<PAGE>
                                                                    EXHIBIT 4.18

================================================================================







                     CONTINENTAL AIRLINES FINANCE TRUST III


                    AMENDED AND RESTATED DECLARATION OF TRUST








================================================================================


                         DATED AS OF __________, ______
<PAGE>

                                TABLE OF CONTENTS


<Table>
<S>                     <C>                                                                                       <C>
                                                      ARTICLE I
                                           DEFINITIONS AND INTERPRETATION

SECTION 1.1             Definitions...............................................................................1

                                                     ARTICLE II
                                                 TRUST INDENTURE ACT

SECTION 2.1             Trust Indenture Act; Application..........................................................7
SECTION 2.2             Lists of Holders of Securities............................................................7
SECTION 2.3             Reports by the Property Trustee...........................................................8
SECTION 2.4             Periodic Reports to Property Trustee......................................................8
SECTION 2.5             Evidence of Compliance with Conditions Precedent..........................................8
SECTION 2.6             Events of Default; Waiver.................................................................8
SECTION 2.7             Event of Default; Notice..................................................................9

                                                     ARTICLE III
                                                    ORGANIZATION

SECTION 3.1             Name.....................................................................................10
SECTION 3.2             Office...................................................................................10
SECTION 3.3             Purpose..................................................................................10
SECTION 3.4             Authority................................................................................11
SECTION 3.5             Title to Property of the Trust...........................................................11
SECTION 3.6             Powers and Duties of the Administrative Trustees.........................................11
SECTION 3.7             Prohibition of Actions by the Trust and the Trustees.....................................14
SECTION 3.8             Powers and Duties of the Property Trustee................................................15
SECTION 3.9             Certain Duties and Responsibilities of the Property Trustee..............................17
SECTION 3.10            Certain Rights of Property Trustee.......................................................18
SECTION 3.11            Delaware Trustee.........................................................................20
SECTION 3.12            Execution of Documents...................................................................20
SECTION 3.13            Not Responsible for Recitals or Issuance of Securities...................................20
SECTION 3.14            Duration of Trust........................................................................20
SECTION 3.15            Mergers..................................................................................20

                                                     ARTICLE IV
                                                       SPONSOR

SECTION 4.1             Sponsor's Purchase of Common Securities..................................................22
SECTION 4.2             Responsibilities of the Sponsor..........................................................22
SECTION 4.3             Right to Proceed.........................................................................23
</Table>


                                      -i-
<PAGE>

<Table>
<S>                     <C>                                                                                       <C>
                                                      ARTICLE V
                                                      TRUSTEES

SECTION 5.1             Number of Trustees: Appointment of Co-Trustee............................................23
SECTION 5.2             Delaware Trustee.........................................................................24
SECTION 5.3             Property Trustee; Eligibility............................................................24
SECTION 5.4             Certain Qualifications of Administrative Trustees and Delaware Trustee Generally.........25
SECTION 5.5             Administrative Trustees..................................................................25
SECTION 5.6             Delaware Trustee.........................................................................26
SECTION 5.7             Appointment, Removal and Resignation of Trustees.........................................26
SECTION 5.8             Vacancies Among Trustees.................................................................27
SECTION 5.9             Effect of Vacancies......................................................................27
SECTION 5.10            Meetings.................................................................................28
SECTION 5.11            Delegation of Power......................................................................28
SECTION 5.12            Merger, Conversion, Consolidation or Succession to Business..............................28

                                                     ARTICLE VI
                                                    DISTRIBUTIONS

SECTION 6.1             Distributions............................................................................29

                                                     ARTICLE VII
                                               ISSUANCE OF SECURITIES

SECTION 7.1             General Provisions Regarding Securities..................................................29
SECTION 7.2             Execution and Authentication.............................................................30
SECTION 7.3             Form and Dating..........................................................................30
SECTION 7.4             Registrar and Paying Agent [and Conversion Agent]........................................32
SECTION 7.5             Paying Agent to Hold Money in Trust......................................................32
SECTION 7.6             Replacement Securities...................................................................32
SECTION 7.7             Outstanding Preferred Securities.........................................................33
SECTION 7.8             Preferred Securities in Treasury.........................................................33
SECTION 7.9             Temporary Securities.....................................................................33
SECTION 7.10            Exchange.................................................................................34
SECTION 7.11            Cancellation.............................................................................35
SECTION 7.12            CUSIP Numbers............................................................................35

                                                    ARTICLE VIII
                                                DISSOLUTION OF TRUST

SECTION 8.1             Dissolution of Trust.....................................................................35

                                                     ARTICLE IX
                                                TRANSFER OF INTERESTS

SECTION 9.1             Transfer of Securities...................................................................36
SECTION 9.2             Transfer Procedures and Restrictions.....................................................37
SECTION 9.3             Deemed Security Holders..................................................................38
SECTION 9.4             Book Entry Interests.....................................................................38
SECTION 9.5             Notices to Clearing Agency...............................................................39
SECTION 9.6             Appointment of Successor Clearing Agency.................................................39
</Table>


                                      -ii-
<PAGE>

<Table>
<S>                     <C>                                                                                       <C>
                                                      ARTICLE X
                                             LIMITATION OF LIABILITY OF
                                      HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

SECTION 10.1            Liability................................................................................39
SECTION 10.2            Exculpation..............................................................................40
SECTION 10.3            Fiduciary Duty...........................................................................40
SECTION 10.4            Indemnification..........................................................................41
SECTION 10.5            Outside Businesses.......................................................................43
SECTION 10.6            Compensation; Fees.......................................................................44

                                                     ARTICLE XI
                                                     ACCOUNTING

SECTION 11.1            Fiscal Year..............................................................................44
SECTION 11.2            Certain Accounting Matters...............................................................44
SECTION 11.3            Banking..................................................................................45
SECTION 11.4            Withholding..............................................................................45

                                                     ARTICLE XII
                                               AMENDMENTS AND MEETINGS

SECTION 12.1            Amendments...............................................................................45
SECTION 12.2            Meetings of the Holders; Action by Written Consent.......................................46

                                                    ARTICLE XIII
                                         REPRESENTATIONS OF PROPERTY TRUSTEE
                                                AND DELAWARE TRUSTEE

SECTION 13.1            Representations and Warranties of Property Trustee.......................................48
SECTION 13.2            Representations and Warranties of Delaware Trustee.......................................48

                                                     ARTICLE XIV
                                                    MISCELLANEOUS

SECTION 14.1            Notices..................................................................................49
SECTION 14.2            GOVERNING LAW............................................................................50
SECTION 14.3            Intention of the Parties.................................................................51
SECTION 14.4            Headings.................................................................................51
SECTION 14.5            Successors and Assigns...................................................................51
SECTION 14.6            Partial Enforceability...................................................................51
SECTION 14.7            Counterparts.............................................................................51
SECTION 14.8            No Recourse..............................................................................52
</Table>



                                      -iii-
<PAGE>

<Table>
<Caption>
                           SECTION OF
                    TRUST INDENTURE ACT OF 1939,                 SECTION OF
                            AS AMENDED                            INDENTURE
<S>                                                             <C>
310(a).....................................................     5.3
310(b).....................................................     5.3(c), 5.3(d)
311(a).....................................................     2.2(b)
311(b).....................................................     2.2(b)
312(a).....................................................     2.2(a)
312(b).....................................................     2.2(b)
313........................................................     2.3
314(a).....................................................     2.4; 3.6(j)
314(c).....................................................     2.5
315(a).....................................................     3.9
315(b).....................................................     2.7(a)
315(c).....................................................     3.9(a)
315(d).....................................................     3.9(b)
316(a).....................................................     2.6
316(c).....................................................     3.6(e)
317(a).....................................................     3.8(e); 3.8(h)
317(b).....................................................     3.8(i); 7.5
</Table>


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

*This Cross-Reference Table does not constitute part of the Declaration of Trust
and shall not affect the interpretation of any of its terms or provisions.


                                      -i-
<PAGE>

                          FORM OF AMENDED AND RESTATED

                              DECLARATION OF TRUST

                                       OF

                     CONTINENTAL AIRLINES FINANCE TRUST III

         AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration") dated
and effective as of _______, ___, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the assets of the Trust to be issued pursuant to this
Declaration;

         WHEREAS, the Sponsor and certain of the Trustees established
Continental Airlines Finance Trust III (the "Trust"), a trust created under the
Delaware Business Trust Act pursuant to a Declaration of Trust dated as of
October __, 2001 (the "Original Declaration of Trust") and a Certificate of
Trust filed with the Secretary of State of the State of Delaware on October __,
2001 for the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Debentures of the Debenture Issuer (each as
hereinafter defined), and engaging in only those other activities necessary,
advisable or incidental thereto; and

         WHEREAS, the parties hereto, by this Declaration, amend and restate
each and every term and provision of the Original Declaration of Trust;

         NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a statutory business trust under the Business Trust Act
and that this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets contributed to the Trust will be
held in trust for the benefit of the holders, from time to time, of the
securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration, and the
parties hereto hereby amend and restate each and every term and provision of the
original Declaration as follows:

                                   ARTICLE I
                         DEFINITIONS AND INTERPRETATION

SECTION 1.1 Definitions.

         Unless the context otherwise requires:

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

         (b) a term defined anywhere in this Declaration has the same meaning
throughout;

         (c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;

<PAGE>


         (d) all references in this Declaration to "Articles" and "Sections" and
"Annexes" and "Exhibits" are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;

         (e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and

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

         "Administrative Trustee" has the meaning set forth in Section 5.1(b).

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

         "Agent" means any Paying Agent or Registrar.

         "Authorized Officer" of a Person means any other Person that is
authorized to legally bind such former Person.

         "Book Entry Interest" means a beneficial interest in a Global Preferred
Security registered in the name of a Clearing Agency or its nominee, ownership
and transfers of which shall be maintained and made through book entries by a
Clearing Agency as described in Section 9.4.

         "Business Day" means any day other than a Saturday or a Sunday or a day
on which banking institutions in New York, New York or Houston, Texas are
authorized or required by law or executive order to close.

         "Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code Section 3801 et seq., as it may be amended from time to time, or
any successor legislation.

         "Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered the Global Preferred Securities and which
shall undertake to effect book entry transfers and pledges of the Preferred
Securities.

         "Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.

         "Closing Date" means the ["Time of Delivery"], as such term is defined
in the Underwriting Agreement.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.


                                      -2-
<PAGE>

         "Commission" means the United States Securities and Exchange Commission
as from time to time constituted, or if any time after the execution of this
Declaration such Commission is not existing and performing the duties now
assigned to it under applicable federal securities laws, then the body
performing such duties at such time.

         "Common Securities" has the meaning specified in Section 7.1(a).

         "Common Securities Guarantee" means the guarantee agreement dated as of
__________, _____ of the Sponsor in respect of the Common Securities.

         "Common Securities Subscription Agreement" means the subscription
agreement dated as of _____, ___ of the Sponsor in respect of the Common
Securities.

         "Company Indemnified Person" means (a) any Administrative Trustee; (b)
any Affiliate of any Administrative Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Administrative Trustee; or (d) any officer, employee or agent of the Trust or
its Affiliates.

         ["Conversion Agent" has the meaning set forth in Section 7.4.]

         "Corporate Trust Office" means the office of the Property Trustee at
which the corporate trust business of the Property Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Declaration is located at ______________.

         "Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.

         "Debenture Issuer" means Continental Airlines, Inc., a Delaware
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.

