exhibit.htm


    
      Exhibit
10.1

       

       

      
        	 	1501 Fourth Ave.,
      Ste. 1900, Seattle, WA 98101-1693  206.340.2300 tel 
      206.340.2485 fax 
www.fhlbsea.com 


      

       

    

     

    Advances,
Security and Deposit Agreement

    
      

    

     

    This
Advances, Security and Deposit Agreement (“Agreement”), dated as of June 23, 2004 (Date
of Agreement) is entered between Central Pacific Bank
(Full Corporate Name of Customer) having its principal place of business at
220 South King Street
Honolulu, HI 96813 (Full Address of Customer's Executive Offices)
(“Customer”) and the Federal Home Loan Bank of Seattle, 1501 Fourth Avenue,
Suite 1900, Seattle, WA 98101 (“Seattle Bank”).

    


    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
1.  Definitions

    


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

    


    
      	
              1.1.1

            	
              “Account”
      or “Accounts” means Customer’s deposit account(s) with Seattle Bank,
      including demand and time deposit accounts.

            
	 	 
	
              1.1.2

            	
              “Act”
      means the Federal Home Loan Bank Act, as amended from time to
      time.

            
	 	 
	
              1.1.3

            	
              “Advance”
      or “Advances” means any loans heretofore, now or hereafter made to
      Customer by Seattle Bank.

            
	 	 
	
              1.1.4

            	
              “Advance
      Master Application” means a writing executed by Customer and accepted by
      Seattle Bank, in form and content satisfactory to Seattle Bank, under
      which Customer may make Requests from time to time to receive Advances,
      subject to the terms of this Agreement, the Seattle Bank’s Credit Policy,
      the Act and the Regulations.

            
	 	 
	
              1.1.5

            	
              “Advances
      Note” means any promissory note executed by Customer and accepted by
      Seattle Bank, in form and content satisfactory to Seattle Bank, relating
      to Advances or Other Credit Accommodations.

            
	 	 
	
              1.1.6

            	
              “Advance
      Confirmation Advice” means a writing or an electronic transmission issued
      at any time by Seattle Bank, in form and content satisfactory to Seattle
      Bank, confirming particular terms of an Advance made at the Request of
      Customer.

            
	 	 
	
              1.1.7

            	
              “Borrowing
      Capacity” means the maximum amount of Advances, Commitments and Other
      Credit Accommodations which Borrower may have outstanding at any
      time.  Borrowing Capacity is limited by the Act and Regulations,
      the Stock Ownership Requirement and Collateral Maintenance Requirement of
      the Credit Policy, and by Customer’s creditworthiness and the quality of
      Customer’s Eligible Collateral, as determined by Seattle Bank from time to
      time.

            
	 	 
	
              1.1.8

            	
              “Capital
      Plan” means the Capital Plan of the Federal Home Loan Bank of Seattle,
      adopted March 5, 2002, as amended November 22, 2002 and as hereafter
      amended.

            


    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	1.1.9 	

              “Capital
      Stock” means all of Customer’s capital stock in Seattle
      Bank. 

            
	 	 
	
              1.1.10

            	
              “Collateral”
      means all property, including the proceeds thereof, heretofore, now or
      hereafter assigned, transferred or pledged to Seattle Bank by Customer as
      security for Indebtedness.

            
	 	 
	
              1.1.11

            	
              “Collateral
      Coverage Factor” means the percentage of value, as determined by Seattle
      Bank from time to time, of various types of Eligible Collateral which will
      support the aggregate amount of all outstanding Advances, Commitments or
      Other Credit Accommodations made to Customer against such Eligible
      Collateral.

            
	 	 
	
              1.1.12

            	
              “Collateral
      Manual” means the Collateral Manual of the Seattle Bank, as published and
      revised by the Seattle Bank from time to time.

            
	 	 
	
              1.1.13

            	
              “Collateral
      Maintenance Requirement” means the minimum level of aggregate Eligible
      Collateral, discounted by applicable Collateral Coverage Factors, which
      Customer must pledge to Seattle Bank, and maintain at or above such
      minimum level, to secure Customer’s outstanding Advances, Commitments or
      Other Credit Accommodations, as determined by Seattle Bank from time to
      time.

            
	 	 
	
              1.1.14

            	
              “Commitment”
      means any written agreement under which Seattle Bank is contractually
      obligated to make Advances to Customer, or payments on behalf of or for
      the account of Customer, at a future date, irrespective of whether Seattle
      Bank’s obligation under such agreement is contingent upon the occurrence
      or non-occurrence of a condition subsequent.  Commitments
      include, without limitation, Letters of Credit, firm commitments,
      guarantees or other financial arrangements made by Seattle Bank in writing
      to facilitate transactions between Customer and third
      parties.  This Agreement is neither a Commitment nor an
      undertaking or obligation to provide any Commitment.

