Advances, Security and Deposit Agreement This Advances, Security and Deposit Agreement (“Agreement”), dated as of December 1, 20 04 is entered

Exhibit 10.37

RECITALS

Whereas, Customer is a Member of Seattle Bank and desires from time to time to apply for extensions of credit, deposit accounts and other services from Seattle Bank in accordance with the terms and conditions of this Agreement; and

Whereas, Seattle Bank requires that all existing and future indebtedness of Customer to Seattle Bank be secured pursuant to this Agreement.

AGREEMENT

NOW THEREFORE, Customer and Seattle Bank agree as follows:

Article I. Definitions

Section 1.1 Definitions  As used in this Agreement, the following terms will have the following meanings:

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Article II. Advances and Other Credit Accommodations

Section 2.1 Procedures for Advances  The terms and conditions of this Agreement shall govern each Advance heretofore, now or hereafter made by Seattle Bank to Customer. The Credit Policy of the Seattle Bank is an integral part of the terms and conditions of all such Advances and is incorporated in this Agreement by this reference as if fully set forth herein. Additional terms and conditions of Advances may be set forth in an Advance Master Application and/or Advances Note, which Seattle Bank may require Customer to sign and deliver to Seattle Bank from time to time. Any additional, particular terms and conditions of an Advance orally quoted by Seattle Bank and accepted by Customer at the time of the Customer’s Request for an Advance, including, without limitation, the principal amount, applicable interest rate or due date of the Advance, will be confirmed by Seattle Bank in an Advance Confirmation Advice or, if no Advance Confirmation Advice is issued, will be evidenced by the books and records of the Seattle Bank. In cases in which a Request for an Advance is made orally by Customer of Seattle Bank in an electronically recorded telephone conversation, and a question arises concerning any particulars of such Advance, Customer agrees that such recording or a transcript thereof will be an integral part of the Seattle Bank’s books and records and may be used as evidence of such particulars. In cases in which an Advance requested orally by Customer is made by another federal home loan bank, on behalf of Seattle Bank, under a Master Backup Support Agreement, the books and records of such other federal home loan bank will establish any additional, particular terms of such Advance. If such Advance is requested by Customer of such other federal home loan bank in an electronically recorded telephone conversation, and a question arises concerning any particulars of such Advance, Customer agrees that such recording or a transcript thereof will be an integral part of the such other federal home loan bank’s books and records and may be used as evidence of such particulars. Unless otherwise agreed by Seattle Bank, each Advance will be made by crediting Customer’s demand deposit Account(s) with Seattle Bank. In all cases, funding of any Request for an Advance will be subject to compliance by Customer with the terms and provisions of the Act, the Regulations, the Credit Policy and this Agreement, including, without limitation, the Stock Ownership Requirement and Collateral Maintenance Requirement. In the event that Customer’s access to Advances is subsequently restricted pursuant to the Act, the Regulations or any other provision of applicable law, Seattle Bank will not be required to fund any outstanding Commitment for Advances not funded prior to the effective date of such restriction.

Section 2.2 Repayment of Advances  Customer agrees to repay each Advance in accordance with its terms and conditions. Customer will maintain in Customer’s demand deposit Account(s) with Seattle Bank an amount at least equal to the amounts then currently due and payable to Seattle Bank with respect to Advances, and Customer hereby authorizes Seattle Bank to debit Customer’s Account(s) with Seattle Bank for all amounts due and payable with respect to any Advance and for all other amounts due and payable under this Agreement. Customer agrees that, in the event any such debit results in Customer’s demand deposit Account being overdrawn, Customer will pay overdraft charges thereon at the rate that Seattle Bank normally assesses for overdrafts on general demand deposit accounts. In the event that the balance in such demand deposit Account(s) is, at any time, insufficient to pay such due and payable amounts, Seattle Bank may in its discretion and without notice to Customer: (i) make a “flexible

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balance” or other similar Advance, as provided in the Credit Policy, in the amount of and for the purpose of paying such due and payable amounts; or (ii) apply any other deposits, credits, Funds or other monies of Customer then in the possession of Seattle Bank to the payment of such due and payable amounts. All payments with respect to Advances will be applied to any fees, costs or charges applicable thereto, to interest due thereon and to any principal amount thereof that is then due and payable, in such order and priority as Seattle Bank may determine.

