Document:

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                 SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
                          CASCADE FINANCIAL CORPORATION
                         Dated as of ____________, 2000

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                                TABLE OF CONTENTS

                                    ARTICLE I

                         DEFINITIONS AND INTERPRETATION

                                                                            Page

SECTION 1.1   Definitions and Interpretation..................................2

                                   ARTICLE II

                               TRUST INDENTURE ACT

SECTION 2.1   Trust Indenture Act; Application................................5
SECTION 2.2   Lists of Holders of Securities..................................5
SECTION 2.3   Reports by the Capital Securities Guarantee Trustee.............6
SECTION 2.4   Periodic Reports................................................6
SECTION 2.5   Evidence of Compliance with Conditions Precedent................6
SECTION 2.6   Waiver of Events of Default.....................................6
SECTION 2.7   Notice of Events of Default.....................................6
SECTION 2.8   Conflicting Interests...........................................7

                                   ARTICLE III

                          POWERS, DUTIES AND RIGHTS OF
                      CAPITAL SECURITIES GUARANTEE TRUSTEE

SECTION 3.1   Powers and Duties of the Capital Securities Guarantee Trustee ..7
SECTION 3.2   Certain Rights of Capital Securities Guarantee Trustee..........9
SECTION 3.3   Not Responsible for Recitals or Issuance of Series
              B Capital Securities Guarantee.................................10

                                   ARTICLE IV

                      CAPITAL SECURITIES GUARANTEE TRUSTEE

SECTION 4.1   Capital Securities Guarantee Trustee; Eligibility..............11
SECTION 4.2   Appointment, Removal and Resignation of Capital Securities
              Guarantee Trustee..............................................11

                                    ARTICLE V

                                    GUARANTEE

SECTION 5.1   Guarantee......................................................12
SECTION 5.2   Waiver of Notice and Demand....................................12
SECTION 5.3   Obligations Not Affected.......................................12
SECTION 5.4   Rights of Holders..............................................13

                                       (i)

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                                                                            Page

SECTION 5.5   Guarantee of Payment...........................................14
SECTION 5.6   Subrogation....................................................14
SECTION 5.7   Independent Obligations........................................14

                                   ARTICLE VI

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 6.1   Limitation of Transactions.....................................14
SECTION 6.2   Ranking........................................................15

                                   ARTICLE VII

                                   TERMINATION

SECTION 7.1   Termination....................................................15

                                  ARTICLE VIII

                                 INDEMNIFICATION

SECTION 8.1   Exculpation....................................................16
SECTION 8.2   Compensation and Indemnification...............................16

                                   ARTICLE IX

                                  MISCELLANEOUS

SECTION 9.1   Successors and Assigns.........................................17
SECTION 9.2   Amendments.....................................................17
SECTION 9.3   Notices........................................................17
SECTION 9.4   Benefit........................................................18
SECTION 9.5   Governing Law..................................................19

                                  (ii)

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                          CROSS REFERENCE TABLE

Section of Trust
Indenture Act of                                            Section of Guarantee
1939, as amended                                                 Agreement
----------------                                                 ---------
     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)
-------------------------

*     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.

                                      (iii)

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                 SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT

         This SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT (the "Series B
Capital Securities Guarantee"), dated as of , 2000, is executed and delivered by
CASCADE FINANCIAL  CORPORATION,  a Delaware  corporation (the "Guarantor"),  and
WILMINGTON  TRUST  COMPANY,  a Delaware  banking  corporation,  as trustee  (the
"Capital  Securities  Guarantee  Trustee" or "Trustee"),  for the benefit of the
Holders (as defined herein) from time to time of the Series B Capital Securities
(as defined  herein) of CASCADE 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 March 1,  2000,  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
(i)  issued on March 1, 2000  10,000  capital  securities,  having an  aggregate
liquidation amount of $10,000,000,  such capital securities being designated the
11.00%  Capital  Securities,  Series  A  (collectively  the  "Series  A  Capital
Securities")  and (ii) in connection  with an Exchange  Offer (as defined in the
Declaration),  hereby  executes  and delivers  this Series B Capital  Securities
Guarantee  (as  defined in the  Declaration)  for the  benefit of Holders of the
Series B Capital Securities (as defined in the Declaration).

         WHEREAS,  the  Series A Capital  Securities  issued by the  Issuer  and
proceeds  thereof,  together with the proceeds from the issuance of the Issuer's
Common  Securities (as defined herein),  were used to purchase the 11.00% Junior
Subordinated  Deferrable  Interest  Debentures  due March 1, 2030 (the "Series A
Junior Subordinated  Debentures") of the Guarantor which were deposited with the
Property Trustee under the Declaration.

         WHEREAS,  as incentive for the Holders to purchase the Series A Capital
Securities,  the Guarantor irrevocably and unconditionally agreed, to the extent
set forth in the  Series A  Capital  Securities  Guarantee  dated as of March 1,
2000,  to pay the Guarantee  Payments (as defined  herein) to the Holders of the
Series A Capital  Securities,  and the  Guarantor  agrees to make certain  other
payments on the terms and conditions set forth herein.

         WHEREAS,  in  connection  with  the  offer  of  the  Series  A  Capital
Securities,  the Guarantor,  the Issuer and Sandler O'Neill & Partners, L.P., as
representative  of the initial  purchasers  named in Schedule A of the  Purchase
Agreement,  executed the  Registration  Rights Agreement dated February 25, 2000
(the "Registration Rights Agreement").

         WHEREAS,  the  Issuer,  in order to satisfy its  obligations  under the
Registration  Rights  Agreement,  intends to offer up to  $10,000,000  aggregate
Liquidation Amount of its 11.00% Capital  Securities,  Series B, which have been
registered  under  the  Securities  Act  of  1933,  as  amended,  pursuant  to a
registration  statement  in exchange for a like  Liquidation  Amount of Series A
Capital Securities.

         WHEREAS,  pursuant  to  the  Exchange  Offer,  the  Guarantor  is  also
exchanging up to $10,000,000  aggregate  principal amount of the Series A Junior
Subordinated  Debentures for up to $10,000,000 aggregate principal amount of the
Series B Junior Subordinated Debentures due March 1, 2030 of the Guarantor.

         WHEREAS,  pursuant to the Exchange Offer,  the Guarantor is required to
execute  this Series B Capital  Securities  Guarantee  and exchange the Series A
Capital  Securities  Guarantee  for this Series B Capital  Securities  Guarantee
Agreement.

                                      - 1 -

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         WHEREAS,   the  Guarantor   also  executed  and  delivered  the  Common
Securities  Guarantee  Agreement,  dated  as  of  March  1,  2000  (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 the Series A
Capital  Securities  and the Series B Capital  Securities  to receive  Guarantee
Payments  under the  Series A Capital  Securities  Guarantee  and this  Series B
Capital Securities Guarantee, as the case may be.

         NOW, THEREFORE,  in consideration of the exchange by each Holder of the
Series A Capital Securities for the Series B Capital Securities,  which exchange
the Guarantor hereby acknowledges shall benefit the Guarantor,  (or in the event
certain Holders do not exchange their Series A Capital  Securities,  in order to
fulfill its  obligations  to such Holders under the Series A Capital  Securities
Guarantee) and intending to be legally bound hereby,  the Guarantor executes and
delivers  this  Series B Capital  Securities  Guarantee  for the  benefit of the
Holders from time to time of the Trust Securities (as defined herein).

                                    ARTICLE I

                         DEFINITIONS AND INTERPRETATION

         SECTION 1.1       Definitions and Interpretation

         In this  Series B Capital  Securities  Guarantee,  unless  the  context
otherwise requires:

         (a)  capitalized  terms  used  in  this  Series  B  Capital  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 Series B Capital  Securities  Guarantee  have the same meaning
when used in this Series B Capital Securities Guarantee unless otherwise defined
in this Series B Capital Securities Guarantee,

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

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

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

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

                                      - 2 -

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         (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 New York, New York, Wilmington, Delaware or
Everett,  Washington  are  authorized  or required by law or executive  order to
remain closed.

         "Capital  Securities  Guarantee  Trustee" shall mean  Wilmington  Trust
Company,  as Trustee under the Series B Capital  Securities  Guarantee,  until a
Successor  Capital  Securities  Guarantee  Trustee  has been  appointed  and has
accepted  such  appointment  pursuant  to the  terms of this  Series  B  Capital
Securities Guarantee and thereafter means each such Successor Capital Securities
Guarantee Trustee.

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

         "Corporate   Trust  Office"  shall  mean  the  office  of  the  Capital
Securities  Guarantee  Trustee  at which the  corporate  trust  business  of the
Capital  Securities   Guarantee  Trustee  shall,  at  any  particular  time,  be
principally  administered,  which  office  at the  date  of  execution  of  this
Agreement  is  located  at  Rodney  Square  North,  1100  North  Market  Street,
Wilmington, Delaware 19890-0001, Attention: Corporate Trust Administration.

         "Covered  Person" shall mean any Holder or beneficial owner of Series B
Capital Securities.

         "Debentures"  shall mean the series of subordinated  debt securities of
the Guarantor  designated  the 11.00% Junior  Subordinated  Deferrable  Interest
Debentures due March 1, 2030, Series B, 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 Series B Capital  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  Series  B  Capital
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 Series B Capital  Securities,  to the extent the
Issuer has funds legally  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 legally
available therefor at such time, with respect to any Series B Capital 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 Series B Capital
Securities  or in  connection  with  the  redemption  of the  Series  B  Capital
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 Series B Capital Securities to the date of

                                      - 3 -

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payment,  to the extent the Issuer has funds legally 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  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
Series B Capital  Securities  shall be paid in full the  Guarantee  Payments  to
which they are entitled under this Series B Capital Securities Guarantee.

         "Holder" shall mean any holder,  as registered on the books and records
of the Issuer, of any Series B Capital Securities;  provided,  however, that, in
determining whether the holders of the requisite  percentage of Series B Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the  Guarantor or any Person  actually  known to a Responsible
Officer of the Capital  Securities  Guarantee  Trustee to be an Affiliate of the
Guarantor.

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

         "Indenture"  shall  mean the  Indenture,  dated  as of  March 1,  2000,
between Cascade Financial  Corporation,  as issuer of Debentures (the "Debenture
Issuer"),  and  Wilmington  Trust  Company,  as  trustee,  pursuant to which the
Debentures are to be issued to the Property Trustee of the Issuer.

         "Majority  in  Liquidation  Amount of the Series B Capital  Securities"
shall mean,  except as provided by the Trust  Indenture Act, a vote by Holder(s)
of the Series B Capital  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 the date upon which the voting  percentages are determined) of
all  outstanding  Series  B  Capital  Securities,  excluding  Series  B  Capital
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 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 Series B Capital 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 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

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

                                      - 4 -

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

         "Other Debentures" shall mean all junior subordinated debentures, other
than the Series A Junior Subordinated  Debentures and the Debentures,  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 Series B
Capital Securities Guarantee and the Series A Capital Securities  Guarantee,  to
be issued by the Guarantor  with respect to capital  securities (if any) similar
to the Series B Capital 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.

         "Registration  Rights  Agreement"  shall mean the  Registration  Rights
Agreement, dated as of February 25, 2000, by and among the Guarantor, the Issuer
and the Initial  Purchaser  named  therein,  as such  agreement  may be amended,
modified or supplemented from time to time.

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

         "Successor Capital Securities Guarantee Trustee" shall mean a successor
Capital  Securities  Guarantee Trustee  possessing the  qualifications to act as
Capital 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 Series A
Capital Securities and Series B Capital Securities, collectively.

                                   ARTICLE II

                               TRUST INDENTURE ACT

         SECTION 2.1       Trust Indenture Act; Application

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

         (b) If and to the extent  that any  provision  of this Series B Capital
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 Series B Capital Securities

                                      - 5 -

<PAGE>

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  Series B  Capital  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  Capital  Securities  Guarantee
Trustee  (unless the  Capital  Securities  Guarantee  Trustee is  otherwise  the
registrar of the Series B Capital  Securities)  with a list, in such form as the
Capital Securities  Guarantee Trustee may reasonably  require,  of the names and
addresses of the Holders of the Series B Capital  Securities ("List of Holders")
as of such  date,  (i)  within 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
Capital 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
Capital  Securities  Guarantee Trustee by the Guarantor.  The Capital Securities
Guarantee  Trustee may destroy any List of Holders  previously  given to it upon
receipt of a new List of Holders.

         (b) The Capital  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 Capital Securities Guarantee Trustee

         Within 60 days after the date hereof, and no later than the anniversary
date hereof in each succeeding year, the Capital  Securities  Guarantee  Trustee
shall provide to the Holders of the Series B Capital  Securities such reports 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 Capital
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 Capital Securities Guarantee Trustee
such documents,  reports and information as are required by Section 314 (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
Capital Securities Guarantee Trustee is for informational  purposes only and the
Capital  Securities  Guarantee  Trustee's  receipt of such shall not  constitute
constructive  notice of any information  contained  therein or determinable from
information contained therein,  including the Guarantor's compliance with any of
its covenants hereunder (as to which the Capital 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 Capital Securities Guarantee Trustee
such evidence of compliance with the conditions precedent,  if any, provided for
in this Series B Capital Securities  Guarantee that relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any

                                      - 6 -

<PAGE>

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 Series B Capital
Securities may, by vote, on behalf of the Holders of all of the Series B Capital
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
Series B Capital  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 Capital Securities  Guarantee Trustee shall, within 10 Business
Days after the  occurrence  of an Event of Default with respect to this Series B
Capital  Securities  Guarantee  actually  known to a Responsible  Officer of the
Capital  Securities  Guarantee  Trustee,  transmit by mail,  first class postage
prepaid, to all Holders of the Series B Capital 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 Capital
Securities  Guarantee  Trustee shall be protected in withholding  such notice if
and so long as a Responsible Officer of the Capital Securities Guarantee Trustee
in good faith determines that the withholding of such notice is in the interests
of the Holders of the Series B Capital Securities.

