<PAGE>

                                                                     Exhibit 4.8

                    PREFERRED SECURITIES GUARANTEE AGREEMENT

                             VALLEY NATIONAL BANCORP


                          Dated as of October __, 2001

<PAGE>

                              CROSS REFERENCE TABLE
                         Section of Section of Guarantee
                Trust Indenture Agreement Act of 1939, as amended

<TABLE>
<S>                                               <C>
310(a) ..........................................                 4.1(a)
310(b) ..........................................            2.8, 4.1(c)
310(c) ..........................................                 N/A
311(a) ..........................................                 2.2(b)
311(b) ..........................................                 2.2(b)
311(c) ..........................................                 N/A
312(a) ..........................................                 2.2(a)
312(b) ..........................................                 2.2(b)
312(c) ..........................................                 N/A
313 .............................................                 2.3
314(a) ..........................................                 2.4
314(b) ..........................................                 N/A
314(c) ..........................................                 2.5
314(d) ..........................................                 N/A
314(e) ..........................................       1.1, 2.5, 3.2
314(f) ..........................................            2.1, 3.2
315(a) ..........................................         3.1(d), 3.2(a)
315(b) ..........................................                 2.7
315(c) ..........................................                 3.1(c)
315(d) .......................................... 3.1(d), 3.2(a), 8.1
315(e) ..........................................                 N/A
316(a) ..........................................       1.1, 2.6, 5.4
316(b) ..........................................            5.3, 5.4
316(c) ..........................................                 9.2
317(a) ..........................................                 N/A
317(b) ..........................................                 N/A
318(a) ..........................................                 2.1(a)
318(b) ..........................................                 2.1(b)
318(c) ..........................................                 2.1(b)
</TABLE>


______________________________
     * This Cross-Reference Table does not constitute part of this Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.

<PAGE>
                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                          Page
<S>                                                                                       <C>
ARTICLE I............................................................................        4

    SECTION 1.1   Definitions and Interpretation ....................................        4

ARTICLE II ..........................................................................        7

    SECTION 2.1   Trust Indenture Act; Application ..................................        7
                  --------------------------------
    SECTION 2.2   Lists of Holders of Securities ....................................        8
                  ------------------------------
    SECTION 2.3   Reports by the Preferred Securities Guarantee Trustee .............        8
                  -----------------------------------------------------
    SECTION 2.4   Periodic Reports ..................................................        8
                  ----------------
    SECTION 2.5   Evidence of Compliance with Conditions Precedent ..................        9
                  ------------------------------------------------
    SECTION 2.6   Waiver of Events of Default .......................................        9
                  ---------------------------
    SECTION 2.7   Notice of Events of Default .......................................        9
                  ---------------------------
    SECTION 2.8   Conflicting Interests .............................................       10
                  ---------------------

ARTICLE III .........................................................................       10


    SECTION 3.1   Powers and Duties of the Preferred Securities Guarantee Trustee ...       10
                  ---------------------------------------------------------------
    SECTION 3.2   Certain Rights of Preferred Securities Guarantee Trustee ..........       12
                  --------------------------------------------------------
    SECTION 3.3   Not Responsible for Recitals or Issuance of Preferred
                  -----------------------------------------------------
                  Securities Guarantee ..............................................       14
                  --------------------
ARTICLE IV ..........................................................................       14


    SECTION 4.1   Capital Securities Guarantee Trustee; Eligibility .................       14
                  -------------------------------------------------
    SECTION 4.2   Appointment, Removal and Resignation of Preferred
                  -------------------------------------------------
                  Securities Guarantee Trustee ......................................       15
                  ----------------------------

ARTICLE V ...........................................................................       16

    SECTION 5.1   Guarantee .........................................................       16
                  ---------
    SECTION 5.2   Waiver of Notice and Demand .......................................       16
                  ---------------------------
    SECTION 5.3   Obligations Not Affected ..........................................       16
                  ------------------------
    SECTION 5.4   Rights of Holders .................................................       17
                  -----------------
    SECTION 5.5   Guarantee of Payment ..............................................       18
                  --------------------
    SECTION 5.6   Subrogation .......................................................       18
                  -----------
    SECTION 5.7   Independent Obligations ...........................................       18
                  -----------------------

ARTICLE VI ..........................................................................       18


    SECTION 6.1   Limitation of Transactions ........................................       18
                  --------------------------
    SECTION 6.2   Ranking ...........................................................       19
                  -------
</TABLE>

<PAGE>

<TABLE>
<S>                                                                         <C>
ARTICLE VII...........................................................      19

   SECTION 7.1   Termination .........................................      19
                 -----------
ARTICLE VIII .........................................................      20

   SECTION 8.1   Exculpation .........................................      20
                 -----------
   SECTION 8.2   Compensation and Indemnification ....................      20
                 --------------------------------