Section 2.3 Estoppel  For any Advance evidenced by an Advance Confirmation Advice, failure of Customer, within ten (10) business days of Customer’s receipt of the Advance Confirmation Advice, to deliver written notice to Seattle Bank specifying any disputed particulars thereof, including without limitation the principal amount, applicable interest rate or due date of the Advance, will constitute the final agreement and acknowledgment by Customer that the particulars of the Advance Confirmation Advice are accurate and are those that Customer requested and by which Customer agreed to be bound, and Customer will thereafter be estopped from asserting any claim or defense with respect thereto. For any Advance which has such particular terms established by the books and records of the Seattle Bank or another federal home loan bank rather than by an Advance Confirmation Advice, such books and records shall be conclusive in the absence of manifest error. Seattle Bank reserves the right to correct its scrivener’s errors, if any, in any Advance Confirmation Advice or such books and records, and no such errors shall affect Customer’s obligations in respect to the affected Advance.

Section 2.4 Interest  Customer agrees to pay interest on each Advance at a rate per annum determined on the basis described in the Credit Policy, Advance Master Application, Advances Note, Advance Confirmation Advice or the books and records of Seattle Bank or other federal home loan bank, as the case may be, pertaining to such Advance.

Section 2.5 Commitment and Cancellation Fees  Customer agrees to pay when due any commitment fees and any cancellation fees applicable to any Commitments issued by Seattle Bank for Advances, determined on the basis described in the Credit Policy, the Commitment documentation or the books and records of Seattle Bank or other federal home loan bank, as the case may be, pertaining to such Commitment.

Section 2.6 Other Credit Accommodations

Section 2.7 Prepayment Fees  Customer agrees to pay a prepayment fee upon the prepayment of all or any portion of any Advance or Other Credit Accommodation, made before the due date thereof, whether such prepayment is made voluntarily or involuntarily, including, without limitation, any prepayment resulting from acceleration under Section 4.1 hereof upon an Event of Default. The amount of the prepayment fee shall not be less than zero and shall be determined by the Seattle Bank on the basis described in the Regulations, the Credit Policy and any applicable Advance Master Application, Advances Note, Advance Confirmation Advice or Swap Transaction, as the case may be, pertaining to prepayment of such Advance or Other Credit Accommodation. Any applicable illustrations and examples of prepayment fees in the Users Guide, as published and revised by the Seattle Bank from time to time, are

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an integral part of the terms and conditions of this Agreement and are incorporated herein by this reference as if fully set forth at length.

Section 2.8 Compliance with the Credit Policy, Act and Regulations  Customer hereby agrees to comply with the terms and provisions of the Credit Policy, the Act and the Regulations, including, without limitation, any reporting requirements, application procedures or eligibility requirements imposed by the Credit Policy, the Act or the Regulations with respect to particular types of Advances, Commitments or Other Credit Accommodations. In the event of any inconsistency between the Credit Policy and the Act or the Regulations, Customer hereby agrees to comply with the more restrictive statute, regulation or policy. In the event any provision of the Credit Policy, the Act or the Regulations is amended, Customer agrees to comply with the terms and provisions of the Credit Policy, the Act and the Regulations as so amended from time to time, provided that, to the extent permitted by the Act and the Regulations, any particular terms of outstanding Advances or Commitments existing at the time of any such amendment, including, without limitation, interest rates or prepayment fees, will continue to be governed by the terms and provisions of the Advance Master Application, Advances Note, Advance Confirmation Advice or Commitment documentation which applied to such outstanding Advances or Commitments at the time such Advances or Commitments were made. Notwithstanding the foregoing, Seattle Bank shall retain the right to amend from time to time the Borrowing Capacity, Collateral Coverage Factors and Collateral Maintenance Requirements applicable to Customer and its Eligible Collateral, and Customer agrees to comply with such changes upon Seattle Bank’s notice thereof to Customer.

Section 2.9 Additional Covenants by Customer  Customer will maintain a copy of this Agreement in its official records at all times. Customer will give Seattle Bank notice of any material event that would cause Customer, pursuant to the provisions of the Act, the Regulations, the Credit Policy or this Agreement, to be ineligible to become a Customer of Seattle Bank or ineligible to obtain Advances, Commitments or Other Credit Accommodations. Any obligation of Seattle Bank to fund any Advance or Other Credit Accommodation, including any Commitment, shall be conditioned upon the satisfaction of each of the following conditions precedent as of the date hereof and at the time of funding of each Advance or Other Credit Accommodation: (a) all representations and warranties of Customer contained this Agreement, or otherwise made by Customer to Seattle Bank, are and continue to be correct; (b) no Event of Default under this Agreement, or other documentation relating to the Advance or Other Credit Accommodation, has occurred or would result from such Advance; (c) the Seattle Bank has received such approvals, opinions or documents that the Seattle Bank may request in connection with the Advance or Other Credit Accommodation; (d) Customer satisfies all membership and borrowing eligibility criteria under the Act, the Regulations, this Agreement and the Credit Policy; (e) Customer, in the judgment of Seattle Bank, is not engaging or has not engaged in unsafe or unsound banking practices, has adequate capital, is not sustaining operating losses, does not have financial or managerial deficiencies that bear on the Customer’s creditworthiness, and has no other deficiencies as determined by Seattle Bank; (f) there has been in Seattle Bank’s judgment no material adverse change in Customer, the Collateral or any financial or other information submitted by Customer to Seattle Bank in connection with an Advance, Other Credit Accommodations or any Other Obligations; and (g) there has been in Seattle Bank’s judgment no change in governmental laws or regulations that materially affects the Seattle Bank’s power, right, authority, or ability to fund the Advance or Other Credit Accommodation.

