July 24, 2000
Cascade Capital Trust I
c/o Cascade Financial Corporation
2828 Colby Avenue
Everett, Washington 98201
Re: Cascade Capital Trust I
Ladies and Gentlemen:
We have acted as special counsel to Cascade Financial Corporation, a
Delaware corporation (the "Corporation"), and Cascade Capital Trust I, a
Delaware statutory business trust (the "Trust"), in connection with the
preparation and filing by the Corporation and the Trust with the Securities and
Exchange Commission (the "Commission") of an exchange offer registration
statement on Form S-4 under the Securities Act of 1933, as amended (the "Act"),
relating to (i) the issuance of up to 10,000 of 11.00% Capital Securities,
Series B (liquidation amount of $1,000 per capital security) of the Trust (the
"Exchange Capital Securities"), representing preferred beneficial interests in
the assets of the Trust under the Amended and Restated Declaration of Trust,
dated as of March 1, 2000 (the "Declaration"), by and among the Corporation,
Wilmington Trust Company, as Property Trustee (the "Property Trustee"),
Wilmington Trust Company, as Delaware Trustee (the "Delaware Trustee"), and the
Administrative Trustees named therein, (ii) the issuance of up to $10,000,000
principal amount of the Corporation's 11.00% Junior Subordinated Deferrable
Interest Debentures due March 1, 2030, Series B (the "Exchange Debentures"),
pursuant to the Indenture, dated as of March 1, 2000 (the "Indenture"), between
the Corporation and Wilmington Trust Company, as Debenture Trustee, and (iii)
the form of the Series B Capital Securities Guarantee Agreement (the "Exchange
Guarantee") between the Corporation and Wilmington Trust Company, as Guarantee
Trustee (the "Guarantee Trustee"), relating to the Exchange Capital Securities.
This opinion is being furnished to you in accordance with the requirements
of Item 601(b)(5) of Regulation S-K under the Act. Capitalized terms used and
not defined herein shall have the respective meanings set forth in the
Registration Statement.
Cascade Capital Trust I
July 24, 2000
Page 2
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the following:
(i) Copy of the Certificate of Incorporation of the Corporation,
certified as of a recent date by the Secretary of State of the
State of Delaware;
(ii) Copy of the Bylaws of the Corporation, certified by the
Secretary of the Corporation to be a true, correct and complete
copy;
(iii) Certificate as of a recent date of the Secretary of State of the
State of Delaware certifying as to the good standing of the
Corporation under the laws of the State of Delaware;
(iv) Executed copy of the Certificate of Trust of the Trust filed
with the Secretary of State of the State of Delaware on February
7, 2000;
(v) Certificate as of a recent date of the Secretary of State of the
State of Delaware certifying as to the good standing of the
Trust under the laws of the State of Delaware;
(vi) Copies, certified by the Secretary of the Corporation to be
true, correct and complete copies, of the resolutions duly
adopted by the Board of Directors of the Corporation on February
24, 2000;
(vii) Copy of the Registration Statement on Form S-4 filed by the
Corporation and the Trust with the Commission on July 11, 2000
under the Act;
(viii) Executed copy of the Declaration of Trust, dated February 4,
2000, by and between the Corporation and the Delaware Trustee;
(ix) Executed copy of the Declaration;
(x) Form of certificates evidencing the Exchange Capital Securities;
(xi) Form of the Exchange Guarantee;
(xii) Executed copy of the Indenture;
(xiii) Form of certificate evidencing the Exchange Debentures; and
Cascade Capital Trust I
July 24, 2000
Page 3
(xiv) Executed copy of the Registration Rights Agreement, dated as of
February 25, 2000 (the "Registration Rights Agreement"), by and
among the Corporation, the Trust and the Initial Purchasers.
We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such other documents, certificates and
records as we have deemed necessary or appropriate as a basis for the opinions
set forth herein.
We have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity to the signed
originals of all documents submitted to us as copies.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Corporation and the
Trust, we have assumed that such parties had the power, corporate or other, to
enter into and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents, and the validity and binding effect
and enforceability thereof on such parties. To the extent this opinion addresses
or is based upon questions of fact, we have not made any independent
investigation or verification thereof other than as specifically stated herein
and have relied exclusively upon the representations and warranties as to
matters of fact contained in the documents listed above and the understandings
and assumptions recited herein. We have not, except as specifically identified
herein, been retained or engaged to perform and, accordingly have not performed,
any independent review or investigation of any statutes, ordinances, laws,
regulations, agreements, contracts, instruments, corporate records, orders,
writs, judgments, rules or decrees to which the Corporation or the Trust may be
a party or to which the Corporation or the Trust or any property thereof may be
subject or bound. The opinions expressed below are made in the context of the
foregoing.