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

         SECTION 2.8       Conflicting Interests

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

                                   ARTICLE III

                          POWERS, DUTIES AND RIGHTS OF
                      CAPITAL SECURITIES GUARANTEE TRUSTEE

         SECTION  3.1  Powers  and Duties of the  Capital  Securities  Guarantee
                       Trustee

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

                                      - 7 -

<PAGE>

succession  of title shall be effective  whether or not  conveyancing  documents
have been executed and delivered  pursuant to the  appointment of such Successor
Capital Securities Guarantee Trustee.

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

         (c) The Capital 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
Series B Capital Securities  Guarantee,  and no implied covenants or obligations
shall be read  into this  Series B  Capital  Securities  Guarantee  against  the
Capital 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 Capital Securities  Guarantee Trustee, the
Capital  Securities  Guarantee  Trustee  shall  exercise  such of the rights and
powers vested in it by this Series B Capital 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 Series B Capital Securities Guarantee shall be
construed to relieve the Capital 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  Capital  Securities
         Guarantee Trustee shall be determined solely by the express  provisions
         of  this  Series  B  Capital  Securities  Guarantee,  and  the  Capital
         Securities  Guarantee  Trustee  shall  not be  liable  except  for  the
         performance  of such duties and  obligations  as are  specifically  set
         forth in this  Series B Capital  Securities  Guarantee,  and no implied
         covenants  or  obligations  shall be read  into  this  Series B Capital
         Securities  Guarantee against the Capital Securities Guarantee Trustee;
         and

                  (B) in the  absence  of bad  faith on the part of the  Capital
         Securities  Guarantee Trustee, the Capital 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 Capital  Securities  Guarantee  Trustee and
         conforming  to the  requirements  of this  Series B Capital  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 Capital Securities  Guarantee Trustee,  the Capital
         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 Series B Capital Securities Guarantee;

                  (ii) the Capital  Securities  Guarantee  Trustee  shall not be
         liable for any errors of judgment  made in good faith by a  Responsible
         Officer of the Capital Securities Guarantee Trustee, unless it shall be
         proved that the Capital Securities Guarantee Trustee or such

                                      - 8 -

<PAGE>

         Responsible  Officer was negligent in ascertaining  the pertinent facts
         upon which such judgment was made;

                  (iii) the Capital  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  Series B  Capital  Securities
         relating to the time, method and place of conducting any proceeding for
         any remedy available to the Capital Securities  Guarantee  Trustee,  or
         exercising  any trust or power  conferred  upon the Capital  Securities
         Guarantee Trustee under this Series B Capital Securities Guarantee; and

                  (iv)  no  provision  of  this  Series  B  Capital   Securities
         Guarantee  shall require the Capital  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  Capital  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  Series B  Capital  Securities  Guarantee  or  indemnity,
         reasonably  satisfactory to the Capital  Securities  Guarantee Trustee,
         against such risk or liability is not reasonably assured to it.

         SECTION 3.2     Certain Rights of Capital Securities Guarantee Trustee

         (a)      Subject to the provisions of Section 3.1:

                  (i) the Capital 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  Series  B  Capital  Securities   Guarantee  may  be  sufficiently
         evidenced by an Officers' Certificate;

                  (iii) whenever, in the administration of this Series B Capital
         Securities  Guarantee,  the Capital Securities  Guarantee Trustee shall
         deem it desirable that a matter be proved or established before taking,
         suffering  or omitting  any action  hereunder,  the Capital  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 Capital  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 Capital 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;  such  counsel may be counsel to the  Guarantor  or any of its
         Affiliates  and may  include  any of its  employees;  and  the  Capital
         Securities Guarantee Trustee shall have the right at any time to

                                      - 9 -

<PAGE>

         seek  instructions  concerning  the  administration  of this  Series  B
         Capital Securities Guarantee from any court of competent jurisdiction;

                  (vi) the Capital  Securities  Guarantee Trustee shall be under
         no  obligation  to exercise any of the rights or powers vested in it by
         this Series B Capital Securities  Guarantee at the request or direction
         of any Holder,  unless such Holder  shall have  provided to the Capital
         Securities  Guarantee  Trustee such security and indemnity,  reasonably
         satisfactory to the Capital Securities  Guarantee Trustee,  against the
         costs,  expenses  (including  attorneys'  fees  and  expenses  and  the
         expenses of the Capital 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  Capital  Securities  Guarantee
         Trustee,  provided,  however,  that  nothing  contained in this Section
         3.2(a)(vi) shall be taken to relieve the Capital  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 Series B Capital
         Securities Guarantee;

                  (vii) the Capital  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
         Capital 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 Capital  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 Capital  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  Capital  Securities  Guarantee
         Trustee or its agents  hereunder shall bind the Holders of the Series B
         Capital  Securities,  and  the  signature  of  the  Capital  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 Capital Securities Guarantee Trustee
         to so act or as to its compliance  with any of the terms and provisions
         of this Series B Capital Securities  Guarantee,  both of which shall be
         conclusively evidenced by the Capital Securities Guarantee Trustee's or
         its agent's taking such action;

                  (x)  whenever in the  administration  of this Series B Capital
         Securities  Guarantee the Capital  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  Capital
         Securities  Guarantee  Trustee  (i) may request  instructions  from the
         Holders of a  Majority  in  Liquidation  Amount of the Series B Capital
         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 Capital  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 reasonably  believed by it to be
         authorized or within the discretion or rights or powers  conferred upon
         it by this Series B Capital Securities Guarantee.

                                     - 10 -

<PAGE>

         (b) No provision of this Series B Capital Securities Guarantee shall be
deemed to impose any duty or  obligation  on the  Capital  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  Capital  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 Capital  Securities  Guarantee
Trustee shall be construed to be a duty.

         SECTION 3.3       Not Responsible for Recitals or Issuance of Series
                           B Capital Securities Guarantee

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

                                   ARTICLE IV

                      CAPITAL SECURITIES GUARANTEE TRUSTEE

         SECTION 4.1       Capital Securities Guarantee Trustee; Eligibility

         (a) There shall at all times be a Capital 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 Capital Securities Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Capital Securities  Guarantee
Trustee  shall  immediately  resign in the manner and with the effect set out in
Section 4.2(c).

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

                                     - 11 -

<PAGE>

         SECTION 4.2  Appointment, Removal and Resignation of Capital Securities
                      Guarantee Trustee

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

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

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

         (d) If no Successor  Capital  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 Capital
Securities  Guarantee  Trustee resigning or being removed may petition any court
of competent  jurisdiction  for  appointment of a Successor  Capital  Securities
Guarantee Trustee.  Such court may thereupon,  after prescribing such notice, if
any, as it may deem proper,  appoint a Successor  Capital  Securities  Guarantee
Trustee.

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

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

                                    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

                                     - 12 -

<PAGE>

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 Series B
Capital  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 Series B Capital Securities  Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:

         (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 Series B Capital  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 Distribution or any
other sums  payable  under the terms of the Series B Capital  Securities  or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Series B Capital Securities;

         (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  Series  B  Capital
Securities,  or any  action on the part of the  Issuer  granting  indulgence  or
extension of any kind;

         (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 Series B Capital
Securities;

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

         (g) the consummation of the Exchange Offer; or

         (h) 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.

                                     - 13 -

<PAGE>

         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 Series B
Capital  Securities  have the right to  direct  the  time,  method  and place of
conducting  any proceeding  for any remedy  available to the Capital  Securities
Guarantee  Trustee in respect of this Series B Capital  Securities  Guarantee or
exercising any trust or power  conferred upon the Capital  Securities  Guarantee
Trustee under this Series B Capital Securities Guarantee.

         (b) If the Capital  Securities  Guarantee Trustee fails to enforce this
Series B  Capital  Securities  Guarantee,  any  Holder  of the  Series B Capital
Securities may institute a legal  proceeding  directly  against the Guarantor to
enforce the Capital  Securities  Guarantee  Trustee's rights under this Series B
Capital  Securities  Guarantee,  without first  instituting  a legal  proceeding
against the Issuer, the Capital 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.

         SECTION 5.5       Guarantee of Payment

         This  Series B Capital  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 Series B Capital Securities against the Issuer in respect of any amounts paid
to such  Holders  by the  Guarantor  under  this  Series  B  Capital  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  Series B
Capital Securities  Guarantee,  if, at the time of any such payment, any amounts
are due and unpaid  under this  Series B Capital  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 Series B
Capital  Securities,  and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this Series
B Capital  Securities  Guarantee  notwithstanding  the  occurrence  of any event
referred to in subsections (a) through (h), inclusive, of Section 5.3 hereof.

                                     - 14 -

<PAGE>

                                   ARTICLE VI

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

         SECTION 6.1       Limitation of Transactions

         So long as any Capital  Securities  remain  outstanding,  the Guarantor
shall not (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 or
premium,  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  or (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 of any such rights pursuant thereto, (c)
payments  under  this  Series B Capital  Securities  Guarantee  and the Series A
Capital  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  Series  B  Capital  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.

         SECTION 6.2       Ranking

         This Series B Capital Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all  Allocable  Amounts (as defined in the  Indenture)  in respect of
Senior Indebtedness (as defined in the Indenture), to the same extent and in the
same manner that the Debentures are subordinated to Senior Indebtedness pursuant
to the  Indenture,  it being  understood  that the  terms of  Article  XV of the
Indenture  shall apply to the  obligations of the Guarantor  under this Series B
Capital  Securities  Guarantee  as if such  Article XV were set forth  herein in
full, (ii) pari passu with the most senior  preferred or preference stock now or
hereafter  issued by the  Guarantor  and with the  Series A  Capital  Securities
Guarantee,  any Other Guarantee and, except to the extent set forth therein, the
Common  Securities  Guarantee,  any Other Common Securities  Guarantee,  and any
guarantee  now or  hereafter  entered  into by the  Guarantor  in respect of any
preferred  or  preference  stock of any  Affiliate of the  Guarantor,  and (iii)
senior to the Guarantor's common stock.

                                     - 15 -

<PAGE>

                                   ARTICLE VII

                                   TERMINATION

         SECTION 7.1       Termination

         This Series B Capital Securities Guarantee shall terminate and be of no
further  force and effect upon (i) full payment of the  Redemption  Price of all
Series B Capital 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  Series B Capital  Securities  Guarantee  will  continue  to be
effective or will be  reinstated,  as the case may be, if at any time any Holder
of the Series B Capital  Securities  must restore payment of any sums paid under
the  Series B Capital  Securities  or under  this  Series B  Capital  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  Series B
Capital  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  Series B Capital  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 Series B Capital Securities might properly be
paid.

         SECTION 8.2       Compensation and Indemnification

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

                                     - 16 -

<PAGE>

         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 Series B Capital
Securities Guarantee and shall survive the resignation or removal of the Capital
Securities Guarantee Trustee.

                                   ARTICLE IX

                                  MISCELLANEOUS

         SECTION 9.1       Successors and Assigns

         All  guarantees  and  agreements  contained  in this  Series B  Capital
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 Series B Capital  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 Capital Securities Guarantee.

         SECTION 9.2       Amendments

         Except with  respect to any changes  that do not  materially  adversely
affect the rights of Holders of the Series B Capital  Securities  (in which case
no consent of such Holders will be required),  this Series B Capital  Securities
Guarantee  may only be  amended  with the prior  approval  of the  Holders  of a
Majority  in  Liquidation  Amount  of  the  Series  B  Capital  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
Series B Capital  Securities  Guarantee  may not be  amended,  and no  amendment
hereof that affects the Capital Securities Guarantee Trustee's rights, duties or
immunities hereunder or otherwise, shall be effective,  unless such amendment is
executed  by the  Capital  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 Series B Capital 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 Capital  Securities  Guarantee  Trustee and the
Holders of the Series B Capital Securities):

                                     - 17 -

<PAGE>

                           CASCADE CAPITAL TRUST I
                           c/o Cascade Financial Corporation
                           2828 Colby Avenue
                           Everett, Washington 98201-3537
                           Attention: Chief Financial Officer
                           Telephone:    (425) 258-5500
                           Telecopier:   (425) 258-0624

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

                         WILMINGTON TRUST COMPANY
                         Rodney Square North
                         1100 North Market Street
                         Wilmington, Delaware 19890-0001
                         Attention:    Corporate Trust Administration
                         Telephone:    (302) 651-1000
                         Telecopier:   (302) 651-8882

         (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
Capital  Securities  Guarantee  Trustee  and the Holders of the Series B Capital
Securities):

                         CASCADE FINANCIAL CORPORATION
                         2828 Colby Avenue
                         Everett, Washington 98201-3537
                         Attention: Chief Financial Officer
                         Telephone:    (425) 258-5500
                         Telecopier:   (425) 258-0624

         (d) If given to any Holder of the Series B Capital  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 Series B Capital Securities Guarantee is solely for the benefit of
the Holders of the Series B Capital  Securities and,  subject to Section 3.1(a),
is not separately transferable from the Series B Capital Securities.

                                     - 18 -

<PAGE>

         SECTION 9.5                Governing Law

         THIS SERIES B CAPITAL  SECURITIES  GUARANTEE  SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE  WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF.

         This Series B Capital  Securities  Guarantee  is executed as of the day
and year first above written.

                                  CASCADE FINANCIAL CORPORATION,
                                  as Guarantor

                                  By:
                                      Frank M. McCord
                                      Chairman and Chief Executive Officer

                                  WILMINGTON TRUST COMPANY,
                                  as Capital Securities Guarantee Trustee

                                  By:
                                      Name:
                                      Title:

                                     - 19 ---------------------------------------------------------------------------------

                          REGISTRATION RIGHTS AGREEMENT

                          Dated as of February 25, 2000

                                  by and among

                         CASCADE FINANCIAL CORPORATION,

                             CASCADE CAPITAL TRUST I

                                       and

                        SANDLER O'NEILL & PARTNERS, L.P.,

                   on behalf of the several Initial Purchasers
                  named in Schedule A of the Purchase Agreement

--------------------------------------------------------------------------------

<PAGE>

                          REGISTRATION RIGHTS AGREEMENT

     THIS  REGISTRATION  RIGHTS AGREEMENT (the  "Agreement") is made and entered
into as of  February  25, 2000 by and among  CASCADE  FINANCIAL  CORPORATION,  a
Delaware corporation (the "Company"),  CASCADE CAPITAL TRUST I, a business trust
formed under the laws of the state of Delaware (the "Trust"),  SANDLER O'NEILL &
PARTNERS,  L.P., as representative of the initial purchasers named in Schedule A
of the Purchase Agreement (the "Initial Purchasers").