Article III. Security Agreement

Section 3.1 Creation of Security Interest As security for the timely payment of all Indebtedness and outstanding Commitments, Customer hereby assigns, transfers, and pledges to Seattle Bank, and grants to Seattle Bank a security interest in all of the following Collateral now owned or hereafter acquired by Customer, and all proceeds thereof:

3.1.1              All promissory notes and other instruments, all mortgages, deeds of trust and other supporting obligations, all mortgage-backed securities, stock and other investment property, and all accounts, general intangibles, payment intangibles, chattel paper, letter of credit rights, deposit accounts, money, goods, software, commercial tort claims, equipment and inventory, now owned or hereafter acquired by Customer, including without limitation:

(a)                         All Capital Stock now owned or hereafter acquired by Customer in Seattle Bank, including all payments which have been or hereafter are made on account of subscriptions to and all unpaid dividends on such stock;

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(b)                        All Funds of Customer now or hereafter on deposit with Seattle Bank;

(c)                         All Eligible Mortgage Collateral and related Mortgage Documents now owned or hereafter acquired by Customer;

(d)                        All Eligible Securities Collateral now owned or hereafter acquired by Customer; and

(e)                         All Other Eligible Collateral now owned or hereafter acquired by Customer.

Section 3.2 Customer’s Representations and Warranties Regarding Collateral  Customer represents and warrants to Seattle Bank, as of the date of this Agreement and the date of each Advance, Commitment or Other Credit Accommodation made under this Agreement, as follows:

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Section 3.3 Collateral Maintenance Requirement

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Section 3.4 Listed Collateral

Section 3.5 Physical Possession Collateral

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Section 3.6 De-Pledging of Collateral  Upon receipt by Seattle Bank of a written request from Customer, in form and content acceptable to Seattle Bank, for the De-Pledge of any part of the Collateral or proceeds thereof in which Seattle Bank has perfected its security interest, setting forth (i) a sufficient description of the Collateral to be withdrawn or reassigned; and (ii) a certificate of an authorized officer of Customer certifying that the immediately after such De-Pledge, Customer’s remaining Eligible Collateral will be sufficient to comply with the Collateral Maintenance Requirement, Seattle Bank will promptly return, reassign or partially release to Customer, at Customer’s expense, the Collateral specified in said request. Notwithstanding anything to the contrary contained in this Agreement, Customer may not obtain any such withdrawal or reassignment (a) while an Event of Default under this Agreement has occurred and is continuing; (b) at any time that Seattle Bank’s records indicate that immediately after such De- Pledge, Customer’s remaining Eligible Collateral would be insufficient to comply with the Collateral Maintenance Requirement as determined by Seattle Bank; or (c) at any time that Seattle Bank reasonably and in good ▇▇▇▇▇ ▇▇▇▇▇ itself insecure. Customer will pay upon request for all filing or recording fees and other reasonable expenses incurred by Seattle Bank or any approved custodian in connection with De-Pledging of any Collateral, including without

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limitation reasonable attorneys fees and costs of legal counsel of Seattle Bank or such custodian. Any such sums owed to Seattle Bank or to such custodian may be collected by Seattle Bank, at its option, by debiting Customer’s demand or time deposit Account(s) with Seattle Bank.

Section 3.7 Reports, Collateral Audits; Access

3.7.1        If requested by Seattle Bank at any time, Customer will furnish to Seattle Bank an audit report prepared in accordance with generally accepted auditing standards by an external auditor acceptable to Seattle Bank, certifying the book value of the Eligible Collateral owned by Customer. If requested by Seattle Bank at any time, Customer will furnish to Seattle Bank a written report covering such matters regarding Eligible Collateral as Seattle Bank may require, including without limitation a listing of mortgages comprising Eligible Mortgage Collateral or loans comprising Eligible CFI Collateral, the unpaid principal balances thereof, the status of payments thereon and of taxes and insurance on the property encumbered thereby; securities and the publicly listed market value thereof, and any other information requested by Seattle Bank regarding the Eligible Collateral. Customer will give Seattle Bank access at all reasonable times to Collateral in Customer’s possession and to Customer’s books and records of account relating to such Collateral, for the purpose of Seattle Bank’s examining, verifying or reconciling the Collateral and Customer’s report to Seattle Bank thereon.

