INSTRUCTIONS WITH RESPECT TO THE SERIES I OFFER
 
    The undersigned acknowledge(s) receipt of your letter and the enclosed
Prospectus, dated May   , 1998, and the Letter of Transmittal and Consent
relating to the Old Series I Preferred Securities in connection with the Series
I Offer by Capital Funding to exchange Old Series I Preferred Securities for New
Series I Preferred Securities or cash.
 
    This will instruct you to tender the number of Old Series I Preferred
Securities indicated below held by you for the account of the undersigned, upon
the terms and subject to the conditions set forth in the Prospectus and the
Letter of Transmittal relating to the Old Series I Preferred Securities.
 
TENDER FOR NEW SERIES I PREFERRED SECURITIES BY HOLDERS AS OF THE RECORD DATE:
 
/ /  By checking this box, all Old Series I Preferred Securities held by you for
    our account will be tendered in the Series I Offer for New Series I
    Preferred Securities. If fewer than all Old Series I Preferred Securities
    are to be tendered, we have checked the box below and indicated the
    aggregate number of Old Series I Preferred Securities to be tendered by you.
    We understand that since the Old Series I Preferred Securities held by you
    for our account were held as of the Record Date, the tender of Old Series I
    Preferred Securities will constitute the Consent to the Proposed Amendments.
 
/ /  ___________________ shares*
 
TENDER FOR CASH BY HOLDERS AS OF THE RECORD DATE:
 
/ /  By checking this box, all Old Series I Preferred Securities held by you for
    our account will be tendered in the Series I Offer for cash. If fewer than
    all Old Series I Preferred Securities are to be tendered, we have checked
    the box below and indicated the aggregate number of Old Series I Preferred
    Securities to be tendered by you. We understand that since the Old Series I
    Preferred Securities held by you for our account were held as of the Record
    Date, the tender of Old Series I Preferred Securities will constitute the
    Consent to the Proposed Amendments.
 
/ /  ___________________ shares*
 
TENDER FOR NEW SERIES I PREFERRED SECURITIES BY HOLDERS WHO ACQUIRED OLD SERIES
  I PREFERRED SECURITIES AFTER THE RECORD DATE:
 
/ /  By checking this box, all Old Series I Preferred Securities held by you for
    our account, will be tendered in the Series I Offer for New Series I
    Preferred Securities. If fewer than all Old Series I Preferred Securities
    are to be tendered, we have checked the box below and indicated the
    aggregate number of Old Series I Preferred Securities to be tendered by you.
 
/ /  ___________________ shares*
 
TENDER FOR CASH BY HOLDERS WHO ACQUIRED OLD SERIES I PREFERRED SECURITIES AFTER
  THE RECORD DATE:
 
/ /  By checking this box, all Old Series I Preferred Securities held by you for
    our account, will be tendered in the Series I Offer for cash. If fewer than
    all Old Series I Preferred Securities are to be tendered, we have checked
    the box below and indicated the aggregate number of Old Series I Preferred
    Securities to be tendered by you.
 
/ /  ___________________ shares*
 
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CONSENT ONLY BY HOLDERS AS OF THE RECORD DATE:
 
/ /  By checking this box, we instruct you to deliver a Consent with respect to
    all Old Series I Preferred Securities held by you for our account as of the
    Record Date which are not being tendered in the Series I Offer. If Consents
    should be provided with respect to fewer than all Old Series I Preferred
    Securities not tendered, we have checked the box below and indicated the
    aggregate number of Old Series I Preferred Securities as to which Consents
    should be provided.
 
/ /  ___________________ shares*
 
- ------------------------
 
*   Unless otherwise indicated, it will be assumed that all such Old Series I
    Preferred Securities are to be tendered or that Consents are to be provided
    with respect to all such Old Series I Preferred Securities.
 
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                                   SIGN HERE
 
SIGNATURE(S): __________________________________________________________________
 
NAME(S): _______________________________________________________________________
 
ADDRESS(ES): ___________________________________________________________________
 
SOCIAL SECURITY OR TAXPAYER ID NO(S).: _________________________________________
 
DATED: _________________________________________________________________________
 
                                (SEE OTHER SIDE)
 
            PLEASE DESIGNATE IN THE BOX BELOW ANY SOLICITING DEALER
                             WHO SOLICITED YOUR TENDER.
 
                               SOLICITED TENDERS
 
The undersigned represents that the Soliciting Dealer who solicited and obtained
this tender is:
 
Name of Firm: __________________________________________________________________
                                 (PLEASE PRINT)
 
Name of Individual Broker
or Financial Consultant: _______________________________________________________
 
Identification Number (if known): ______________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
                               (INCLUDE ZIP CODE)
 
                                   SIGN HERE
 

                                           
X
 
                     X
                SIGNATURE(S)                       PRINT NAME(S) AND ADDRESS(ES) HERE
 
Dated:

 
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