            
	 	 
	
              1.1.15

            	
              “Credit
      Policy” means the credit and collateral policies of Seattle Bank,
      including without limitation the credit and collateral policies set forth
      in the Users Guide and the Collateral Manual, as published and revised by
      the Seattle Bank from time to time.  In addition to the Users
      Guide and Collateral Manual, the Credit Policy includes other policies
      adopted from time to time by Seattle Bank.  The Credit Policy is
      subject to the Act and Regulations, and in the event of any inconsistency
      between the Credit Policy and the Act or Regulations, the more restrictive
      statute, regulation or policy shall be controlling.

            
	 	 
	
              1.1.16

            	
              “De-Pledge”
      means the partial release, re-assignment and/or re-delivery by Seattle
      Bank or its approved custodian of any part of the Collateral pledged to
      Seattle Bank for Indebtedness.

            
	 	 
	
              1.1.17

            	
              “Eligible
      Collateral” means Collateral other than Capital Stock which: (i) qualifies
      as security for Advances or Other Credit Accommodations under the Act and
      Regulations; (ii) qualifies as security for Advances or Other Credit
      Accommodations under the Credit Policy, as amended by Seattle Bank from
      time to time, which may be more restrictive than the Act or Regulations;
      (iii) is owned by Customer free and clear of any liens, encumbrances or
      other interests, other than the pledge of such Collateral to Seattle Bank
      under this Agreement; and (iv) is not a home mortgage on which any
      director, officer, employee, attorney or agent of Customer or any federal
      home loan bank is personally liable, unless acceptance of such mortgage is
      specifically approved by formal resolution of the Seattle Bank’s board of
      directors, and the Finance Board has endorses such
    resolution.

            
	 	 
	
              1.1.18

            	
              “Eligible
      CFI Collateral” means, if Customer is a community financial institution as
      defined in the Regulations, certain small agri-business loans, small farm
      loans or small business loans which meet the requirements of Eligible
      Collateral described in Subsection 1.1.17 above.

            
	 	 
	
              1.1.19

            	
              “Eligible
      Securities Collateral” means securities, now owned or hereafter acquired
      by Customer, whether certificated or uncertificated, which meets the
      requirements of Eligible Collateral described in Subsection 1.1.17
      above.

            
	 	 
	
              1.1.20

            	
              “Eligible
      Mortgage Collateral” means Mortgage Collateral which meets the
      requirements of Eligible Collateral described in Subsection 1.1.17
      above.

            
	 	 
	
              1.1.21

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

            
	 	 
	
              1.1.22

            	
              “Funds”
      means money maintained in Customer’s Account(s) with Seattle
      Bank.

            


    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              1.1.23

            	
              “Indebtedness”
      means all obligations of Customer to Seattle Bank, defined in the broadest
      and most comprehensive sense, to mean all primary, secondary, direct,
      indirect, fixed or contingent, debts, duties, agreements, undertakings,
      obligations, covenants and conditions now or at any time in the future to
      be paid or performed by Customer in connection with or relating to
      Advances, Other Credit Accommodations, Commitments, Accounts of Other
      Obligations, including, without limitation, all of Customer’s obligations
      to pay principal, interest, fees (including, without limitation, loan fees
      and prepayment fees), charges (including, without limitation, overdraft
      charges), costs, reimbursements (including, without limitation, attorneys
      fees) and losses (including, without limitation, damages for Customer’s
      breach of any contractual obligations to Seattle Bank), which at any time
      may be owing under or in connection therewith.

            
	 	 
	
              1.1.24

            	
              “Letter
      of Credit” means any standby letter of credit issued by Seattle Bank for
      the account of Customer.

            
	 	 
	
              1.1.25

            	
              “Listed
      Collateral” is defined in Section 3.4 below.

            
	 	 
	
              1.1.26

            	
              “Master
      Backup Support Agreement” means any agreement now or hereafter made by
      Seattle Bank and one or more other federal home loan bank(s) under which
      such other federal home loan bank(s) may make Advances or Other Credit
      Accommodations to Customer in the event of a loss of power, communications
      or computer failure, property damage or other forms of business
      interruption adversely affecting Seattle Bank’s normal
      operations.

            
	 	 
	
              1.1.27

            	
              “Member”
      means an owner of Capital Stock in Seattle Bank.

            
	 	 
	
              1.1.28

            	
              “Member
      Advance Stock Purchase Requirement” is described in Section 6.10 of this
      Agreement and in the Capital Plan.

