from the Bank subject to each of the following conditions: 
  

	 	•	 	It must execute a blanket lien on all types of permitted mortgage collateral 

  

	 	•	 	Advances may not exceed 20 percent of the borrower’s total assets 

  

	 	•	 	Advances secured by ORERC may not exceed 10 percent of the borrower’s total assets 

  

	 	•	 	It must provide a quarterly or monthly QCR, and in the Bank’s sole discretion, it may be required to provide increased collateral detail or to deliver collateral

  

	 	•	 	A de novo borrower with a CAMELS rating of 4 or 5 must provide monthly loan status updates 

 An institution is no longer considered to be de novo once it has met all of the following conditions: 
  

	 	•	 	It has been in operation for two or more years 

  

	 	•	 	It has a CAMELS rating of 1 or 2 

  

	 	•	 	It has been profitable in four of the past six operating quarters 

  

	 	•	 	Its reserves/non-performing loans are greater than 60 percent in four of the past six operating quarters 

  

	 	•	 	Its non-performing loans/total loans are less than 5 percent in four of the past six operating quarters 

 COLLATERAL REQUIREMENTS FOR THE LOANS HELD FOR SALE PROGRAM 
 Generally, to be eligible to participate in the Loans Held For Sale (LHFS) program, each of the following conditions must be met: 
  

	•	 	The borrower’s Matrix category is 1 or 2. Matrix 3 and de novo borrowers may be approved by the Bank, at its discretion. CAMELS 4 or 5 rated borrowers may not access the LHFS
program 

  

	•	 	The borrower must have satisfactory prior CVR results 

  

	•	 	The borrower must have executed the Bank’s Advances and Security Agreement and must not have opted-out of the blanket lien on its Residential First Mortgage Collateral

  

	•	 	All potential purchasers (investors) of the collateral eligible to support LHFS advances must enter into a tri-party agreement with the Bank and the borrower governing the status of
the Bank’s security interest in the collateral, the sale of the collateral and the disposition of the proceeds of such sales, or establish a custodial arrangement. No sales of collateral supporting LHFS advances shall be made to any party who
has not executed such a tri-party agreement 

  

	•	 	The borrower’s investors must be acceptable to the Bank 

 LCV
and Eligibility Criteria 
 The LCV for collateral under the program shall not exceed 80 percent of the UPB of the eligible collateral reported to
secure such advances. 
 Loans must meet the following criteria to be eligible to support LHFS advances: 
  

	•	 	Loans must be fully-disbursed, wholly-owned first mortgage loans secured by a first lien on improved one-to-four unit single family dwellings, including primary residences, second
homes and investment properties 

  

	•	 	Loans must be underwritten to the guidelines of the borrower’s investor(s) 

  

	•	 	Loans must be appropriately identified as being held for sale in the borrower’s periodic financial regulatory reporting 

 Ineligible Collateral 
 The following Collateral is not eligible to secure LHFS advances: 
  

	•	 	Loans reported to the Bank to support any prior LHFS advances, even if such prior LHFS advances are paid off within 90 days 

  

	•	 	Loans pledged for a period greater than 90 days 

  

	•	 	Loans that are not fully disbursed 

  

	•	 	Revolving lines of credit 

  

	•	 	Loans with a loan-to-value ratio greater than 100 percent, based on the lesser of the purchase price or appraised value 

  

	•	 	Participation interests in any loan, or loans in which participation interests have been sold 

  

	•	 	Loans past due more than 30 days, or adversely classified loans 

  

	•	 	Loans pledged to secure any other borrowings 

  

	•	 	Loans to any director, officer, any employee, attorney or agent of the borrower or the Bank, or loans held in a third party subsidiary 

  

	•	 	Loans with document deficiencies, such as lack of an original note or copy of a recorded mortgage instrument 

  

	•	 	Loans that do not conform to the requirements of the Bank’s Guidelines to Promote Responsible Lending, as described in the policy 

  

	•	 	Loans secured by mobile or manufactured homes that do not constitute real property under state law 

  

	•	 	Loans not meeting any other requirement to be Qualifying Collateral 

 Monitoring/Periodic Review 
  

	•	 	The Bank, in its sole discretion, may conduct periodic CVRs relating to the LHFS program, with or without notice. The Bank will conduct quarterly internal compliance reviews to
value the pledged LHFS collateral. The Bank may, in its sole discretion, discontinue a borrower’s participation in the LHFS program at any time. 

