FEDERAL HOME LOAN BANK OF TOPEKA

DEFINITIONS

1.1

Defined Terms  

a.

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

b.

“Advance” or “Advances” means any and all loans or other extensions of credit, including without limitation Swap Transactions, letters of credit, guarantees or other arrangements intended to facilitate transactions between the Institution and third parties (but excluding any obligations that the Bank may now or hereafter

have to honor such as items or transfer orders under a depository or similar agreement between the Institution and the Bank), and irrespective of whether the Bank’s obligation under such agreement is contingent upon the occurrence or nonoccurrence of any condition, and including all loans or extensions of credit by the Bank to the Institution prior to the date hereof.

“Business Day” means any day that the Federal Reserve Bank of Kansas City is open for business.

“Capital Stock” means all of thc capital stock of the Bank owned by the Institution and all payments that have been or hereafter are made on account of any subscription for such capital stock and all unpaid dividends on such capital stock.

“Collateral” means all property, including the proceeds thereof, previously assigned, transferred or pledged to the Bank by the Institution as collateral for Advances and all property assigned, transferred or pledged to the Bank pursuant to Section 3.1 of the Agreement or otherwise.

“Collateral Policy” means the collateral policy of the Bank as published from time to time.

“Commitment” or “Commitments” means any agreement under which the Bank is obligated to make an Advance to the Institution.

“Confirmation” means a written or machine-readable electronic transmission issued by the Bank from time to time confirming an Advance, including the notation of the Advance on the Institution’s demand deposit

“Credit Policy” means the credit policy of the Bank as published from time to time.

“Eligible Collateral” means Collateral, other than Capital Stock, which: (1) qualifies as security for Advances under the terms and conditions of the Act and the Regulations and satisfies the requirements that may be established by the Bank from time to time; and (2) is owned by the Institution free and clear of any liens, encumbrances or interest other than the interest of the Bank hereunder.

“Indebtedness” means all indebtedness of the Institution to the Bank, whether now outstanding or hereafter incurred, including all Advances and any other sums owed by the Institution to the Bank pursuant to any provision hereof, and all other obligations and liabilities of the Institution to the Bank.

“Lending Value” means the value that the Bank shall from time to rime, in its sole discretion, ascribe to the various types of Collateral.

“Listed Collateral” means all individual items of Collateral which: (1) the institution has specifically identified as Collateral in a written or electronic communication so the Bank (including the description of airy individual item of Collateral in a financing statement or similar document); or (2) the Institution has delivered or caused to be delivered to the Bank, or a bailee or agent acting on the Bank’s behalf.

“Regulations” means the regulations of the Federal Housing Finance Board or its successor, as amended, 12 CFR Chapter IX.

“Required Collateral Amount” means the aggregate dollar amount that the Bank may specify from time so time with respect to each Advance and any other

obligation or liability of the Institution to the Bank. The Bank may increase or decrease the Required Collateral Amount at any time.

“Swap Transaction” or “Swap Transactions” means any and all interest rate swaps, interest rate caps, floors or collars, currency exchange transactions or similar transactions entered into between the Bunk mud the Institution.

ADVANCES

2.1

Advance Procedures; Demand Deposit Account . All Advances are subject to and governed by the Credit Policy and the Collateral Policy, both of which are incorporated in and made a part of this Agreement. Periodically, the Institution may apply cc the Bank for Advances in accordance with the procedures established by the Bank. Each Advance shall be evidenced by a Confirmation. Unless otherwise agreed to in writing by the Bank, each Advance shall be made by crediting a demand deposit account of the Institution with the Bunk and payments of interest, principal or other amounts owed the Bank shall be made by debiting such account The Institution shall maintain sufficient available balances in the account to fund all payments due the Bank.

2.2

Estoppel . Failure of the Institution to deliver a written notice so the Bank specifying any disputed term or condition of an Advance within ten (10) Business Days after the Bank mails by first-class mail or transmits electronically a Confirmation to the Institution shall constitute the agreement and acknowledgment by the Institution that the terms and conditions of the Advance as stated in the Confirmation are valid and are those that the Institution requested and by which the Institution agreed to be bound. The Institution shall thereafter be estopped from asserting any claim or defense with respect to the repayment of such Advance and all interest, fees and other charges thereon or in connection therewith.

2.3

Interest . The institution agrees to pay interest on each Advance at the applicable rate per annum provided in die Confirmation pertaining thereto, as specified in the Bank’s Credit Policy for such type of Advance and as otherwise specified therein. Accrued interest on each Advance shall be due and payable at the times specified in the Bank’s Credit Policy, Confirmation or as otherwise specified in writing by the Bank.

2.4

Funding Commitments; Ineligibility . In the event the Institution’s access to Advances is restricted by any applicable law or regulatory directive, the Bank shall not fund outstanding Commitments to the Institution. The Institution shall immediately notify the Bank if it becomes ineligible for Advances under any applicable law or regulatory directive.

SECURITY AGREEMENT

3.1

Blanket Pledge; Required Collateral .

a.

As security for all present and future Indebtedness, the Institution hereby assigns, transfers and pledges to the Bank, and grants to the Bank a security interest in, all property now or hereafter owned by the Institution including without limitation the following types of property: (1) Capital Stock; (2) instruments (including without limitation any note or other instrument evidencing a debt and any mortgage, deed of trust, title or document securing it); (3) investment property (including without limitation mortgage-backed securities, share certificates or other participation interests in any securities trust and mortgage loan participation

certificates); (4) chattel paper; (5) choses in action; (6) general intangibles; (7) certificates of deposit; (8) deposit accounts held by the Institution at to Bank and (9) the proceeds of any of the foregoing.