            
	 	 
	
              1.1.29

            	
              “MERS”
      means Mortgage Electronic Registration Systems, Inc., a corporation
      organized and existing under the laws of the State of Delaware, or any
      successor thereto.

            
	 	 
	
              1.1.30

            	
              “MERS
      Mortgages” means mortgages registered with MERS, in which the Mortgage
      Documents name MERS as mortgagee, solely as nominee, for the originators
      of such mortgages and their successors and assigns.

            
	 	 
	
              1.1.31

            	
              “Mortgage
      Collateral” means Mortgage Documents (excluding participation or other
      fractional interests therein) and all ancillary security agreements,
      policies and certificates of insurance, guarantees, indemnities, evidences
      of recordation, applications, underwriting materials, surveys, appraisals,
      notices, opinions of counsel and loan servicing data and all other
      electronically stored and written records or materials relating to the
      loans evidenced or secured by the Mortgage Documents.

            
	 	 
	
              1.1.32

            	
              “Mortgage
      Documents” means mortgages and deeds of trust (in this Agreement,
      “mortgages”) and all notes, bonds or other instruments evidencing loans
      secured thereby (in this Agreement, “mortgage notes”) and any endorsements
      and assignments thereof to Customer.

            
	 	 
	
              1.1.33

            	
              “Mortgage
      Purchase Program” means any program offered by Seattle Bank for the
      purchase from a Member of mortgage notes and related
      mortgages.

            
	 	 
	
              1.1.34

            	
              “Other
      Credit Accommodations” means credit products, other than Advances,
      authorized under the terms and conditions of the Act and Regulations and
      offered from time to time by Seattle Bank under its Credit Policy,
      including, without limitation, Swap Transactions, Letters of Credit and
      other Commitments.

            
	 	 
	
              1.1.35

            	
              “Other
      Eligible Collateral” means property, other than Eligible Mortgage
      Collateral or Eligible Securities Collateral, which meets the requirements
      of Eligible Collateral described in Subsection 1.1.17 above, including, if
      Customer is a community financial institution as defined in the
      Regulations, any Eligible CFI Collateral.

            
	 	 
	
              1.1.36

            	
              “Other
      Obligations” means obligations of Customer to Seattle Bank other than
      those relating to Advances or Other Credit Accommodations, including,
      without limitation, any repurchase obligations of Customer under a
      Mortgage Purchase Program, if applicable; overdraft charges, wire charges,
      Account fees and charges for other miscellaneous services provided to
      Customer by Seattle Bank; and all other amounts, of any nature whatsoever,
      now or hereafter owed to the Seattle Bank by Customer.

            
	 	 
	
              1.1.37

            	
              “Physical
      Possession Collateral” is defined in Section 3.5 below.

            
	 	 
	
              1.1.38

            	
              “Regulations”
      means the regulations of the Finance Board, as amended from time to
      time.

            


    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              1.1.39

            	
              “Request”
      or “Requests” means any request(s) made by Customer via telephone, or
      other means made available by Seattle Bank from time to time, for
      Advances.

            
	 	 
	
              1.1.40

            	
              “Stock
      Ownership Requirement” means the obligation of Customer to own minimum
      amounts of Capital Stock in accordance with the Capital
    Plan.

            
	 	 
	
              1.1.41

            	
              “Swap
      Transaction” means an interest rate qeap, cap or collar, currency exchange
      transaction, or any other similar transaction (including any option to
      enter into any of the foregoing) or any combination of the foregoing,
      entered into between the Seattle Bank and Customer pursuant to the terms
      of the Credit Policy, this Agreement or other related documentation,
      including without limitation any form of master agreement published by the
      International Swaps and Derivatives Association, Inc.

            
	 	 
	
              1.1.42

            	
              “UCC”
      means the Uniform Commercial Code, as amended from time to time, of the
      State of Washington or the state of formation of Customer, as applicable
      under Section 6.13 of this Agreement.

            
	 	 
	
              1.1.43

            	
              “Users
      Guide” means the Financial Products and Services Users Guide of the
      Seattle Bank, as published and revised by Seattle Bank from time to
      time.

            


    

    


    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 and 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 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 used 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

    


    
      	
              2.6.1

            	
              Customer
      may apply to Seattle Bank for the issuance of other credit products,
      including without limitation Letters of Credit, firm commitments for
      Advances and Swap Transactions, provided such other credit products, and
      Customer’s intended use thereof, are authorized under the Act, the
      Regulations and the Credit Policy.  The terms and conditions of
      such Other Credit Accommodations shall be governed by the Act, the
      Regulations, the Credit Policy, this Agreement and such other
      documentation as Seattle Bank may require from time to
    time.