         "Debenture Subscription Agreement" means the subscription agreement
dated as of _______, __ of the Trust in respect of the Debentures.

         "Debenture Trustee" means _____________, a [national banking
association,] as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.

         "Debentures" means, collectively, the [ ____% Junior Subordinated
Debentures due _____] issued pursuant to the Indenture.

         "Default" means an event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.

         "Definitive Preferred Securities" shall have the meaning set forth in
Section 7.3(c).

         "Delaware Trustee" has the meaning set forth in Section 5.2.


                                      -3-
<PAGE>

         "Direct Action" shall have the meaning set forth in Section 3.8(e).

         "Distribution" means a distribution payable to Holders in accordance
with Section 6.1.

         "DTC" means The Depository Trust Company, the initial Clearing Agency.

         "Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) that has occurred and is continuing in
respect of the Debentures.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.

         "Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).

         "Fiscal Year" has the meaning set forth in Section 11.1.

         "Global Preferred Security" has the meaning set forth in Section
7.3(a).

         "Holder" means a Person in whose name a Security is registered, such
Person being a beneficial owner within the meaning of the Business Trust Act.

         "Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.

         "Indenture" means the Indenture dated as of ______, ___, among the
Debenture Issuer and the Debenture Trustee, as amended from time to time.

         "Investment Company" means an investment company as defined in the
Investment Company Act.

         "Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.

         "Legal Action" has the meaning set forth in Section 3.6(g).

         "Like Amount" has the meaning set forth in Section 3 of Annex I.

         "Liquidation Amount" has the meaning set forth in Section 2(a) of Annex
I.

         "List of Holders" has the meaning set forth in Section 2.2(a).

         "Majority in Liquidation Amount" means, with respect to the Trust
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate Liquidation Amount of all outstanding Securities of the relevant
class.


                                      -4-
<PAGE>

         "Officers' Certificate" means, with respect to any Person, a
certificate signed by any of the Chairman of the Board, a Vice Chairman of the
Board, the Chief Executive Officer, the President or a Vice President and the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
such Person. Any Officers' Certificate delivered by the Trust shall be signed by
at least one Administrative Trustee. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Declaration shall include: (a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition and the definitions
relating thereto; (b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Officers' Certificate; (c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and (d) a statement as to whether,
in the opinion of each such officer, such condition or covenant has been
complied with.

         "Opinion of Counsel" means a written opinion of counsel, who may be an
employee of the Sponsor, and who shall be reasonably acceptable to the Property
Trustee.

         ["Option Closing Time" means any settlement date with respect to an
over-allotment option to purchase additional Preferred Securities granted to the
underwriters in the Underwriting Agreement.]

         "Paying Agent" has the meaning specified in Section 7.4.

         "Payment Amount" has the meaning specified in Section 6.1.

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

         "Preferred Securities" has the meaning specified in Section 7.1(a).

         "Preferred Securities Guarantee" means the guarantee agreement dated as
of ______, ___, by the Sponsor in respect of Preferred Securities.

         "Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).

         "Property Trustee" has the meaning set forth in Section 5.3(a).

         "Property Trustee Account" has the meaning set forth in Section
3.8(c)(i).

         "Quorum" means a majority of the Administrative Trustees or, if there
are only two Administrative Trustees, both of them.


                                      -5-
<PAGE>

         "Registrar" has the meaning set forth in Section 7.4.

         "Responsible Officer" means any officer within the Corporate Trust
Office of the Property Trustee with direct responsibility for the administration
of this Declaration and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.

         "Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or any
successor rule or regulation.

         "Securities" or "Trust Securities" means the Common Securities and the
Preferred Securities.

         "Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.

         "Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.

         "Special Event" has the meaning set forth in [Section 4(b)] of Annex I
hereto.

         "Sponsor" means Continental Airlines, Inc., a Delaware corporation, or
any successor entity resulting from any merger, conversion, consolidation,
amalgamation or other business combination, in its capacity as depositor of the
Trust.

         "Sponsor Affiliated Holder" has the meaning set forth in Section 7.10.

         "Successor Entity" has the meaning set forth in Section 3.15(b)(i).

         "Successor Property Trustee" has the meaning set forth in Section
3.8(f).

         "10% in Liquidation Amount" means, with respect to the Trust
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of 10% or more of the
aggregate Liquidation Amount of all outstanding Securities of the relevant
class.

         "Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).

         "Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue as a trustee in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.


                                      -6-
<PAGE>

         "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.

         "Underwriting Agreement" means the Underwriting Agreement dated _______
among the Sponsor, the Trust, and ___________, as representatives of the several
underwriters named therein relating to the initial offering and sale of the
Preferred Securities.

                                   ARTICLE II
                               TRUST INDENTURE ACT

SECTION 2.1 Trust Indenture Act; Application.

         (a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration in order for this
Declaration to be qualified under the Trust Indenture Act and shall, to the
extent applicable, be governed by such provisions.

         (b) The Property Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.

         (c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.

         (d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.

SECTION 2.2 Lists of Holders of Securities.

         (a) Each of the Sponsor and the Administrative Trustees on behalf of
the Trust shall provide the Property Trustee, unless the Property Trustee is
Registrar for the Securities, (i) within 14 days after each record date for
payment of Distributions, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the Holders ("List of
Holders") as of such record date, provided that neither the Sponsor nor the
Administrative Trustees on behalf of the Trust shall be obligated to provide
such List of Holders at any time that the List of Holders does not differ from
the most recent List of Holders given to the Property Trustee by the Sponsor and
the Administrative Trustees on behalf of the Trust, and (ii) at any other time,
within 30 days of receipt by the Trust 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 Property Trustee. The Property Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in Lists of Holders
given to it or which it receives in the capacity as Paying Agent (if acting in
such capacity), provided that the Property Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.

         (b) The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.


                                      -7-
<PAGE>

SECTION 2.3 Reports by the Property Trustee.

         Within 60 days after _______ of each year, commencing _______, ___, the
Property Trustee shall provide to the Holders of the Preferred 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 Property Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.

SECTION 2.4 Periodic Reports to Property Trustee.

         Each of the Sponsor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information as are required by Section 314 (if any) of the Trust Indenture Act
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(a)(4) of
the Trust Indenture Act.

SECTION 2.5 Evidence of Compliance with Conditions Precedent.

         Each of the Sponsor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent provided for in this Declaration that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) of
the Trust Indenture Act may be given in the form of an Officers' Certificate.

SECTION 2.6 Events of Default; Waiver.

         (a) The Holders of a Majority in Liquidation Amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:

                  (i) is not waivable under the Indenture, the Event of Default
under this Declaration shall also not be waivable; or

                  (ii) requires the consent or vote of all holders of the
Debentures to be waived under the Indenture, the Event of Default under this
Declaration may be waived only by the vote of the Holders of all outstanding
Preferred Securities.

The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.


                                      -8-
<PAGE>

         (b) The Holders of a Majority in Liquidation Amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:

                  (i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section 2.6(b), the Event of
Default under the Declaration shall also not be waivable; or

                  (ii) requires the consent or vote of all Debentures to be
waived, except where the Holders of the Common Securities are deemed to have
waived such Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration may be waived only by
the vote of all Holders of outstanding Common Securities; provided further, the
Holders of Common Securities will be deemed to have waived any such Event of
Default and all Events of Default with respect to the Common Securities and
their consequences until all Events of Default with respect to the Preferred
Securities have been cured, waived or otherwise eliminated, and until such
Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities.

The foregoing provisions of this Section 2.6(b) shall be in lieu of Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
such waiver, any such default shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have been
cured for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.

         (c) A waiver of an Event of Default under the Indenture by the Property
Trustee, at the direction of the Holders of the Preferred Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.

SECTION 2.7 Event of Default; Notice.

         (a) The Property Trustee shall, within 90 days after the occurrence of
a Default actually known to a Responsible Officer, transmit by mail, first class
postage prepaid, to the Holders, notices of all such Defaults with respect to
the Securities, unless such Defaults have been cured before the giving of such
notice; provided that, except for a Default in the payment of principal of (or
premium, if any) or interest (including Compounded Interest and Additional Sums
(as such terms are defined in the Indenture), if any) on any of the Debentures,
the Property


                                      -9-
<PAGE>

Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer in good faith determines that the withholding of such notice
is in the interests of the Holders.

         (b) The Property Trustee shall not be deemed to have knowledge of any
Default except:

                  (i) a default under Sections 5.01(a) or (b) of the Indenture;
or

                  (ii) any Default as to which the Property Trustee shall have
received written notice specifying such Default and stating that such notice is
a "Notice of Default" or of which a Responsible Officer charged with the
administration of the Declaration shall have actual knowledge.

         (c) Within five Business Days after the occurrence of any Event of
Default actually known to the Property Trustee, the Property Trustee shall
transmit notice of such Event of Default to the Holders of the Preferred
Securities, the Administrative Trustees and the Sponsor, unless such Event of
Default shall have been cured or waived. The Sponsor and the Administrative
Trustees shall file annually with the Property Trustee a certification as to
whether or not they are in compliance with all the conditions and covenants
applicable to them under this Declaration.

                                  ARTICLE III
                                  ORGANIZATION

SECTION 3.1 Name.

         The Trust is named "Continental Airlines Finance Trust III" as such
name may be modified from time to time by the Administrative Trustees following
written notice to the Delaware Trustee, the Property Trustee and the Holders.
The Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Administrative Trustees.

SECTION 3.2 Office.

         The address of the principal office of the Trust is c/o Continental
Airlines, Inc., 1600 Smith Street, Houston, Texas 77002. On ten Business Days
written notice to the Delaware Trustee, the Property Trustee and the Holders of
Securities, the Administrative Trustees may designate another principal office.

SECTION 3.3 Purpose.

         The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities, (b) use the proceeds from the sale of the Securities to acquire
the Debentures, and (c) except as otherwise limited herein, to engage in only
those other activities necessary, advisable or incidental thereto.


                                      -10-
<PAGE>

SECTION 3.4 Authority.

         Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Administrative Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Administrative Trustees in accordance with their powers
shall constitute the act of and serve to bind the Trust and an action taken by
the Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.

SECTION 3.5 Title to Property of the Trust.

         Except as provided in Section 3.8 with respect to the Debentures and
the Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders shall
not have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial interest in the assets of the Trust.

SECTION 3.6 Powers and Duties of the Administrative Trustees.