ARTICLE IX ...........................................................      21


   SECTION 9.1   Successors and Assigns ..............................      21
                 ----------------------
   SECTION 9.2   Amendments ..........................................      21
                 ----------
   SECTION 9.3   Notices .............................................      21
                 -------
   SECTION 9.4   Benefit .............................................      22
                 -------
   SECTION 9.5   Governing Law .......................................      23
                 -------------
</TABLE>

                                      -2-

<PAGE>

                    PREFERRED SECURITIES GUARANTEE AGREEMENT

     This PREFERRED SECURITIES GUARANTEE AGREEMENT (the "Preferred Securities
Guarantee"), dated as of October __, 2001 is executed and delivered by VALLEY
NATIONAL BANCORP, a New Jersey corporation (the "Guarantor"), and THE BANK OF
NEW YORK, a New York banking corporation, as trustee ( the "Preferred Securities
Guarantee Trustee" or "Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of VNB
CAPITAL TRUST I, a Delaware statutory business trust (the "Issuer").

     WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of October __, 2001, by and among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the Holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof _______ Preferred securities, having an aggregate
liquidation amount of $25, such Preferred securities being designated the ____%
Trust Originated Preferred Securities/SM/ ("TOPrS/SM/") (the "Preferred
Securities").

     WHEREAS, as incentive for the Holders to purchase the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Preferred Securities Guarantee, to pay the Guarantee Payments
(as defined herein) to the Holders of the Preferred Securities, and the
Guarantor agrees to make certain other payments on the terms and conditions set
forth herein.

     WHEREAS, the Guarantor is also executing and delivering the Common
Securities Guarantee Agreement, dated as of October __, 2001 (the "Common
Securities Guarantee"), for the benefit of the holders of the Common Securities
(as defined herein), the terms of which provide that if an Event of Default (as
defined in the Declaration) has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated, to the extent and in the manner set forth
in the Common Securities Guarantee, to the rights of Holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.

     NOW, THEREFORE, in consideration of the purchase by each Holder of the
Preferred Securities, which purchase the Guarantor hereby acknowledges shall
benefit the Guarantor, the Guarantor executes and delivers this Preferred
Securities Guarantee for the benefit of such Holders.


_____________
/SM/  "Trust Originated Preferred Securities" and "TOPrS" are service marks of
      Merrill Lynch & Co., Inc.



                                      -3-

<PAGE>

                                    ARTICLE I

                         DEFINITIONS AND INTERPRETATION

     SECTION 1.1   Definitions and Interpretation

     In this Preferred Securities Guarantee, unless the context otherwise
requires:

     (a) capitalized terms used in this Preferred Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;

     (b) terms defined in the Declaration as in effect at the date of execution
of this Preferred Securities Guarantee have the same meaning when used in this
Preferred Securities Guarantee unless otherwise defined in this Preferred
Securities Guarantee;

     (c) a term defined anywhere in this Preferred Securities Guarantee has the
same meaning throughout;


     (d) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are references to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;

     (e) all references in this Preferred Securities Guarantee to Articles and
Sections are references to Articles and Sections of this Preferred Securities
Guarantee, unless otherwise specified;

     (f) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise defined in this
Preferred Securities Guarantee or unless the context otherwise requires; and

     (g) a reference to the singular includes the plural and vice versa.


     "Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act of 1933, as amended, or any successor rule thereunder.

     "Business Day" shall mean any day other than a Saturday, a Sunday, or a day
on which banking institutions in Wilmington, Delaware, Wayne, New Jersey or New
York, New York are authorized or required by law or executive order to remain
closed.

     "Common Securities" shall mean the securities representing common undivided
beneficial interests in the assets of the Issuer.

                                      -4-

<PAGE>

     "Corporate Trust Office" shall mean the office of the Preferred Securities
Guarantee Trustee at which the corporate trust business of the Preferred
Securities Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this Agreement is located
at 101 Barclay Street, New York, New York 10286.

     "Covered Person" shall mean any Holder or beneficial owner of Preferred
Securities.

     "Debentures" shall mean the series of subordinated debt securities of the
Guarantor designated the ____% Junior Subordinated Deferrable Interest
Debentures due ______, 2031, held by the Property Trustee (as defined in the
Declaration) of the Issuer.

     "Event of Default" shall mean a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee;
provided, however, that, except with respect to default in respect of any
Guarantee Payment, no default by the Guarantor hereunder shall constitute an
Event of Default unless the Guarantor shall have received written notice of the
default and shall not have cured such default within 60 days after receipt
thereof.