            
	 	 
	
              2.6.2

            	
              The
      Borrowing Capacity of Customer shall be reduced by Seattle Bank’s
      outstanding obligations under any Letter of Credit, Swap Transaction,
      Commitment or Other Credit Accommodation, as determined by Seattle Bank
      from time to time, in the same manner as outstanding
    Advances.

            
	 	 
	
              2.6.3

            	
              In
      the event any Commitment, including without limitation a Letter of Credit,
      is outstanding at the time of an Event of Default under Section 4.1 of
      this Agreement, Seattle Bank may at its option make an Advance by
      crediting a special Account with Seattle Bank in an amount equal to the
      outstanding Commitment.  Amounts credited to such special
      Account will be utilized by Seattle Bank for the purpose of satisfying
      Seattle Bank’s obligations under the outstanding
      Commitment.  When all such obligations have expired or have been
      satisfied, Seattle Bank will disburse the balance, if any, in such special
      Account first to the satisfaction of any Indebtedness then owing by
      Customer to Seattle Bank and then to Customer or its successors in
      interest.  Advances made pursuant to this Subsection 2.7.3 will
      be payable on demand and will bear interest at the rate in effect and
      being charged by Seattle Bank from time to time on overdrafts on demand
      deposit accounts of its Customers.

            


    

    


    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 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;

            
	 	 	 
	 
      	
              (b)

            	
              All
      Funds of Customer now and 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.

            


    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              3.1.2

            	
              It
      is the intention of Seattle Bank and Customer that the Collateral shall
      include all assets now owned or hereafter acquired by Customer in which a
      security interest can be created under the UCC, specifically including but
      not limited to the property types and categories set forth in Subsection
      3.1.1 and Subparagraphs 3.1.1(a)-(e) above.  All of the
      Collateral shall secure the Indebtedness, irrespective of whether only
      part of the Collateral constitutes Eligible Collateral for purposes of
      satisfying the Collateral Maintenance Requirements of Section 3.3
      below.

            


    

    


    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:

    


    
      	
              3.2.1

            	
              Customer
      owns and has marketable title to all Collateral and has the right and
      authority to grant a security interest in the Collateral and to subject
      all of the Collateral to this Agreement, and Customer covenants that it
      will defend the Collateral against the claims and demands of all
      persons;

            
	 	 
	
              3.2.2

            	
              With
      respect to any Eligible Mortgage Collateral originated by any party
      (whether affiliated or unaffiliated) other than Customer, the Mortgage
      Documents contain either a complete chain of endorsements (either on the
      mortgage note or a related allonge) from the originating party to
      Customer, a complete chain of endorsements in blank from each successive
      holder of the Mortgage Collateral or are MERS Mortgages for which
      Customer’s ownership has been registered with MERS.

            
	 	 
	
              3.2.3

            	
              The
      information contained in any financial report, call report, certification,
      audit, confirmation, report, schedule, or other documents required under
      this Agreement and any other information given from time to time by
      Customer as to each item of Eligible Collateral, and any information
      provided by Customer to its supervising state or federal agency in call
      reports or other reports, from which Seattle Bank obtains information
      related to Collateral, is true, accurate and complete in all material
      respects;

            
	 	 
	
              3.2.4

            	
              All
      Eligible Collateral meets the standards and requirements from time to time
      established by the Credit Policy, the Act and the Regulations and, in any
      case of variances among the Act, the Regulations and the Credit Policy,
      the most restrictive of such standards and
requirements;

            
	 	 
	
              3.2.5

            	
              To
      Customer’s knowledge, no part of any real property encumbered by Mortgage
      Collateral contains or is subject to the effects of any hazardous
      materials or other hazardous substances, except as may have been disclosed
      to and reasonably approved by Customer in its underwriting of Mortgage
      Collateral, and Customer will indemnify and hold Seattle Bank harmless,
      and, at the option of Seattle Bank, defend Seattle Bank (with counsel
      satisfactory to Seattle Bank) from all liabilities, costs, damages, claims
      or expenses (including attorneys’ fees and environmental consultants’
      fees) suffered, paid or incurred by Seattle Bank resulting from or arising
      out of any requirement under any applicable federal, state or local law,
      regulation, ordinance, order, judgment or decree relating to the release
      or cleanup of any such hazardous material or hazardous
      substance;

            
	 	 