         The Administrative Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:

         (a) to execute, deliver, issue and sell the Securities in accordance
with this Declaration; provided, however, that except as contemplated in Section
7.1(a),

                  (i) the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities,

                  (ii) there shall be no interests in the Trust other than the
Securities, and

                  (iii) the issuance of Securities shall be limited to a
simultaneous issuance of both Preferred Securities and Common Securities at the
Closing Date [and, if applicable, at any Option Closing Time];

         (b) in connection with the issue and sale of the Preferred Securities,
at the direction of the Sponsor, to:

                  (i) file with the Commission a registration statement prepared
by the Sponsor on the appropriate form in relation to the Preferred Securities,
including any amendments thereto and including any supplements or amendments to
the form of prospectus included therein, as permitted by the rules and
regulations of the Commission;

                  (ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in order to
qualify or register all or part of the Preferred Securities in any state in
which the Sponsor has determined to qualify or register such Preferred
Securities for sale;


                                      -11-
<PAGE>

                  (iii) at the direction of the Sponsor, execute and file an
application, prepared by the Sponsor, to the New York Stock Exchange or any
other national stock exchange or the Nasdaq National Market for listing or
quotation of the Preferred Securities;

                  (iv) to execute and deliver letters, documents, or instruments
with DTC and any other Clearing Agencies relating to the Preferred Securities;

                  (v) if required, execute and file with the Commission a
registration statement on Form 8-A, including any amendments thereto, prepared
by the Sponsor, relating to the registration of the Preferred Securities under
Section 12(b) or 12(g) of the Exchange Act; and

                  (vi) to cause the Trust to enter into such agreements and
arrangements as may be necessary or desirable in connection with the sale of
Preferred Securities to the underwriters thereof and the consummation thereof,
and to take all action as may be necessary or desirable in connection with the
consummation thereof;

         (c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders;

         (d) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Special Event;

         (e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;

         (f) to take all actions and perform such duties as may be required of
the Administrative Trustees pursuant to the terms of the Securities;

         (g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;

         (h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;

         (i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;

         (j) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Administrative Trustee;


                                      -12-
<PAGE>

         (k) to incur expenses that are necessary or incidental to carry out any
of the purposes of the Trust;

         (l) to act as, or appoint another Person to act as, Registrar for the
Securities or to appoint a Paying Agent [and Conversion Agent] for the
Securities as provided in Section 7.4 except for such time as such power to
appoint a Paying Agent [or Conversion Agent] is vested in the Property Trustee;

         (m) to give prompt written notice to the Property Trustee and to
Holders of any notice received from the Debenture Issuer of its election to
defer payments of interest on the Debentures by extending the interest payment
period under the Indenture;

         (n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders or to enable the Trust
to effect the purposes for which the Trust was created;

         (o) to take any action, not inconsistent with this Declaration or with
applicable law, that the Administrative Trustees determine in their discretion
to be necessary or desirable in carrying out the activities of the Trust as set
out in this Section 3.6, including, but not limited to:

                  (i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;

                  (ii) causing the Trust not to be classified for United States
federal income tax purposes as an association taxable as a corporation; and

                  (iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for United
States federal income tax purposes;

         (p) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Administrative Trustees, on behalf of
the Trust; and

         (q) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.

         The Administrative Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Administrative Trustees shall not take
any action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.

         Subject to this Section 3.6, the Administrative Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.8.


                                      -13-
<PAGE>

         The Administrative Trustees shall take all actions on behalf of the
Trust that are not specifically required by this Declaration to be taken by any
other Trustee.

         Any expenses incurred by the Administrative Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.

SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.

         (a) The Trust shall not, and the Trustees (including the Property
Trustee) shall cause the Trust not to, engage in any activity other than as
required or authorized by this Declaration. The Trust shall not:

                  (i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders pursuant to the
terms of this Declaration and of the Securities;

                  (ii) acquire any assets other than as expressly provided
herein;

                  (iii) possess Trust property for other than a Trust purpose;

                  (iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;

                  (v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way whatsoever,
except as otherwise expressly provided herein;

                  (vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the Securities;

                  (vii) other than as provided in this Declaration or Annex I,
(A) direct the time, method and place of conducting any proceeding with respect
to any remedy available to the Debenture Trustee, or exercising any trust or
power conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under the Indenture, (C) exercise any
right to rescind or annul any declaration that the principal of all the
Debentures shall be due and payable, or (D) consent to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required, unless in the case of any of (A), (B), (C), or (D),
the Trust shall have received an opinion of independent tax counsel experienced
in such matters to the effect that such amendment, modification or termination
will not cause more than an insubstantial risk that for United States federal
income tax purposes the Trust will not be classified as a grantor trust;

                  (viii) take any action that would result in the placement of a
pledge or mortgage on any of the Trust property; or

                  (ix) vary the investment (within the meaning of Treasury
Regulation Section 301.7701-4(c)) of the Trust or of the Holders of Securities.


                                      -14-
<PAGE>

SECTION 3.8 Powers and Duties of the Property Trustee.

         (a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the Trust
and the Holders. The right, title and interest of the Property Trustee to the
Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.7. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.

         (b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).

         (c) The Property Trustee shall:

                  (i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders and, upon the
receipt of payments of funds made in respect of the Debentures held by the
Property Trustee, deposit such funds into the Property Trustee Account and make
payments or cause the Paying Agent to make payments to the Holders from the
Property Trustee Account in accordance with Section 6.1. Funds in the Property
Trustee Account shall be held uninvested until disbursed in accordance with this
Declaration. The Property Trustee Account shall be an account that is maintained
with a banking institution the rating on whose long-term unsecured indebtedness
by a "nationally recognized statistical rating organization", as that term is
defined for purposes of Rule 436(g)(2) under the Securities Act, is at least
investment grade;

                  (ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Trust Securities to the
extent the Debentures are redeemed or mature; and

                  (iii) upon written notice of distribution issued by the
Administrative Trustees in accordance with the terms of the Securities, engage
in such ministerial activities as shall be necessary or appropriate to effect
the distribution of the Debentures to Holders upon the occurrence of certain
events.

         (d) The Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to the terms of
the Securities.

         (e) Subject to Section 3.9(a), the Property Trustee shall take any
Legal Action which arises out of or in connection with an Event of Default of
which a Responsible Officer of the Property Trustee has actual knowledge or the
Property Trustee's duties and obligations under this Declaration or the Trust
Indenture Act; provided, however, that if an Event of Default has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay the principal of or premium, if any, or interest on the Debentures
on the date such principal, premium, if any, or interest is otherwise payable
(or in the case of redemption, on the redemption date), then a Holder of
Preferred Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of or premium, if any, or interest on
the Debentures


                                      -15-
<PAGE>

having a principal amount equal to the aggregate Liquidation Amount of the
Preferred Securities of such Holder (a "Direct Action") on or after the
respective due date specified in the Debentures. Notwithstanding any payments
made to such Holder by the Debenture Issuer in connection with such Direct
Action, the Debenture Issuer shall be subrogated to the rights of such Holder of
Preferred Securities to the extent of any payment made by the Debenture Issuer
to such Holder of Preferred Securities in such Direct Action. Except as provided
in the preceding sentences, the Holders of Preferred Securities will not be able
to exercise directly any other remedy available to the Holders of the
Debentures.

         (f) The Property Trustee shall continue to serve as a Trustee until
either:

                  (i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders pursuant to the terms of the
Securities; or

                  (ii) a successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.7 (a "Successor Property
Trustee").

         (g) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debentures under the Indenture
and, if an Event of Default actually known to a Responsible Officer occurs and
is continuing, the Property Trustee shall, for the benefit of Holders, enforce
its rights as holder of the Debentures subject to the rights of the Holders
pursuant to the terms of such Securities.

         (h) The Property Trustee shall be authorized to undertake any actions
set forth in Section 317(a) of the Trust Indenture Act.

         (i) For such time as the Property Trustee is the Paying Agent, the
Property Trustee may authorize one or more Persons to act as additional Paying
Agents and to pay Distributions, redemption payments or liquidation payments on
behalf of the Trust with respect to all Securities and any such Paying Agent
shall comply with Section 317(b) of the Trust Indenture Act. Any such additional
Paying Agent may be removed by the Property Trustee at any time the Property
Trustee remains as Paying Agent and a successor Paying Agent or additional
Paying Agents may be (but are not required to be) appointed at any time by the
Property Trustee while the Property Trustee is so acting as Paying Agent.

         (j) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Administrative
Trustees set forth in Section 3.6.

         Notwithstanding anything expressed or implied to the contrary in this
Declaration or any Annex or Exhibit hereto, (i) the Property Trustee must
exercise the powers set forth in this Section 3.8 in a manner that is consistent
with the purposes and functions of the Trust set out in Section 3.3, and (ii)
the Property Trustee shall not take any action that is inconsistent with the
purposes and functions of the Trust set out in Section 3.3.


                                      -16-
<PAGE>

SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.

         (a) The Property Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration and in the Securities and no implied covenants shall be read into
this Declaration against the Property Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer has actual knowledge, the Property Trustee shall exercise
such of the rights and powers vested in it by this Declaration, and use the same
degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of his or her own affairs.

         (b) No provision of this Declaration shall be construed to relieve the
Property 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 an Event of Default and after
the curing or waiving of all such Events of Default that may have occurred: (A)
the duties and obligations of the Property Trustee shall be determined solely by
the express provisions of this Declaration and in the Securities and the
Property Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Declaration and in the
Securities, and no implied covenants or obligations shall be read into this
Declaration or the Securities against the Property Trustee; and (B) in the
absence of bad faith on the part of the Property Trustee, the Property 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 Property Trustee and conforming to the requirements of this Declaration;
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 Property
Trustee, the Property Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Declaration;

                  (ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be proved
that the Property Trustee was negligent in ascertaining the pertinent facts;

                  (iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in Liquidation Amount
of the Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under this Declaration;

                  (iv) no provision of this Declaration shall require the
Property 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 it 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 Declaration or indemnity reasonably
satisfactory to the Property Trustee against such risk or liability is not
reasonably assured to it;


                                      -17-
<PAGE>

                  (v) the Property Trustee's sole duty with respect to the
custody, safekeeping and physical preservation of the Debentures and the
Property Trustee Account shall be to deal with such property in a similar manner
as the Property Trustee deals with similar property for its own account, subject
to the protections and limitations on liability afforded to the Property Trustee
under this Declaration and the Trust Indenture Act;

                  (vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;

                  (vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree in writing
with the Sponsor. Money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section 3.8(c)(i) and except to
the extent otherwise required by law; and

                  (viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the Property Trustee
be liable for any default or misconduct of the Administrative Trustees or the
Sponsor.

SECTION 3.10 Certain Rights of Property Trustee.

         (a) Subject to the provisions of Section 3.9:

                  (i) the Property 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 Sponsor or the Administrative
Trustees contemplated by this Declaration may be sufficiently evidenced by an
Officers' Certificate;

                  (iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Property 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 Sponsor or the Administrative Trustees;

                  (iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof except for those required as a
result of any change in the name, address or identity of the Property Trustee;

                  (v) the Property Trustee may consult with counsel or other
experts of its selection or request an Opinion of Counsel be furnished by, or on
behalf of, the Sponsor and the


                                      -18-
<PAGE>

advice or opinion of such counsel and experts with respect to legal matters or
advice within the scope of such experts' area of expertise or such Opinion of
Counsel 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 or Opinion of Counsel, such counsel may
be counsel to the Sponsor or any of its Affiliates, and may include any of its
employees. The Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Declaration from any court of
competent jurisdiction;

                  (vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at the
request or direction of any Holder, unless such Holder shall have provided to
the Property Trustee security and indemnity, reasonably satisfactory to the
Property Trustee, against the costs, expenses (including reasonable attorneys'
fees and expenses and the expenses of the Property 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 Property Trustee;

                  (vii) the Property Trustee shall not be bound 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 Property Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit;

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

                  (ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders, and the signature of the
Property 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 Property Trustee to so act or as to its compliance with any
of the terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Property Trustee's or its agent's taking such
action;

                  (x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders which instructions may
only be given by the Holders of the same proportion in Liquidation Amount of the
Securities as would be entitled to direct the Property Trustee under the terms
of the Securities in respect of such remedy, right or action, (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;

                  (xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Declaration; and


                                      -19-
<PAGE>

                  (xii) the Property 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 Declaration.

         (b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Property 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 Property 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 Property Trustee shall be
construed to be a duty.

SECTION 3.11 Delaware Trustee.

         Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Trustees (except as required under the Business Trust Act) described in this
Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Business Trust Act. No implied covenants or obligations
shall be read into this Declaration against the Delaware Trustee.

SECTION 3.12 Execution of Documents.