                  This  Agreement  is made  pursuant to the  Purchase  Agreement
dated February 25, 2000 (the "Purchase Agreement"), by and among the Company, as
issuer of the 11.00% Junior  Subordinated  Deferrable  Interest  Debentures  due
March 1,  2030,  Series A (the  "Subordinated  Debentures"),  the  Trust and the
Initial  Purchasers,  which  provides for,  among other things,  the sale by the
Trust  to the  Initial  Purchasers  of  10,000  of the  Trust's  11.00%  Capital
Securities,  Series A,  liquidation  amount  $1,000 per  Capital  Security  (the
"Capital Securities"), the proceeds of which will be used by the Trust, together
with the proceeds from the sale of the Trust's Common Securities to the Company,
to purchase the Subordinated Debentures.  The Capital Securities,  together with
the Subordinated  Debentures and the Company's guarantee agreement in respect of
the Capital Securities (the "Capital  Securities  Guarantee"),  are collectively
referred to as the  "Securities."  In order to induce the Initial  Purchasers to
enter into the  Purchase  Agreement,  the  Company  and the Trust have agreed to
provide to the Initial  Purchasers and its direct and indirect  transferees  the
registration  rights set forth in this Agreement.  The execution and delivery of
this Agreement is a condition to the closing under the Purchase Agreement.

     In consideration of the foregoing, the parties hereto agree as follows:

1.   Definitions.  As used in this Agreement,  the following capitalized defined
     terms shall have the following meanings:

     "Additional Distributions" shall have the meaning set forth in Section 2(e)
hereof.

     "Advice"  shall have the meaning set forth in the last paragraph of Section
3 hereof.

     "Affiliate"  shall have the same  meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.

     "Applicable  Period"  shall  have the  meaning  set forth in  Section  3(u)
hereof.

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

     "Closing  Time"  shall mean the  Closing  Time as  defined in the  Purchase
Agreement.

     "Company"  shall  have  the  meaning  set  forth  in the  preamble  to this
Agreement and also includes the Company's successors and permitted assigns.

                                        1

<PAGE>

     "Debentures"  shall  collectively mean the Subordinated  Debentures and the
Exchange Debentures.

     "Declaration" or "Declaration of Trust" shall mean the Amended and Restated
Declaration  of Trust of Cascade  Capital Trust I, dated as of the Closing Time,
by the trustees named therein and the Company as sponsor.

     "Depositary"  shall  mean  The  Depository  Trust  Company,  or  any  other
depositary appointed by the Trust; provided,  however, that such depositary must
have an address in the Borough of Manhattan, in The City of New York.

     "Effectiveness  Period"  shall have the meaning  set forth in Section  2(b)
hereof.

     "Exchange Act" shall mean the  Securities  Exchange Act of 1934, as amended
from time to time.

     "Exchange  Offer"  shall mean the offer by the Company and the Trust to the
Holders to  exchange  all of the  Registrable  Securities  (other  than  Private
Exchange  Securities)  for a like  amount of  Exchange  Securities  pursuant  to
Section 2(a) hereof.

     "Exchange  Offer   Registration"   shall  mean  a  registration  under  the
Securities Act effected pursuant to Section 2(a) hereof.

     "Exchange  Offer  Registration  Statement"  shall  mean an  exchange  offer
registration  statement  on  SEC  Form  S-4  (or,  if  applicable,   on  another
appropriate  form),  and all  amendments and  supplements  to such  registration
statement, in each case including the Prospectus contained therein, all exhibits
thereto and all documents incorporated by reference therein.

     "Exchange Period" shall have the meaning set forth in Section 2(a) hereof.

     "Exchange  Securities"  shall  mean (i) with  respect  to the  Subordinated
Debentures,  the 11.00% Junior  Subordinated  Deferrable Interest Debentures due
March  1,  2030,   Series  B  (the  "Exchange   Debentures")   containing  terms
substantially  identical to the Subordinated  Debentures  (except that they will
not contain terms with respect to the transfer restrictions under the Securities
Act (other than requiring  minimum transfers thereof to be in blocks of $100,000
aggregate  principal  amount and multiples of $1,000 in excess thereof) and will
not  provide  for any  Liquidated  Damages  thereon),  (ii) with  respect to the
Capital Securities, the Trust's 11.00% Capital Securities, Series B, liquidation
amount  $1,000  per  Capital  Security  (the  "Exchange   Capital   Securities")
containing terms substantially  identical to the Capital Securities (except they
will  not  contain  terms  with  respect  to  transfer  restrictions  under  the
Securities Act (other than requiring  minimum  transfers thereof to be in blocks
of  $100,000  aggregate  liquidation  amount and  multiples  of $1,000 in excess
thereof)  and will not provide  for any  increase  in  Additional  Distributions
thereon)  and (iii)  with  respect  to the  Capital  Securities  Guarantee,  the
Company's guarantee agreement in respect of the Exchange Capital Securities (the
"Exchange  Capital  Securities   Guarantee")   containing  terms   substantially
identical to the Capital Securities Guarantee.

                                        2

<PAGE>

     "Holder"  shall  mean the  Initial  Purchasers,  for so long as it owns any
Registrable  Securities,  and each of its  successors,  assigns  and  direct and
indirect  transferees  who become  registered  owners of Registrable  Securities
under the Indenture or Declaration of Trust.

     "Indenture"   shall  mean  the  Indenture   relating  to  the  Subordinated
Debentures and the Exchange  Debentures,  dated as of the Closing Time,  between
the Company,  as issuer, and Wilmington Trust Company,  as trustee,  as the same
may be amended from time to time in accordance with the terms thereof.

     "Initial  Purchasers"  shall have the meaning set forth in the  preamble to
this Agreement.

     "Inspectors" shall have the meaning set forth in Section 3(o) hereof.

     "Issue Date" shall mean March 1, 2000, the date of original issuance of the
Securities.

     "Liquidated  Damages"  shall have the  meaning  set forth in  Section  2(e)
hereof.

     "Majority  Holders"  shall mean the Holders of a majority of the  aggregate
liquidation amount of outstanding Capital Securities.

     "Participating  Broker-Dealer"  shall have the meaning set forth in Section
3(u) hereof.

     "Person"  shall  mean an  individual,  partnership,  corporation,  trust or
unincorporated  organization,  limited  liability  company,  or a government  or
agency or political subdivision thereof.

     "Private Exchange" shall have the meaning set forth in Section 2(a) hereof.

     "Private  Exchange  Securities" shall have the meaning set forth in Section
2(a) hereof.

     "Prospectus"   shall  mean  the  prospectus   included  in  a  Registration
Statement,  including any  preliminary  prospectus,  and any such  prospectus as
amended or  supplemented  by any prospectus  supplement,  including a prospectus
supplement  with  respect  to the terms of the  offering  of any  portion of the
Registrable  Securities  covered by a Shelf Registration  Statement,  and by all
other  amendments  and  supplements  to a prospectus,  including  post-effective
amendments,  and in each case including all documents  incorporated by reference
therein.

     "Purchase  Agreement"  shall have the meaning set forth in the  preamble to
this Agreement.

     "Records" shall have the meaning set forth in Section 3(o) hereof.

                                        3

<PAGE>

     "Registrable  Securities"  shall mean the  Securities  and, if issued,  the
Private  Exchange  Securities;  provided,  however,  that  Securities or Private
Exchange  Securities,  as  the  case  may  be,  shall  cease  to be  Registrable
Securities when (i) a Registration  Statement with respect to such Securities or
Private Exchange  Securities for the exchange or resale thereof, as the case may
be,  shall  have  been  declared  effective  under the  Securities  Act and such
Securities or Private Exchange  Securities,  as the case may be, shall have been
disposed of pursuant to such  Registration  Statement,  (ii) such  Securities or
Private  Exchange  Securities,  as the case may be,  shall have been sold to the
public pursuant to Rule 144(k) (or any similar  provision then in force, but not
Rule  144A)  under  the  Securities  Act  or are  eligible  to be  sold  without
restriction as  contemplated  by Rule 144(k),  (iii) such  Securities or Private
Exchange Securities,  as the case may be, shall have ceased to be outstanding or
(iv) with respect to the Securities,  such Securities  shall have been exchanged
for  Exchange  Securities  upon  consummation  of the  Exchange  Offer  and  are
thereafter  freely  tradeable by the holder  thereof (other than an Affiliate of
the Company).

     "Registration  Expenses"  shall  mean  any and  all  expenses  incident  to
performance  of or  compliance  by the Company  with this  Agreement,  including
without limitation:  (i) all SEC or National  Association of Securities Dealers,
Inc. (the "NASD") registration and filing fees,  including,  if applicable,  the
fees and expenses of any "qualified  independent  underwriter" (and its counsel)
that is  required  to be retained  by any Holder of  Registrable  Securities  in
accordance  with  the  rules  and  regulations  of the  NASD,  (ii) all fees and
expenses  incurred in connection with  compliance with state  securities or blue
sky laws  (including  reasonable fees and  disbursements  of one counsel for all
underwriters or Holders as a group in connection with blue sky  qualification of
any of the Exchange  Securities or Registrable  Securities)  and compliance with
the rules of the  NASD,  (iii) all  expenses  of any  Persons  in  preparing  or
assisting  in  preparing,   word  processing,   printing  and  distributing  any
Registration  Statement,  any  Prospectus  and  any  amendments  or  supplements
thereto,  and in preparing or assisting in preparing,  printing and distributing
any  underwriting  agreements,  securities  sales agreements and other documents
relating to the  performance of and  compliance  with this  Agreement,  (iv) all
rating agency fees,  (v) the fees and  disbursements  of counsel for the Company
and of the independent  certified public  accountants of the Company,  including
the  expenses  of any "cold  comfort"  letters  required  by or  incident to the
performance of and compliance with this Agreement,  (vi) the reasonable fees and
expenses of the Trustees and their counsel and any exchange  agent or custodian,
and (vii) the reasonable  fees and expenses of any special  experts  retained by
the Company in connection with any Registration Statement.

     "Registration  Statement"  shall  mean any  registration  statement  of the
Company and the Trust which covers any of the Exchange Securities or Registrable
Securities pursuant to the provisions of this Agreement,  and all amendments and
supplements  to  any  such  Registration  Statement,   including  post-effective
amendments,  in each  case  including  the  Prospectus  contained  therein,  all
exhibits thereto and all documents incorporated by reference therein.

     "Rule  144(k)  Period"  shall mean the period of two years (or such shorter
period as may hereafter be referred to in Rule 144(k) under the  Securities  Act
(or similar successor rule)) commencing on the Issue Date.

     "SEC" shall mean the Securities and Exchange Commission.

                                        4

<PAGE>

     "Securities"  shall  have the  meaning  set forth in the  preamble  to this
Agreement.

     "Securities  Act" shall mean the  Securities  Act of 1933,  as amended from
time to time.

     "Shelf Registration" shall mean a registration effected pursuant to Section
2(b) hereof.

     "Shelf Registration Event" shall have the meaning set forth in Section 2(b)
hereof.

     "Shelf Registration Event Date" shall have the meaning set forth in Section
2(b) hereof.

     "Shelf Registration  Statement" shall mean a "shelf" registration statement
of the Company and the Trust  pursuant to the  provisions of Section 2(b) hereof
which covers all of the  Registrable  Securities or all of the Private  Exchange
Securities,  as the case may be, on an appropriate form under Rule 415 under the
Securities  Act,  or any  similar  rule that may be adopted by the SEC,  and all
amendments  and   supplements   to  such   registration   statement,   including
post-effective  amendments,  in each case  including  the  Prospectus  contained
therein,  all  exhibits  thereto and all  documents  incorporated  by  reference
therein.

     "TIA" shall mean the Trust  Indenture  Act of 1939, as amended from time to
time.

     "Trustees"  shall  mean any and all  trustees  under the  Declaration,  the
Indenture,  the Capital Securities  Guarantee or the Exchange Capital Securities
Guarantee.

2.   Registration Under the Securities Act.

          (a)  Exchange  Offer.  Except as set forth in Section 2(b) below,  the
               Company and the Trust shall,  for the benefit of the Holders,  at
               the  Company's  cost,  use their best  efforts to (i) cause to be
               filed  with the SEC  within  150 days  after  the  Issue  Date an
               Exchange  Offer  Registration  Statement on an  appropriate  form
               under the  Securities  Act relating to the Exchange  Offer,  (ii)
               cause such Exchange Offer  Registration  Statement to be declared
               effective  under the Securities Act by the SEC not later than the
               date which is 180 days after the Issue Date,  and (iii) keep such
               Exchange Offer Registration Statement effective for not less than
               30 calendar days (or longer if required by applicable  law) after
               the date notice of the  Exchange  Offer is mailed to the Holders.
               Promptly   after  the   effectiveness   of  the  Exchange   Offer
               Registration Statement,  the Company and the Trust shall commence
               the Exchange Offer, it being the objective of such Exchange Offer
               to  enable  each  Holder   eligible   and  electing  to  exchange
               Registrable  Securities for a like  principal  amount of Exchange
               Debentures  or a like  liquidation  amount  of  Exchange  Capital
               Securities,   together  with  the  Exchange  Capital   Securities
               Guarantee, as applicable (provided that such Holder (w) is not an
               Affiliate of the Trust or the Company, (x) is not a broker-dealer
               tendering Registrable Securities acquired directly from the Trust
               or the  Company,  (y) acquires  the  Exchange  Securities  in the
               ordinary  course  of  such  Holder's  business  and  (z)  has  no
               arrangements or understandings  with any Person to participate in
               the Exchange Offer for the purpose of  distributing  the Exchange
               Securities),  to transfer such Exchange Securities from and after
               their receipt without any  limitations or restrictions  under the
               Securities Act and under state securities or blue sky laws (other
               than  requiring  minimum  transfers in blocks having an aggregate
               principal or liquidation  amount, as the case may be, of $100,000
               and multiples of $1,000 in excess thereof).