     "Guarantee Payments" shall mean the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Preferred Securities, to the extent the Issuer has funds available therefor
at such time, (ii) the redemption price, including all accumulated and unpaid
Distributions to the date of redemption (the "Redemption Price"), to the extent
the Issuer has funds available therefor at such time, with respect to any
Preferred Securities called for redemption, and (iii) upon a voluntary or
involuntary dissolution, winding up or liquidation of the Issuer (other than in
connection with the distribution of Debentures to the Holders in exchange for
Preferred Securities or in connection with the redemption of the Preferred
Securities, in each case as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accumulated and unpaid Distributions
on the Preferred Securities to the date of payment, to the extent the Issuer has
funds available therefor at such time, and (b) the amount of assets of the
Issuer remaining available for distribution to Holders after satisfaction of
liabilities to creditors of the Issuer as required by applicable law (in either
case, the "Liquidation Distribution"). If an Event of Default hereunder or an
Event of Default under the Declaration (as defined therein) has occurred and is
continuing, no Guarantee Payments under the Common Securities Guarantee with
respect to the Common Securities or any guarantee payment under the Common
Securities Guarantee or any Other Common Securities Guarantee shall be made
until the Holders of the Preferred Securities shall be paid in full the
Guarantee Payments to which they are entitled under this Preferred Securities
Guarantee.

     "Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Person actually known to a

                                      -5-

<PAGE>

Responsible Officer of the Preferred Securities Guarantee Trustee to be an
Affiliate of the Guarantor.


     "Indemnified Person" shall mean the Preferred Securities Guarantee Trustee
(including in its individual capacity), any Affiliate of the Preferred
Securities Guarantee Trustee, or any officers, directors, shareholders, members,
partners, employees, representatives, nominees, custodians or agents of the
Preferred Securities Guarantee Trustee.

     "Indenture" shall mean the Indenture, dated as of October __, 2001, between
Valley National Bancorp, as issuer of Debentures (the "Debenture Issuer"), and
The Bank of New York, as trustee, pursuant to which the Debentures are to be
issued to the Property Trustee of the Issuer.

     "Majority in Liquidation Amount of the Preferred Securities" shall mean,
except as provided by the Trust Indenture Act, a vote by Holder(s) of the
Preferred Securities, voting separately as a class, of more than 50% of the
aggregate liquidation amount (including the amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to but excluding the date upon which the voting percentages are determined) of
all outstanding Preferred Securities, excluding Preferred Securities held by the
Guarantor, the Issuer or any Affiliate thereof.

     "Officers' Certificate" shall mean, with respect to any Person, a
certificate signed by the Chairman, the Vice Chairman, the Chief Executive
Officer, the President, an Executive or Senior Vice President, a Vice President,
the Chief Financial Officer and the Secretary or an Assistant Secretary. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Preferred Securities Guarantee shall include:

     (a) a statement that each officer signing the Officers' Certificate has
read the covenants or conditions and the definitions relating thereto;

     (b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer on behalf of such Person in rendering
the Officer's Certificate;

     (c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and

     (d) a statement as to whether or not, in the opinion of each such officer,
such condition or covenant has been complied with.

     "Other Common Securities Guarantees" shall have the same meaning as "Other
Guarantees" in the Common Securities Guarantee.

                                      -6-

<PAGE>

              "Other Debentures" shall mean all junior subordinated debentures,
other than the Debentures (as defined in the Indenture), issued by the
Guarantor, from time to time and sold to trusts other than the Issuer to be
established by the Guarantor (if any), in each case similar to the Issuer.

              "Other Guarantees" shall mean all guarantees, other than this
Preferred Securities Guarantee, to be issued by the Guarantor with respect to
preferred securities (if any) similar to the Preferred Securities, issued by
trusts other than the Issuer to be established by the Guarantor (if any), in
each case similar to the Issuer.

              "Person" shall mean a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.

              "Preferred Securities Guarantee Trustee" shall mean The Bank of
New York, as Trustee under the Preferred Securities Guarantee, unless and until
a Successor Preferred Securities Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Securities
Guarantee Trustee.

              "Responsible Officer" shall mean, with respect to a Person, any
officer with direct responsibility for the administration of any matters
relating to this Preferred Securities Guarantee.

              "Successor Preferred Securities Guarantee Trustee" shall mean a
successor Preferred Securities Guarantee Trustee possessing the qualifications
to act as Preferred Securities Guarantee Trustee under Section 4.1.

              "Trust Indenture Act" shall mean the Trust Indenture Act of 1939,
as amended.

              "Trust Securities" shall mean the Common Securities and the
Preferred Securities, collectively.

                                   ARTICLE II

                               TRUST INDENTURE ACT

SECTION 2.1   Trust Indenture Act; Application
              --------------------------------

              (a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions.

                                      -7-

<PAGE>

              (b) If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control. If any provision of this Preferred Securities Guarantee modifies
or excludes any provision of the Trust Indenture Act that may be so modified or
excluded, the modified or excluded provision of the Trust Indenture Act shall be
deemed to apply to this Preferred Securities Guarantee as so modified or
excluded, as the case may be.

SECTION 2.2   Lists of Holders of Securities
              ------------------------------

              (a) The Guarantor shall provide the Preferred Securities Guarantee
Trustee (unless the Preferred Securities Guarantee Trustee is otherwise the
registrar of the Preferred Securities) with a list, in such form as the
Preferred Securities Guarantee Trustee may reasonably require, of the names and
addresses of the Holders of the Preferred Securities ("List of Holders") as of
such date, (i) within fourteen (14) days after each record date for payment of
Distributions (as defined in the Declaration), and (ii) at any other time within
30 days of receipt by the Guarantor of a written request for a List of Holders
as of a date no more than 14 days before such List of Holders is given to the
Preferred Securities Guarantee Trustee; provided, however, that the Guarantor
                                        --------  -------
shall not be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most recent List of Holders given to the
Preferred Securities Guarantee Trustee by the Guarantor. The Preferred
Securities Guarantee Trustee may destroy any List of Holders previously given to
it upon receipt of a new List of Holders.