 COLLATERAL REQUIREMENTS FOR DERIVATIVE CONTRACTS 
 Members must
collateralize the exposure to the Bank under any derivative contract when the Bank is the buyer of an interest rate cap or floor. The required collateral must have an LCV equal to not less than 0.5 percent of the notional principal amount of the
contract, plus the net exposure to the Bank under the cap or floor. The Bank does not require collateral when the Bank is the seller of an interest rate cap or floor. The member must enter into an ISDA master agreement and schedule with the Bank.

 Interest rate swap exposure is included in the calculation of the overall credit limit and must be fully collateralized
as outlined below. 
  

	 	•	 	For maturities less than one year: Market value of swap + 0 percent of notional principal of the swap 

  

	 	•	 	For maturities between one and less than five year(s): Market value of swap + .5 percent of the notional principal of the swap 

  

	 	•	 	For maturities greater than five years: Market value of swap + 1.5 percent of the notional principal of the swap 

 Under certain conditions, the Bank may permit a borrower to enter into an uncollateralized interest rate swap transaction. 
 ADVANCES TO LESS CREDITWORTHY, CAPITAL DEFICIENT OR
INSOLVENT BORROWERS 
 The following limitations on access to advances apply to less creditworthy, capital deficient or
insolvent borrowers (i.e., without positive tangible capital). 
 Less Creditworthy Borrowers 
 The Bank, in its sole discretion, may grant new advances to a less creditworthy borrower. A borrower is deemed less creditworthy if, in the Bank’s sole discretion
and based on its credit underwriting, the borrower’s financial condition has deteriorated or the borrower’s Matrix category is 3 or 4. Generally, however, the Bank shall grant new advances, if any, to a less creditworthy borrower subject
to each of the following conditions (and any other conditions the Bank may impose in the future): 
  

	 	•	 	The term of the advances shall not exceed 12 months 

  

	 	•	 	Qualifying Collateral must consist of Bank deposits or eligible government and agency securities 

  

	 	•	 	The Bank, in its sole discretion, shall determine the market value of the Qualifying Collateral 

 Capital Deficient Borrowers 
 The Bank, in its sole discretion, may grant new advances to a borrower that has
failed one or more of its regulatory capital requirements, provided the borrower remains solvent on a tangible capital basis. However, the Bank shall honor a written request from such borrower’s primary federal regulator or insurer to limit or
eliminate access to advances. Such requests shall be submitted through the Finance Board. If a borrower’s core capital to assets ratio is 3 percent or less, outstanding letters of credit must be collateralized by a cash deposit or government or
agency securities until the letters of credit expire or are surrendered to the Bank by the beneficiary for cancellation. 

 Insolvent Borrowers 
 The Bank shall not grant new advances to a tangibly insolvent borrower unless it meets each of the following conditions: 
  

	 	•	 	The borrower’s primary federal regulator or insurer submits a written request to the Finance Board that the Bank make such advances 

  

	 	•	 	Upon notification from the Finance Board of such request, the Bank, in its sole discretion, elects to grant such advances 