3.7.2        All Collateral and the satisfaction by Customer of the Collateral Maintenance Requirement will be subject to audit and verification by or on behalf of Seattle Bank. Such audits and verifications may occur without notice during Customer’s normal business hours or upon reasonable notice at such other times as Seattle Bank may reasonably request. Customer will provide access to, and will make adequate working facilities available to, the representatives or agents of Seattle Bank for purposes of such audits and verifications. Customer agrees to pay to Seattle Bank such reasonable fees and charges as may be assessed by Seattle Bank to cover overhead and other costs relating to such audit and verification.

Section 3.8 Additional Documentation  Customer will make, execute, record and deliver to Seattle Bank such notices, instructions, assignments, listings, powers, and other documents with respect to the Collateral and Seattle Bank’s security interest therein in such form as Seattle Bank may require. Customer authorizes Seattle Bank to file such financing statements as Seattle Bank deems necessary with respect to the Collateral, and Customer hereby ratifies any financing statements previously filed by Seattle Bank with respect to the Collateral.

Section 3.9 Seattle Bank’s Responsibilities as to Collateral  In the event that Seattle Bank takes possession of any Collateral pursuant to the terms of this Agreement, Seattle Bank’s duty as to the Collateral will be solely to use reasonable care in the custody and preservation of the Collateral in its possession, which will not include any steps necessary to preserve Customer’s rights against any third parties nor the duty to send notices, perform services, or take any action in connection with management of the Collateral. Seattle Bank will 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. Customer agrees that any and all Collateral may be removed by Seattle Bank from the state or location where situated, and may there be dealt with by Seattle Bank as provided in this Agreement.

Section 3.10 Seattle Bank’s Rights as to Collateral  At any time or times, at the expense of Customer, Seattle Bank will have the right, before or after the occurrence of an Event of Default as set forth in Section 4.1 of this Agreement, but shall not have the obligation, to do any or all things and take any and all actions that are deemed necessary or convenient by Seattle Bank to the protection of its rights and interests under this Agreement and are lawful under the Act, the Regulations and the laws of the State of Washington, including, but not limited to, the following:

3.10.1      Terminate any consent given under this Agreement;

3.10.2      Notify obligors on any Collateral to make payments thereon directly to Seattle Bank;

3.10.3      Endorse any Collateral that is in Customer’s name or that has been endorsed by others to Customer’s name;

3.10.4      Enter into any extension, compromise, settlement, or other agreement relating to or affecting any Collateral;

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3.10.5      Take any action Customer is required to take or which is otherwise necessary to: (i) file a financing statement or otherwise perfect a security interest in any or all of the Collateral; or (ii) to obtain, preserve, protect, enforce or collect the Collateral;

3.10.6      Take control of any funds or other proceeds generated by the Collateral and use the same to reduce Indebtedness as it becomes due; and

3.10.7      Cause the Collateral to be transferred to Seattle Bank’s name or the name of its nominee.

Section 3.11 Power of Attorney  Customer hereby appoints Seattle Bank as its true and lawful attorney, for and on behalf of Customer and in its name, place and stead, to prepare, execute and record endorsements and assignments to Seattle Bank of all or any item of Collateral, giving or granting to Seattle Bank, as such attorney, full power and authority to do or perform every lawful act necessary or proper in connection therewith as fully as Customer might or could do. Customer hereby ratifies and confirms all that Seattle Bank will 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 of this Agreement and continuing until the discharge of all Indebtedness and Commitments and all obligations of Customer under this Agreement regardless of any Event of Default by Customer, is coupled with an interest and is irrevocable for the period granted. As Customer’s true and lawful attorney-in-fact, Seattle Bank has no responsibility to take 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.