              (b) The Preferred Securities Guarantee Trustee shall comply with
its obligations under Sections 31l(a), 31l(b) and Section 312(b) of the Trust
Indenture Act.

SECTION 2.3   Reports by the Preferred Securities Guarantee Trustee
              -----------------------------------------------------

              By June 14 of each year, commencing June 14, 2002, the Preferred
Securities Guarantee Trustee shall provide to the Holders of the Preferred
Securities such reports, dated as of May 15 of each year, as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Preferred Securities
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.

SECTION 2.4   Periodic Reports
              ----------------

              The Guarantor shall provide to the Preferred Securities Guarantee
Trustee such documents, reports and information as are required by Section 314
of the Trust Indenture Act (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act. Delivery of such
reports, information and documents to the Preferred Securities Guarantee Trustee
is for informational purposes only and the Preferred Securities Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or

                                      -8-

<PAGE>

determinable from information contained therein, including the Guarantor's
compliance with any of its covenants hereunder (as to which the Preferred
Securities Guarantee Trustee is entitled to rely exclusively on Officers'
Certificates).

SECTION 2.5   Evidence of Compliance with Conditions Precedent
              ------------------------------------------------

              The Guarantor shall provide to the Preferred Securities Guarantee
Trustee such evidence of compliance with the conditions precedent, if any,
provided for in this Preferred Securities Guarantee that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.

SECTION 2.6   Waiver of Events of Default
              ---------------------------

              The Holders of a Majority in Liquidation Amount of the Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.

SECTION 2.7   Notice of Events of Default
              ---------------------------

              (a) The Preferred Securities Guarantee Trustee shall, within 10
Business Days after the occurrence of an Event of Default with respect to this
Preferred Securities Guarantee actually known to a Responsible Officer of the
Preferred Securities Guarantee Trustee, transmit by mail, first class postage
prepaid, to all Holders of the Preferred Securities, notices of all such Events
of Default, unless such Events of Default have been cured before the giving of
such notice; provided, however, that, except in the case of an Event of Default
arising from the non-payment of any Guarantee Payment, the Preferred Securities
Guarantee Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer of the Preferred Securities Guarantee Trustee in good
faith determines that the withholding of such notice is in the interests of the
Holders of the Preferred Securities.

              (b) The Preferred Securities Guarantee Trustee shall not be deemed
to have knowledge of any Event of Default unless the Preferred Securities
Guarantee Trustee shall have received written notice, or a Responsible Officer
of the Preferred Securities Guarantee Trustee charged with the administration of
the Declaration shall have obtained actual knowledge, of such Event of Default.

                                      -9-

<PAGE>

SECTION 2.8   Conflicting Interests
              ---------------------

              The Declaration shall be deemed to be specifically described in
this Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.

SECTION 2.9   Guarantee Trustee May File Proofs of Claim
              ------------------------------------------

              Upon the occurrence of an Event of Default, the Trustee is hereby
authorized to (a) recover judgment, in its own name and as trustee of an express
trust, against the Guarantor for the whole amount of any Guarantee Payments
remaining unpaid and (b) file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have its claims and those of the
Holders of the Preferred Securities allowed in any judicial proceedings relative
to the Guarantor, its creditors or its property.

                                   ARTICLE III

                          POWERS, DUTIES AND RIGHTS OF
                     PREFERRED SECURITIES GUARANTEE TRUSTEE

SECTION 3.1   Powers and Duties of the Preferred Securities Guarantee Trustee
              ---------------------------------------------------------------

              (a) This Preferred Securities Guarantee shall be held by the
Preferred Securities Guarantee Trustee for the benefit of the Holders of the
Preferred Securities, and the Preferred Securities Guarantee Trustee shall not
transfer this Preferred Securities Guarantee to any Person except a Holder of
the Preferred Securities exercising his or her rights pursuant to Section 5.4(b)
or to a Successor Preferred Securities Guarantee Trustee on acceptance by such
Successor Preferred Securities Guarantee Trustee of its appointment to act as
Successor Preferred Securities Guarantee Trustee. The right, title and interest
of the Preferred Securities Guarantee Trustee shall automatically vest in any
Successor Preferred Securities Guarantee Trustee, and such vesting and
succession of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to the appointment of such Successor
Preferred Securities Guarantee Trustee.

              (b) If an Event of Default actually known to a Responsible Officer
of the Preferred Securities Guarantee Trustee has occurred and is continuing,
the Preferred Securities Guarantee Trustee shall enforce this Preferred
Securities Guarantee for the benefit of the Holders of the Preferred Securities.