         Except as otherwise required by the Business Trust Act or this
Declaration, any Administrative Trustee or, if there is only one, such
Administrative Trustee is authorized to execute on behalf of the Trust any
documents that the Administrative Trustees have the power and authority to
execute pursuant to Section 3.6; provided that any Registration Statement
referred to in Section 3.6(b)(i), including any amendments thereto, shall be
signed by all of the Administrative Trustees.

SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.

         The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.

SECTION 3.14 Duration of Trust.

         The Trust, unless dissolved pursuant to the provisions of Article VIII
hereof, shall dissolve on __________, ____.

SECTION 3.15 Mergers.

         (a) The Trust may not merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to


                                      -20-
<PAGE>

any Person, except as described in Section 3.15(b) and (c) of this Declaration
and Section 3 of Annex I.

         (b) The Trust may, at the request of the Sponsor, with the consent of
the Administrative Trustees or, if there are more than two, a majority of the
Administrative Trustees and without the consent of the Holders, the Delaware
Trustee or the Property Trustee, merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to, a trust organized as
such under the laws of any State; provided that:

                  (i) such successor entity (the "Successor Entity") either: (A)
expressly assumes all of the obligations of the Trust under the Securities and
this Declaration; or (B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor Securities") so
long as the Successor Securities rank the same as the Securities rank with
respect to Distributions and payments upon liquidation, redemption and
otherwise;

                  (ii) the Sponsor expressly appoints a trustee of the Successor
Entity that possesses the same powers and duties as the Property Trustee as the
holder of the Debentures;

                  (iii) the Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or with another organization on which the Preferred
Securities are then listed or quoted, if any;

                  (iv) if the Preferred Securities (including any Successor
Securities) are rated by any nationally recognized statistical rating
organization prior to such transaction, such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Preferred Securities (including any Successor Securities), or if the Debentures
are so rated, the Debentures, to be downgraded by any nationally recognized
statistical rating organization;

                  (v) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders (including the holders of any
Successor Securities) in any material respect (other than with respect to any
dilution of such Holders' interests in the new entity);

                  (vi) such Successor Entity has a purpose substantially
identical to that of the Trust;

                  (vii) prior to such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Sponsor has
received an opinion of an independent counsel to the Trust experienced in such
matters to the effect that: (A) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the Holders (including the
holders of any Successor Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the new entity); (B)
following such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither the Trust nor the Successor Entity will
be required to register as an Investment Company; and (C) following such merger,
conversion, consolidation, amalgamation, replacement, conveyance, transfer or
lease, the Trust


                                      -21-
<PAGE>

(or the Successor Entity) will continue to be classified as a grantor trust for
United States federal income tax purposes; and

                  (viii) the Sponsor or any permitted successor or assignee owns
all of the common securities of such Successor Entity and guarantees the
obligations of such Successor Entity under the Successor Securities at least to
the extent provided by the Preferred Securities Guarantee and the Common
Securities Guarantee.

         (c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in Liquidation Amount of the Securities,
consolidate, amalgamate, merge with or into, convert into, or be replaced by, or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to, any other Person or permit any other Person to
consolidate, convert into, amalgamate, merge with or into, or replace it if such
consolidation, conversion, amalgamation, merger, replacement, conveyance,
transfer or lease would cause the Trust or the Successor Entity not to be
classified as a grantor trust for United States federal income tax purposes or
would cause the Holders of the Securities not to be treated as owning an
undivided interest in the Debentures.

                                   ARTICLE IV
                                     SPONSOR

SECTION 4.1 Sponsor's Purchase of Common Securities.

         At the Closing Date [and any Option Closing Time, if applicable], the
Sponsor will purchase all of the Common Securities then issued by the Trust, in
an amount equal to at least 3% of the total capital of the Trust, at the same
time as the Preferred Securities are issued and sold.

SECTION 4.2 Responsibilities of the Sponsor.

         In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:

         (a) if deemed necessary by the Sponsor and not performed by the Sponsor
prior to the date of this Declaration pursuant to the Original Declaration, to
prepare for filing by the Trust with the Commission any Registration Statement
(including a Prospectus contained therein and any Prospectus Supplement relating
thereto), including any amendments thereto, as contemplated by Section
3.6(b)(i);

         (b) if deemed necessary by the Sponsor and not performed by the Sponsor
prior to the date of this Declaration pursuant to the Original Declaration, to
determine the States in which to take appropriate action to qualify or register
for sale all or part of the Preferred Securities and to do any and all such
acts, other than actions which must be taken by the Trust, and advise the Trust
of actions it must take, and prepare for execution and filing any documents to
be executed and filed by the Trust, as the Sponsor deems necessary or advisable
in order to comply with the applicable laws of any such States;


                                      -22-
<PAGE>

         (c) if deemed necessary or desirable by the Sponsor, to prepare for
filing by the Trust an application to permit the Preferred Securities to trade
or be quoted or listed in or on any other securities exchange, quotation system
or the Nasdaq Stock Market's National Market;

         (d) if deemed necessary or desirable by the Sponsor, to prepare for and
execute for filing by the Trust with the Commission a registration statement on
Form 8-A, including any amendments thereto, relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act;

         (e) if deemed necessary by the Sponsor and not performed by the Sponsor
prior to the date of this Declaration pursuant to the Original Declaration, to
negotiate the terms of an Underwriting Agreement providing for the sale and
registration of the Preferred Securities; and

         (f) if deemed necessary by the Sponsor and not performed by the Sponsor
prior to the date of this Declaration pursuant to the Original Declaration, to
negotiate the terms of the Debenture Subscription Agreement and the Common
Securities Subscription Agreement.

SECTION 4.3 Right to Proceed.

         The Sponsor acknowledges the rights of the Holders of Preferred
Securities (as set forth in Section 3.8(e) of this Declaration and Sections 6(b)
and 7(c) of Annex I), in the event that a failure of the Trust to pay
Distributions on the Preferred Securities is attributable to the failure of the
Company to pay interest or principal on the Debentures, to institute a
proceeding directly against the Debenture Issuer for enforcement of its payment
obligations on the Debentures.

                                   ARTICLE V
                                    TRUSTEES

SECTION 5.1 Number of Trustees: Appointment of Co-Trustee.

         The number of Trustees initially shall be [five (5)], and:

         (a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees; and

         (b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a Majority in Liquidation
Amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities; provided, however, that, the number of Trustees shall in
no event be less than two (2); provided further that (1) one Trustee shall
satisfy the requirements of the Delaware Trustee pursuant to Section 5.2; (2)
there shall be at least one Trustee who is an officer of the Sponsor (an
"Administrative Trustee"); and (3) one Trustee shall be the Property Trustee for
so long as this Declaration is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements. Notwithstanding the above, unless an Event of
Default shall have occurred and be continuing, at any time or times, for the
purpose of meeting the legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust's property may at the time be
located, the Holders of a Majority in Liquidation Amount of the Common
Securities acting as a class at a meeting of the Holders of the Common
Securities,


                                      -23-
<PAGE>

and the Administrative Trustees shall have power to appoint one or more Persons
either to act as a co-trustee, jointly with the Property Trustee, of all or any
part of the Trust's property, or to act as separate trustee of any such
property, in either case with such powers as may be provided in the instrument
of appointment, and to vest in such Person or Persons in such capacity any
property, title, right or power deemed necessary or desirable, subject to the
provisions of this Declaration. In case an Event of Default has occurred and is
continuing, the Property Trustee alone shall have power to make any such
appointment of a co-trustee.

SECTION 5.2 Delaware Trustee.

         If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:

         (a) a natural person who is a resident of the State of Delaware; or

         (b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law, provided that, if the Property Trustee has its principal place
of business in the State of Delaware and otherwise meets the requirements of
applicable law, then the Property Trustee shall also be the Delaware Trustee and
Section 3.11 shall have no application.

SECTION 5.3 Property Trustee; Eligibility.

         (a) There shall at all times be one Trustee (the "Property Trustee")
which shall act as Property Trustee which shall:

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

                  (ii) be a 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 Person permitted by the Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia authority. If
such 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 5.3(a)(ii), 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 Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.7(c).

         (c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.


                                      -24-
<PAGE>

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

         (e) The initial Property Trustee shall be:

         [NAME, ADDRESS]

         Attention: Corporate Trust Department
         Telecopy: _____



SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware
Trustee Generally.

         Each Administrative Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural person
who is at least 21 years of age or a legal entity that shall act through one or
more Authorized Officers.

SECTION 5.5 Administrative Trustees.

         The initial Administrative Trustees shall be:


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

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

         (a) Except as expressly set forth in this Declaration and except if a
meeting of the Administrative Trustees is called with respect to any matter over
which the Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.

         (b) An Administrative Trustee shall have the authority set forth in
Section 3.12 to execute on behalf of the Trust any documents that the
Administrative Trustees have the power and authority to cause the Trust to
execute pursuant to Section 3.6 provided that any Registration Statement
referred to in Section 3.6(b)(i), including any amendments thereto, shall be
signed by all of the Administrative Trustees.


                                      -25-
<PAGE>

SECTION 5.6 Delaware Trustee.

         The initial Delaware Trustee shall be:

         [NAME, ADDRESS]
         Attention: Corporate Trust Department
         Telecopy: ________


SECTION 5.7 Appointment, Removal and Resignation of Trustees.

         (a) Subject to Section 5.7(b) of this Declaration and to Section 7(b)
of Annex I hereto, Trustees may be appointed or removed without cause at any
time:

                  (i) until the issuance of any Securities, by written
instrument executed by the Sponsor;

                  (ii) unless an Event of Default shall have occurred and be
continuing after the issuance of any Securities, by vote of the Holders of a
Majority in Liquidation Amount of the Common Securities voting as a class at a
meeting of the Holders of the Common Securities; and

                  (iii) if an Event of Default shall have occurred and be
continuing after the issuance of the Securities, with respect to the Property
Trustee or the Delaware Trustee, by vote of Holders of a Majority in Liquidation
Amount of the Preferred Securities voting as a class at a meeting of Holders of
the Preferred Securities.

         (b) (i) The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 5.7(a) until a Successor Property Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Property Trustee and delivered to the Administrative Trustees and
the Sponsor; and

                  (ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.7(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Administrative Trustees and the Sponsor.

         (c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing signed by the Trustee and delivered to the Sponsor
and the Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:

                  (i) no such resignation of the Trustee that acts as the
Property Trustee shall be effective: (A) until a Successor Property Trustee has
been appointed and has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to


                                      -26-
<PAGE>

the Trust, the Sponsor and the resigning Property Trustee; or (B) until the
assets of the Trust have been completely liquidated and the proceeds thereof
distributed to the Holders; and

                  (ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.

         (d) The Holders of the Common Securities or, if an Event of Default
shall have occurred and be continuing after the issuance of the Securities, the
Holders of the Preferred Securities shall use their best efforts to promptly
appoint a Successor Delaware Trustee or Successor Property Trustee, as the case
may be, if the Property Trustee or the Delaware Trustee delivers an instrument
of resignation in accordance with this Section 5.7.

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

         (f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.

SECTION 5.8 Vacancies Among Trustees.

         If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Administrative Trustees or, if
there are more than two, a majority of the Administrative Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.

SECTION 5.9 Effect of Vacancies.

         The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to dissolve, terminate or annul the Trust. Whenever a vacancy in the
number of Administrative Trustees shall occur, until such vacancy is filled by
the appointment of an Administrative Trustee in accordance with Section 5.7, the
Administrative Trustees in office, regardless of their number, shall have all
the powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Declaration.