                                        5

<PAGE>

               In connection with the Exchange Offer,  the Company and the Trust
               shall:

               (i)  mail to each Holder a copy of the Prospectus forming part of
                    the Exchange Offer Registration Statement,  together with an
                    appropriate letter of transmittal and related documents;

               (ii) keep the Exchange  Offer open for acceptance for a period of
                    not less  than 30 days  after  the date  notice  thereof  is
                    mailed to the Holders  (or longer if required by  applicable
                    law)  (such  period  referred  to  herein  as the  "Exchange
                    Period");

               (iii)utilize the  services  of the  Depositary  for the  Exchange
                    Offer with respect to Capital  Securities  represented  by a
                    global certificate;

               (iv) permit Holders to withdraw  tendered  Securities at any time
                    prior to the close of business,  New York time,  on the last
                    Business  Day of the  Exchange  Period,  by  sending  to the
                    institution  specified in the notice to Holders, a telegram,
                    telex,  facsimile  transmission  or letter setting forth the
                    name of such Holder, the amount of Securities  delivered for
                    exchange and a statement that such Holder is withdrawing his
                    election to have such Securities exchanged;

               (v)  notify each Holder that any  Security  not  tendered by such
                    Holder in the  Exchange  Offer will remain  outstanding  and
                    continue to accrue interest or accumulate distributions,  as
                    the case may be, but will not  retain any rights  under this
                    Agreement (except in the case of the Initial  Purchasers and
                    Participating Broker-Dealers as provided herein); and

               (vi) otherwise  comply in all respects with all  applicable  laws
                    relating to the Exchange Offer.

     If either Initial  Purchaser  determines upon advice of its outside counsel
that it is not eligible to participate in the Exchange Offer with respect to the
exchange of Securities  constituting  any portion of an unsold  allotment in the
initial  placement,  as soon as practicable  upon receipt by the Company and the
Trust of a written  request  from such  Initial  Purchaser,  the Company and the
Trust,  as  applicable,  shall issue and deliver to such  Initial  Purchaser  in
exchange  (the  "Private  Exchange")  for the  Securities  held by such  Initial
Purchaser a like liquidation  amount of Exchange Capital Securities of the Trust
or, in the  event  the  Trust is  liquidated  and  Subordinated  Debentures  are
distributed,  a like principal amount of the Exchange Debentures of the Company,
together with the Exchange Capital Securities  Guarantee,  in each case that are
identical  (except that such securities may bear a customary legend with respect
to  restrictions  on transfer  pursuant to the  Securities  Act) to the Exchange
Securities (the "Private Exchange  Securities") and which are issued pursuant to
the Indenture or the Declaration  (which  provides that the Exchange  Securities
will not be subject to the transfer  restrictions  set forth in the Indenture or
the Declaration, as applicable (other than requiring minimum transfers in blocks
having an aggregate  principal  or  liquidation  amount,  as the case may be, of
$100,000  and  multiples  of $1,000 in excess  thereof),  and that the  Exchange
Securities,  the Private  Exchange  Securities and the Securities  will vote and
consent  together  on all  matters  as one class  and that none of the  Exchange
Securities,  the Private  Exchange  Securities or the  Securities  will have the
right to vote or  consent  as a  separate  class  on any  matter).  The  Private
Exchange Securities shall be of the same series as the Exchange Securities,  and
the Company and the Trust will seek to cause the CUSIP  Service  Bureau to issue
the same CUSIP numbers for the Private  Exchange  Securities as for the Exchange
Securities issued pursuant to the Exchange Offer.

                                        6

<PAGE>

     As soon as  practicable  after  the close of the  Exchange  Offer  and,  if
applicable,  the  Private  Exchange,  the  Company  and the  Trust,  as the case
requires, shall:

     (i)  accept for exchange all  Securities or portions  thereof  tendered and
          not validly  withdrawn  pursuant to the Exchange  Offer or the Private
          Exchange;

     (ii) deliver,  or cause to be  delivered,  to the  applicable  Trustee  for
          cancellation  all  Securities  or  portions  thereof so  accepted  for
          exchange by the Company and the Trust; and

     (iii)issue,  and cause the  applicable  Trustee  under the Indenture or the
          Declaration,  as applicable,  to promptly  authenticate and deliver to
          each Holder, new Exchange  Securities or Private Exchange  Securities,
          as applicable,  equal in principal  amount to the principal  amount of
          the  Subordinated  Debentures  or equal in  liquidation  amount to the
          liquidation  amount of the Capital  Securities as are  surrendered  by
          such Holder,  and will execute,  and cause the  applicable  Trustee to
          execute, the Exchange Capital Securities Guarantee.

     Distributions   on  each   Exchange   Capital   Security  and  interest  or
distributions on each Exchange  Debenture and Private  Exchange  Security issued
pursuant to the Exchange  Offer and in the Private  Exchange will  accumulate or
accrue from the last date on which a  distribution  or interest  was paid on the
Capital Security or the Subordinated  Debenture surrendered in exchange therefor
or, if no  distribution  or interest has been paid on such  Capital  Security or
Subordinated Debenture, from the Issue Date. To the extent not prohibited by any
law or  applicable  interpretation  of the staff of the SEC, the Company and the
Trust shall use their best efforts to complete  the  Exchange  Offer as provided
above, and shall comply with the applicable  requirements of the Securities Act,
the  Exchange  Act and other  applicable  laws in  connection  with the Exchange
Offer.  The Exchange Offer shall not be subject to any conditions other than the
conditions  referred to in Section  2(b)(i) and (ii) below and those  conditions
that are  customary  in similar  exchange  offers.  Each  Holder of  Registrable
Securities  who wishes to exchange  such  Registrable  Securities  for  Exchange
Securities  in the  Exchange  Offer will be required to make  certain  customary
representations in connection therewith, including, in the case of any Holder of
Capital Securities, representations that (i) it is not an Affiliate of the Trust
or the Company, (ii) it is not a broker-dealer  tendering Registrable Securities
acquired directly from the Trust or Company, (iii) the Exchange Securities to be
received by it were acquired in the ordinary  course of its business and (iv) at
the time of the Exchange Offer, it has no  arrangements or  understandings  with
any  Person to  participate  in the  distribution  (within  the  meaning  of the
Securities Act) of the Exchange  Capital  Securities.  The Company and the Trust
shall inform the Initial  Purchasers,  after  consultation  with the  applicable
Trustees,  of the names and addresses of the Holders to whom the Exchange  Offer
is made, and the Initial Purchasers shall have the right to contact such Holders
in order to  facilitate  the tender of  Registrable  Securities in the Ex change
Offer.

     Upon  consummation  of the Exchange  Offer in accordance  with this Section
2(a),  the  provisions  of this  Agreement  shall  continue  to  apply,  mutatis
mutandis,  solely  with  respect  to  Registrable  Securities  that are  Private
Exchange    Securities   and   Exchange   Securities   held   by   Participating
Broker-Dealers,  and the Company and the Trust shall have no further  obligation
to register the Registrable  Securities (other than Private Exchange Securities)
held by any Holder pursuant to Section 2(b) of this Agreement.

                                        7

<PAGE>

     (b)  Shelf  Registration.  In the event  that (i) the  Company or the Trust
          reasonably  determine,  after  conferring  with counsel  (which may be
          in-house counsel),  that the Exchange Offer  Registration  provided in
          Section  2(a)  above  is  not  available  under   applicable  law  and
          regulations and currently  prevailing  interpretations of the staff of
          the SEC, (ii) the Company shall  determine in good faith that there is
          a reasonable  likelihood that, or a material  uncertainty exists as to
          whether,  consummation  of the Exchange  Offer would result in (x) the
          Trust  becoming  subject to federal  income tax with respect to income
          received or accrued on the Debentures, (y) the interest payable by the
          Company on the  Debentures  not being  deductible  by the  Company for
          United States  federal  income tax purposes or (z) the Trust  becoming
          subject to more than a de  minimis  amount of other  taxes,  duties or
          governmental charges,  (iii) the Exchange Offer Registration Statement
          is not  declared  effective  within 180 days of the Issue Date or (iv)
          upon the  request  of either  Initial  Purchaser  with  respect to any
          Registrable  Securities  held by it, if such Initial  Purchaser is not
          permitted,  in the  reasonable  opinion  of  Thacher  Proffitt & Wood,
          pursuant to applicable law or applicable  interpretations of the staff
          of the SEC, to participate  in the Exchange Offer and thereby  receive
          securities that are freely  tradeable  without  restriction  under the
          Securities Act and applicable  blue sky or state  securities laws (any
          of the events  specified  in (i),  (ii),  (iii) or (iv) being a "Shelf
          Registration  Event," and the date of occurrence  thereof,  the "Shelf
          Registration  Event  Date"),  then  in  addition  to  or  in  lieu  of
          conducting  the Exchange  Offer  contemplated  by Section 2(a), as the
          case may be, the Company and the Trust shall, at their cost, use their
          best  efforts to cause to be filed as  promptly as  practicable  after
          such Shelf  Registration  Event Date,  as the case may be, and, in any
          event,  within  45 days  after  such  Shelf  Registration  Event  Date
          (provided  that in no event  shall such  filing date be required to be
          earlier  than 75 days  after the  Issue  Date),  a Shelf  Registration
          Statement  providing  for  the  sale  by  the  Holders  of  all of the
          Registrable Securities,  and shall use their best efforts to have such
          Shelf Registration  Statement declared effective by the SEC as soon as
          practicable.  No Holder of Registrable Securities shall be entitled to
          include any of its  Registrable  Securities in any Shelf  Registration
          pursuant  to this  Agreement  unless and until such  Holder  agrees in
          writing  to be  bound  by all  of the  provisions  of  this  Agreement
          applicable  to such Holder and  furnishes to the Company and the Trust
          in writing,  within 15 days after receipt of a request therefor,  such
          information  as the Company and the Trust may, after  conferring  with
          counsel with regard to  information  relating to Holders that would be
          required  by  the  SEC  to be  included  in  such  Shelf  Registration
          Statement  or  Prospectus  included  therein,  reasonably  request for
          inclusion in any Shelf Registration  Statement or Prospectus  included
          therein.  Each  Holder  as to which any  Shelf  Registration  is being
          effected   agrees  to  furnish  to  the  Company  and  the  Trust  all
          information  with  respect  to  such  Holder  necessary  to  make  the
          information  previously  furnished  to the  Company by such Holder not
          materially misleading.

     The Company and the Trust agree to use their best efforts to keep the Shelf
Registration Statement continuously effective and usable for resales for (a) the
Rule 144(k) Period in the case of a Shelf Registration  Statement filed pursuant
to  Section  2(b)(i),  (ii)  or  (iii)  or (b) 180  days in the  case of a Shelf
Registration  Statement filed pursuant to Section 2(b)(iv) (subject in each case
to extension  pursuant to the last  paragraph of Section 3 hereof),  or for such
shorter period which will  terminate  when all of the Securities  covered by the
Shelf  Registration  Statement have been sold pursuant to the Shelf Registration
Statement or cease to be Registrable  Securities (the  "Effectiveness  Period").
The Company and the Trust shall not permit any securities other than Registrable
Securities to be included in the Shelf  Registration.  The Company and the Trust
will, in the event a Shelf Registration Statement is declared effective, provide
to each Holder a reasonable  number of copies of the Prospectus  which is a part
of the Shelf Registration Statement, notify each such Holder when

                                        8

<PAGE>

the Shelf  Registration  has become  effective and take certain other actions as
are  required  to  permit  certain   unrestricted  resales  of  the  Registrable
Securities. The Company and the Trust further agree, if necessary, to supplement
or amend the Shelf Registration Statement, if required by the rules, regulations
or instructions applicable to the registration form used by the Company for such
Shelf Registration  Statement or by the Securities Act or by any other rules and
regulations  thereunder for shelf  registrations,  and the Company and the Trust
agree to furnish to the  Holders of  Registrable  Securities  copies of any such
supplement or amendment promptly after its being used or filed with the SEC.

     (c)  Expenses. The Company, as issuer of the Subordinated Debentures, shall
          pay all  Registration  Expenses in  connection  with any  Registration
          Statement  filed  pursuant to Section 2(a) and/or 2(b) hereof and will
          reimburse  the  Initial   Purchasers  for  the  reasonable   fees  and
          disbursements  of Thacher  Proffitt & Wood,  counsel  for the  Initial
          Purchasers,  incurred in  connection  with the Exchange  Offer and, if
          applicable,  the Private Exchange,  and either Thacher Proffitt & Wood
          or any other  single  counsel  designated  in writing by the  Majority
          Holders  to  act  as  counsel  for  the  Holders  of  the  Registrable
          Securities in connection with a Shelf  Registration  Statement,  which
          other counsel shall be reasonably satisfactory to the Company provided
          that, in the event of an Exchange Offer,  such fees and  disbursements
          for counsel for the  Initial  Purchasers  shall be limited to $25,000.
          Except as provided  herein,  each Holder shall pay all expenses of its
          counsel, underwriting discounts and commissions and transfer taxes, if
          any, relating to the sale or disposition of such Holder's  Registrable
          Securities pursuant to the Shelf Registration Statement.

     (d)  Effective  Registration  Statement.  An  Exchange  Offer  Registration
          Statement  pursuant  to Section  2(a)  hereof or a Shelf  Registration
          Statement  pursuant to Section  2(b) hereof will not be deemed to have
          become  effective  unless it has been  declared  effective by the SEC;
          provided,  however, that if, after it has been declared effective, the
          offering of  Registrable  Securities  pursuant to such Exchange  Offer
          Registration  Statement or Shelf Registration  Statement is interfered
          with by any stop order,  injunction or other order or  requirement  of
          the SEC or any other governmental agency or court, such Exchange Offer
          Registration  Statement or Shelf Registration Statement will be deemed
          not to have been  effective  during the  period of such  interference,
          until  the  offering  of  Registrable   Securities  pursuant  to  such
          Registration  Statement may legally resume.  The Company and the Trust
          will be  deemed  not to have  used  their  best  efforts  to cause the
          Exchange  Offer  Registration  Statement  or  the  Shelf  Registration
          Statement,  as the case may be, to  become,  or to  remain,  effective
          during the requisite  period if either of them  voluntarily  takes any
          action that would result in any such Registration  Statement not being
          declared  effective or that would result in the Holders of Registrable
          Securities  covered  thereby  not being able to  exchange or offer and
          sell such  Registrable  Securities  during  that  period,  unless such
          action is required by applicable law.