Article IV. Default; Remedies

Section 4.1 Events of Default;  Acceleration Upon the occurrence of and during the continuation any of the following events or conditions of default (“Event of Default’), Seattle Bank may at its option, by a notice to Customer, declare all Indebtedness and accrued interest thereon, including any prepayment fees or charges which are payable in connection with the payment prior to the originally scheduled maturity of any Advance or Other Credit Accommodation, to be immediately due and payable without presentment, demand, protest or any further notice and/or terminate any obligation on the part of Seattle Bank in respect of any Commitment to make or continue making any Advances:

4.1.1        Failure of Customer to pay when due any interest on or principal of any Advance or Other Credit Accommodation; or

4.1.2        Failure of Customer to perform any promise or obligation or to satisfy any condition or liability contained in this Agreement, the Credit Policy or any Advances Note, Advance Master Application or Advance Confirmation Advice, or in any other agreement to which Customer and Seattle Bank are parties, whether pertaining to any Advance, Other Credit Accommodation or Other Obligations; or

4.1.3        Evidence coming to the attention of Seattle Bank that any representations, statements, or warranty made or furnished in any manner to Seattle Bank by or on behalf of Customer in connection with any Advance or Other Credit Accommodation, any specification of Eligible Collateral or any certification of Fair Market Value were false, misleading or incomplete in any material respect when made or, with the passage of time, have become untrue in any material respect; or

4.1.4        Failure of Customer to maintain adequate Eligible Collateral free of any encumbrances or claims as required in this Agreement, or any material damage to or loss of Eligible Collateral, or any sale or encumbrance of any Eligible Collateral except as permitted by this Agreement

4.1.5        The issuance of any tax, levy, seizure, attachment, garnishment, levy of execution, or other process with respect to any of the Collateral; or

4.1.6        Any suspension of payment by Customer to any creditor of sums due or the occurrence of any event which results in another creditor having the right to accelerate the maturity of any indebtedness of Customer under any security agreement, indenture, loan agreement, or comparable undertaking; or

4.1.7        Any taking over of the Customer or any of its assets or affiliates by a supervising agency, or an application for or appointment of a conservator or receiver for Customer or any affiliate of Customer or Customer’s property, entry of a judgment or decree adjudicating Customer or any affiliate of Customer insolvent or bankrupt, an assignment by Customer or any affiliate of Customer for benefit of creditors, or the entry of any

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supervisory or consent order pertaining to Customer or any affiliate of Customer by any regulatory body or by any court at the request of such regulator; or

4.1.8        Sale by Customer of all or a material part of Customer’s asset or the taking of any other action by Customer to liquidate or dissolve; or

4.1.9        Termination of Customer’s membership in Seattle Bank, or Customer’s ceasing to be a type of financial institution that is eligible under the Act or the Regulations to become a Customer of Seattle Bank; or

4.1.10      Merger, consolidation or other combination of Customer with an entity which is not a Customer of Seattle Bank if the non-Customer entity is the surviving entity; or

4.1.11      Seattle Bank determines in good faith that a material adverse change has occurred in the financial condition of Customer from that disclosed at the time of the making of any Advance or from the condition of Customer as theretofore most recently disclosed to Seattle Bank; or

4.1.12      Seattle Bank in good ▇▇▇▇▇ ▇▇▇▇▇ itself insecure even though Customer is not otherwise in default; or

4.1.13      Customer has borrowed, or committed to borrow, from any source an amount that is greater than the amount Customer is permitted to borrow under applicable law.

Section 4.2 Remedies  Upon the occurrence of any Event of Default, Seattle Bank will have all of the rights and remedies provided by applicable law, including but not be limited to all of the remedies of a secured party under the UCC. In addition, Seattle Bank may take immediate possession of any of the Collateral or any part thereof wherever the same may be found. Seattle Bank may sell, assign and deliver the Collateral or any part thereof at public or private sale for such price as Seattle Bank deems appropriate without any liability for any loss due to decrease in the market value of the Collateral during the period held. Seattle Bank will have the right to purchase all or part of the Collateral at such sale. If the Collateral includes insurance or securities which will be redeemed by the issuer upon surrender, or any accounts or deposits in the possession of Seattle Bank, Seattle Bank may realize upon such Collateral without notice to Customer. If any notification of intended disposition of any of the Collateral is required by applicable law, then, if no greater period of notification is required by applicable law, such notification will be deemed reasonable and properly given if mailed, postage prepaid, at least 10 days before any such disposition to the address of Customer appearing on the records of Seattle Bank. The proceeds of any sale will be applied in the order that Seattle Bank, in its sole discretion, may choose. Customer agrees to pay all the costs and expenses of Seattle Bank in the collection of the Indebtedness and enforcement of Seattle Bank’s rights and remedies in case of default, including, without limitation, reasonable attorneys’ fees. Seattle Bank will, to the extent required by law, apply any surplus after payment of the Indebtedness, provision for repayment to Seattle Bank of any amounts to be paid or advanced under outstanding Commitments, and all costs of collection and enforcement to third parties claiming a secondary security interest in the Collateral, with any remaining surplus paid to Customer. Customer will be liable to Seattle Bank for any deficiency remaining.