Our opinions set forth herein as to the validity, binding effect and
enforceability of the Exchange Debentures and the Exchange Guarantee are
specifically qualified to the extent that the validity, binding effect or
enforceability of any obligations of the Trust and the Corporation under any of
the documents listed above, or the availability or enforceability of any
remedies provided therein or by law may be subject to or limited by (i)
applicable bankruptcy, insolvency, reorganization, conservatorship,
receivership, moratorium and other statutory or decisional laws relating to or
affecting creditors' rights or the reorganization of financial institutions
(including, without limitation, preference and fraudulent conveyance or transfer
laws), heretofore or hereafter enacted or in effect, affecting the rights of
creditors generally; (ii) the exercise of judicial or administrative discretion
in accordance with general equitable principles, whether enforcement is sought
at law or in equity, including without limitation the exercise of judicial or
administrative discretion with respect to provisions relating to waivers, waiver
of remedies (or the delay or
Cascade Capital Trust I
July 24, 2000
Page 4
omission of enforcement thereof), disclaimers, releases of legal or equitable
rights or discharges of defenses; (iii) the availability of injunctive relief or
other equitable remedies; and (iv) the application by courts of competent
jurisdiction of laws containing provisions determined to have a paramount public
interest.
We express no opinion (a) as to the enforceability of any provision or
accumulation of provisions that may be deemed to be unconscionable or against
public policy; (b) as to provisions which purport to establish evidentiary
standards; (c) as to provisions relating to venue, governing law, disclaimers or
liability limitations with respect to third parties; (d) as to any anti-trust or
state securities laws; (e) as to provisions regarding indemnification,
contribution, waiver of the right to jury trial or waiver of objections to
jurisdiction, each of which may be subject to limitations of public policy; or
(f) provisions which purport or would operate to render ineffective any waiver
or modification not in writing.
For purposes of this opinion letter, we have assumed (i) that the
Declaration constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation, and termination of the Trust, and that the Declaration and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation, due formation or
due organization, as the case may be, and valid existence in good standing of
each party to the documents examined by us under the laws of the jurisdiction
governing its creation, formation or organization, (iii) the receipt by each
Person to whom an Exchange Capital Security is to be issued by the Trust (the
"Exchange Capital Security Holders") of an appropriate certificate for such
Exchange Capital Security and the exchange by each Exchange Capital Security
Holder of its validly issued Series A Capital Securities accepted for exchange
for the Exchange Capital Securities to be issued to it, in accordance with the
Declaration and the Registration Statement, and (iv) that the Exchange Capital
Securities are issued to the Exchange Capital Security Holders in accordance
with the Declaration and the Registration Statement.
Our opinions set forth below address only laws and regulations of general
applicability and are limited to the matters expressly set forth in this opinion
letter. No opinion is to be implied or may be inferred beyond the matters
expressly so stated. The opinions expressed herein are limited solely to matters
involving the application of the laws of the United States and the State of New
York.
Based upon and subject to the limitations, qualifications, exceptions and
assumptions set forth herein, we are of the opinion that:
1. The Exchange Debentures have been duly authorized by all requisite
corporate action and, when executed and authenticated as specified in the
Indenture and delivered and paid for in the manner described in the Registration
Statement, the Exchange Debentures will constitute valid and binding obligations
of the Company, enforceable in accordance with their terms.
Cascade Capital Trust I
July 24, 2000
Page 5
2. The Exchange Guarantee has been duly authorized by all requisite
corporate action and, when duly executed as specified in the Guarantee Agreement
and delivered in the manner described in the Registration Statement, the
Guarantee will constitute the valid and binding obligation of the Company,
enforceable in accordance with its terms.
We are members of the Bar of the State of New York, and we do not express
any opinion concerning any law other than the corporate law of the State of New
York and the federal securities laws of the United States of America, and we do
not express any opinion concerning the application of the securities laws of any
jurisdiction other than the federal securities laws of the United States. We do
not express any opinion on any issue not expressly addressed above.
This opinion is rendered as of the effective date set forth above, and we
neither express any opinion as to circumstances or events which may occur
subsequent to such date nor undertake to advise you of any changes in law or
facts which may occur after the date hereof. Except as stated above, without our
prior written consent, this opinion letter may not be furnished or quoted to, or
relied upon by, any other person for any purpose except for Breyer & Associates
PC for the purpose of rendering their opinion to you. This opinion is not to be
used, circulated, quoted or otherwise relied upon by any other Person or entity
or, for any other purpose, without our prior written consent.
Very truly yours,
/s/ Silver, Freedman & Taff, L.L.P.
SILVER, FREEDMAN & TAFF, L.L.P.