     (e)  Liquidated Damages and Additional Distributions. In the event that:

          (i)  neither the Exchange Offer  Registration  Statement is filed with
               the SEC on or prior to the 150th  day after the Issue  Date nor a
               Shelf Registration Statement is filed with the SEC on or prior to
               the 45th day after the Shelf  Registration  Event Date in respect
               of a Shelf  Registration  Event attributable to any of the events
               set forth in Sections  2(b)(i),  (ii) and (iii) (provided that in
               no event shall such filing date be required to be earlier than 75
               days after the Issue Date),  then commencing on the day after the
               applicable required filing date,  liquidated damages ("Liquidated
               Damages")   shall   accrue  on  the   principal   amount  of  the
               Subordinated Debentures, and additional distributions

                                        9

<PAGE>

               ("Additional  Distributions") shall accumulate on the liquidation
               amount of the Trust  Securities  (as such term is  defined in the
               Declaration), each at a rate of 25 basis points per annum; or

          (ii) neither the  Exchange  Offer  Registration  Statement is declared
               effective by the SEC on or prior to the 180th day after the Issue
               Date nor a Shelf Registration  Statement is declared effective by
               the SEC on or prior to the  later of (A) the 40th day  after  the
               date such Shelf  Registration  Statement was required to be filed
               and (B) the 180th day after the Issue Date, in respect of a Shelf
               Registration Event attributable to any of the events set forth in
               Sections  2(b)(i),  (ii) and (iii),  then,  commencing on the day
               after the  applicable  required  effectiveness  date,  Liquidated
               Damages shall accrue on the principal  amount of the Subordinated
               Debentures,  and Additional Distributions shall accumulate on the
               liquidation amount of the Trust Securities,  each at a rate of 25
               basis points per annum; or

          (iii)(A) the Trust has not exchanged  Exchange Capital  Securities for
               all Capital  Securities or the Company has not exchanged Exchange
               Debentures for all Subordinated Debentures,  in each case validly
               tendered  during the  Exchange  Period,  or executed the Exchange
               Capital  Securities  Guarantee in respect of the Exchange Capital
               Securities, in accordance with the terms of the Exchange Offer on
               or prior to the 45th day  after  the date on which  the  Exchange
               Offer  Registration  Statement  was declared  effective or (B) if
               applicable,  the Shelf  Registration  Statement  in  respect of a
               Shelf  Registration  Event  attributable to any of the events set
               forth in  Sections  2(b)(i),  (ii) and  (iii)  has been  declared
               effective  and such  Shelf  Registration  Statement  ceases to be
               effective or usable for resales  (whether as a result of an event
               contemplated  by Section 3(e) or  otherwise) at any time prior to
               the  expiration  of the Rule 144(k) Period (other than after such
               time as all  Securities  have  been  disposed  of  thereunder  or
               otherwise  cease to be Registered  Securities),  then  Liquidated
               Damages  shall  accrue on the  principal  amount of  Subordinated
               Debentures,  and Additional Distributions shall accumulate on the
               liquidation amount of the Trust Securities,  each at a rate of 25
               basis points per annum  commencing on (x) the 46th day after such
               effective  date,  in the case of (A)  above,  or (y) the day such
               Shelf Registration Statement ceases to be effective or usable for
               resales, in the case of (B) above;

          provided,  however,  that neither the  Liquidated  Damages rate on the
          Subordinated  Debentures,  nor the Additional Distribution rate on the
          liquidation  amount  of  the  Trust  Securities,  may  exceed  in  the
          aggregate 25 basis points per annum; provided,  further, however, that
          (1) upon the filing of the Exchange Offer Registration  Statement or a
          Shelf  Registration  Statement (in the case of clause (i) above),  (2)
          upon the effectiveness of the Exchange Offer Registration Statement or
          a Shelf  Registration  Statement (in the case of clause (ii) above) or
          (3) upon the  exchange of Exchange  Capital  Securities  and  Exchange
          Debentures  for all Capital  Securities  and  Subordinated  Debentures
          validly  tendered and  execution of the  Exchange  Capital  Securities
          Guarantee  (in the case of clause  (iii)(A)  above) or at such time as
          the Shelf  Registration  Statement that had ceased to remain effective
          or usable for resales again  becomes  effective and usable for resales
          (in the case of clause  (iii)(B)  above),  Liquidated  Damages  on the
          principal  amount  of  the  Subordinated   Debentures  and  Additional
          Distributions  on the liquidation  amount of the Trust Securities as a
          result of such clause (or the relevant  subclause thereof) shall cease
          to accrue and accumulate, as the case may be.

     Any amounts of Liquidated Damages and Additional Distributions due pursuant
to  Section  2(e)(i),  (ii) or (iii)  above  will be payable in cash on the next
succeeding August 15 and

                                       10

<PAGE>

February 15, as the case may be, to Holders on the relevant record dates for the
payment  of  interest  and  distributions  pursuant  to the  Indenture  and  the
Declaration, respectively.

     (f)  Specific  Enforcement.  Without limiting the remedies available to the
          Holders, the Company and the Trust acknowledge that any failure by the
          Company or the Trust to comply with its obligations under Section 2(a)
          and Section 2(b) hereof may result in material  irreparable  injury to
          the  Holders for which  there is no  adequate  remedy at law,  that it
          would not be possible to measure  damages for such injuries  precisely
          and that, in the event of any such failure, any Holder may obtain such
          relief as may be required to  specifically  enforce the  Company's and
          the Trust's obligations under Section 2(a) and Section 2(b) hereof.

     (g)  Distribution of  Subordinated  Debentures.  Notwithstanding  any other
          provisions  of  this  Agreement,   in  the  event  that   Subordinated
          Debentures  are  distributed  to  holders  of  Capital  Securities  in
          liquidation  of  the  Trust  pursuant  to  the  Declaration,  (i)  all
          references  in  this  Section  2  and  in  Section  3  to  Securities,
          Registrable  Securities and Exchange  Securities shall not include the
          Capital  Securities and Capital  Securities  Guarantee or the Exchange
          Capital Securities and Exchange Capital Securities Guarantee issued or
          to be issued in exchange  therefor in the Exchange  Offer and (ii) all
          requirements for any action to be taken by the Trust in this Section 2
          and in  Section 3 shall  cease to apply and all  requirements  for any
          action to be taken by the  Company in this  Section 2 and in Section 3
          shall apply to the  Subordinated  Debentures  and Exchange  Debentures
          issued or to be issued in exchange therefor in the Exchange Offer.

3.   Registration Procedures.  In connection with the obligations of the Company
     and the Trust  with  respect to the  Registration  Statements  pursuant  to
     Sections  2(a) and 2(b)  hereof,  the Company and the Trust shall use their
     best efforts to:

     (a)  prepare and file with the SEC a Registration Statement or Registration
          Statements  as  prescribed by Sections 2(a) and 2(b) hereof within the
          relevant time period  specified in Section 2 hereof on the appropriate
          form under the Securities Act, which form (i) shall be selected by the
          Company  and  the  Trust,   (ii)  shall,   in  the  case  of  a  Shelf
          Registration,  be available for the sale of the Registrable Securities
          by the selling  Holders thereof and, in the case of an Exchange Offer,
          be available  for the  exchange of  Registrable  Securities  and (iii)
          shall comply as to form in all material respects with the requirements
          of the applicable form and include all financial  statements  required
          by the SEC to be filed therewith;  and use their best efforts to cause
          such  Registration  Statement to become effective and remain effective
          (and,  in the  case  of a Shelf  Registration  Statement,  usable  for
          resales) in accordance with Section 2 hereof; provided,  however, that
          if (1) such filing is pursuant to Section  2(b),  or (2) a  Prospectus
          contained in an Exchange Offer  Registration  Statement filed pursuant
          to Section 2(a) is required to be delivered  under the  Securities Act
          by  any  Participating   Broker-Dealer  who  seeks  to  sell  Exchange
          Securities,  before filing any Registration Statement or Prospectus or
          any amendments or supplements thereto, the Company and the Trust shall
          furnish to and afford the Holders of the  Registrable  Securities  and
          each such Participating Broker-Dealer,  as the case may be, covered by
          such   Registration   Statement,   their   counsel  and  the  managing
          underwriters,  if any, a  reasonable  opportunity  (not to exceed five
          Business  Days) to  review  copies  of all such  documents  (including
          copies of any documents to be  incorporated  by reference  therein and
          all exhibits  thereto) proposed to be filed. The Company and the Trust
          shall  not  file  any  Registration  Statement  or  Prospectus  or any
          amendments or supplements thereto in respect of which the Holders must
          be afforded an opportunity to review prior to the filing of such

                                       11

<PAGE>

          document if the Majority Holders or such Participating  Broker-Dealer,
          as the case may be,  their  counsel or the managing  underwriters,  if
          any, shall reasonably object in a timely manner;

     (b)  prepare  and  file  with the SEC such  amendments  and  post-effective
          amendments to each Registration  Statement as may be necessary to keep
          such Registration  Statement effective for the Effectiveness Period or
          the Applicable  Period,  as the case may be; and cause each Prospectus
          to be  supplemented,  if so  determined by the Company or the Trust or
          requested by the SEC, by any required prospectus  supplement and as so
          supplemented  to be  filed  pursuant  to  Rule  424  (or  any  similar
          provision then in force) under the Securities Act, and comply with the
          provisions of the  Securities  Act, the Exchange Act and the rules and
          regulations  promulgated  thereunder  applicable to it with respect to
          the  disposition  of  all  securities  covered  by  each  Registration
          Statement during the Effectiveness Period or the Applicable Period, as
          the case may be, in accordance  with the intended method or methods of
          distribution  by  the  selling  Holders  thereof   described  in  this
          Agreement (including sales by any Participating Broker-Dealer);

     (c)  in the  case  of a Shelf  Registration,  (i)  notify  each  Holder  of
          Registrable  Securities included in the Shelf Registration  Statement,
          at  least  three   Business  Days  prior  to  filing,   that  a  Shelf
          Registration  Statement with respect to the Registrable  Securities is
          being  filed  and  advising  such  Holder  that  the  distribution  of
          Registrable  Securities  will be made in  accordance  with the  method
          selected by the Majority  Holders;  and (ii) furnish to each Holder of
          Registrable  Securities  included in the Shelf Registration  Statement
          and to each  underwriter  of an  underwritten  offering of Registrable
          Securities, if any, without charge, as many copies of each Prospectus,
          including each preliminary Prospectus, and any amendment or supplement
          thereto,  and such other  documents as such Holder or underwriter  may
          reasonably  request,  in order to facilitate  the public sale or other
          disposition of the  Registrable  Securities;  and (iii) consent to the
          use of the  Prospectus or any amendment or supplement  thereto by each
          of the selling Holders of Registrable Securities included in the Shelf
          Registration Statement in connection with the offering and sale of the
          Registrable  Securities  covered by the Prospectus or any amendment or
          supplement thereto;

     (d)  in  the  case  of  a  Shelf  Registration,  register  or  qualify  the
          Registrable  Securities under all applicable state securities or "blue
          sky"  laws  of  such   jurisdictions   by  the  time  the   applicable
          Registration  Statement is declared effective by the SEC as any Holder
          of Registrable Securities covered by a Registration Statement and each
          underwriter  of an  underwritten  offering of  Registrable  Securities
          shall  reasonably  request  in  writing  in  advance  of such  date of
          effectiveness,  and do any and all other acts and things  which may be
          reasonably   necessary   or   advisable  to  enable  such  Holder  and
          underwriter to consummate the disposition in each such jurisdiction of
          such Registrable Securities owned by such Holder;  provided,  however,
          that the Company and the Trust shall not be required to (i) qualify as
          a foreign corporation or as a dealer in securities in any jurisdiction
          where it would not  otherwise  be  required  to  qualify  but for this
          Section 3(d),  (ii) file any general  consent to service of process in
          any  jurisdiction  where it would not  otherwise  be  subject  to such
          service of process or (iii)  subject  itself to  taxation  in any such
          jurisdiction if it is not then so subject;

     (e)  (1)  in the  case  of a  Shelf  Registration  or (2) if  Participating
          Broker-Dealers  from whom the Company or the Trust has received  prior
          written notice that they will be utilizing the Prospectus contained in
          the Exchange Offer Registration Statement as provided in Section 3(u)

                                       12

<PAGE>

          hereof,  are seeking to sell Exchange  Securities  and are required to
          deliver  Prospectuses,  promptly  notify  each  Holder of  Registrable
          Securities, or such Participating Broker-Dealers,  as the case may be,
          their  counsel and the  managing  underwriters,  if any,  and promptly
          confirm such notice in writing (i) when a  Registration  Statement has
          become effective and when any post-effective amendments thereto become
          effective,  (ii) of any  request  by the SEC or any  state  securities
          authority for amendments and  supplements to a Registration  Statement
          or Prospectus or for  additional  information  after the  Registration
          Statement  has become  effective,  (iii) of the issuance by the SEC or
          any  state  securities  authority  of any stop  order  suspending  the
          effectiveness of a Registration  Statement or the qualification of the
          Registrable  Securities  or the Exchange  Securities  to be offered or
          sold by any Participating  Broker-Dealer in any jurisdiction described
          in paragraph 3(d) hereof or the initiation of any proceedings for that
          purpose,  (iv) in the case of a Shelf  Registration,  if,  between the
          effective date of a Registration Statement and the closing of any sale
          of Registrable  Securities covered thereby,  the  representations  and
          warranties  of the Company  and the Trust  contained  in any  purchase
          agreement, securities sales agreement or other similar agreement cease
          to be true and correct in all material respects,  (v) of the happening
          of any event or the failure of any event to occur or the  discovery of
          any facts, during the Effectiveness  Period, which makes any statement
          made in such Registration  Statement or the related  Prospectus untrue
          in any material respect or which causes such Registration Statement or
          Prospectus to omit to state a material fact necessary in order to make
          the statements  therein, in the light of the circumstances under which
          they  were  made,   not   misleading,   and  (vi)  of  the  reasonable
          determination  of the  Company  and the  Trust  that a  post-effective
          amendment to the Registration Statement would be appropriate;

