(AS UPDATED FROM TIME TO TIME
PURSUANT TO SECTION 7.01) IDENTIFIES EACH SUBSIDIARY, THE JURISDICTION OF ITS
INCORPORATION OR ORGANIZATION, THE PERCENTAGE OF ISSUED AND OUTSTANDING SHARES
OF EACH CLASS OF ITS CAPITAL STOCK OR OTHER EQUITY INTERESTS OWNED BY THE
BORROWER AND THE SUBSIDIARIES AND, IF SUCH PERCENTAGE IS NOT 100% (EXCLUDING
DIRECTORS' QUALIFYING SHARES AS REQUIRED BY LAW), A DESCRIPTION OF EACH CLASS OF
ITS AUTHORIZED CAPITAL STOCK AND THE NUMBER OF SHARES OF EACH CLASS ISSUED AND
OUTSTANDING.
BANK SUBSIDIARY IS DULY ORGANIZED AND VALIDLY EXISTING AS A
WASHINGTON-STATE CHARTERED SAVINGS AND LOAN ASSOCIATION AND IS AUTHORIZED BY THE
WASHINGTON STATE DEPARTMENT OF FINANCIAL INSTITUTIONS TO CONDUCT BUSINESS AS A
SAVINGS AND LOAN ASSOCIATION (OR, IF BANK SUBSIDIARY'S CHARTER HAS BEEN DULY
CONVERTED INTO A BANK CHARTER, THEN BANK SUBSIDIARY IS DULY ORGANIZED AND
VALIDLY EXISTING AS A STATE OR FEDERALLY CHARTERED BANK BY THE APPLICABLE
BANKING REGULATOR TO CONDUCT BUSINESS AS A BANK).
UNTIL SUCH TIME AS BANK
SUBSIDIARY CONVERTS ITS CHARTER, IF AT ALL, BANK SUBSIDIARY IS A MEMBER OF THE
FEDERAL HOME LOAN BANK OF SEATTLE AND ITS DEPOSITS ARE INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION IN THE MANNER AND TO THE EXTENT PROVIDED BY LAW.
EACH OTHER SUBSIDIARY IS AN ENTITY, DULY ORGANIZED AND VALIDLY EXISTING UNDER
THE LAWS OF THE JURISDICTION OF ITS INCORPORATION.
EACH SUBSIDIARY HAS ALL
NECESSARY POWER TO OWN ITS PROPERTY AND TO CARRY ON ITS BUSINESS AS NOW BEING
CONDUCTED, AND IS DULY LICENSED OR QUALIFIED TO DO BUSINESS AND IS IN GOOD
STANDING (IN SUCH JURISDICTIONS AS APPLICABLE) IN EACH JURISDICTION IN WHICH THE
NATURE OF THE BUSINESS TRANSACTED BY IT OR THE NATURE OF THE PROPERTY OWNED OR
LEASED BY IT MAKES SUCH LICENSING OR QUALIFICATION NECESSARY, EXCEPT WHERE THE
FAILURE TO BE SO LICENSED OR QUALIFIED OR IN GOOD STANDING (IN SUCH
JURISDICTIONS AS APPLICABLE) COULD NOT REASONABLY BE EXPECTED, INDIVIDUALLY OR
IN THE AGGREGATE, TO HAVE A MATERIAL ADVERSE EFFECT.
EXCEPT AS SET FORTH ON
SCHEDULE 5.01(B), ALL OF
19
THE ISSUED AND OUTSTANDING SHARES OF CAPITAL STOCK OF EACH SUBSIDIARY HAVE BEEN
DULY AUTHORIZED AND VALIDLY ISSUED AND ARE FULLY PAID AND NONASSESSABLE.
ALL
SUCH SHARES OWNED BY THE BORROWER ARE OWNED BENEFICIALLY FREE OF ANY LIEN, OTHER
THAN THE LIEN GRANTED PURSUANT TO THE COLLATERAL PLEDGE AGREEMENT AND IN THE
CASE OF OTHER SUBSIDIARIES, OTHER PERMITTED LIENS.
(C)
CORPORATE AUTHORITY.
THE BORROWER AND EACH SUBSIDIARY HAS ALL
NECESSARY CORPORATE POWER AND AUTHORITY TO EXECUTE AND DELIVER, AND TO INCUR AND
PERFORM ITS OBLIGATIONS UNDER, EACH OF THE CREDIT DOCUMENTS TO WHICH IT IS A
PARTY, ALL OF WHICH HAVE BEEN DULY AUTHORIZED BY ALL PROPER AND NECESSARY
CORPORATE ACTION.
NO CONSENT OR APPROVAL OF STOCKHOLDERS IS REQUIRED AS A
CONDITION TO THE VALIDITY OR PERFORMANCE OF, OR THE EXERCISE BY THE LENDER OF
ANY OF THEIR RIGHTS OR REMEDIES UNDER, ANY CREDIT DOCUMENT.
(D)
AUTHORIZATIONS.
ALL AUTHORIZATIONS, CONSENTS, APPROVALS,
REGISTRATIONS, NOTICES, EXEMPTIONS AND LICENSES WITH OR FROM ANY GOVERNMENTAL
AUTHORITY