Section 4.3 Payment of Prepayment Charges  Any prepayment fees or charges for which provision is made, whether under the Regulations, the Credit Policy, or any applicable Advance Master Application, Advances Note, Advance Confirmation Advice or Swap Transaction, as the case may be, with respect to any Advances or Other Credit Accommodations, will be payable at the time of any voluntary or involuntary payment of the principal of such Advances or Other Credit Accommodations prior to the originally scheduled maturity thereof, including, without limitation, payments that are made as a part of a liquidation of Customer or that become due as a result of an acceleration pursuant to Section 4.1 of this Agreement, whether such payment is made by Customer, by a conservator, receiver, liquidator or trustee of or for Customer, or by any successor to or any assignee of Customer.

Article V. Accounts

Section 5.1 Deposit Accounts  The Customer may open Accounts with the Seattle Bank subject to the Act, the Regulations, the Credit Policy and any other policies adopted by the Seattle Bank from time to time in respect to Accounts and related services, including without limitation the wire transfer of funds. Any Customer’s funds deposited in Accounts shall be subject to withdrawal or charge at any time and from time to time upon wire transfers or any other orders for the payment of money when made and drawn on behalf of the Customer by a person or persons authorized by Resolution of the Customer under Section 6.7 below. The Seattle Bank is authorized to pay any such wire transfers or other orders, provided they are in the form prescribed by it, and to charge the Customer’s Accounts

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therefor, without inquiry as to the circumstances of issue or the disposition of the proceeds, even if drawn to the individual order of any authorized person or payable to others for his account.

Section 5.2 Bank’s Reliance  The Seattle Bank, if it acts in good faith and with ordinary care (and without liability if it does so act), can charge the Accounts with orders received by the Seattle Bank by telephone, or otherwise orally, from any person acting for or purporting to act for the Customer as its officer or employee, for the transfer of funds to others, including the person giving such instructions or payable to others for his account, or between Accounts of the Customer. All scheduled charges and fees adopted by the Seattle Bank from time to time in respect to Accounts and related services will be charged monthly to such Accounts.

Section 5.3 Positive Balance Requirement  The Customer shall maintain a net positive collected balance in all of its Accounts. The Seattle Bank shall have the option of closing or restricting the use of Accounts in which positive balances are not maintained. For each day the aggregate collected balance of an Account is negative, the Customer shall pay such overdraft charges as are consistent with the scheduled charges and fees adopted by the Seattle Bank from time to time in respect to Accounts and related services.

Article VI. Miscellaneous

Section 6.1 General Representations and Warranties by Customer. Customer hereby represents and warrants that, as of the date of this Agreement and the date of each Advance or Other Credit Accommodation, including any Commitment, made pursuant to this Agreement:

6.1.1        Customer is not, and neither the execution of nor the performance of any of the transactions or obligations of Customer under this agreement will, with the passage of time, the giving of notice or otherwise, cause Customer 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; or (ii) in default under or in breach of any indenture, contract, or other instrument or agreement to which Customer is a party or by which it or any of its property is bound.

6.1.2        Customer has full corporate power and authority and has received all corporate and governmental authorizations and approvals (including without limitation those required under the Act and the Regulations) as may be required to enter into and perform its obligations under this Agreement, to borrow each Advance and to obtain each Other Credit Accommodation.

6.1.3        The information given by Customer in any document provided, or in any oral statement made, in connection with any application or request for an Advance or Other Credit Accommodation, is true, accurate and complete in all material respects.

Section 6.2 Assignment  Seattle Bank may assign or negotiate to any other federal home loan bank or to any other person or entity, with or without recourse, any Indebtedness of Customer or participations therein, and Seattle Bank may assign or transfer all or any part of Seattle Bank’s right, title, and interest in and to this Agreement and may assign and deliver the whole or any part of the Collateral to the transferee, which will succeed to all the powers and rights of Seattle Bank in respect thereof, and Seattle Bank will thereafter be forever relieved and fully discharged from any liability or responsibility with respect to the transferred Collateral. Customer hereby acknowledges and agrees that any such disposition will give rise to a direct obligation of Customer to the participant. Customer hereby authorizes Seattle Bank and each participant, in case of default by Customer under this Agreement, to proceed directly, by right of setoff or otherwise, against any assets of Customer which may at the time of such default be in the respective hands of Seattle Bank or any such participant. Customer further agrees that Seattle Bank may furnish any information pertaining to Customer which is in the possession of Seattle Bank to any prospective participant to assist it in evaluating such participation provided that any non-pubic information reasonably designated in writing to Seattle Bank by Customer as constituting non-public information will be furnished to such prospective participant on a confidential basis. Customer may not assign or transfer any of its rights or obligations under this Agreement without the express prior consent of Seattle Bank, which may be granted or withheld in Seattle Bank’s sole discretion.