              (c) The Preferred Securities Guarantee Trustee, before the
occurrence of any Event of Default (of which, other than a default in respect of
any Guarantee Payment, a Responsible Officer of the Property Trustee has actual
knowledge) and after the curing of all such Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants or

                                      -10-

<PAGE>

obligations shall be read into this Preferred Securities Guarantee against the
Preferred Securities Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) and is actually
known to a Responsible Officer of the Preferred Securities Guarantee Trustee,
the Preferred Securities Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Preferred Securities Guarantee, and use the same
degree of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.

           (d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Securities Guarantee Trustee from liability
for its own negligent action, its own negligent failure to act, or its own
willful misconduct, except that:

               (i)   prior to the occurrence of any Event of Default (of which,
other than a default in respect of any Guarantee Payment, a Responsible Officer
of the Property Trustee has actual knowledge) and after the curing or waiving of
all such Events of Default that may have occurred:

                     (A) the duties and obligations of the Preferred Securities
Guarantee Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Securities Guarantee Trustee
shall not be liable except for the performance of such duties and obligations as
are specifically set forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into this Preferred Securities
Guarantee against the Preferred Securities Guarantee Trustee; and

                     (B) in the absence of bad faith on the part of the
Preferred Securities Guarantee Trustee, the Preferred Securities Guarantee
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Preferred Securities Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; provided, however, that in
the case of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Preferred Securities Guarantee
Trustee, the Preferred Securities Guarantee Trustee shall be under a duty to
examine the same to determine whether or not on their face they conform to the
requirements of this Preferred Securities Guarantee;

               (ii)  the Preferred Securities Guarantee Trustee shall not be
liable for any errors of judgment made in good faith by a Responsible Officer of
the Preferred Securities Guarantee Trustee, unless it shall be proved that the
Preferred Securities Guarantee Trustee or such Responsible Officer was negligent
in ascertaining the pertinent facts upon which such judgment was made;

               (iii) the Preferred Securities Guarantee Trustee shall not be
liable with respect to any actions taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of a Majority in
Liquidation Amount of the Preferred Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the

                                      -11-

<PAGE>

Preferred Securities Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Securities Guarantee Trustee under this Preferred
Securities Guarantee; and

                         (iv)  no provision of this Preferred Securities
Guarantee shall require the Preferred Securities Guarantee Trustee to expend or
risk its own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers, if the Preferred Securities Guarantee Trustee shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Preferred Securities Guarantee
or indemnity, reasonably satisfactory to the Preferred Securities Guarantee
Trustee, against such risk or liability is not reasonably assured to it.

SECTION 3.2   Certain Rights of Preferred Securities Guarantee Trustee
              --------------------------------------------------------

              (a)   Subject to the provisions of Section 3.1:


                         (i)   the Preferred Securities Guarantee Trustee may
conclusively rely, and shall be fully protected in acting or refraining from
acting, upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed, sent or presented by the proper party or parties;

                         (ii)  any direction or act of the Guarantor
contemplated by this Preferred Securities Guarantee may be sufficiently
evidenced by an Officers' Certificate;


                         (iii) whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Securities Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking, suffering or
omitting any action hereunder, the Preferred Securities Guarantee Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and conclusively rely upon an Officers'
Certificate, which, upon receipt of such request, shall be promptly delivered by
the Guarantor;

                         (iv)  the Preferred Securities Guarantee Trustee shall
have no duty to see to any recording, filing or registration of any instrument
or other document (or any rerecording, refiling or registration thereof);


                         (v)   the Preferred Securities Guarantee Trustee may
consult with counsel of its selection, and the advice or opinion of such counsel
with respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or opinion; and such counsel
may be counsel to the Guarantor or any of its Affiliates and may include any of
its employees; and the Preferred Securities Guarantee Trustee shall have the
right at any time to seek instructions concerning the administration of this
Preferred Securities Guarantee from any court of competent jurisdiction;

                                      -12-

<PAGE>

          (vi)   the Preferred Securities Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Preferred Securities Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Securities Guarantee Trustee
such security and indemnity, reasonably satisfactory to the Preferred Securities
Guarantee Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Securities Guarantee Trustee's
agents, nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable advances as
may be requested by the Preferred Securities Guarantee Trustee, provided,
however, that nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Preferred Securities Guarantee Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee;

          (vii)  the Preferred Securities Guarantee Trustee shall have no
obligation to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Securities Guarantee
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit;

          (viii) the Preferred Securities Guarantee Trustee may execute any of
the trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the Preferred
Securities Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any such person appointed with due care by it
hereunder;

          (ix)   any action taken by the Preferred Securities Guarantee Trustee
or its agents hereunder shall bind the Holders of the Preferred Securities, and
the signature of the Preferred Securities Guarantee Trustee or its agents alone
shall be sufficient and effective to perform any such action; and no third party
shall be required to inquire as to the authority of the Preferred Securities
Guarantee Trustee to so act or as to its compliance with any of the terms and
provisions of this Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Preferred Securities Guarantee Trustee's or its
agent's taking such action;

          (x)    whenever in the administration of this Preferred Securities
Guarantee the Preferred Securities Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Preferred Securities Guarantee Trustee, (i) may
request instructions from the Holders of a Majority in Liquidation Amount of the
Preferred Securities, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and (iii) shall
be protected in conclusively relying on or acting in accordance with such
instructions; and

          (xi)   the Preferred Securities Guarantee Trustee shall not be liable
for any action taken, suffered, or omitted to be taken by it in good faith,
without negligence, and

                                      -13-

<PAGE>

reasonably believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Preferred Securities Guarantee.