     (f)  obtain the withdrawal of any order  suspending the  effectiveness of a
          Registration Statement at the earliest possible moment;

     (g)  in the  case of a  Shelf  Registration,  furnish  to  each  Holder  of
          Registrable  Securities  included  within the  coverage  of such Shelf
          Registration Statement, without charge, at least one conformed copy of
          each Registration  Statement  relating to such Shelf  Registration and
          any post-effective  amendment thereto (without documents  incorporated
          therein by reference or exhibits thereto, unless requested);

     (h)  in the  case of a  Shelf  Registration,  cooperate  with  the  selling
          Holders of Registrable Securities to facilitate the timely preparation
          and delivery of certificates representing Registrable Securities to be
          sold and not bearing any restrictive  legends (other than with respect
          to  restrictions  requiring  minimum  transfers  in  blocks  having an
          aggregate  principal  or  liquidation  amount,  as the case may be, of
          $100,000  and  multiples  of  $1,000 in  excess  thereof)  and in such
          denominations (consistent with the provisions of the Indenture and the
          Declaration)  and  registered in such names as the selling  Holders or
          the  underwriters  may  reasonably  request at least two Business Days
          prior to the closing of any sale of Registrable Securities pursuant to
          such Shelf Registration Statement;

     (i)  in the case of a Shelf Registration or an Exchange Offer Registration,
          promptly  after the  occurrence  of any  event  specified  in  Section
          3(e)(ii),  3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, prepare a supplement
          or  post-effective  amendment  to such  Registration  Statement or the
          related Prospectus or any document  incorporated  therein by reference
          or file any other required  document so that, as thereafter  delivered
          to the purchasers of the Registrable Securities, such

                                       13

<PAGE>

          Prospectus will not include any untrue statement of a material fact or
          omit to  state a  material  fact  necessary  to  make  the  statements
          therein, in the light of the circumstances under which they were made,
          not  misleading;  and to  notify  each  Holder to  suspend  use of the
          Prospectus as promptly as practicable  after the occurrence of such an
          event,  and each Holder hereby agrees to suspend use of the Prospectus
          until the  Company  has  amended or  supplemented  the  Prospectus  to
          correct such misstatement or omission;

     (j)  in the case of a Shelf  Registration,  a reasonable  time prior to the
          filing of any document which is to be incorporated by reference into a
          Registration  Statement or a Prospectus  after the initial filing of a
          Registration Statement,  provide a reasonable number of copies of such
          document to the Holders;  and make such of the  representatives of the
          Company and the Trust as shall be reasonably  requested by the Holders
          of Registrable  Securities or the Initial Purchasers on behalf of such
          Holders  available for discussion of such document;  provided that the
          Holders shall be required to agree in writing that such  documents and
          information  shall be deemed  confidential and shall not be used by it
          as the basis for any  market  transactions  in the  securities  of the
          Trust or the Company unless and until such is made generally available
          to the public through no fault of the Holders.

     (k)  obtain a CUSIP  number for all  Exchange  Capital  Securities  and the
          Capital  Securities  (and, if the Trust has made a distribution of the
          Subordinated Debentures to the Holders of the Capital Securities,  the
          Subordinated  Debentures or the Exchange Debentures),  as the case may
          be, not later than the effective date of a Registration Statement, and
          provide the  applicable  Trustee  with  certificates  for the Exchange
          Securities  or the  Registrable  Securities,  as the case may be, in a
          form eligible for deposit with the Depositary;

     (l)  cause the Indenture, the Declaration, the Capital Securities Guarantee
          (in the  case  of a  Shelf  Registration)  and  the  Exchange  Capital
          Securities  Guarantee (in the case of an Exchange Offer  Registration)
          to be qualified under the TIA, in connection with the  registration of
          the Exchange Securities or Registrable Securities, as the case may be,
          and effect such changes to such  documents as may be required for them
          to be so  qualified  in  accordance  with  the  terms  of the  TIA and
          execute, and cause the applicable Trustee to execute, all documents as
          may be  required  to effect  such  changes,  and all  other  forms and
          documents  required to be filed with the SEC to enable such  documents
          to be so qualified in a timely manner;

     (m)  in the  case of a  Shelf  Registration,  enter  into  such  agreements
          (including  underwriting  agreements) as are customary in underwritten
          offerings  and take all such other  appropriate  actions in connection
          therewith as are  reasonably  requested by the Holders of at least 25%
          in aggregate  principal or liquidation  amount, as the case may be, of
          the  Registrable  Securities  in order to expedite or  facilitate  the
          registration or the disposition or the Registrable Securities;

     (n)  in the case of a Shelf  Registration,  whether or not an  underwriting
          agreement  is entered into and whether or not the  registration  is an
          underwritten   registration,   if  requested  by  (x)  either  Initial
          Purchaser,  in the case where such Initial  Purchaser holds Securities
          acquired by it as part of its initial  placement and (y) Holders of at
          least 25% in aggregate  principal or liquidation  amount,  as the case
          may be, of the Registrable  Securities covered thereby:  (i) make such
          representations   and  warranties  to  Holders  of  such   Registrable
          Securities and the underwriters (if

                                       14

<PAGE>

          any),  with respect to the business of the Trust,  the Company and the
          subsidiaries  of the Company as then  conducted  and the  Registration
          Statement, Prospectus and documents, if any, incorporated or deemed to
          be incorporated by reference therein, in each case, as are customarily
          made by issuers to underwriters in underwritten offerings, and confirm
          the same if and when requested; (ii) obtain opinions of counsel to the
          Company and the Trust and updates thereof (which may be in the form of
          a reliance  letter) in form and substance  reasonably  satisfactory to
          the  managing  underwriters  (if any) and the Holders of a majority in
          aggregate  principal or liquidation amount, as the case may be, of the
          Registrable  Securities  being sold,  addressed to each selling Holder
          and the underwriters (if any) covering the matters customarily covered
          in opinions requested in underwritten offerings and such other matters
          as may be reasonably  requested by such  underwriters (it being agreed
          that the  matters  to be  covered  by such  opinion  may be subject to
          customary qualifications and exceptions);  (iii) obtain "cold comfort"
          letters  and  updates   thereof  in  form  and  substance   reasonably
          satisfactory  to  the  managing   underwriters  from  the  independent
          certified  public  accountants  of the Company and the Trust (and,  if
          necessary,  any other independent  certified public accountants of any
          business  acquired by the  Company  and the Trust for which  financial
          statements and financial data are, or are required to be,  included in
          the Registration  Statement),  addressed to each of the  underwriters,
          such letters to be in customary form and covering  matters of the type
          customarily  covered  in "cold  comfort"  letters in  connection  with
          underwritten  offerings and such other matters as reasonably requested
          by  such   underwriters  in  accordance  with  Statement  on  Auditing
          Standards  No. 72; and (iv) if an  underwriting  agreement  is entered
          into, the same shall contain indemnification provisions and procedures
          no less  favorable  than  those set forth in Section 4 hereof (or such
          other provisions and procedures acceptable to Holders of a majority in
          aggregate  principal  or  liquidation  amount,  as the case may be, of
          Registrable  Securities covered by such Registration Statement and the
          managing  underwriters)  customary for such agreements with respect to
          all parties to be  indemnified  pursuant to said  Section  (including,
          without limitation, such underwriters and selling Holders); and in the
          case of an underwritten registration,  the above requirements shall be
          satisfied at each closing under the related underwriting  agreement or
          as and to the extent required thereunder;

     (o)  if (1) a Shelf Registration is filed pursuant to Section 2(b) or (2) a
          Prospectus contained in an Exchange Offer Registration Statement filed
          pursuant  to  Section  2(a) is  required  to be  delivered  under  the
          Securities Act by any  Participating  Broker-Dealer  who seeks to sell
          Exchange  Securities  during the Applicable  Period,  make  reasonably
          available  for   inspection  by  any  selling  Holder  of  Registrable
          Securities  or  Participating   Broker-Dealer,   as  applicable,   who
          certifies to the Company and the Trust that it has a current intention
          to sell Registrable Securities pursuant to the Shelf Registration, any
          underwriter  participating  in any  such  disposition  of  Registrable
          Securities,  if any,  and any  attorney,  accountant  or  other  agent
          retained by any such selling Holder, Participating  Broker-Dealer,  as
          the case may be, or underwriter (collectively,  the "Inspectors"),  at
          the offices where normally kept,  during the Company's normal business
          hours, all financial and other records,  pertinent corporate documents
          and  properties  of  the  Trust,  the  Company  and  its  subsidiaries
          (collectively,  the  "Records")  as shall be  reasonably  necessary to
          enable them to exercise any applicable due diligence responsibilities,
          and cause the  officers,  directors  and  employees of the Trust,  the
          Company and its  subsidiaries  to supply all relevant  information  in
          each case  reasonably  requested by any such  Inspector in  connection
          with such  Registration  Statement;  records and information which the
          Company and the Trust determine, in good faith, to be confidential and
          any  Records and  information  which it notifies  the  Inspectors  are
          confidential  shall not be disclosed to any Inspector except where (i)
          the disclosure of such Records or information is necessary to avoid or
          correct a

                                       15

<PAGE>

          material misstatement or omission in such Registration Statement, (ii)
          the release of such Records or  information  is ordered  pursuant to a
          subpoena or other order from a court of competent  jurisdiction  or is
          necessary in connection  with any action,  suit or proceeding or (iii)
          such  Records  or  information  previously  has  been  made  generally
          available  to the  public;  each  selling  Holder of such  Registrable
          Securities and each such Participating  Broker-Dealer will be required
          to agree in writing that Records and  information  obtained by it as a
          result of such inspections shall be deemed  confidential and shall not
          be  used  by it as  the  basis  for  any  market  transactions  in the
          securities  of the Trust or the Company  unless and until such is made
          generally  available to the public through no fault of an Inspector or
          a  selling  Holder;  and  each  selling  Holder  of  such  Registrable
          Securities and each such Participating  Broker-Dealer will be required
          to  further  agree  in  writing  that  it  will,  upon  learning  that
          disclosure  of such  Records  or  information  is sought in a court of
          competent  jurisdiction,  or in  connection  with any action,  suit or
          proceeding,  give  notice to the  Company and allow the Company at its
          expense to undertake  appropriate  action to prevent disclosure of the
          Records and information deemed confidential;

     (p)  comply with all applicable rules and regulations of the SEC so long as
          any provision of this Agreement shall be applicable and make generally
          available to its  securityholders  earning  statements  satisfying the
          provisions  of  Section  11(a)  of the  Securities  Act and  Rule  158
          thereunder (or any similar rule promulgated  under the Securities Act)
          no later than 45 days after the end of any 12-month period (or 90 days
          after the end of any 12-month  period if such period is a fiscal year)
          (i) commencing at the end of any fiscal  quarter in which  Registrable
          Securities  are  sold to  underwriters  in a firm  commitment  or best
          efforts underwritten  offering and (ii) if not sold to underwriters in
          such an  offering,  commencing  on the first  day of the first  fiscal
          quarter of the  Company  after the  effective  date of a  Registration
          Statement,  which  statements  shall  cover  said  12  month  periods,
          provided  that the  obligations  under  this  paragraph  (p)  shall be
          satisfied  by the timely  filing of  quarterly  and annual  reports on
          Forms 10-Q and 10-K under the Exchange Act;

     (q)  upon  consummation  of an  Exchange  Offer or a Private  Exchange,  if
          requested  by a Trustee,  obtain an opinion of counsel to the  Company
          addressed to the Trustee for the benefit of all Holders of Registrable
          Securities   participating  in  the  Exchange  Offer  or  the  Private
          Exchange,  as the case may be,  substantially  to the effect  that (i)
          each of the  Company  and the Trust,  as the case  requires,  has duly
          authorized, executed and delivered the Exchange Securities and Private
          Exchange  Securities,  and (ii) each of the Exchange Securities or the
          Private Exchange Securities, as the case may be, constitutes a validly
          issued,  fully paid and nonassessable  undivided  beneficial ownership
          interest  in the  assets  of the  Trust  (in the  case of an  Exchange
          Capital  Security)  or a legal,  valid and binding  obligation  of the
          Company,  enforceable  against the  Company,  in  accordance  with its
          respective  terms  (in  the  case  of an  Exchange  Debenture  and the
          Exchange Capital  Securities  Guarantee),  as the case may be (in each
          case, with customary exceptions);

     (r)  if an Exchange Offer or a Private Exchange is to be consummated,  upon
          delivery of the  Registrable  Securities  by Holders to the Company or
          the Trust,  as applicable  (or to such other Person as directed by the
          Company or the Trust,  respectively),  in  exchange  for the  Exchange
          Securities or the Private Exchange Securities, as the case may be, the
          Company  or the  Trust,  as  applicable,  shall  mark,  or cause to be
          marked, on such Registrable  Securities delivered by such Holders that
          such  Registrable  Securities  are being  canceled in exchange for the
          Exchange

                                       16

<PAGE>

          Securities or the Private Exchange Securities,  as the case may be; it
          being understood that in no event shall such Registrable Securities be
          marked as paid or otherwise satisfied;

     (s)  cooperate  with each seller of Registrable  Securities  covered by any
          Registration Statement and each underwriter,  if any, participating in
          the disposition of such  Registrable  Securities and their  respective
          counsel in  connection  with any filings  required to be made with the
          NASD;

     (t)  take all other  steps  necessary  to effect  the  registration  of the
          Registrable   Securities   covered   by   a   Registration   Statement
          contemplated hereby;