                                      -27-
<PAGE>

SECTION 5.10 Meetings.

         If there is more than one Administrative Trustee, meetings of the
Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before such meeting. Notice of
any telephonic meetings of the Administrative Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an Administrative Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
otherwise provided in this Declaration, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting
by the unanimous written consent of the Administrative Trustees. In the event
there is only one Administrative Trustee, any and all action of such
Administrative Trustee shall be evidenced by a written consent of such
Administrative Trustee.

SECTION 5.11 Delegation of Power.

         (a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and

         (b) the Administrative Trustees shall have power to delegate from time
to time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Administrative Trustees or otherwise as the Administrative
Trustees may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.

SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business.

         Any Person into which the Property Trustee or the Delaware Trustee or
any Administrative Trustee that is not a natural person, as the case may be, may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Property
Trustee or the Delaware Trustee or the Administrative Trustees, as the case may
be, shall be a party, or any Person succeeding to all or substantially all the
corporate trust business of the Property Trustee or the Delaware Trustee or the
Administrative Trustees, as the case may be, shall be the successor of the
Property Trustee or the Delaware Trustee or the Administrative Trustees, as the
case may be, hereunder, provided


                                      -28-
<PAGE>

such Person shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.

                                   ARTICLE VI
                                  DISTRIBUTIONS

SECTION 6.1 Distributions.

         Holders shall receive Distributions in accordance with the applicable
terms of the relevant Holder's Securities as set forth herein and in Annex I. If
and to the extent that the Debenture Issuer makes a payment of interest
(including Compounded Interest and Additional Sums (as such terms are defined in
the Indenture)), premium and/or principal on the Debentures held by the Property
Trustee with respect to the Debentures held by the Property Trustee (the amount
of any such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.

                                  ARTICLE VII
                             ISSUANCE OF SECURITIES

SECTION 7.1 General Provisions Regarding Securities.

         (a) The Administrative Trustees shall on behalf of the Trust issue one
class of preferred securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Common Securities"). Annex I is hereby
incorporated in and made a part of this Declaration. The Trust shall issue no
securities or other interests in the assets of the Trust other than the Trust
Securities.

         (b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.

         (c) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable undivided beneficial interests in the assets of Trust.

         (d) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.

         (e) Holders of the Securities shall not have any preemptive or similar
rights.

         (f) At the Closing Date [and any Option Closing Time], an
Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase
from the Debenture Issuer, Debentures registered in the name of the Property
Trustee on behalf of the Trust and having an aggregate principal amount equal to
the aggregate Liquidation Amount of the Preferred Securities and Common
Securities issued and sold on such date, and, in satisfaction of the purchase
price for


                                      -29-
<PAGE>

such Debentures, the Property Trustee, on behalf of the Trust, shall deliver to
the Debenture Issuer the amount received on such date from the sale by the Trust
of the Preferred Securities and Common Securities issued on such date.

SECTION 7.2 Execution and Authentication.

         (a) The Securities shall be signed on behalf of the Trust by an
Administrative Trustee by manual or facsimile signature. In case any
Administrative Trustee of the Trust who shall have signed any of the Securities
shall cease to be such Administrative Trustee before the Securities so signed
shall be delivered by the Trust, such Securities nevertheless may be delivered
as though the person who signed such Securities had not ceased to be such
Administrative Trustee; and any Securities may be signed on behalf of the Trust
by such persons who, at the actual date of execution of such Security, shall be
the Administrative Trustees of the Trust, although at the date of the execution
and delivery of the Declaration any such person was not such an Administrative
Trustee.

         (b) One Administrative Trustee shall sign the Preferred Securities for
the Trust by manual or facsimile signature.

         A Preferred Security shall not be valid until authenticated by the
manual or facsimile signature of an authorized signatory of the Property
Trustee. The signature shall be conclusive evidence that the Preferred Security
has been authenticated under this Declaration.

         Upon a written order of the Trust signed by one Administrative Trustee,
the Property Trustee shall authenticate the Preferred Securities for original
issue. The aggregate number of Preferred Securities outstanding at any time
shall not exceed the number set forth in Annex I hereto except as provided in
Section 7.6.

         The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as the
Property Trustee to deal with the Sponsor or an Affiliate.

SECTION 7.3 Form and Dating.

         The Preferred Securities and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the Common
Securities shall be substantially in the form of Exhibit A-2, each of which is
hereby incorporated in and expressly made a part of this Declaration.
Certificates representing the Securities may be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by their execution thereof by one or
more of them. The Securities may have letters, CUSIP or other numbers, notations
or other marks of identification or designation and such legends or endorsements
required by law, stock exchange rule, agreements to which the Trust is subject,
if any, or usage (provided that any such notation, legend or endorsement is in a
form acceptable to the Trust). The Trust at the direction of the Sponsor shall
furnish any such legend not contained in Exhibit A-1 to the Property Trustee in
writing. Each Preferred Security shall be dated the date of its authentication.
The terms and provisions of the Securities set forth in Annex


                                      -30-
<PAGE>

I and the forms of Securities set forth in Exhibits A-1 and A-2 are part of the
terms of this Declaration and to the extent applicable, the Property Trustee and
the Sponsor, by their execution and delivery of this Declaration, expressly
agree to such terms and provisions and to be bound thereby.

         (a) Global Securities. Securities offered may be issued in the form of
one or more permanent global Securities in definitive, fully registered form
without distribution coupons with the appropriate global legends set forth in
Exhibit A-1 hereto (the "Global Preferred Securities"), which shall be deposited
on behalf of the purchasers of the Preferred Securities represented thereby with
the Property Trustee, as custodian for the Clearing Agency, and registered in
the name of the Clearing Agency or a nominee of the Clearing Agency, duly
executed by the Trust and authenticated by the Property Trustee as hereinafter
provided. The number of Preferred Securities represented by the Global Preferred
Security may from time to time be increased or decreased by adjustments made on
the records of the Property Trustee and the Clearing Agency or its nominee as
hereinafter provided.

         (b) Book-Entry Provisions. This Section 7.3(b) shall apply only to the
Global Preferred Securities.

         The Trust shall execute and the Property Trustee shall, in accordance
with this Section 7.3, authenticate and make available for delivery initially
one or more Global Preferred Securities that (i) shall be registered in the name
of Cede & Co. or other nominee of such Clearing Agency and (ii) shall be
delivered by the Trustee to such Clearing Agency or pursuant to such Clearing
Agency's written instructions or held by the Property Trustee as custodian for
the Clearing Agency.

         Members of, or participants in, the Clearing Agency ("Participants")
shall have no rights under this Declaration with respect to any Global Preferred
Security held on their behalf by the Clearing Agency or by the Property Trustee
as the custodian of the Clearing Agency or under such Global Preferred Security,
and the Clearing Agency may be treated by the Trust, the Property Trustee and
any agent of the Trust or the Property Trustee as the absolute owner of such
Global Preferred Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Trust, the Property Trustee or any
agent of the Trust or the Property Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Clearing Agency or
impair, as between the Clearing Agency and its Participants, the operation of
customary practices of such Clearing Agency governing the exercise of the rights
of a holder of a beneficial interest in any Global Preferred Security.

         (c) Definitive Preferred Securities. Except as provided in Section
7.9(b) or 9.2, owners of beneficial interests in a Global Preferred Security
will not be entitled to receive physical delivery of certificated Preferred
Securities. Preferred Securities not represented by a Global Preferred Security
may be issued in the form of individual certificates in definitive, fully
registered form without distribution coupons ("Definitive Preferred
Securities").

         (d) Authorized Denominations. The Preferred Securities are issuable
only in denominations of $__________ and any integral multiple thereof.


                                      -31-
<PAGE>

SECTION 7.4 Registrar and Paying Agent [and Conversion Agent].

         The Trust shall maintain in the Borough of Manhattan, The City of New
York, (i) an office or agency where Preferred Securities may be presented for
registration of transfer ("Registrar"), (ii) an office or agency where Preferred
Securities may be presented for payment ("Paying Agent") [and (iii) an office or
agency where securities may be presented for conversion or exchange (a
"Conversion Agent.")]. The Registrar shall keep a register of the Preferred
Securities and of their transfer. The Trust may appoint the Registrar, Paying
Agent [and Conversion Agent] and may appoint one or more co-registrars and one
or more additional paying agents [or conversion agents] in such other locations
as it shall determine. The term "Registrar" includes any additional registrar,
the term "Paying Agent" includes any additional paying agent [and the term
"Conversion Agent" includes any additional conversion agent.]. The Trust may
change any Paying Agent, Registrar or [Conversion Agent] without prior notice to
any Holder. The Paying Agent shall be permitted to resign as Paying Agent upon
30 days' written notice to the Property Trustee and the Sponsor. The Trust shall
notify the Property Trustee of the name and address of any Agent not a party to
this Declaration. If the Trust fails to appoint or maintain another entity as
Registrar, Paying Agent [or Conversion Agent], the Property Trustee shall act as
such. The Trust or any of its Affiliates may act as Paying Agent, Registrar [or
Conversion Agent]. The Trust shall act as Paying Agent, Registrar [and
Conversion Agent] for the Common Securities.

         The Trust initially appoints [the Property Trustee] as Registrar,
Paying Agent [and Conversion Agent] for the Preferred Securities.

         The Registrar, Paying Agent [and Conversion Agent] shall be entitled to
all of the rights, protections, immunities and indemnities afforded to the
Property Trustee hereunder.

SECTION 7.5 Paying Agent to Hold Money in Trust.

         The Trust shall require each Paying Agent other than the Property
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of Liquidation Amounts or Distributions, and will notify the
Property Trustee if there are insufficient funds for such purpose. While any
such insufficiency continues, the Property Trustee may require a Paying Agent to
pay all money held by it to the Property Trustee. The Trust at any time may
require a Paying Agent to pay all money held by it to the Property Trustee and
to account for any money disbursed by it. Upon payment over to the Property
Trustee, the Paying Agent (if other than the Trust or an Affiliate of the Trust)
shall have no further liability for the money. If the Trust or the Sponsor or an
Affiliate of the Trust or the Sponsor acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the Holders all money held
by it as Paying Agent.

SECTION 7.6 Replacement Securities.

         If a Holder claims that a Security owned by it has been lost, destroyed
or wrongfully taken or if such Security is mutilated and is surrendered to the
Trust or in the case of the Preferred Securities to the Property Trustee, the
Trust shall issue and the Property Trustee shall, upon written order of the
Trust, authenticate a replacement Security if the Property Trustee's and


                                      -32-
<PAGE>

the Trust's requirements, as the case may be, are met. An indemnity bond must be
provided by the Holder which, in the judgment of the Property Trustee, is
sufficient to protect the Trustees, the Sponsor, the Trust or any authenticating
agent from any loss which any of them may suffer if a Security is replaced. The
Trust may charge such Holder for its expenses in replacing a Security. Every
replacement Security issued and authenticated in accordance with this Section
7.6 shall represent an undivided beneficial interest in the assets of the Trust.

SECTION 7.7 Outstanding Preferred Securities.

         The Preferred Securities outstanding at any time are all the Preferred
Securities authenticated by the Property Trustee except for those canceled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding.

         If a Preferred Security is replaced, paid or purchased pursuant to
Section 7.6 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased Preferred
Security is held by a bona fide purchaser.

         If Preferred Securities are considered paid in accordance with the
terms of this Declaration, they cease to be outstanding and Distributions on
them shall cease to accumulate.