	
              3.2.6

            	
              Except
      as permitted under Section 3.3 of this Agreement, Customer will not (i)
      sell, offer to sell or otherwise transfer Eligible Collateral, nor pledge,
      mortgage or create or suffer to exist a lien, claim of lien, encumbrance,
      right to set-off or other security interest or collateral assignment of
      any kind whatsoever in Eligible Collateral or the proceeds thereof in
      favor of any person other than Seattle Bank, or (ii) transfer physical
      possession of the Mortgage Documents evidencing Eligible Mortgage
      Collateral to any third party or affiliate without the prior written
      consent of Seattle Bank;

            
	 	 
	
              3.2.7

            	
              All
      taxes, assessments and governmental charges levied or assessed or imposed
      upon or with respect to Eligible Collateral, including any real property
      subject to Eligible Mortgage Collateral, will be paid and if Customer
      fails to promptly pay such taxes, assessments or governmental changes,
      Seattle Bank my (but will not be required to) pay the same and any such
      expense will be an obligation under this Agreement; and

            
	 	 
	
              3.2.8

            	
              Customer
      will notify Seattle Bank promptly in writing of any change in the location
      of the Eligible Collateral and of any change in location of its principal
      place of business or jurisdiction of incorporation, organization or
      formation.

            


    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
3.3  Collateral Maintenance Requirement

    


    
      	
              3.3.1

            	
              Customer
      will at all times maintain an amount of Eligible Collateral, pledged to
      Seattle Bank under this Agreement, which, after discounting by the
      Collateral Coverage Factor(s) applicable to such Eligible Collateral, has
      a value, as determined by Seattle Bank, of not less than the aggregate
      amount of all Advances, Commitments and Other Credit Accommodations then
      outstanding.  This Collateral Maintenance Requirement may be
      increased or decreased by Seattle Bank at any time, based upon Customer’s
      creditworthiness or the quality of Customer’s Eligible Collateral, as
      determined by Seattle Bank from time to time.  Customer will
      not, without prior written consent of Seattle Bank, assign, pledge,
      transfer, create any security interest in, sell, or otherwise dispose of
      any Eligible Collateral if: (i) such Eligible Collateral is Physical
      Possession Collateral under Section 3.5 of this Agreement; (ii)
      immediately after such action, Customer’s remaining Eligible Collateral
      would be insufficient to comply with the Collateral Maintenance
      Requirement; or (iii) at the time of such action, there is an outstanding
      Event of Default under Section 4.1 of this Agreement.

            
	 	 
	
              3.3.2

            	
              All
      Eligible Collateral (other than Physical Possession Collateral held by
      Seattle Bank of its custodian) will be held by Customer in trust for the
      benefit of, and subject to the direction and control of Seattle Bank, and
      will be physically safeguarded by Customer with at least the same degree
      of care as Customer would ordinarily use in prudently safeguarding its
      property.  Without limiting the foregoing, Customer will take
      all action necessary or desirable to protect and preserve Eligible
      Collateral held by Customer, including without limitation the maintaining
      of insurance on property securing mortgages constituting Eligible
      Collateral (such policies and certificates of insurance relating to such
      mortgages are in this Agreement called “insurance”), the collection of
      payments under all such mortgages and under all such insurance, and
      otherwise assuring that loans comprising Eligible Mortgage Collateral are
      serviced in accordance with the standards of a reasonable and prudent
      mortgagee.  Customer, as Seattle Bank’s agent, will collect all
      payments when due on all Eligible Collateral held by Customer in trust for
      the benefit of Seattle Bank.  If Seattle Bank requests, all such
      collections shall be held separate from Customer’s other monies in one or
      more designated Accounts maintained at Seattle Bank.  At Seattle
      Bank’s sole discretion, Seattle Bank may then apply such collections to
      the payment of Indebtedness as it becomes due; otherwise, and provided
      there is no outstanding Event of Default under Section 4.1 of this
      Agreement, Customer may use and dispose of such collections in the
      ordinary course of its business.

            
	 	 
	
              3.3.3

            	
              Subject
      to the Collateral Maintenance Requirement of Subsection 3.3.1 above, and
      provided there is no outstanding Event of Default under Section 4.1 of
      this Agreement, Customer may use or dispose of all or part of the
      Collateral and proceeds thereof in the ordinary course of its
      business.  Notwithstanding the foregoing, Customer may not use
      or dispose or all or part of Physical Possession Collateral or the
      proceeds thereof, except upon the De-Pledging of such Physical Possession
      Collateral in accordance with Section 3.6 below.

            
	 	 
	
              3.3.4

            	
              Customer
      will, upon request of Seattle Bank, immediately take such actions and
      execute such documentation as Seattle Bank may deem necessary or
      appropriate to create and perfect Seattle Bank’s security interest in the
      Collateral or otherwise to obtain, preserve, protect, enforce or collect
      the Collateral; including, without limitation, executing any agreements,
      instructions or other documents that Seattle Bank deems necessary to
      establish control of Collateral by Seattle Bank or by its custodian on
      Seattle Bank’s behalf.