          (b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Securities Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Preferred Securities Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Preferred Securities Guarantee
Trustee shall be construed to be a duty.

SECTION 3.3   Not Responsible for Recitals or Issuance of Preferred Securities
              ----------------------------------------------------------------
Guarantee
---------

          The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Securities Guarantee
Trustee does not assume any responsibility for their correctness. The Preferred
Securities Guarantee Trustee makes no representation as to the validity or
sufficiency of this Preferred Securities Guarantee.

                                   ARTICLE IV

                     PREFERRED SECURITIES GUARANTEE TRUSTEE

SECTION 4.1   Preferred Securities Guarantee Trustee; Eligibility
              ---------------------------------------------------

              (a) There shall at all times be a Preferred Securities Guarantee
Trustee that shall

                    (i)   not be an Affiliate of the Guarantor; and


                    (ii)  be a corporation or other Person organized and doing
business under the laws of the United States of America or any state or
territory thereof or of the District of Columbia, or a corporation or other
Person permitted by the Securities and Exchange Commission to act as an
indenture trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least fifty million U.S. dollars ($50,000,000), and subject to supervision or
examination by federal, state, territorial or District of Columbia authority; it
being understood that if such corporation or other Person publishes reports of
condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then, for the purposes of
this Section 4.1(a)(ii) and to the extent permitted by the Trust Indenture Act,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published.

              (b) If at any time the Preferred Securities Guarantee Trustee
shall cease to be eligible to so act under Section 4.1(a), the Preferred
Securities Guarantee Trustee shall immediately resign in the manner and with the
effect set out in Section 4.2(c).

                                      -14-

<PAGE>

          (c) If the Preferred Securities Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Securities Guarantee Trustee and Guarantor shall in
all respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.

SECTION 4.2   Appointment, Removal and Resignation of Preferred Securities
              ------------------------------------------------------------
Guarantee Trustee
-----------------

          (a) Subject to Section 4.2(b), the Preferred Securities Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor
except during an Event of Default.

          (b) The Preferred Securities Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Securities Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Preferred Securities Guarantee Trustee and
delivered to the Guarantor.

          (c) The Preferred Securities Guarantee Trustee shall hold office until
a Successor Preferred Securities Guarantee Trustee shall have been appointed,
subject to Section 4.1, or until its removal or resignation. The Preferred
Securities Guarantee Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by the Preferred
Securities Guarantee Trustee and delivered to the Guarantor, which resignation
shall not take effect until a Successor Preferred Securities Guarantee Trustee
has been appointed, subject to Section 4.1, and has accepted such appointment by
instrument in writing executed by such Successor Preferred Securities Guarantee
Trustee and delivered to the Guarantor and the resigning Preferred Securities
Guarantee Trustee.

          (d) If no Successor Preferred Securities Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery of an instrument of removal or resignation, the Preferred
Securities Guarantee Trustee resigning or being removed may petition any court
of competent jurisdiction for appointment of a Successor Preferred Securities
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Preferred Securities Guarantee
Trustee.

          (e) No Preferred Securities Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Preferred Securities Guarantee
Trustee.

          (f) Upon termination of this Preferred Securities Guarantee or removal
or resignation of the Preferred Securities Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Preferred Securities Guarantee
Trustee all amounts due to the Preferred Securities Guarantee Trustee accrued to
the date of such termination, removal or resignation.

                                      -15-

<PAGE>

                                    ARTICLE V

                                    GUARANTEE

SECTION 5.1 Guarantee
            ---------

            The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.

SECTION 5.2 Waiver of Notice and Demand
            ---------------------------

            The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.

SECTION 5.3 Obligations Not Affected
            ------------------------

            The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall be absolute and unconditional
and shall in no way be affected or impaired by reason of the happening from time
to time of any event, including without limitation the following, whether or not
with notice to, or the consent of, the Guarantor:

            (a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;

            (b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Redemption Price, Liquidation Distributions or
any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Preferred Securities (other than an extension of
time for payment of Distributions, Redemption Price, Liquidation Distributions
or other sums payable that result from the extension of any interest payment
period on the Debentures permitted by the Indenture);

            (c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;

                                      -16-

<PAGE>

          (d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;

          (e) any invalidity of, or defect or deficiency in, the Preferred
Securities;


          (f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or

          (g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor; it being the intent of
this Section 5.3 that the obligations of the Guarantor with respect to the
Guarantee Payments shall be absolute and unconditional under any and all
circumstances.

