FEDERAL HOME LOAN BANK OF SEATTLE
                               Seattle, Washington

                   PLEDGE, SECURITY AND SAFEKEEPING AGREEMENT

                               September 30, 1997
                               ------------------


         This Agreement is made as of the above date between CENTENNIAL BANK OF
EUGENE, OREGON ("Institution") and the FEDERAL HOME LOAN BANK OF SEATTLE
("Bank").

                                    Recitals
                                    --------

     A. The Institution has received funds under Repurchase Agreements from
designated customers ("Depositors").

     B. The Institution has agreed with the Depositors to collateralize those
funds by creating a security interest in the collateral ("Collateral") pledged
by the Institution to the Depositors for that purpose.

     C. The Bank is willing to safekeep such collateral as the security agent
("Custodian") for the Depositors on the terms and conditions set forth herein.

                                   Agreements
                                   ----------

     1. The Collateral used for the purposes of this Agreement hereby is pledged
by the Institution to the Depositors to secure funds deposited by the Depositors
with the Institution. The Depositors are granted a primary security interest
therein and they are third party beneficiaries of this Agreement.

     2. The Collateral secures the performance by the Institution of the
Repurchase Agreements as the interests of the Depositors from time to time may
appear. Acknowledgement of such interest can be obtained from the Bank upon
request by a Depositor.

     3. The Institution shall furnish information at least once a month to the
Bank, or more often if requested, as to the interest in the Collateral securing
each designated Depositor, which information shall include the repurchase price
and the securities pledged hereunder. The percentage security interest of each
Depositor shall be the total repurchase price of that Depositor's Repurchase
Agreement(s) divided by the purchase price paid by the Institution for the
Collateral.

     4. Unless and until a Claim (as subsequently defined) is made by one or
more Depositors, all interest, principal, dividends and/or other payments
relating to the Collateral shall be for the account of the Institution, it being
understood that principal or similar distributions will be replaced by other
Collateral of equal or greater par or face value if needed.

     5. In the event the Institution so requests, the Bank shall release to the
Institution any of the Collateral upon receipt in substitution of other
Collateral of which the par or face value is at least equal to the par or face
value of the Collateral released. The Institution hereby warrants to the Bank
and to the Depositors that all Collateral, initially or in substitution, will be
eligible as to type, quality and sufficiency,

<PAGE>
and will comply in all respects with applicable law and the terms of this
Agreement. The Bank shall have no responsibility for determining such
eligibility or adequacy. It expressly is understood that no Collateral will be
released by the Bank to the Institution except (i) on written authorization
received from all the Depositors, or (ii) on receipt in substitution of other
Collateral at least equal in par or face value, or (iii) for the purpose of
reducing excess Collateral (or all of it if there are no outstanding Repurchase
Agreements) upon written request by the Institution (the Bank can rely upon such
a written request without reservation).

     6. All charges for the handling and safekeeping of Collateral shall be paid
by the Institution.

     7. As between the Institution and the Bank, the safekeeping of the
Collateral is subject to the terms and conditions of the Bank's "Securities
Services Agreement" (Form 8A [Rev. Nov. 1996]), including (but not by way of
limitation) Section 7.6 thereof which provides as follows: "Under the provisions
of various documents now or hereafter in force between Bank and Institution, the
collateral that may be pledged to a third party . . . will have been assigned
previously by Institution to Bank as security for any and all of Institution's
obligations to Bank. It expressly is understood that Bank's security interest in
such collateral will continue despite the creation of a primary security
interest therein in favor of such third party, but the Bank's security interest
will be subordinate to that of such third party. Under those circumstances, the
Bank will hold such collateral both (i) on behalf of the third party as the
primarily secured party under all the terms, conditions and provisions of the
Tri-Party Agreement, and (ii) also on its own behalf as the secondarily secured
party."

     8. In the event the Institution defaults on its obligations to one or more
Depositors under one or more Repurchase Agreements secured by the Collateral,
such Depositor(s) can give written notice to the Bank and the Institution of the
dollar amount claimed ("Claim"). If within 15 days after such notice (i) the
Institution does not cure the default(s) or (ii) the Institution delivers to the
Bank a sworn affidavit disputing the Claim, the Bank shall bring an interpleader
action joining such Depositor(s) and the Institution and thereby interplead an
amount of Collateral having a market value equal to the Claim. The disposition
or other use of that part of the Collateral shall be determined by the Court as
provided by law.

     9. Bank is authorized and directed to accept and to rely upon the
information to be provided by Institution pursuant to this Agreement. The
Institution warrants that all such information will be accurate and complete.

     10. Unless terminated, this Agreement shall continue to be effective
whenever Collateral is in safekeeping with the Bank. The Institution or the
Bank, upon not less than 15 days prior notice to the other, may elect to
terminate the Bank's duties hereunder. The Institution agrees, by such 15th day,
to find a successor to replace the Bank. Upon appointment by the Institution of
a successor, the Bank, without any recourse against it, shall transfer to such
successor all Collateral. If no successor is designated within the 15 days, the
Bank may appoint the successor. Upon transfer by the Bank of the Collateral, it
shall be relieved and released of all duties and liability hereunder.

11. The Bank makes no  representations or warranties of any kind with respect to
the  safekeeping  to be provided  hereunder,  except as  specifically  set forth
herein.  The Bank shall not be liable for any loss or damage  resulting from any
action or  inaction  by it under this  Agreement  in the absence of a showing of
gross negligence or willful misconduct.  The Institution shall defend, indemnify
and hold harmless the Bank, and its directors,  officers,  employees, agents and
subagents,   from  and  against  any  and  all  claims,   losses,   liabilities,
obligations,  damages,  costs and/or expenses  (including,  without  limitation,
attorney  fees  both  in  connection  with  this   indemnification  and  in  the
enforcement thereof) that the Bank or such other parties may at any time sustain
or incur in connection with or arising out of this Agreement and the


                                       2
<PAGE>

safekeeping provided hereunder, except upon a showing of gross negligence or
willful misconduct. In no event shall the Bank be liable to the Institution or
to the Depositors for any special, consequential, incidental or punitive
damages.

Executed as of the date first appearing above.

FEDERAL HOME LOAN BANK OF SEATTLE

By       /s/ Rebecca Paul
  ---------------------------
         (Authorized Officer)

Its      AVP Manager
   --------------------------
         (Title)

                                                Centennial Bank
                                             -----------------------------------
                                                        (Institution)

                                             By       /s/ Eric Hardin
                                               ---------------------------------
                                                      (Authorized Officer)

                                             Its      Executive Vice President
                                                --------------------------------
                                                           (Title)

                                             By       /s/ Michael Nysingh
                                               ---------------------------------
                                                     (Authorized Officer)

                                             Its    Sr. Vice President & Cashier
                                                --------------------------------
                                                           (Title)


Form 11 (Rev. April 1990)


                                       3