Section 6.3 Discretion of Seattle Bank to Grant or Deny Advances  Nothing contained in this Agreement or in any documents describing or setting forth the Credit Policy or any other policy of Seattle Bank will be construed as an agreement or commitment on the part of Seattle Bank to grant Advances or extend Commitments or Other Credit Accommodations under this Agreement, the right and power of Seattle Bank in its discretion to either grant or deny any of the foregoing being herein expressly reserved.

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Section 6.4 Amendment; Waivers  No modification, amendment or waiver of any provision of this Agreement or consent to any departure therefrom will be effective unless executed by the party against whom such change is asserted and will be effective only in the specific instance and for the purpose for which given. No notice to or demand on Customer in any case will entitle Customer to any other or further notice or demand in the same, or similar or other circumstances. Any forbearance, failure or delay by Seattle Bank in exercising any right, power or remedy under this Agreement will not be deemed to be a waiver thereof, and any single or partial exercise by Seattle Bank of any right, power or remedy under this Agreement will not preclude the further exercise thereof. Every right, power and remedy of Seattle Bank will continue in full force and effect until specifically waived by Seattle Bank in writing.

Section 6.5 Exceptions to Credit Policy  Customer acknowledges and agrees that no exception to the Credit Policy requested of Seattle Bank by Customer shall be binding upon the Seattle Bank unless (i) approved in writing by the Seattle Bank’s authorized representative and (ii) authorized by the Act and Regulations.

Section 6.6 Jurisdiction; Legal Fees  In any action or proceeding brought by Seattle Bank or Customer in order to enforce any right or remedy under this Agreement, the parties hereby consent to, and agree that they will submit to, the jurisdiction of the United States District Court for the Western District of Washington, or, if such action or proceeding may not be brought in federal court, the jurisdiction of the courts of King County, Washington. Customer agrees that, if any action or proceeding is brought by Customer seeking to obtain any legal or equitable relief against Seattle Bank under or arising out of this Agreement or any transaction contemplated hereby, and such relief is not granted by the final decision, after any and all appeals, of a court of competent jurisdiction, Customer will pay all attorneys’ fees and other costs incurred by Seattle Bank in connection therewith. Customer agrees to reimburse Seattle Bank for all costs and expenses (including reasonable fees and out-of-pocket expenses of counsel for Seattle Bank) incurred by Seattle Bank in connection with (i) the administration, enforcement, interpretation or preservation of Seattle Bank’s rights under this Agreement including, but not limited to, its rights in respect of any Collateral or the audit or possession thereof, whether or not an Event of Default has occurred or any suit has been brought; (ii) Seattle Bank’s rights in any litigation, arbitration or supervisory, receivership, bankruptcy or other insolvency or regulatory proceedings affecting Customer, any Collateral or any Advances, Other Credit Accommodations or Other Obligations; or (iii) Seattle Bank’s preparation of additional documentation for Advances, Other Credit Accommodations or Other Obligations or any Collateral, or any amendments, approvals, consents, waivers or releases requested, required, proposed or done from time to time.

Section 6.7 Notices  Except as provided in Subsection 6.8.3 below, any notice, advice, request, consent or direction given, made or withdrawn pursuant to this Agreement must be in writing or by machine-readable electronic transmission, and will be deemed to have been given to and received by a party to this Agreement when mailed to such party at its address given above by first class mail, or if given by hand or by electronic transmission, when actually received by such party at its principal office.

Section 6.8 Signatures of Customer; Resolution; Oral Requests

6.8.1        The Secretary or the Assistant Secretaries of Customer will from time to time certify to Seattle Bank on forms provided by Seattle Bank the names and specimen signatures of the persons authorized to apply on behalf of Customer to Seattle Bank for Advances and otherwise act for and on behalf of Customer in accordance with this Agreement. Such certifications are incorporated in this Agreement and made a part of this Agreement and will continue in effect until expressly revoked by Customer notwithstanding that subsequent certifications may authorize additional persons to act for and on behalf of Customer.

6.8.2        Prior to or at the time of the execution and delivery of this Agreement, the Secretary or the Assistant Secretaries of Customer shall provide the Seattle Bank with a certified copy of a resolution adopted by the Customer’s Board of Directors or other governing body (“Resolution”) approving this Agreement and authorizing designated officers or employees of the Customer to obtain Advances and Other Credit Accommodations, open and use Accounts, and incur Other Obligations. The Seattle Bank may rely upon, and the Customer is estopped from denying, the authority of the persons designated in the Resolution or of the persons to whom such authority has been delegated pursuant to the terms of the Resolution.