          There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.

SECTION 5.4  Rights of Holders
             -----------------

          (a) The Holders of a Majority in Liquidation Amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Preferred Securities Guarantee
Trustee in respect of this Preferred Securities Guarantee or exercising any
trust or power conferred upon the Preferred Securities Guarantee Trustee under
this Preferred Securities Guarantee; provided, however, that, subject to Section
3.1, the Preferred Securities Guarantee Trustee shall have the right to decline
to follow any such direction if the Preferred Securities Guarantee Trustee shall
reasonably and in good faith determine that the action so directed would be
unjustly prejudicial to the holders not taking part in such direction or if the
Preferred Securities Guarantee Trustee being advised by counsel determines that
the action or proceeding so directed may not lawfully be taken or if the
Preferred Securities Guarantee Trustee reasonably and in good faith by its board
of directors or trustees, executive committee, or a trust committee of directors
or trustees and/or Responsible Officers shall determine that the action or
proceedings so directed would involve the Preferred Securities Guarantee Trustee
in personal liability.

          (b) If the Preferred Securities Guarantee Trustee fails to enforce
such Preferred Securities Guarantee, any Holder of the Preferred Securities may
institute a legal proceeding directly against the Guarantor to enforce the
Preferred Securities Guarantee Trustee's rights under this Preferred Securities
Guarantee, without first instituting a legal proceeding against the Issuer, the
Preferred Securities Guarantee Trustee or any other person or entity. The
Guarantor waives any right or remedy to require that any action be brought first
against the Issuer or any other person or entity before proceeding directly
against the Guarantor.

                                      -17-

<PAGE>

SECTION 5.5 Guarantee of Payment
            --------------------

            This Preferred Securities Guarantee creates a guarantee of payment
and not of collection.

SECTION 5.6 Subrogation
            -----------

            The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
--------  -------
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.

SECTION 5.7 Independent Obligations
            -----------------------

            The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (h), inclusive, of Section 5.3 hereof.

                                   ARTICLE VI

                   LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 6.1 Limitation of Transactions
            --------------------------

            So long as any Preferred Securities remain outstanding, the
Guarantor shall not nor permit any subsidiary of the Guarantor to (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Guarantor's capital stock, (ii)
make any payment of principal of, or interest, if any, on or repay, repurchase
or redeem any debt securities of the Guarantor (including Other Debentures) that
rank pari passu with or junior in right of payment to the Debentures, (iii) make
any guarantee payments with respect to any guarantee by the Guarantor of the
debt securities of any subsidiary of the Guarantor (including Other Guarantees)
if such guarantee ranks pari passu with or junior in right of payment to the
Debentures (other than (a) dividends or distributions in shares of, or options,
warrants, rights to subscribe for or purchase shares of, common stock of the
Guarantor, (b) any declaration of a dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase

                                      -18-

<PAGE>

of any such rights pursuant thereto, (c) payments under this Preferred
Securities Guarantee, (d) as a result of a reclassification of the Guarantor's
capital stock or the exchange or the conversion of one class or series of the
Guarantor's capital stock for another class or series of the Guarantor's capital
stock, (e) the purchase of fractional interests in shares of the Guarantor's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, and (f) purchases of common
stock related to the issuance of common stock or rights under any of the
Guarantor's benefit or compensation plans for its directors, officers or
employees or any of the Guarantor's dividend reinvestment plans) if at such time
(l) there shall have occurred any event of which the Guarantor has actual
knowledge that (A) is a Default or Event of Default (each as defined in the
Indenture) and (B) in respect of which the Guarantor shall not have taken
reasonable steps to cure, (2) if the Debentures are held by the Property
Trustee, the Guarantor shall be in default with respect to its payment of any
obligations under this Preferred Securities Guarantee or (3) the Guarantor shall
have given notice of its election of the exercise of its right to commence an
Extended Interest Payment Period as provided in the Indenture and shall not have
rescinded such notice, and such Extended Interest Payment Period, or an
extension thereof, shall have commenced and be continuing, or (iv) amend the
Common Securities Guarantee to reduce, suspend or cancel the subordination, to
the rights of holders of the Preferred Securities, of Guarantee Payments (as
that term is defined in the Common Securities Guarantee with respect to the
Common Securities) with respect to the holders of the Common Securities.

SECTION 6.2 Ranking
            -------

          The obligations of the Guarantor under this Preferred Securities
Guarantee shall rank pari passu with the obligations of the Guarantor under (i)
any Other Guarantee, (ii) the Indenture and the Debentures issued thereunder;
and (iii) any other security, guarantee or other agreement or obligation that is
expressly stated to rank pari passu with the obligations of the Guarantor under
this Preferred Securities Guarantee or with any obligation that ranks pari passu
with the obligations of the Guarantor under this Preferred Securities Guarantee.