            
	 	 
	
              3.3.5

            	
              Any
      Collateral that is not satisfactory to Seattle Bank may be rejected at any
      time as Eligible Collateral by Seattle Bank, or in Seattle Bank’s
      discretion may at any time be discounted by a Collateral Coverage Factor
      that is less than the Collateral Coverage Factor normally ascribed thereto
      under the Credit Policy.  Seattle Bank may require, before or
      during the period when any Advance is made to Customer, that Customer make
      any or all Eligible Securities Collateral, all Mortgage Documents for
      Eligible Mortgage Collateral and any other documents pertaining to
      Eligible Collateral, including without limitation any agreements between
      Customer and its servicing agents, available to Seattle Bank for its
      inspection and approval.

            
	 	 
	
              3.3.6

            	
              In
      the case of any Eligible Collateral which is physically possessed by
      Customer, Customer will grant, upon Seattle Bank’s written request, an
      irrevocable license to Seattle Bank, in form and content satisfactory to
      Seattle Bank (and if requested by Seattle Bank, joined in by any real
      property owner or landlord of the premises where such Eligible Collateral
      is located), that will allow representatives of Seattle Bank to enter the
      premises of Customer in order to inspect from time to time and/or remove
      and take possession of the Eligible
Collateral.

            


    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              3.3.7

            	
              In
      the case of Eligible Collateral which is physically possessed by any
      affiliate or servicing agent of Customer, Customer will, upon Seattle
      Bank’s written request, cause Customer’s affiliate or servicing agent to
      (i) grant an irrevocable license to Seattle Bank, in form and content
      satisfactory to Seattle Bank (and if requested by Seattle Bank, joined in
      by any real property owner or landlord of the premises where such Eligible
      Collateral is located), that will allow representatives of Seattle Bank to
      enter the premises of Customer’s affiliate or servicing agent in order to
      inspect from time to time and/or remove and take possession of the
      Eligible Collateral; and/or (ii) establish custodial or control
      agreements, in form and content satisfactory to Seattle Bank, under which
      the affiliate’s or servicing agent’s physical possession will be held for
      the benefit of Seattle Bank as secured party.  Seattle Bank may
      require such arrangements irrespective of whether the Eligible Collateral
      has been designated as Listed Collateral or Physical Possession Collateral
      under Sections 3.4 or 3.5 below.

            
	 	 
	
              3.3.8

            	
              Seattle
      Bank’s acceptance as Eligible Collateral of any Mortgage Collateral
      relating to multifamily or commercial properties may, in the discretion of
      Seattle Bank, be conditioned upon Customer’s execution and delivery of
      Rider(s) to this Agreement containing warranties and representations
      required of Customer by Seattle Bank for any Mortgage Collateral relating
      to multifamily or commercial
properties.

            


    

    


    Section
3.4  Listed Collateral

    


    
      	
              3.4.1

            	
              At
      any time that Customer’s Eligible Mortgage Collateral or Eligible CFI
      Collateral becomes subject to mandatory listing requirements under the
      Credit Policy, or at any time, at the sole discretion of Seattle Bank,
      Customer will deliver to Seattle Bank, upon Seattle Bank’s written
      request, a status report and accompanying schedules, all in form and
      content acceptable to Seattle Bank, specifying and describing any mortgage
      loan pledged to Seattle Bank as Eligible Mortgage Collateral and any item
      of Eligible CFI Collateral pledged to Seattle Bank (collectively, “Listed
      Collateral”).  At such other times as Seattle Bank may request,
      Customer will deliver to Seattle Bank periodic status reports and
      accompanying schedules, in form and content acceptable to Seattle Bank,
      describing the status of the Listed Collateral.

            
	 	 
	
              3.4.2

            	
              Upon
      Seattle Bank’s written request, Customer will physically segregate the
      mortgages, loan packages and other property comprising Listed Collateral
      from all other property of Customer in a manner satisfactory to Seattle
      Bank.  Until particular items of Listed Collateral are
      De-Pledged in accordance with the Credit Policy, the physical segregation
      of such items shall be maintained.

            
	 	 
	
              3.4.3

            	
              Upon
      Seattle Bank’s written request, Customer will hold each loan package
      included in Listed Collateral in a separate file folder, with each file
      folder clearly labeled with the loan identification number and the name of
      the mortgagor.  Upon written request of Seattle Bank, the file
      folder for each package of loan documents included within Listed
      Collateral will be clearly marked or stamped with the statement: “The
      Instrument(s) and Security Relating to this Loan Have Been Pledged to the
      Federal Home Loan Bank of Seattle.”