     (u)  (A) in the  case of the  Exchange  Offer  Registration  Statement  (i)
          include  in  the  Exchange  Offer  Registration  Statement  a  section
          entitled  "Plan of  Distribution,"  which  section shall be reasonably
          acceptable to the Initial Purchasers or another  representative of the
          Participating  Broker-Dealers,  and  which  shall  contain  a  summary
          statement of the positions  taken or policies made by the staff of the
          SEC  with  respect  to  the  potential  "underwriter"  status  of  any
          broker-dealer that holds Registrable  Securities  acquired for its own
          account  as a result  of  market-making  activities  or other  trading
          activities  (a  "Participating  Broker-Dealer")  and that  will be the
          beneficial  owner (as defined in Rule 13d-3 under the Exchange Act) of
          Exchange  Securities  to be  received  by  such  broker-dealer  in the
          Exchange Offer,  whether such positions or policies have been publicly
          disseminated by the staff of the SEC or such positions or policies, in
          the  reasonable  judgment  of the  Initial  Purchasers  or such  other
          representative,  represent  the  prevailing  views of the staff of the
          SEC,  including a statement that any such  broker-dealer  who receives
          Exchange  Securities  for  Registrable   Securities  pursuant  to  the
          Exchange Offer may be deemed a statutory  underwriter and must deliver
          a  prospectus  meeting  the  requirements  of  the  Securities  Act in
          connection with any resale of such Exchange  Securities,  (ii) furnish
          to each  Participating  Broker-Dealer who has delivered to the Company
          the notice referred to in Section 3(e), without charge, as many copies
          of  each  Prospectus  included  in  the  Exchange  Offer  Registration
          Statement,  including any preliminary Prospectus, and any amendment or
          supplement thereto, as such Participating Broker-Dealer may reasonably
          request (each of the Company and the Trust hereby  consents to the use
          of the  Prospectus  forming  part of the Exchange  Offer  Registration
          Statement or any amendment or supplement thereto by any Person subject
          to  the  prospectus  delivery  requirements  of  the  Securities  Act,
          including all  Participating  Broker-Dealers,  in connection  with the
          sale or transfer of the Exchange  Securities covered by the Prospectus
          or any amendment or supplement thereto),  (iii) use their best efforts
          to keep the Exchange  Offer  Registration  Statement  effective and to
          amend and  supplement  the  Prospectus  contained  therein in order to
          permit such Prospectus to be lawfully delivered by all Persons subject
          to the prospectus delivery requirements of the Securities Act for such
          period of time as such  Persons  must  comply  with such  requirements
          under the Securities Act and applicable rules and regulations in order
          to resell the Exchange Securities; provided, however, that such period
          shall not be  required  to exceed  90 days (or such  longer  period if
          extended  pursuant  to the last  sentence  of  Section 3 hereof)  (the
          "Applicable  Period"),  and (iv) include in the transmittal  letter or
          similar  documentation  to be executed by an exchange offeree in order
          to participate in the Exchange Offer (x) the following provision:

               "If the exchange offeree is a broker-dealer  holding  Registrable
               Securities   acquired   for  its  own  account  as  a  result  of
               market-making

                                       17

<PAGE>

               activities  or  other  trading  activities,  it  will  deliver  a
               prospectus  meeting the  requirements  of the  Securities  Act in
               connection  with any resale of  Exchange  Securities  received in
               respect of such Registrable  Securities  pursuant to the Exchange
               Offer";

          and (y) a statement to the effect that by a  broker-dealer  making the
          acknowledgment  described in clause (x) and by delivering a Prospectus
          in  connection  with  the  exchange  of  Registrable  Securities,  the
          broker-dealer  will not be deemed to admit  that it is an  underwriter
          within the meaning of the  Securities  Act; and (B) in the case of any
          Exchange Offer Registration Statement, the Company and the Trust agree
          to deliver to the Initial  Purchasers or to another  representative of
          the  Participating   Broker-Dealers,   if  requested  by  the  Initial
          Purchasers   or   such   other    representative    of   Participating
          Broker-Dealers,  on behalf of the  Participating  Broker-Dealers  upon
          consummation  of the Exchange  Offer (i) an opinion of counsel in form
          and substance  reasonably  satisfactory  to the Initial  Purchasers or
          such  other   representative  of  the  Participating   Broker-Dealers,
          covering  the matters  customarily  covered in opinions  requested  in
          connection with Exchange Offer Registration  Statements and such other
          matters  as may be  reasonably  requested  (it being  agreed  that the
          matters  to be  covered by such  opinion  may be subject to  customary
          qualifications   and  exceptions),   (ii)  an  officers'   certificate
          containing certifications  substantially similar to those set forth in
          Section  5(f)  of  the   Purchase   Agreement   and  such   additional
          certifications  as are  customarily  delivered in a public offering of
          debt  securities  and (iii) as well as upon the  effectiveness  of the
          Exchange Offer Registration Statement, a comfort letter, in each case,
          in customary form if permitted by Statement on Auditing  Standards No.
          72.

     The Company or the Trust may require each seller of Registrable  Securities
as to which any  registration is being effected to furnish to the Company or the
Trust, as applicable,  such information regarding such seller as may be required
by the staff of the SEC to be included in a Registration Statement.  The Company
or the Trust may exclude from such  registration  the Registrable  Securities of
any  seller  who  unreasonably  fails  to  furnish  such  information  within  a
reasonable  time  after  receiving  such  request.  The  Company  shall  have no
obligation to register under the Securities Act the Registrable  Securities of a
seller who so fails to furnish such information.

     In  the  case  of a  Shelf  Registration  Statement,  or  if  Participating
Broker-Dealers  who have  notified  the  Company and the Trust that they will be
utilizing the Prospectus contained in the Exchange Offer Registration  Statement
as provided in this Section 3(u) hereof, are seeking to sell Exchange Securities
and are required to deliver Prospectuses,  each Holder agrees that, upon receipt
of any  notice  from the  Company  or the Trust of the  occurrence  of any event
specified  in Section  3(e)(ii),  3(e)(iii),  3(e)(v) or 3(e)(vi)  hereof,  such
Holder will forthwith discontinue disposition of Registrable Securities pursuant
to a  Registration  Statement  until such Holder's  receipt of the copies of the
supplemented or amended Prospectus  contemplated by Section 3(i) hereof or until
it is advised in writing  (the  "Advice")  by the Company and the Trust that the
use of the  applicable  Prospectus  may be  resumed,  and, if so directed by the
Company and the Trust,  such Holder will deliver to the Company or the Trust (at
the Company's or the Trust's  expense,  as the case requires) all copies in such
Holder's  possession,  other than  permanent  file copies then in such  Holder's
possession,  of the Prospectus covering such Registrable  Securities or Exchange
Securities,  as the case may be,  current at the time of receipt of such notice.
If the  Company  or the  Trust  shall  give  any  such  notice  to  suspend  the
disposition of Registrable  Securities or Exchange  Securities,  as the case may
be,

                                       18

<PAGE>

pursuant to a Registration Statement,  the Company and the Trust shall use their
best efforts to file and have  declared  effective  (if an amendment) as soon as
practicable  after  the  resolution  of the  related  matters  an  amendment  or
supplement  to the  Registration  Statement  and shall extend the period  during
which such  Registration  Statement is required to be  maintained  effective and
usable  for  resales  pursuant  to this  Agreement  by the number of days in the
period from and including the date of the giving of such notice to and including
the date when the Company and the Trust shall have made available to the Holders
(x) copies of the  supplemented or amended  Prospectus  necessary to resume such
dispositions or (y) the Advice.

4.   Indemnification  and Contribution.

     (a)  In connection  with any  Registration  Statement,  the Company and the
          Trust shall,  jointly and severally,  indemnify and hold harmless each
          Initial Purchaser,  each Holder,  each underwriter who participates in
          an  offering  of  the  Registrable   Securities,   each  Participating
          Broker-Dealer,  each Person,  if any, who controls any of such parties
          within the meaning of Section 15 of the  Securities  Act or Section 20
          of the Exchange Act and each of their respective partners,  directors,
          officers, employees and agents as follows:

          (i)  against any and all loss,  liability,  claim,  damage and expense
               whatsoever,  as incurred,  arising out of any untrue statement or
               alleged  untrue  statement  of a material  fact  contained in any
               Registration  Statement (or any amendment or supplement thereto),
               covering  Registrable  Securities  or  Exchange  Securities,   as
               applicable,  or the omission or alleged  omission  therefrom of a
               material fact required to be stated  therein or necessary to make
               the statements  therein,  in the light of the circumstances under
               which they were made, not misleading;

          (ii) against any and all loss,  liability,  claim,  damage and expense
               whatsoever,  as incurred,  to the extent of the aggregate  amount
               paid in settlement of any  litigation,  or any  investigation  or
               proceeding  by any  governmental  agency  or body,  commenced  or
               threatened, or of any claim whatsoever based upon any such untrue
               statement or omission,  or any such alleged  untrue  statement or
               omission in the Registration Statement; provided that (subject to
               Section 4(d)  hereof) any such  settlement  is effected  with the
               prior written consent of the Company and the Trust; and

          (iii)against any and all expenses  whatsoever,  as incurred (including
               the fees and  disbursements  of  counsel,  except  to the  extent
               otherwise expressly provided in Section 4(c) hereof),  reasonably
               incurred in  investigating,  preparing or  defending  against any
               litigation,   or  any   investigation   or   proceeding   by  any
               governmental  agency or body,  commenced  or  threatened,  or any
               claim   whatsoever  based  upon  any  such  untrue  statement  or
               omission,  or any such alleged untrue  statement or omission,  to
               the extent that any such  expense is not paid under  subparagraph
               (i) or (ii) of this Section 4(a);

          provided,  however,  that this  indemnity  does not apply to any loss,
          liability,  claim,  damage or expense to the extent  arising out of an
          untrue  statement or omission or alleged untrue  statement or omission
          made in  reliance  upon and in  conformity  with  written  information
          furnished  in  writing to the  Company or the Trust by either  Initial
          Purchaser or such Holder,  underwriter or Participating  Broker-Dealer
          for use in a Registration  Statement (or any amendment thereto) or any
          Prospectus (or any amendment or supplement thereto).

                                       19

<PAGE>

     (b)  Each Initial  Purchaser and each Holder,  underwriter or Participating
          Broker-Dealer agrees, severally and not jointly, to indemnify and hold
          harmless the Company,  its  directors  and  officers  (including  each
          officer  of the  Company  and the Trust who  signed  the  Registration
          Statement),  the Trust,  each of the Trustees and each Person, if any,
          who  controls  the  Company  within  the  meaning of Section 15 of the
          Securities  Act or Section 20 of the  Exchange Act against any and all
          loss, liability, claim, damage and expense whatsoever described in the
          indemnity contained in Section 4(a) hereof, as incurred, but only with
          respect  to  untrue   statements  or  omissions,   or  alleged  untrue
          statements  or  omissions,  made in a  Registration  Statement (or any
          amendment  thereto) or any  Prospectus (or any amendment or supplement
          thereto) in reliance upon and in conformity  with written  information
          furnished to the Company or the Trust by such Holder,  underwriter  or
          Participating  Broker-Dealer,  as the case maybe, expressly for use in
          such Registration  Statement (or any amendment  thereto),  or any such
          Prospectus  (or  any  amendment  or  supplement  thereto);   provided,
          however, that in the case of a Shelf Registration  Statement,  no such
          Holder  shall be  liable  for any  claims  hereunder  in excess of the
          amount  of net  proceeds  received  by such  Holder  from  the sale of
          Registrable Securities pursuant to such Shelf Registration Statement.

     (c)  Each  indemnified  party shall give  notice as promptly as  reasonably
          practicable to each indemnifying party of any action commenced against
          it in respect of which indemnity may be sought hereunder,  but failure
          to so notify an indemnifying party shall not relieve such indemnifying
          party from any liability which it may have under this Section 4 to the
          extent  that it is not  materially  prejudiced  by such  failure  as a
          result  thereof,  and in any event shall not relieve it from liability
          which it may have otherwise on account of this indemnity agreement. In
          the case of parties indemnified pursuant to Section 4(a) or (b) above,
          counsel to the indemnified  parties shall be selected by such parties.
          An  indemnifying  party  may  participate  at its own  expense  in the
          defense  of  such  action;  provided,  however,  that  counsel  to the
          indemnifying   party  shall  not  (except  with  the  consent  of  the
          indemnified  party) also be counsel to the  indemnified  party.  In no
          event  shall  the  indemnifying  parties  be  liable  for the fees and
          expenses  of more than one counsel  (in  addition  to local  counsel),
          separate  from  their own  counsel,  for all  indemnified  parties  in
          connection  with any one  action or  separate  but  similar or related
          actions  in the same  jurisdiction  arising  out of the  same  general
          allegations or circumstances. No indemnifying party shall, without the
          prior written consent of the indemnified parties, settle or compromise
          or  consent  to  the  entry  of  any  judgment  with  respect  to  any
          litigation,  or any  investigation  or proceeding by any  governmental
          agency or body,  commenced or threatened,  or any claim  whatsoever in
          respect of which indemnification or contribution could be sought under
          this Section 4 (whether or not the  indemnified  parties are actual or
          potential  parties  thereto),  unless such  settlement,  compromise or
          consent  (i)  includes  an  unconditional   written  release  of  each
          indemnified  party from all liability arising out of such litiga tion,
          investigation,  proceeding  or claim  and  (ii)  does  not  include  a
          statement as to or an admission of fault,  culpability or a failure to
          act by or on behalf of any indemnified party.

     (d)  If at any time an  indemnified  party shall have validly  requested an
          indemnifying  party to reimburse the indemnified  party for reasonable
          fees  and  expenses  of  counsel   pursuant  to  Section  4(a),   such
          indemnifying  party agrees that it shall be liable for any  settlement
          of the nature  contemplated by Section  4(a)(ii)  effected without its
          written  consent if (i) such  settlement  is entered into more than 45
          days  after  receipt  by  such  indemnifying  party  of the  aforesaid
          request,  (ii) such  indemnifying  party shall have received notice of
          the terms of such settlement at least 30 days prior to such settlement
          being entered into and (iii) such indemnifying party shall not have

                                       20

<PAGE>

          reimbursed  such  indemnified  party in  accordance  with such request
          prior to the date of such settlement.