         A Preferred Security does not cease to be outstanding because one of
the Trust, the Sponsor or an Affiliate of the Sponsor holds the Security.

SECTION 7.8 Preferred Securities in Treasury.

         In determining whether the Holders of the required amount of Securities
have concurred in any direction, waiver or consent, Preferred Securities owned
by the Trust, the Sponsor or an Affiliate of the Sponsor, as the case may be,
shall be disregarded and deemed not to be outstanding, except that for the
purposes of determining whether the Property Trustee shall be fully protected in
relying on any such direction, waiver or consent, only Securities which a
Responsible Officer of the Property Trustee actually knows are so owned shall be
so disregarded.

SECTION 7.9 Temporary Securities.

         (a) Until Definitive Preferred Securities are ready for delivery, the
Trust may prepare and, in the case of the Preferred Securities, the Property
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Preferred Securities but may have
variations that the Trust considers appropriate for temporary Securities.
Without unreasonable delay, the Trust shall prepare and, in the case of the
Preferred Securities, the Property Trustee shall authenticate Definitive
Preferred Securities in exchange for temporary Securities.

         (b) A Global Preferred Security deposited with the Clearing Agency or
with the Property Trustee as custodian for the Clearing Agency pursuant to
Section 7.3 shall be transferred to the beneficial owners thereof in the form of
Definitive Preferred Securities only if such transfer complies with Section 9.2
and (i) the Clearing Agency notifies the Sponsor that it is unwilling or unable
to continue as Clearing Agency for such Global Preferred Security or if at any
time such Clearing Agency ceases to be a "clearing agency" registered under the
Exchange


                                      -33-
<PAGE>

Act and a clearing agency is not appointed by the Sponsor within 90 days of such
notice, or (ii) the Administrative Trustees, on behalf of the Trust, at their
sole discretion elect to cause the issuance of Definitive Preferred Securities.

         (c) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of Definitive Preferred Securities
pursuant to this Section 7.9 shall be surrendered by the Clearing Agency to the
Property Trustee, to be so transferred, in whole or from time to time in part,
without charge, and the Administrative Trustee shall prepare and the Property
Trustee shall authenticate and make available for delivery, upon such transfer
of each portion of such Global Preferred Security, an equal aggregate
Liquidation Amount of Securities of authorized denominations in the form of
certificated Preferred Securities. Any portion of a Global Preferred Security
transferred pursuant to this Section shall be registered in such names as the
Clearing Agency shall direct.

         (d) Subject to the provisions of Section 7.9(c), the Holder of a Global
Preferred Security may grant proxies and otherwise authorize any Person,
including Participants and Persons that may hold interests through Participants,
to take any action which such Holder is entitled to take under this Declaration
or the Securities.

         (e) In the event of the occurrence of any of the events specified in
Section 7.9(b), the Administrative Trustees on behalf of the Trust will promptly
make available to the Property Trustee a reasonable supply of certificated
Preferred Securities in fully registered form without distribution coupons.

SECTION 7.10 Exchange.

         (a) If at any time the Sponsor or any of its Affiliates (in either
case, a "Sponsor Affiliated Holder") is the Holder of any Preferred Securities,
such Sponsor Affiliated Holder shall have the right to deliver to the Property
Trustee all or such portion of its Preferred Securities as its elects and
receive, in exchange therefore, a like amount of Debentures. Such election (i)
shall be exercisable effective on any date of Distribution by such Sponsor
Affiliated Holder delivering to the Property Trustee a written notice of such
election specifying the Liquidation Amount of Preferred Securities with respect
to which such election is being made and the date of Distribution on which such
exchange shall occur, which Distribution date shall be not fewer than ten
Business Days after the date of receipt by the Property Trustee of such election
notice and (ii) shall be conditioned upon such Sponsor Affiliated Holder having
delivered or caused to be delivered to the Property Trustee or its designee the
Preferred Securities which are the subject of such election by 10:00 A.M. New
York time, on the date of Distribution on which such exchange is to occur. After
the exchange, such Preferred Securities will be canceled and will no longer be
deemed to be outstanding and all rights of the Sponsor or its Affiliates with
respect to such Preferred Securities will cease.

         (b) In the case of an exchange described in Section 7.10(a), the Trust
will, on the date of such exchange, exchange Debentures having a principal
amount equal to a proportional amount of the aggregate Liquidation Amount of the
outstanding Common Securities, based on the ratio of the aggregate Liquidation
Amount of the Preferred Securities exchanged pursuant to Section 7.10(a) divided
by the aggregate Liquidation Amount of the Preferred Securities


                                      -34-
<PAGE>

outstanding immediately prior to such exchange, for such proportional amount of
Common Securities held by the Sponsor (which contemporaneously shall be canceled
and no longer be deemed to be outstanding); provided, that the Sponsor delivers
or caused to be delivered to the Property Trustee or its designee the required
amount of Common Securities to be exchanged by 10:00 A.M. New York time, on the
date of Distribution on which such exchange is to occur.

SECTION 7.11 Cancellation.

         The Trust at any time may deliver Preferred Securities to the Property
Trustee for cancellation. The Registrar and the Paying Agent shall forward to
the Property Trustee any Preferred Securities surrendered to them for
registration of transfer, redemption, exchange or payment. The Property Trustee
shall promptly cancel all Preferred Securities surrendered for registration of
transfer, redemption, exchange, payment, replacement or cancellation and shall
dispose of canceled Preferred Securities in accordance with its customary
procedures unless the Trust otherwise directs. The Trust may not issue new
Preferred Securities to replace Preferred Securities that it has paid or that
have been delivered to the Property Trustee for cancellation or that any Holder
has exchanged.

SECTION 7.12 CUSIP Numbers.

         The Trust in issuing the Preferred Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Property Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders of Preferred
Securities; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Preferred
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Preferred
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.

                                  ARTICLE VIII
                              DISSOLUTION OF TRUST

SECTION 8.1 Dissolution of Trust.

         (a) The Trust shall automatically dissolve:

                  (i) upon the bankruptcy of the Sponsor;

                  (ii) upon the filing of a certificate of dissolution or
liquidation or its equivalent with respect to the Sponsor; or the revocation of
the Sponsor's charter and the expiration of 90 days after the date of revocation
without a reinstatement thereof;

                  (iii) upon receipt of a written direction from the Sponsor
(which shall be at its sole discretion) while the Debentures are outstanding
requiring the Trustees to dissolve the Trust and, after satisfaction of the
liabilities of the Trust to the creditors of the Trust, to distribute a Like
Amount of the Debentures to Holders of the Securities pursuant to the terms
thereof;


                                      -35-
<PAGE>

                  (iv) upon the entry of a decree of judicial dissolution of the
Trust by a court of competent jurisdiction;

                  (v) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have been paid
to the Holders in accordance with the terms of the Securities;

                  (vi) the expiration of the term of the Trust provided in
Section 3.14; [or]

                  (vii) [upon the distribution of the Sponsor's [other
securities] to all Holders of Securities upon a conversion or exchange of all
such Securities in accordance with the terms thereof].

         (b) As soon as is practicable after the occurrence of an event referred
to in Section 8.1(a), after the winding up of the affairs of the Trust is
completed, the Administrative Trustees shall execute and file a certificate of
cancellation with the Secretary of State of the State of Delaware.

         (c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.

                                   ARTICLE IX
                              TRANSFER OF INTERESTS

SECTION 9.1 Transfer of Securities.

         (a) Securities may be transferred, in whole or in part, only in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. To the fullest extent permitted by law, any
transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.

         (b) The Administrative Trustees shall provide for the registration of
Preferred Securities and of the transfer of Preferred Securities, which will be
effected without charge but only upon payment (with such indemnity as the
Administrative Trustees may require) in respect of any tax or other governmental
charges that may be imposed in relation to it. Upon surrender for registration
of transfer of any Preferred Securities, the Administrative Trustees shall cause
one or more new Preferred Securities to be issued in the name of the designated
transferee or transferees. Every Preferred Security surrendered for registration
of transfer shall be accompanied by a written instrument of transfer in form
satisfactory to the Administrative Trustees and the Registrar duly executed by
the Holder or such Holder's attorney duly authorized in writing. Each Preferred
Security surrendered for registration of transfer shall be canceled by the
Property Trustee. A transferee of a Preferred Security shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Preferred Security. By acceptance of a Preferred Security,
each transferee shall be deemed to have agreed to be bound by this Declaration.

         (c) For so long as the Trust Securities remain outstanding, the Sponsor
agrees (i) to directly or indirectly maintain 100% direct or indirect ownership
of the Common Securities;


                                      -36-
<PAGE>

provided, however, that any permitted successor of the Sponsor under the
Indenture may succeed to the Sponsor's ownership of such Common Securities, (ii)
to use its reasonable efforts to cause the Trust (x) to remain a business trust,
except in connection with the distribution of Debentures to the Holders of Trust
Securities in dissolution and liquidation of the Trust, the redemption of all of
the Trust Securities, or certain mergers, conversions, consolidations or
amalgamations, each as permitted by this Declaration, and (y) to otherwise
continue to be classified as a grantor trust for United States federal income
tax purposes and (iii) to use its reasonable efforts to cause each Holder of
Trust Securities to be treated as owning an undivided beneficial interest in the
Debentures.

SECTION 9.2 Transfer Procedures and Restrictions.

         (a) Transfer and Exchange of Definitive Preferred Securities. When
Definitive Preferred Securities are presented to the Registrar or co-Registrar
(i) to register the transfer of such Definitive Preferred Securities, or (ii) to
exchange such Definitive Preferred Securities which became mutilated, destroyed,
defaced, stolen or lost for an equal number of Definitive Preferred Securities,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Preferred Securities surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory to the
Administrative Trustees and the Registrar or co-registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.

         (b) Restrictions on Transfer of a Definitive Preferred Security for a
Beneficial Interest in a Global Preferred Security. A Definitive Preferred
Security may not be exchanged for a beneficial interest in a Global Preferred
Security except upon satisfaction of the requirements set forth below. Upon
receipt by the Property Trustee of a Definitive Preferred Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Property Trustee and the Administrative Trustees, together
with written instructions directing the Property Trustee to make, or to direct
the Clearing Agency to make, an adjustment on its books and records with respect
to the appropriate Global Preferred Security to reflect an increase in the
number of the Preferred Securities represented by such Global Preferred
Security, then the Property Trustee shall cancel such Definitive Preferred
Security and cause, or direct the Clearing Agency to cause, the aggregate number
of Preferred Securities represented by the appropriate Global Preferred Security
to be increased accordingly. If no Global Preferred Securities are then
outstanding, the Trust shall issue and the Property Trustee shall authenticate,
upon written order of any Administrative Trustee, an appropriate number of
Preferred Securities in global form.

         (c) Transfer and Exchange of Global Preferred Securities. The transfer
and exchange of Global Preferred Securities or beneficial interests therein
shall be effected through the Clearing Agency, in accordance with this
Declaration (including applicable restrictions on transfer set forth herein, if
any) and the procedures of the Clearing Agency therefor. Notwithstanding any
other provisions of this Declaration (other than the provisions set forth in
Section 7.9(b)), a Global Preferred Security may not be transferred as a whole
except by the Clearing Agency to a nominee of the Clearing Agency or another
nominee of the Clearing Agency or by the Clearing Agency or any such nominee to
a successor Clearing Agency or a nominee of such successor Clearing Agency.