            


    

    


    Section
3.5  Physical Possession Collateral

    


    
      	
              3.5.1

            	
              At
      any time that Customer becomes subject to mandatory physical possession
      requirements under the Credit Policy, or at any other time, at the sole
      discretion of Seattle Bank, Customer will deliver to Seattle Bank, or to a
      custodian approved by Seattle Bank in its discretion, upon Seattle Bank’s
      written request, the mortgage loans pledged to Seattle Bank as Eligible
      Mortgage Collateral, securities pledged to Seattle Bank as Eligible
      Securities Collateral, loans pledged to Seattle Bank as Eligible CFI
      Collateral and each item of Other Eligible Collateral pledged to Seattle
      Bank (collectively, “Physical Possession Collateral”).

            
	 	 
	
              3.5.2

            	
              Eligible
      Mortgage Collateral delivered to Seattle Bank or its approved custodian as
      Physical Possession Collateral will be endorsed or assigned by Customer in
      blank or, if requested by Seattle Bank, to Seattle Bank.  For
      MERS Mortgages, Customer will execute a notification to MERS of its
      assignment of the MERS Mortgage in blank or, if requested by Seattle Bank,
      to Seattle Bank.  Regardless of whether any endorsement is
      stated to be “without recourse,” Customer shall be liable for any
      deficiency remaining after any exercise by the Bank of its remedies in
      respect of Collateral, as provided in Section 4.2
below.

            
	 	 
	
              3.5.3

            	
              With
      respect to certified Eligible Securities Collateral pledged to Seattle
      Bank as Physical Possession Collateral, the delivery requirements
      contained in this Section 3.5 will be satisfied, at the election of
      Seattle Bank, by one of more of: (i) transfer of physical possession of
      such certificated securities to Seattle Bank; (ii) re-registration of such
      securities in Seattle Bank’s name; or (iii) possession of such
      certificated securities, on Seattle Bank’s behalf, by a custodian approved
      by Seattle Bank.  Any such possession of certificated securities
      by an approved custodian, on Seattle Bank’s behalf, will be effected and
      evidenced by documentation acceptable to Seattle Bank in form and content,
      establishing Seattle Bank’s control of such certificated securities under
      the provisions of the UCC.

            


    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              3.5.4

            	
              With
      respect to uncertificated Eligible Securities Collateral pledged to
      Seattle Bank as Physical Possession Collateral, satisfaction of the
      delivery requirements contained in this Section 3.5 will be effected and
      evidenced by agreements, instructions or other documentation acceptable to
      Seattle Bank in form and content, establishing Seattle Bank’s control of
      such uncertificated securities under the provisions of the
      UCC.

            
	 	 
	
              3.5.5

            	
              Concurrently
      with the initial delivery of Physical Possession Collateral, and at such
      other times as Seattle Bank may request, Customer will deliver to Seattle
      Bank a status report and accompanying schedules, in form and content
      acceptable to Seattle Bank, describing the status of the Physical
      Possession Collateral held by Seattle Bank or its custodian.  At
      such other times as Seattle Bank may request, Customer will deliver to
      Seattle Bank periodic status reports and accompanying schedules, in form
      and content acceptable to Seattle Bank, describing the status of the
      Physical Possession Collateral.  Until Physical Possession
      Collateral is De-Pledged in accordance with Section 3.6 below, such
      physical possession by Seattle Bank or its approved custodian shall be
      maintained with respect to such Physical Possession
      Collateral.  At Seattle Bank’s sole discretion, all proceeds the
      Physical Possession Collateral, including without limitation all payments
      made under the loans or securities constituting Physical Possession
      Collateral, shall be held separate from Customer’s other monies in one or
      more designated Accounts maintained at Seattle Bank.  Seattle
      Bank may apply such monies to the payment of Indebtedness as it becomes
      due, or hold such monies as part of its Physical Possession Collateral,
      subject to De-Pledging under the terms and conditions of Section 3.6
      below.

            
	 	 
	
              3.5.6

            	
              Customer
      agrees to pay to Seattle Bank such reasonable fees and charges as may be
      assessed by Seattle Bank to cover Seattle Bank’s overhead and other costs
      relating to the receipt, holding, De-Pledge, redelivery and reassignment
      of Physical Possession and to reimburse Seattle Bank upon request for all
      filing or recording fees and other reasonable expenses, disbursements and
      advances incurred or made by Seattle Bank in connection therewith,
      including without limitation reasonable attorneys fees and costs of legal
      counsel of Seattle Bank.  Customer shall pay the fees and
      expenses, including, without limitation, reasonable attorneys fees and
      costs, of any custodian approved or retained by Seattle Bank with respect
      to Collateral.  As such sums owed to Seattle Bank or to such
      custodian may be collected by Seattle Bank, at its option, by debiting
      Customer’s Account(s) with Seattle
Bank.