 The Bank, in its sole discretion, may renew advances to a tangibly insolvent borrower for a term of up to 30 days. However, the Bank shall honor a written request from
such borrower’s primary federal regulator or insurer not to renew such advances. Such requests shall be submitted through the Finance Board. The Bank, in its sole discretion, may renew outstanding advances to a tangibly insolvent borrower for a
term greater than 30 days at the written request of the primary federal regulator or insurer. 
 FEES 
 The Bank may assess reasonable fees and charges to cover the Bank’s costs, including overhead, relating to the receipt, holding, redelivery and reassignment of the
borrower’s collateral, as required by the Bank. The Bank shall publish a schedule of such fees and charges on the Bank’s website from time to time. In addition, the Bank also may assess fees to cover the cost of any CVR performed by, or on
behalf of, the Bank and all expenses incurred in connection with lien perfection. 
 The Bank may charge a borrower for the Bank’s outside legal counsel
fees, costs and expenses when the Bank assists the borrower with a transaction that primarily benefits that borrower. Such transactions include, but are not limited to, the following: affiliate pledge arrangements, intercreditor agreements,
subordination agreements, letters of credit (including issuance, amendment, transfer and cancellation), custody arrangements, mergers and assumptions of borrower obligations, and transactions that require or potentially require involvement on the
part of the Finance Board, such as new business activity requests, regulatory interpretations, waivers or other action. The Bank, in its sole discretion, shall determine whether the services of outside counsel are required with respect to a
particular transaction. The amount charged to the borrower shall be based on actual outside counsel legal fees, costs and expenses related to the matter. The borrower shall be responsible for such charges regardless of whether the transaction
ultimately is concluded. 
 GUIDELINES TO PROMOTE RESPONSIBLE LENDING

 The Bank requires that all Residential First Mortgage Collateral comply with applicable federal, state and local anti-predatory lending laws and other
similar credit-related consumer protection laws, regulations and orders designed to prevent or regulate abusive and deceptive lending practices and 

 
loan terms (collectively, Anti-Predatory Lending Laws). For example, Anti-Predatory Lending Laws may prohibit or limit certain practices and characteristics,
including, but not limited to, the following: 
  

	 	•	 	Requiring the borrower to obtain prepaid, single-premium credit life, credit disability, credit unemployment, or other similar credit insurance; 

  

	 	•	 	Requiring mandatory arbitration provisions with respect to dispute resolution in the loan documents; or 

  

	 	•	 	Charging prepayment penalties for the payoff of the loan beyond the early years of such loan. 

 Any Residential First Mortgage Collateral that does not comply with all applicable Anti-Predatory Lending Laws will not constitute Qualifying Collateral. In addition, any Residential First Mortgage Collateral that
exceeds the annual percentage rate or points and fees thresholds of the Home Ownership and Equity Protection Act of 1994 and its implementing regulations (Federal Reserve Board Regulation Z) will not constitute Qualifying Collateral. 
 Each pledgor is responsible for avoiding all unlawful practices and terms prohibited by applicable Anti-Predatory Lending Laws, regardless of whether the pledgor
originates or purchases the Residential First Mortgage Collateral pledged to the Bank. The Bank will take those steps it deems reasonably necessary in order to confirm or monitor a pledgor’s compliance with this policy. In addition, the Bank
reserves the right to require evidence reasonably satisfactory to the Bank that Residential First Mortgage Collateral does not violate applicable Anti-Predatory Lending Laws. With respect to Residential First Mortgage Collateral purchased by the
pledgor, the pledgor is responsible for conducting due diligence that it deems sufficient to support its obligations to the Bank. 
 Under the terms and
conditions of the Advances and Security Agreement, each pledgor has agreed that it will: (1) comply at all times with the Bank’s Credit and Collateral Policy, including these Guidelines; (2) comply at all times with the requirements
of all applicable Anti-Predatory Lending Laws; (3) maintain Qualifying Collateral with an LCV at least equal to the Collateral Maintenance Level required by the Bank, and will substitute Qualifying Collateral, if necessary, for any Residential
First Mortgage Collateral that does not comply with these Guidelines; and (4) indemnify, defend and hold the Bank harmless from and against any liability, loss, cost or expense (including reasonable attorneys’ fees and expenses) that
result from such pledgor’s violation of these Guidelines. 
 The Bank will not knowingly accept as Qualifying Collateral Residential First Mortgage
Collateral that violates applicable Anti-Predatory Lending Laws or these Guidelines. If the Bank knows or discovers that such Residential First Mortgage Collateral violates applicable Anti-Predatory Lending Laws or these Guidelines, the Bank may, in
addition to all available rights and remedies it has at law or in equity, (1) require the pledgor to substitute Qualifying Collateral for such Residential First Mortgage Collateral; (2) assign an LCV of zero to such Residential First
Mortgage Collateral; and (3) require the pledgor to undertake a review of its policies, practices, and procedures for complying with the Bank’s Credit and Collateral Policy, practices and procedures. 