                                      -37-
<PAGE>

         (d) Cancellation or Adjustment of Global Preferred Security. At such
time as all beneficial interests in a Global Preferred Security have either been
exchanged for Definitive Preferred Securities to the extent permitted by this
Declaration or redeemed, repurchased or canceled in accordance with the terms of
this Declaration, such Global Preferred Security shall be canceled by the
Property Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Preferred Security is exchanged for Definitive Preferred
Securities, Preferred Securities represented by such Global Preferred Security
shall be reduced and an adjustment shall be made on the books and records of the
Clearing Agency and the Registrar, to reflect such reduction.

         (e) Issuance of Definitive Preferred Securities in Exchange for Global
Securities. Definitive Preferred Securities will be issued in exchange for
Global Securities only as provided in Sections 7.9(b) and (c).

SECTION 9.3 Deemed Security Holders.

         The Trustees may treat the Person in whose name any Security shall be
registered on the books and records of the Trust as the sole owner of such
Security for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Security on the part of any Person, whether
or not the Trust shall have actual or other notice thereof.

SECTION 9.4 Book Entry Interests.

         Global Preferred Securities shall initially be registered on the books
and records of the Trust in the name of Cede & Co., the nominee of the Clearing
Agency, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security Beneficial
Owner's interests in such Global Preferred Securities, except as provided in
Section 9.2 and Section 7.9. Unless and until definitive, fully registered
Preferred Securities certificates have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.2 and Section 7.9:

         (a) the provisions of this Section 9.4 shall be in full force and
effect;

         (b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Preferred Securities and receiving approvals, votes
or consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the certificate or certificates representing Global Preferred
Securities and shall have no obligation to the Preferred Security Beneficial
Owners;

         (c) to the extent that the provisions of this Section 9.4 conflict with
any other provisions of this Declaration, the provisions of this Section 9.4
shall control; and

         (d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Participants and the Clearing Agency
shall receive and transmit payments of Distributions on the Global Preferred
Securities to such Participants, provided, that solely for the purposes of


                                      -38-
<PAGE>

determining whether the Holders of the requisite amount of Preferred Securities
have voted on any matter provided for in this Declaration, so long as Definitive
Preferred Security certificates have not been issued, the Trustees may
conclusively rely on, and shall be protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the Clearing Agency
setting forth the Preferred Security Beneficial Owners' votes or assigning the
right to vote on any matter to any other Persons either in whole or in part. DTC
will make book entry transfers among the Participants.

SECTION 9.5 Notices to Clearing Agency.

         Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, the Trustees shall give all such
notices and communications specified herein to be given to the Holders of Global
Preferred Securities to the Clearing Agency, and shall have no notice
obligations to the Preferred Security Beneficial Owners.

SECTION 9.6 Appointment of Successor Clearing Agency.

         If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Administrative Trustees
may, in their sole discretion, appoint a successor Clearing Agency with respect
to such Preferred Securities.

                                   ARTICLE X
                           LIMITATION OF LIABILITY OF
                    HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

SECTION 10.1 Liability.

         (a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:

                  (i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders which shall be made
solely from assets of the Trust; or

                  (ii) required to pay to the Trust or to any Holder any deficit
upon dissolution or termination of the Trust or otherwise.

         (b) The Debenture Issuer shall be liable for all of the debts and
obligations of the Trust (other than in respect of the payment of principal,
interest and premium, if any, on the Securities) to the extent not satisfied out
of the Trust's assets.

         (c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders
shall be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.


                                      -39-
<PAGE>

SECTION 10.2 Exculpation.

         (a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust 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 on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration 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 gross negligence (or, in the
case of the Property Trustee, 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 Trust and upon such information, opinions, reports
or statements presented to the Trust 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
Trust, 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 might properly be paid.

SECTION 10.3 Fiduciary Duty.

         (a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.

         (b) Unless otherwise expressly provided herein:

                  (i) whenever a conflict of interest exists or arises between
any Covered Person and any Indemnified Person; or

                  (ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person shall act in
a manner that is, or provides terms that are, fair and reasonable to the Trust
or any Holder of Securities, the Indemnified Person shall resolve such conflict
of interest, take such action or provide such terms, considering in each case
the relative interest of each party (including its own interest) to such
conflict, agreement, transaction or situation and the benefits and burdens
relating to such interests, any customary or accepted industry practices, and
any applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution, action or term
so made, taken or provided by the Indemnified Person shall not constitute a
breach of this Declaration or any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law or in equity or otherwise.


                                      -40-
<PAGE>

         (c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:

                  (i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or obligation
to give any consideration to any interest of or factors affecting the Trust or
any other Person; or

                  (ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration.

SECTION 10.4 Indemnification.

         (a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys' fees and expenses), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding except that no Company Indemnified Person shall be indemnified for
his own gross negligence or willful misconduct. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a presumption
that the Company Indemnified Person acted with gross negligence or willful
misconduct.

                  (ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees and expenses) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit except that no Company Indemnified Party shall be indemnified for such
Company Indemnified Party's own gross negligence or willful misconduct and
except that no such indemnification shall be made in respect of any claim, issue
or matter as to which such Company Indemnified Person shall have been adjudged
to be liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such Person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery or such
other court shall deem proper.

                  (iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a), or in defense of any claim, issue or matter therein, he
shall be indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.


                                      -41-
<PAGE>

                  (iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the circumstances
because he has met the applicable standard of conduct set forth in paragraphs
(i) and (ii). Such determination shall be made (1) by the Administrative
Trustees by a majority vote of a Quorum consisting of such Administrative
Trustees who were not parties to such action, suit or proceeding, (2) if such a
Quorum is not obtainable, or, even if obtainable, if a Quorum of disinterested
Administrative Trustees so directs, by independent legal counsel in a written
opinion, or (3) by the Common Security Holder of the Trust.

                  (v) Expenses (including attorneys' fees and expenses) incurred
by a Company Indemnified Person in defending a civil, criminal, administrative
or investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall, to the fullest extent permitted by law, be
paid by the Debenture Issuer in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of such
Company Indemnified Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Debenture Issuer as
authorized in this Section 10.4(a). Notwithstanding the foregoing, no advance
shall be made by the Debenture Issuer if a determination is reasonably and
promptly made (i) by the Administrative Trustees by a majority vote of a Quorum
of disinterested Administrative Trustees, (ii) if such a Quorum is not
obtainable, or, even if obtainable, if a Quorum of disinterested Administrative
Trustees so directs, by independent legal counsel in a written opinion or (iii)
the Common Security Holder of the Trust, that, based upon the facts known to the
Administrative Trustees, counsel or the Common Security Holder at the time such
determination is made, such Company Indemnified Person acted with gross
negligence or willful misconduct. In no event shall any advance be made in
instances where the Administrative Trustees, independent legal counsel or Common
Security Holder reasonably determine that such Person deliberately breached his
duty to the Trust or its Common or Preferred Security Holders.

                  (vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section 10.4(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any agreement,
vote of stockholders or disinterested directors of the Debenture Issuer or
Preferred Security Holders of the Trust or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office. All rights to indemnification under this Section 10.4(a) shall be deemed
to be provided by a contract between the Debenture Issuer and each Company
Indemnified Person who serves in such capacity at any time while this Section
10.4(a) is in effect. Any repeal or modification of this Section 10.4(a) shall
not affect any rights or obligations then existing.

                  (vii) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any Person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the
Debenture Issuer would have the power to indemnify him against such liability
under the provisions of this Section 10.4(a).


                                      -42-
<PAGE>

                  (viii) For purposes of this Section 10.4(a), references to
"the Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in the same position under the provisions
of this Section 10.4(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.

                  (ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 10.4(a) shall, unless otherwise
provided when authorized or ratified, continue as to a person who has ceased to
be a Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.

         (b) The Debenture Issuer agrees to indemnify the (i) Property Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee or the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee or the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense including taxes (other than taxes based on the income
of such Fiduciary Indemnified Person) incurred without gross negligence (or, in
the case of the Property Trustee, negligence) or willful misconduct 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 10.4(b) shall
survive the resignation or removal of the Property Trustee or the Delaware
Trustee and the satisfaction and discharge of this Declaration.

SECTION 10.5 Outside Businesses.

         Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee (subject to Section 5.3(c)) may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Property Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Property Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for, or act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.


                                      -43-
<PAGE>

SECTION 10.6 Compensation; Fees.

         The Debenture Issuer agrees:

         (a) to pay to the Trustees from time to time such compensation for all
services rendered by them hereunder as the parties shall agree in writing from
time to time (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust); and

         (b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this
Declaration (including the reasonable compensation and the expenses and
disbursements of their respective agents and counsel), except any such expense,
disbursement or advance as may be attributable to its gross negligence (or, in
the case of the property trustee, negligence) or willful misconduct.

         The provisions of this Section 10.6 shall survive the dissolution of
the Trust and the termination of this Declaration and the removal or resignation
of any Trustee.

         No Trustee may claim any lien or charge on any property of the Trust as
a result of any amount due pursuant to this Section 10.6.

                                   ARTICLE XI
                                   ACCOUNTING

SECTION 11.1 Fiscal Year.

         The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.

SECTION 11.2 Certain Accounting Matters.

         (a) At all times during the existence of the Trust, the Administrative
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The books of account and the records of the Trust shall be
examined by and reported upon as of the end of each Fiscal Year of the Trust by
a firm of independent certified public accountants selected by the
Administrative Trustees.

         (b) The Administrative Trustees shall cause to be duly prepared and
delivered to each of the Holders, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Administrative Trustees shall endeavor to
deliver all such information statements within 30 days after the end of each
Fiscal Year of the Trust.


                                      -44-
<PAGE>

         (c) The Administrative Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States federal
income tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to be
filed by the Administrative Trustees on behalf of the Trust with any state or
local taxing authority.

SECTION 11.3 Banking.

         The Trust may maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the Trust shall be deposited
in the Property Trustee Account. The sole signatories for such accounts shall be
designated by the Administrative Trustees; provided, however, that the Property
Trustee shall designate the signatories for the Property Trustee Account.

SECTION 11.4 Withholding.

         The Trust and the Administrative Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Administrative Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to Distributions or allocations to any Holder, the amount withheld shall
be deemed to be a Distribution in the amount of the withholding to the Holder.
In the event of any claimed over withholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.

                                  ARTICLE XII
                             AMENDMENTS AND MEETINGS

SECTION 12.1 Amendments.

         (a) Except as otherwise provided in this Declaration (including Section
8 of Annex I hereto) or by any applicable terms of the Securities, this
Declaration may only be amended by a written instrument approved and executed by
the Administrative Trustees (or if there are more than two Administrative
Trustees a majority of the Administrative Trustees); and

                  (i) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, also by the Property Trustee;
and

                  (ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, also by the Delaware Trustee.


                                      -45-
<PAGE>

                  (iii) No amendment shall be made, and any such purported
amendment shall be void and ineffective unless the Property Trustee shall have
first received: (A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities); and (B) an Opinion of
Counsel (who may be counsel to the Sponsor or the Trust) that such amendment is
permitted by, and conforms to, the terms of this Declaration (including the
terms of the Securities) and that all conditions precedent, if any, in this
Declaration to the execution and delivery of such amendment have been satisfied.

         (b) At such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder may be effected only with such additional requirements
as may be set forth in the terms of such Securities.

         (c) This Section 12.1 shall not be amended without the consent of all
of the Holders.

         (d) Article Four shall not be amended without the consent of the
Holders of a Majority in Liquidation Amount of the Common Securities.