     (e)  In  order  to  provide  for  just  and   equitable   contribution   in
          circumstances under which any of the indemnity provisions set forth in
          this  Section  4 is for  any  reason  held to be  unenforceable  by an
          indemnified  party although  applicable in accordance  with its terms,
          the  Company,  the  Trust  and the  Holders  shall  contribute  to the
          aggregate  losses,  liabilities,  claims,  damages and expenses of the
          nature  contemplated  by  such  indemnity  agreement  incurred  by the
          Company,  the Trust and the Holders, as incurred;  provided,  however,
          that no Person  guilty of  fraudulent  misrepresentation  (within  the
          meaning  of  Section  11(f) of the 1933  Act)  shall  be  entitled  to
          contribution  from any Person  that was not guilty of such  fraudulent
          misrepresentation. As between the Company, the Trust, and the Holders,
          such parties shall contribute to such aggregate  losses,  liabilities,
          claims,  damages  and  expenses  of the  nature  contemplated  by such
          indemnity  agreement in such  proportion  as shall be  appropriate  to
          reflect the relative fault of the Company and Trust,  on the one hand,
          and the Holders,  on the other hand, with respect to the statements or
          omissions  which resulted in such loss,  liability,  claim,  damage or
          expense,  or action in respect thereof,  as well as any other relevant
          equitable  considerations.  The relative  fault of the Company and the
          Trust, on the one hand, and of the Holders,  on the other hand,  shall
          be determined by reference to, among other things,  whether the untrue
          or alleged  untrue  statement  of a material  fact or the  omission or
          alleged  omission  to state a material  fact  relates  to  information
          supplied  by the  Company or the Trust,  on the one hand,  or by or on
          behalf of the Holders, on the other, and the parties' relative intent,
          knowledge, access to information and opportunity to correct or prevent
          such statement or omission.  The Company, the Trust and the Holders of
          the  Registrable  Securities  agree  that it  would  not be  just  and
          equitable  if  contribution  pursuant  to  this  Section  4 were to be
          determined by pro rata allocation or by any other method of allocation
          that does not take into account the relevant equitable considerations.
          For purposes of this Section 4, each  Affiliate of a Holder,  and each
          partner, director,  officer, employee and Person, if any, who controls
          a Holder or such  Affiliate  within  the  meaning of Section 15 of the
          Securities  Act or Section 20 of the  Exchange Act shall have the same
          rights  to  contribution  as such  Holder,  and each  director  of the
          Company,  each  Trustee  of the Trust  and each  Person,  if any,  who
          controls  the  Company  within  the  meaning  of  Section  15  of  the
          Securities  Act or Section 20 of the  Exchange Act shall have the same
          rights to contribution as each of the Company or the Trust.

5.   Participation in an Underwritten Registration. No Holder may participate in
     an  underwritten  registration  hereunder  unless such Holder (a) agrees to
     sell such  Holder's  Registrable  Securities  on the basis  provided in the
     underwriting  arrangement  approved by the Persons  entitled  hereunder  to
     approve such  arrangements  and (b) completes  and executes all  reasonable
     questionnaires,  powers of attorney, indemnities,  underwriting agreements,
     lock-up letters and other documents  reasonably required under the terms of
     such underwriting arrangements.

6.   Selection of Underwriters. The Holders of Registrable Securities covered by
     the  Shelf  Registration  Statement  who  desire  to do  so  may  sell  the
     Securities covered by such Shelf Registration in an underwritten  offering,
     subject to the provisions of Section 3(m) hereof.  In any such underwritten
     offering, the underwriter or underwriters and manager or managers that will
     administer  the  offering  will be selected by the Holders of a majority in
     aggregate   principal  or  liquidation   amount,  as  applicable,   of  the
     Registrable Securities included in such offering;  provided,  however, that
     such  underwriters  and managers  must be  reasonably  satisfactory  to the
     Company and the Trust.

                                       21

<PAGE>

7.   Miscellaneous.

     (a)  Rule 144 and Rule 144A.  For so long as the  Company is subject to the
          reporting requirements of Section 13 or 15 of the Exchange Act and any
          Registrable  Securities remain outstanding,  the Company will file the
          reports  required  to be  filed  by it under  the  Securities  Act and
          Section  13(a)  or  15(d)  of the  Exchange  Act  and  the  rules  and
          regulations adopted by the SEC thereunder;  provided, however, that if
          the Company  ceases to be so required to file such  reports,  it will,
          upon the  request of any  Holder of  Registrable  Securities  (a) make
          publicly available such information as is necessary to permit sales of
          its  securities  pursuant to Rule 144 under the  Securities  Act,  (b)
          deliver such information to a prospective purchaser as is necessary to
          permit  sales  of its  securities  pursuant  to Rule  144A  under  the
          Securities  Act and (c) take such further action that is reasonable in
          the  circumstances,  in each case, to the extent required from time to
          time to enable such Holder to sell its Registrable  Securities without
          registration  under the  Securities  Act within the  limitation of the
          exemptions  provided by (i) Rule 144 under the Securities Act, as such
          rule may be  amended  from  time to time,  (ii)  Rule  144A  under the
          Securities  Act,  as such rule may be  amended  from time to time,  or
          (iii) any similar rules or regulations  hereafter  adopted by the SEC.
          Upon the request of any Holder of Registrable Securities,  the Company
          will  deliver to such Holder a written  statement as to whether it has
          complied with such requirements.

     (b)  No  Inconsistent  Agreements.  Neither  the  Company nor the Trust has
          entered  into,  nor will the Company or the Trust on or after the date
          of this Agreement enter into, any agreement which is inconsistent with
          the rights  granted to the Holders of  Registrable  Securities in this
          Agreement or which otherwise conflicts with the provisions hereof. The
          rights  granted to the Holders  hereunder  do not in any way  conflict
          with and are not  inconsistent  with the rights granted to the holders
          of  the  Company's  or  the  Trust's  other  issued  and   outstanding
          securities under any such agreements.

     (c)  Amendments and Waivers.  The provisions of this  Agreement,  including
          the  provisions  of this  sentence,  may not be  amended,  modified or
          supplemented,   and  waivers  or  consents  to  departures   from  the
          provisions  hereof may not be given,  unless the Company and the Trust
          have obtained the written consent of Holders of at least a majority in
          aggregate   principal  or  liquidation   amount  of  the   outstanding
          Registrable  Securities  affected  by  such  amendment,  modification,
          supplement,   waiver  or   departure;   provided  that  no  amendment,
          modification  or supplement or waiver or consent to the departure with
          respect to the  provisions  of Section 4 hereof  shall be effective as
          against any Holder of Registrable  Securities  unless  consented to in
          writing by such Holder of Registrable Securities.  Notwithstanding the
          foregoing  sentence,  (i) this  Agreement may be amended,  without the
          consent of any Holder of Registrable Securities,  by written agreement
          signed by the Company,  the Trust and the Initial Purchasers,  to cure
          any  ambiguity,  correct or supplement any provision of this Agreement
          that may be inconsistent with any other provision of this Agreement or
          to make any other  provisions  with  respect to  matters or  questions
          arising  under this  Agreement  which shall not be  inconsistent  with
          other  provisions  of  this  Agreement,  (ii)  this  Agreement  may be
          amended,  modified  or  supplemented,  and  waivers  and  consents  to
          departures  from  the  provisions  hereof  may be  given,  by  written
          agreement signed by the Company,  the Trust and the Initial Purchasers
          to the  extent  that any  such  amendment,  modification,  supplement,
          waiver or consent is,

                                       22

<PAGE>

          in their reasonable judgment,  necessary or appropriate to comply with
          applicable law (including any  interpretation of the Staff of the SEC)
          or any change  therein and (iii) to the extent any  provision  of this
          Agreement  relates  to an Initial  Purchaser,  such  provision  may be
          amended,  modified  or  supplemented,   and  waivers  or  consents  to
          departures  from such  provisions may be given,  by written  agreement
          signed by such  Initial  Purchaser,  the Company  and the Trust.  Each
          Holder of  Registrable  Securities  shall be bound by any amendment or
          waiver  effected  pursuant to this  Section  7(c),  whether or not any
          notice, writing or marking indicating such amendment or waiver appears
          on such security or is delivered to such Holder.

     (d)  Notices.  All  notices  and  other  communications   provided  for  or
          permitted  hereunder  shall  be  made  in  writing  by  hand-delivery,
          registered   first-class  mail,  telex,   telecopier  or  any  courier
          guaranteeing  overnight  delivery  (i) if to a  Holder,  at  the  most
          current  address  given by such  Holder to the Company or the Trust by
          means of a notice  given in  accordance  with the  provisions  of this
          Section 7(d), which address initially is, with respect to each Initial
          Purchaser,  the address set forth in the Purchase Agreement;  and (ii)
          if to the Company or the Trust, initially at the Company's address set
          forth in the Purchase  Agreement and thereafter at such other address,
          notice of which is given in  accordance  with the  provisions  of this
          Section 7(d).

          All such notices and communications  shall be deemed to have been duly
          given:  at the time delivered by hand, if personally  delivered;  five
          Business Days after being deposited in the mail,  postage prepaid,  if
          mailed; when answered back, if telexed;  when receipt is acknowledged,
          if telecopied; and on the next Business Day, if timely delivered to an
          air courier guaranteeing overnight delivery.

          Copies of all such notices,  demands or other  communications shall be
          concurrently  delivered by the Person  giving the same to the Trustee,
          at the address specified in the Indenture.

     (e)  Successors and Assigns.  This Agreement  shall inure to the benefit of
          and be binding upon the  successors,  assigns and  transferees  of the
          Initial Purchasers, including, without limitation and without the need
          for an express assignment, subsequent Holders; provided, however, that
          nothing herein shall be deemed to permit any  assignment,  transfer or
          other disposition of Registrable  Securities in violation of the terms
          of the Purchase  Agreement,  the Declaration or the Indenture.  If any
          transferee of any Holder shall acquire Registrable Securities,  in any
          manner,  whether by operation of law or  otherwise,  such  Registrable
          Securities  shall  be  held  subject  to  all  of the  terms  of  this
          Agreement, and by taking and holding such Registrable Securities, such
          Person shall be conclusively  deemed to have agreed to be bound by and
          to perform all of the terms and  provisions of this Agreement and such
          Person shall be entitled to receive the benefits hereof.

     (f)  Third  Party   Beneficiaries.   Each  Holder  and  any   Participating
          Broker-Dealer  shall be third party  beneficiaries  of the  agreements
          made  hereunder  among the  Initial  Purchasers,  the  Company and the
          Trust, and the Initial Purchasers shall have the right to enforce such
          agreements directly to the extent it deems such enforcement  necessary
          or advisable to protect its rights or the rights of Holders hereunder.

     (g)  Counterparts;  Facsimile. This Agreement may be executed in any number
          of  counterparts  and by the parties hereto in separate  counterparts,
          and signature pages may be delivered

                                       23

<PAGE>

          by facsimile,  each of which when so executed shall be deemed to be an
          original and all of which taken together shall  constitute one and the
          same agreement.

     (h)  Headings.  The  headings  in this  Agreement  are for  convenience  of
          reference  only and shall not limit or  otherwise  affect the  meaning
          hereof.

     (i)  GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE
          STATE OF NEW YORK. THE VALIDITY AND  INTERPRETATION OF THIS AGREEMENT,
          AND THE TERMS AND  CONDITIONS  SET FORTH HEREIN,  SHALL BE GOVERNED BY
          AND  CONSTRUED  IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK
          WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
          EACH  OF  THE  PARTIES  HERETO  AGREES  TO  SUBMIT  TO  THE  EXCLUSIVE
          JURISDICTION  OF THE  COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
          PROCEEDING  ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE
          MATTERS CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF
          PERSONAL  JURISDICTION  AND  IRREVOCABLY  AGREES  THAT ALL  CLAIMS  IN
          RESPECT OF ANY SUIT,  ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
          IN ANY SUCH COURT. EACH OF THE PARTIES HERETO  IRREVOCABLY  WAIVES, TO
          THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER  APPLICABLE LAW, ANY
          OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
          SUCH  SUIT,  ACTION OR  PROCEEDING  BROUGHT  IN ANY SUCH COURT AND ANY
          CLAIM THAT ANY SUCH  SUIT,  ACTION OR  PROCEEDING  BROUGHT IN ANY SUCH
          COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

     (j)  Severability.  In the  event  that  any one or more of the  provisions
          contained herein, or the application  thereof in any circumstance,  is
          held invalid,  illegal or  unenforceable,  the validity,  legality and
          enforceability of any such provision in every other respect and of the
          remaining  provisions  contained  herein  shall  not  be  affected  or
          impaired thereby.

     (k)  Securities Held by the Company, the Trust or its Affiliates.  Whenever
          the  consent  or  approval  of Holders of a  specified  percentage  of
          Registrable  Securities is required hereunder,  Registrable Securities
          held by the Company,  the Trust or any Affiliates shall not be counted
          in  determining  whether  such  consent or  approval  was given by the
          Holders of such required percentage.

                                       24

<PAGE>

     IN WITNESS  WHEREOF,  the parties have  executed this  Registration  Rights
Agreement as of the date first written above.

                                    CASCADE FINANCIAL CORPORATION

                                    By:    /s/ Frank M. McCord
                                           ------------------------------------
                                           Frank M. McCord
                                           Chairman and Chief Executive Officer

                                    CASCADE CAPITAL TRUST I

                                    By:    CASCADE FINANCIAL CORPORATION,
                                           as Sponsor

                                    By:    /s/ C.F. Safstrom
                                           ------------------------------------
                                           C.F. Safstrom
                                           President

                                    SANDLER O'NEILL & PARTNERS,  L.P.
                                    Acting  severally on behalf of itself
                                    and as  representative of the several
                                    Initial  Purchasers named in Schedule A
                                    of the Purchase Agreement.

                                    By:    SANDLER O'NEILL & PARTNERS CORP.,
                                           the sole general partner

                                    By:    /s/ Thomas W. Killian
                                           ------------------------------------
                                           Thomas W. Killian
                                           Vice President

                                       25

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