 CREDIT AND COLLATERAL POLICY FOR
HOUSING ASSOCIATES 
 The Bank has established a specific credit and collateral policy for housing associates that qualify
as State Housing Finance Agencies (SHFAs). Through this policy, the Bank provides a range of credit products to qualified SHFAs. To the extent there is a conflict between this section of the Credit and Collateral Policy and any other section of the
Credit and Collateral Policy, as applied to housing associates, this section shall prevail. 
 The Bank shall grant advances to a housing associate
qualifying as an SHFA in accordance with the Act, the Regulations, and the Credit and Collateral Policy currently in place for members. 
 An SHFA must be
prequalified, prior to the funding of an advance request, to determine suitability with respect to the Bank’s credit standards. 
 The Bank reserves the
right to request financial information with each application. Additionally, the Bank reserves the right to request that the SHFA submit financial data on a quarterly basis during the term of the outstanding advance or advances. 
 The Bank generally shall determine an SHFA’s borrowing capacity based on the SHFA’s overall financial and operating condition and the adequacy of the pledged
collateral. Total borrowings may not exceed the lendable value of the pledged collateral. 
 As with all credit decisions, the Bank, in its sole discretion,
reserves the right to decline a request for credit from an SHFA that does not meet the Bank’s underwriting or collateral standards. 
 Types of
Credit Products: Generally, an SHFA shall have access to the credit products available to a member, except for any affordable housing, community investment, or economic development program that the Bank may offer only to its members. The Bank
may issue a standby letter of credit on behalf of an SHFA for the purpose of residential or economic development lending that benefits individuals or families meeting specific income requirements. 
 Use of Funds: An advance to an SHFA shall be for the purpose of facilitating residential mortgage lending that benefits individuals or families meeting the income
requirements in section 142(d) or 143(f) of the Internal Revenue Code (26 U.S.C. 142(d) or 143(f)). 
 Maturities: Terms to maturity shall be
consistent with those imposed by the particular credit product. However, terms to maturity shall not exceed the terms of the loan(s) to be funded. 
 Pricing: Pricing and prepayment fees shall be the same as those applicable to member borrowings. 
 Collateral
Requirements: The SHFA must deliver to the Bank or its designated custodian sufficient eligible collateral to secure its advances. The Bank shall accept as collateral the following types of mortgages and securities owned by the SHFA free and
clear of any liens, encumbrances, and other interest (at the respective Lendable Collateral Values shown, as determined by the Bank): 
  

	 	•	 	First Residential First Mortgage Collateral (85 percent of market value) 

	 	•	 	Multifamily Mortgage Collateral (50 percent of the unpaid principal balance) 

  

	 	•	 	Private Label Mortgage-Backed Securities (90 percent of market value) 

  

	 	•	 	HELOC/Second Mortgage-Backed Securities (90 percent of market value) 

  

	 	•	 	Government and agency securities (97 percent of market value) 

  

	 	•	 	Deposits at the Bank (100 percent of deposit amount) 

 Miscellaneous: The SHFA must inform the Bank of any material change in financial condition or any change in its status as an SHFA. An SHFA is not required to purchase capital stock in the Bank to secure outstanding advances.

 WAIVERS AND EXCEPTIONS 
 The Bank may, in its sole discretion, waive or otherwise grant exceptions to some or all of the requirements of the Credit and Collateral Policy. Any such waiver or exception shall be approved as provided in the
Credit and Collateral Policy, or by the Bank’s internal credit and collateral committee or the Bank’s Board of Directors, as may be required by Bank policy. 
 REGULATORY COMPLIANCE 
 The Bank will not honor prior advance commitments if the
borrower’s access to Bank advances is subsequently restricted pursuant to the Act or the Regulations and guidelines of the Finance Board.

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