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December 31, 2009
Any member that has submitted a letter of intent to withdraw
from membership in the Federal Home Loan Bank of Boston may
not borrow under any advances program with a maturity date
beyond the effective date of the member's withdrawal.
When a member has submitted a letter of intent to withdraw
from the Bank, any outstanding advances with maturities extending
beyond the date of withdrawal are subject to immediate prepayment
of principal and interest, as well as appropriate prepayment
fees, either on or before the withdrawal date. In the event
of an involuntary termination of membership, whether by merger,
acquisition, regulatory action, or otherwise, the Bank may
allow a nonmember to assume the outstanding advances of the
former member. If the Bank allows the nonmember to assume
the outstanding advances, these advances must be fully secured
by qualified collateral delivered to the Bank.
If in the event of termination of membership, whether voluntary
or involuntary, a nonprepayable advance is prepaid, the Bank
will charge the member a prepayment fee sufficient to render
the Bank indifferent to the prepayment.
In the event of termination of membership, whether voluntary
or involuntary, while letters of credit are outstanding,
i) the withdrawing member must deliver qualified collateral
to the Bank in the amount of the outstanding letters of
credit, to be held until the letters of credit expire, ii)
the withdrawing member must substitute a letter of credit
from another financial institution, naming the Federal Home
Loan Bank of Boston as the beneficiary, or iii) the beneficiary
must surrender the letters of credit to the Bank for cancellation.
Approval by the Bank is required for whatever option is
taken.
For derivatives transactions outstanding, termination of membership will be deemed an “Additional Termination Event” as defined in the form of the 1992 ISDA Master Agreement (hereafter the “ISDA”) as published by the International Swaps and Derivatives Association, Inc. The member will also be deemed the “Affected Party” as defined therein. Members can receive copies of the ISDA and the Bank’s derivatives agreement by contacting the Bank’s Money Desk at 1-800-357-3452.
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