            


    

    


    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-Pledging 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 faith deems 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
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;

            
	 	 
	
              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
      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 faith deems 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 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 therefore, 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-public 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.

    


    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 euch requests
      are 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
the 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 Unites 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.

    


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

    


    
      	
              Central
      Pacific Bank

            	 
      
	
              (Full
      Corporate Name of Customer)

            	 
      


    

     

    
      	
              By:

            	
              /s/
      Neal Kanda

            
	 
      	
              (Signature
      of Authorized Officer)

            
	 
      	
              Neal
      Kanda

            
	 
      	
              (Name
      of Authorized Officer)

            
	 
      	
              President
      and Chief Operating Officer

            
	 
      	
              (Title
      of Authorized Officer)

            
	 	 
	
              and

            	 
      
	 	 
	
              By:

            	
              /s/
      Denis Isono

            
	 
      	
              (Signature
      of Authorized Officer)

            
	 
      	
              Denis
      Isono

            
	 
      	
              (Name
      of Authorized Officer)

            
	 
      	
              Executive
      Vice President

            
	 
      	
              (Title
      of Authorized Officer)

            
	 
      	 
      
	
              FEDERAL
      HOME LOAN BANK OF SEATTLE

            
	 	 
	
              By:

            	
              /s/
      Dale Jeschke

            
	 
      	
              (Signature
      of Authorized Officer)

            
	 
      	
              Dale
      Jeschke

            
	 
      	
              (Name
      of Authorized Officer)

            
	 
      	
              Vice-President

            
	 
      	
              (Title
      of Authorized Officer)

            


    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CORPORATE
ACKNOWLEDGMENT

    


    STATE OF
Hawaii)             
(State
Where Signed)

                                                                                        )
ss.

    COUNTY OF
Honolulu)
(County
Where Signed)

    


    I certify
that I know or have satisfactory evidence that Neal Kanda (Name of Authorized Officer
of Customer) is the person who appeared before me, and said person acknowledged
that [he/she] signed this instrument, on oath stated that [he/she] was
authorized to execute the instrument and acknowledge it as the President and Chief Operating Officer
(Title of Authorized Officer) of Central Pacific Bank (Full
Corporate Name of Customer) to be the free and voluntary act of such party for
the uses and purposes mentioned in the instrument.

    


    
      	 
      	
              /s/
      Stephanie T. Katayama

            
	 
      	
              (Signature
      of Notary)

            
	
              12/9/04

            	
              Stephanie
      T. Katayama

            
	(Date
      of Notary Acknowledgement)	(Please
      print notary's name legibly.)
	 
      	 
      
	 
      	
              NOTARY PUBLIC in and
      for the State of Hawaii,
      residing at Honolulu,
      Hawaii. (City
      Where Notary Resides)

            
	___________________________________ 
      	
              My
      commission expires: 7/1/2008.

            
	
              (Include
      notary seal in space above this line.)

            	 
      


    

    


    CORPORATE
ACKNOWLEDGMENT

     

    
      STATE OF
Hawaii)             
(State
Where Signed)

                                                                                          )
ss.

      COUNTY OF
Honolulu)
(County
Where Signed)

       

    

    I certify that I know or have
satisfactory evidence that Denis Isono (Name of
Authorized Officer of Customer) is the person who appeared before me, and said
person acknowledged that [he/she] signed this instrument, on oath stated that
[he/she] was authorized to execute the instrument and acknowledge it as the
Executive Vice
President (Title of Authorized Officer) of Central Pacific Bank (Full Corporate
Name of Customer) to be the free and voluntary act of such party for the uses
and purposes mentioned in the instrument.

     

    
      
        	 
      	
                /s/
      Stephanie T. Katayama

              
	 
      	
                (Signature
      of Notary)

              
	
                12/9/04

              	
                Stephanie
      T. Katayama

              
	(Date
      of Notary Acknowledgement)	(Please
      print notary's name legibly.)
	 
      	 
      
	 
      	
                NOTARY PUBLIC in and
      for the State of Hawaii,
      residing at Honolulu,
      Hawaii. (City
      Where Notary Resides)

              
	___________________________________ 
      	
                My
      commission expires: 7/1/2008.

              
	
                (Include
      notary seal in space above this line.)