The Institution shall at all times have granted the Bank a security interest in an amount of Eligible Collateral that has a Lending Value at least equal to the Required Collateral Amount applicable to the Institution.

While the may, except as provided below, retain the documents evidencing any Collateral it has pledged to the Back, it is specifically understood and agreed that the holding of such documents is solely for the benefit, and subject to the direction and control, of the Bank.

The Bank grants to the Institution the right to use, commingle and dispose of the Collateral and to collect, compromise and dispose of the proceeds of the Collateral, and any transferee of such Collateral shall take free and clear of any security or other interest granted to the Bank in Section 3.1(a) hereof; subject only to the Institution’s obligation to maintain the Collateral as provided in Section 3.1(b); provided, however, that this Section 3.1(d) shall not apply to Listed Collateral.

Immediately upon the Bank’s request, and from time to time thereafter, the Institution shall provide the Bank an amount of Listed Collateral which is also Eligible Collateral that has a Lending Value at all limes at least equal to the Required Collateral Amount applicable to the Institution. The Institution shall take all actions as the Bunk shall reasonably deem necessary or appropriate to perfect the Bank’s security interest in the Listed Collateral, including but not limited to the making, execution and delivery to the Bank of such assignments, listings, powers, financing statements or other instruments and documents as the Bank may require. The Institution shall not assign, pledge, transfer, create any security interest in, sell or otherwise dispose of any Listed Collateral without the prior written consent of the Bank.

The Institution agrees to pay to the Bank upon demand such fees and charges as may be assessed by to Bank to cover overhead and other costs relating to the perfection of the Bank’s security latest in the Listed Collateral (including without limitation the receipt, holding and redelivery of Collateral and to reimburse the Bank upon request for recording fees) 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 bailee that may be appointed by the Bank hereunder, and the agents and legal counsel of the Bank and of such bailee).

In the event any Listed Collateral that was Eligible Collateral ceases to be Eligible Collateral, the Institution will promptly notify the Bank in writing of the reason such Listed Collateral has ceased to be Eligible Collateral and request the deletion or redelivery of such Listed Collateral pursuant to Section 3.4.

The form and sufficiency of all documents pertaining to the Listed Collateral shall be satisfactory to the Bank. Any Listed Collateral that is not satisfactory to the Bank may be rejected by the Bank or may have a value ascribed thereto that shall

be less than the value normally ascribed thereto under the Bank’s Collateral Policy, or as the Bank may otherwise specify.

The Bank may take such steps as is reasonably deems necessary to protect its security position with respect to outstanding Advances, including requiring the pledging and/or perfection of additional collateral whether or nor such additional collateral is Eligible Collateral.

The Institution owns and has title to the Listed Collateral and has the right and authority to grant a security interest to the Bank in the Listed Collateral and to subject all of the Listed Collateral to this Agreement.

All the Listed Collateral that the Institution represents to be Eligible Collateral meets the standards and requirements with respect thereto from time to time established by the Beak, the Act and the Regulations.

The Institution has not conveyed or otherwise created, and there does not otherwise exist, any participation interest or other direct, indirect, legal or beneficial interest in any Listed Collateral in favor of anyone or any entity other than the Bank and the Institution except as specifically communicated in writing to the Bank.

The Institution shall provide the Bank with written periodic reports containing such information on the Collateral as the Bank shall require from time to time, including listings of mortgages and securities, unpaid principal balances thereof and certifications concerning the status of payments of mortgages and of taxes and insurance on property securing mortgages. The Institution shall give the Bank access at all reasonable times to Collateral in the possession of the Institution and to the books and records of account of the Institution relating to the Collateral for the purpose of permitting the Bank to examine, verify or reconcile the Collateral and the reports of the Institution to the Bank thereon.

All Collateral and the satisfaction by the Institution of the Required Collateral Amount shall be subject to periodic audit and verification by or on behalf of the Bank. Such audits and verifications may occur without notice during the Institution’s normal business hours or upon reasonable notice at such other time as the Bank may reasonably request. The Institution shall provide access to, and shall make adequate working facilities to, the representatives or agents of the Bank for purposes of such audits and verifications. The Institution agrees to pay

to the Bank such reasonable fees and charges as may be assessed by the Bank to cover overhead and other costs relating to such audits and verifications.

The Institution shall furnish to the Bank, if the Bank requests, an audit report prepared by an external independent auditor of the Institution in such form as the Bank may require certifying the accuracy of any or all information required to be given to the Bank by the Institution with respect to Collateral.

The Institution shall also furnish to the Bank, on an annual basis, copies of any available audited financial statements, management letters and directors’ exams in regard to the Institution.

If the Lending Value of the Eligible Collateral owned by the Institution shall at any time fall below the Required Collateral Amount, the Institution shall immediately notify the Bank.

Bank’s Responsibility as to Collateral . In the event that the Bank shall take possession of any Collateral hereunder, the Bank’s duty as to such Collateral shall be solely to use reasonable care in the custody and preservation of the Collateral in its possession. This duty shall not require the Bank to take any steps necessary to preserve rights against prior parties or the duty to send notices, perform services or take any action in connection with the management of the Collateral. The Institution shall make and maintain copies, microfilm or other recordings of all Collateral delivered to the Bank.

Application of Payments . The Bank may, in Its sole discretion, apply any payments by or recovery from the Institution, which are received by the