                                   ARTICLE VII

                                   TERMINATION

SECTION 7.1 Termination
            -----------

          This Preferred Securities Guarantee shall terminate and be of no
further force and effect upon (i) full payment of the Redemption Price of all
Preferred Securities, (ii) dissolution, winding up or liquidation of the Issuer,
immediately following the full payment of the amounts payable in accordance with
the Declaration, or (iii) the distribution of all of the Debentures to the
Holders of the Trust Securities. Notwithstanding the foregoing, this Preferred
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time

                                      -19-

<PAGE>

any Holder of the Preferred Securities must restore payment of any sums paid
under the Preferred Securities or under this Preferred Securities Guarantee.

                                  ARTICLE VIII

                                 INDEMNIFICATION

SECTION 8.1 Exculpation
            -----------

          (a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Preferred
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Preferred Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omissions.

          (b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Preferred Securities might properly be paid.

SECTION 8.2 Compensation and Indemnification
            --------------------------------

          The Guarantor agrees to pay to the Preferred Securities Guarantee
Trustee such compensation for its services as shall be mutually agreed upon by
the Guarantor and the Preferred Securities Guarantee Trustee. The Guarantor
shall reimburse the Preferred Securities Guarantee Trustee upon request for all
reasonable out-of-pocket expenses incurred by it, including the reasonable
compensation and expenses of the Preferred Securities Guarantee Trustee's agents
and counsel, except any expense as may be attributable to the negligence or bad
faith of the Preferred Securities Guarantee Trustee.

          The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any and all loss, liability,
damage, action, suit, claim or expense incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The provisions
of this Section 8.2 shall survive the termination of this Preferred

                                      -20-

<PAGE>

Securities Guarantee and shall survive the resignation or removal of the
Preferred Securities Guarantee Trustee.

                                   ARTICLE IX

                                  MISCELLANEOUS

SECTION 9.1 Successors and Assigns
            ----------------------

            All guarantees and agreements contained in this Preferred
Securities Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding. Except in connection with any
merger or consolidation of the Guarantor with or into another entity permitted
by Section 10.01 of the Indenture or any sale, transfer, conveyance or other
disposition of the property of the Guarantor permitted by Section 10.01 of the
Indenture, the Guarantor may not assign its rights or delegate its obligations
under this Preferred Securities Guarantee.

SECTION 9.2 Amendments
            ----------

            Except with respect to any changes that do not materially adversely
affect the rights of Holders of the Preferred Securities (in which case no
consent of such Holders will be required), this Preferred Securities Guarantee
may only be amended with the prior approval of the Holders of a Majority in
Liquidation Amount of the Preferred Securities. The provisions of Section 12.2
of the Declaration with respect to meetings of Holders of the Trust Securities
apply to the giving of such approval. This Preferred Securities Guarantee may
not be amended, and no amendment hereof that affects the Preferred Securities
Guarantee Trustee's rights, duties or immunities hereunder or otherwise, shall
be effective, unless such amendment is executed by the Preferred Securities
Guarantee Trustee (which shall have no obligation to execute any such amendment,
but may do so in its sole discretion).

SECTION 9.3 Notices
            -------

            All notices provided for in this Preferred Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:

            (a) If given to the Issuer, in care of the Administrative Trustee at
the Issuer's mailing address set forth below (or such other address as the
Issuer may give notice of to the Preferred Securities Guarantee Trustee and the
Holders of the Preferred Securities):

                                      -21-

<PAGE>

            VNB CAPITAL TRUST I
            1455 Valley Road
            Wayne, New Jersey 07470
            Attention:  Alan D. Eskow
            Telephone:  (973) 305-4003
            Telecopier: (973) 305-8415

            (b) If given to the Preferred Securities Guarantee Trustee, at the
Preferred Securities Guarantee Trustee's mailing address set forth below (or
such other address as the Preferred Securities Guarantee Trustee may give notice
of to the Holders of the Preferred Securities):

            THE BANK OF NEW YORK
            101 Barclay Street
            New York, New York 10286
            Attention:
            Telephone:
            Telecopier:

            (c) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Preferred Securities Guarantee Trustee and the Holders of the Preferred
Securities):

            VALLEY NATIONAL BANCORP
            1455 Valley Road
            Wayne, New Jersey 07470
            Attention:  Alan D. Eskow
            Telephone:  (973) 305-4003
            Telecopier: (973) 305-8415

            (d) If given to any Holder of the Preferred Securities, at the
address set forth on the books and records of the Issuer.

            All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.

SECTION 9.4 Benefit
            -------

            This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.

                                      -22-

<PAGE>

SECTION 9.5 Governing Law
            -------------

            THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO ITS CONFLICTS OF LAWS PRINCIPLES.

                                      -23-

<PAGE>

          THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.

                                     VALLEY NATIONAL BANCORP
                                     as Guarantor

                                     By:________________________________________
                                           Name:  Alan D. Eskow
                                           Title: Executive Vice President and
                                                  Chief Financial Officer

                                     THE BANK OF NEW YORK
                                     as Preferred Securities Guarantee Trustee

                                     By:________________________________________
                                           Name:
                                           Title:

                                      -24-