6.8.3        Notwithstanding the preceding or any other provision of this Agreement, the Seattle Bank may, but is not obligated to, honor, and Customer shall be bound by, any form of request, including an oral request, for Advances, Other Credit Accommodations or other services from Seattle Bank, whenever such requests are

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made by persons purporting to act as officers or employees of Customer, if Seattle Bank acts in good faith and with ordinary care (and without liability if it does so act).

Section 6.9 Recording Conversations. Customer for itself and its employees hereby authorizes and consents to Seattle Bank’s electronic recording of, transcription of and use of all telephone conversations made by Customer’s employees to the Seattle Bank for the purpose of requesting Advances or Other Credit Accommodations. The period of time for which such recordings are stored or whether transcriptions are made shall be determined by Seattle Bank.

Section 6.10 Stock Ownership Requirement  The Seattle Bank and the Customer acknowledge and agree that the Customer is subject to the Member Advance Stock Purchase Requirement and other terms and conditions set forth in the Capital Plan of the Seattle Bank. The Member Advance Stock Purchase Requirement provides that the Customer hold a specified amount capital stock in the Seattle Bank in connection with Advance transactions. Currently, each Customer is required to hold Class B (1) stock with a par value equal to three and one-half percent (3.5%) of the unpaid principal balances of Advances As set forth in the Capital Plan, the Board of Directors of the Seattle Bank may change the above percentage within a range of not less than two and one-half percent (2.5%) or not greater than four and one-half percent (4.5%). The Customer agrees to be bound by any such change in the Member Advance Stock Purchase Requirement percentage. Any such change in the Member Advance Stock Purchase Requirement will be applied as of the implementation date of the change to all new Advances made by the Seattle Bank to the Customer. In addition, the Customer agrees and acknowledges that it will be subject to all amendments to the Capital Plan, that may be made from time to time.

Section 6.11 Force Majeure  Any obligations of the Seattle Bank in connection with this Agreement, any Commitment, or otherwise arising in connection with any Advance, Other Credit Accommodation, Account, Mortgage Purchase Program or other service, shall be excused to the extent delayed or prevented by reason of computer, communications system or power failure, labor disturbances, governmental laws, orders or regulations, riots, insurrection, acts of terror, war or any other causes beyond the reasonable control of the Seattle Bank. In addition, the Seattle Bank shall not be liable for the failure of any wire transfer, fedwire or other such system.

Section 6.12 Limitation of Damages  If Seattle Bank, in connection with this Agreement, any Commitment, or any Advance, Other Credit Accommodation, Account, Mortgage Purchase Program or other service, breaches any obligation of Seattle Bank to Customer not otherwise excused by this Agreement or applicable law, Seattle Bank will be obligated to Customer only for Customer’s actual, direct damages, if any. Under no circumstances shall Seattle Bank be liable for, and Customer hereby forever waives, any special, indirect or consequential damages or any punitive or exemplary damages.

Section 6.13 Applicable Law; Severability  In addition to the terms and conditions specifically set forth in this Agreement and any other related documentation, this Agreement, and all Advances granted and Commitments extended under this Agreement, will 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 Washington. Notwithstanding the foregoing, the UCC of the State of Washington, as amended from time to time, will be deemed applicable to this Agreement and to any Advance or Other Credit Accommodation made or Collateral pledged under this Agreement, except as otherwise required by the provisions of RCW 62A.9A-301 through 307. In the event that any portion of this Agreement conflicts with applicable law, such conflict will not affect other provisions of this Agreement that can be given effect without the conflicting provision, and to this end the provisions of this Agreement are declared to be severable.

Section 6.14 Successors and Assigns  This Agreement will be binding upon and inure to the benefit of the successors and permitted assigns of Customer and Seattle Bank.

Section 6.15 Amendment and Restatement of Any Prior Agreement  This Agreement amends and restates the terms of, and is not a novation of, any previous agreements between the parties or their predecessors entitled “Advances, Security and Deposit Agreement,” “Deposit Account Resolution” or “Advances Agreement, Pledge Agreement and Security Agreement.” This Agreement shall not release or impair the priority position of any existing Collateral for any existing Collateral securing any existing Indebtedness.

NOTICE: ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, TO EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.

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IN WITNESS WHEREOF, Customer and Seattle Bank have caused this Agreement to be signed in their names by their duly authorized officers as of the date first above mentioned.

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CORPORATE ACKNOWLEDGMENT

CORPORATE ACKNOWLEDGMENT

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