         (e) The rights of the Holders of the Common Securities under Article
Five to increase or decrease the number of, and appoint and remove Trustees
shall not be amended without the consent of the Holders of a Majority in
Liquidation Amount of the Common Securities.

         (f) Notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders to:

                  (i) cure any ambiguity, correct or supplement any provision in
this Declaration that may be inconsistent with any other provision of this
Declaration or to make any other provisions with respect to matters or questions
arising under this Declaration which shall not be inconsistent with the other
provisions of the Declaration;

                  (ii) modify, eliminate or add to any provisions of the
Declaration to such extent as shall be necessary to ensure that the Trust will
be classified for United States federal income tax purposes as a grantor trust
at all times that any Securities are outstanding or to ensure that the Trust
will not be required to register as an Investment Company under the Investment
Company Act;

                  (iii) evidence, pursuant to Section 5.7 hereof, the acceptance
of the appointment of a successor Trustee or to fill a vacancy created by an
increase in the number of Administrative Trustees; or

                  (iv) add to the covenants, restrictions or obligations of the
Sponsor;

provided, however, that in the case of clauses (i) or (ii) above, such action
shall not adversely affect in any material respect the interests of the Holders,
and any such amendments of this Declaration shall become effective when notice
thereof is given to the Holders.


                                      -46-
<PAGE>

SECTION 12.2 Meetings of the Holders; Action by Written Consent.

         (a) Meetings of the Holders of any class of Securities may be called at
any time by the Administrative Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Administrative Trustees shall
call a meeting of the Holders of such class if directed to do so by the Holders
of at least 25% in Liquidation Amount of such class of Securities. Such
direction shall be given by delivering to the Administrative Trustees one or
more notices in writing stating that the signing Holders wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders calling a meeting shall specify in writing the Security
Certificates held by the Holders exercising the right to call a meeting and only
those Securities specified shall be counted for purposes of determining whether
the required percentage set forth in the second sentence of this paragraph has
been met.

         (b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders:

                  (i) notice of any such meeting shall be given to all the
Holders having a right to vote thereat at least seven days and not more than 60
days before the date of such meeting. Whenever a vote, consent or approval of
the Holders is permitted or required under this Declaration or the rules of any
stock exchange on which the Preferred Securities are listed or admitted for
trading, such vote, consent or approval may be given at a meeting of the
Holders. Any action that may be taken at a meeting of the Holders may be taken
without a meeting and without prior notice if a consent in writing setting forth
the action so taken is signed by the Holders owning not less than the minimum
amount of Securities in Liquidation Amount that would be necessary to authorize
or take such action at a meeting at which all Holders having a right to vote
thereon were present and voting. Prompt notice of the taking of action without a
meeting shall be given to the Holders entitled to vote who have not consented in
writing. The Administrative Trustees may specify that any written ballot
submitted to the Security Holder for the purpose of taking any action without a
meeting shall be returned to the Trust within the time specified by the
Administrative Trustees;

                  (ii) each Holder may authorize any Person to act for it by
proxy on all matters in which a Holder is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting. No proxy
shall be valid after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at the pleasure
of the Holder executing it. Except as otherwise provided herein, all matters
relating to the giving, voting or validity of proxies shall be governed by the
General Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders were stockholders of a Delaware corporation;

                  (iii) each meeting of the Holders shall be conducted by the
Administrative Trustees or by such other Person that the Administrative Trustees
may designate; and

                  (iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or the listing rules of any
stock exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Administrative Trustees, in


                                      -47-
<PAGE>

their sole discretion, shall establish all other provisions relating to meetings
of Holders, including notice of the time, place or purpose of any meeting at
which any matter is to be voted on by any Holders, waiver of any such notice,
action by consent without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with respect to
the exercise of any such right to vote.

                                  ARTICLE XIII
                       REPRESENTATIONS OF PROPERTY TRUSTEE
                              AND DELAWARE TRUSTEE

SECTION 13.1 Representations and Warranties of Property Trustee.

         The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:

         (a) The Property Trustee is a Delaware banking corporation, a national
banking association or a bank or trust company organized under the laws of any
State of the United States or the District of Columbia, in any case with trust
powers and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration;

         (b) The execution, delivery and performance by the Property Trustee of
this Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. This Declaration has been duly executed and
delivered by the Property Trustee and constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);

         (c) The execution, delivery and performance of this Declaration by the
Property Trustee does not conflict with or constitute a breach of the charter or
by-laws of the Property Trustee;

         (d) No consent, approval or authorization of, or registration with or
notice to, any applicable state or federal banking authority is required for the
execution, delivery or performance by the Property Trustee of this Declaration;
and

         (e) The Property Trustee satisfies the requirements set forth in
Section 5.3(a).

SECTION 13.2 Representations and Warranties of Delaware Trustee.

         The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:


                                      -48-
<PAGE>

         (a) The Delaware Trustee is a national banking association, duly
organized, validly existing and in good standing under the federal laws of the
United States, with power and authority to execute and deliver, and to carry out
and perform its obligations under the terms of, this Declaration;

         (b) The execution, delivery and performance by the Delaware Trustee of
this Declaration has been duly authorized by all necessary action on the part of
the Delaware Trustee. This Declaration has been duly executed and delivered by
the Delaware Trustee and constitutes a legal, valid and binding obligation of
the Delaware Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity or at law);

         (c) No consent, approval or authorization of, or registration with or
notice to, any federal banking authority is required for the execution, delivery
or performance by the Delaware Trustee of this Declaration; and

         (d) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware and is a Person that satisfies for
the Trust section 3807(a) of the Business Trust Act.

                                  ARTICLE XIV
                                  MISCELLANEOUS

SECTION 14.1 Notices.

         All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, overnight courier service or confirmed telecopy, as
follows:

         (a) if given to the Trust, in care of the Administrative Trustees at
the Trust's mailing address set forth below (or such other address as the Trust
may give notice of to the Property Trustee, the Delaware Trustee and the
Holders):

         Continental Airlines Finance Trust III
         c/o Continental Airlines, Inc.
         1600 Smith Street
         Department HQFSN
         Houston, Texas 77002
         Attention:  Senior Vice President -- Finance
         Telecopy:  (713) 324-2448

         (b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Holders):


                                      -49-
<PAGE>

         [NAME, ADDRESS]
         Attention: Corporate Trust Department
         Telecopy: ________

         (c) if given to the Property Trustee, at the Property Trustee's mailing
address set forth below (or such other address as the Property Trustee may give
notice of to the Holders):

         [NAME, ADDRESS]
         Attention: Corporate Trust Department
         Telecopy: ________

         (d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Property Trustee and the Trust):

         Continental Airlines, Inc.
         1600 Smith Street
         Department HQFSN
         Houston, Texas 77002
         Attention:  Senior Vice President -- Finance
         Telecopy:  (713) 324-2448

         (e) if given to any other Holder, at the address set forth on the books
and records of the Trust.

         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 14.2 GOVERNING LAW.

THIS DECLARATION AND THE RIGHTS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS OF THE STATE OF DELAWARE OR ANY OTHER
JURISDICTION THAT WOULD CALL FOR THE APPLICATION OF THE LAW OF ANY JURISDICTION
OTHER THAN THE STATE OF DELAWARE; PROVIDED, HOWEVER, THAT THERE SHALL NOT BE
APPLICABLE TO THE PARTIES HEREUNDER OR THIS DECLARATION ANY PROVISION OF THE
LAWS (STATUTORY OR COMMON) OF THE STATE OF DELAWARE PERTAINING TO TRUSTS THAT
RELATE TO OR REGULATE, IN A MANNER INCONSISTENT WITH THE TERMS HEREOF (A) THE
FILING WITH ANY COURT OR GOVERNMENTAL BODY OR AGENCY OF TRUSTEE ACCOUNTS OR
SCHEDULES OF TRUSTEE FEES AND CHARGES, (B) AFFIRMATIVE REQUIREMENTS TO POST
BONDS FOR TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (C) THE NECESSITY
FOR OBTAINING COURT OR OTHER GOVERNMENTAL


                                      -50-
<PAGE>

APPROVAL CONCERNING THE ACQUISITION, HOLDING OR DISPOSITION OF REAL OR PERSONAL
PROPERTY, (D) FEES OR OTHER SUMS PAYABLE TO TRUSTEES, OFFICERS, AGENTS OR
EMPLOYEES OF A TRUST, (E) THE ALLOCATION OF RECEIPTS AND EXPENDITURES TO INCOME
OR PRINCIPAL, (F) RESTRICTIONS OR LIMITATIONS ON THE PERMISSIBLE NATURE, AMOUNT
OR CONCENTRATION OF TRUST INVESTMENTS OR REQUIREMENTS RELATING TO THE TITLING,
STORAGE OR OTHER MANNER OF HOLDING OR INVESTING TRUST ASSETS OR (G) THE
ESTABLISHMENT OF FIDUCIARY OR OTHER STANDARDS OF RESPONSIBILITY OR LIMITATIONS
ON THE ACTS OR POWERS OF TRUSTEES THAT ARE INCONSISTENT WITH THE LIMITATIONS OR
LIABILITIES OR AUTHORITIES AND POWERS OF THE TRUSTEES HEREUNDER AS SET FORTH OR
REFERENCED IN THIS TRUST AGREEMENT. SECTION 3540 OF TITLE 12 OF THE DELAWARE
CODE SHALL NOT APPLY TO THE TRUST.

SECTION 14.3 Intention of the Parties.

         It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The provisions
of this Declaration shall be interpreted to further this intention of the
parties.

SECTION 14.4 Headings.

         Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.

SECTION 14.5 Successors and Assigns.

         Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether or not so expressed.

SECTION 14.6 Partial Enforceability.

         If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.

SECTION 14.7 Counterparts.

         This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees and the Sponsor to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.


                                      -51-
<PAGE>

SECTION 14.8 No Recourse.

         The Trust's obligations hereunder are intended to be the obligations of
the Trust and no recourse for the payment of Distributions (including Additional
Distributions, if applicable) on, and the Redemption Price of, Securities, as
applicable, or for any claim upon the Securities or otherwise in respect
thereof, shall be had against any Holder of Preferred Securities or any
Affiliate of a Holder of Preferred Securities, solely by reason of such Person
being a Holder of Preferred Securities or an Affiliate of a Holder of Preferred
Securities, it being understood that the Holders of Preferred Securities, solely
by reason of being a Holder of Preferred Securities, have limited liability (in
accordance with the provisions of the Business Trust Act) for the liabilities
and obligations of the Trust. Nothing contained in this Section 14.8 shall be
construed to limit the exercise or enforcement, in accordance with the terms of
this Declaration, the Preferred Securities Guarantee, the Common Securities
Guarantee and the Indenture, of rights and remedies against the Trust or the
Sponsor.


                                      -52-
<PAGE>

         IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.


                                  ___________, as Administrative Trustee


                                  ______________________________________________

                                  ___________________, as Administrative Trustee


                                  ______________________________________________

                                  ___________________, as Administrative Trustee


                                  ________________________,

                                  AS DELAWARE TRUSTEE


                                  By:
                                      ------------------------------------------
                                  Name:
                                        ----------------------------------------
                                  Title:
                                         ---------------------------------------

                                  ________________________,

                                  AS PROPERTY TRUSTEE


                                  By:
                                      ------------------------------------------
                                  Name:
                                        ----------------------------------------
                                  Title:
                                         ---------------------------------------


                                  CONTINENTAL AIRLINES, INC.
                                  AS SPONSOR AND DEBENTURE ISSUER


                                  By:
                                      ------------------------------------------
                                  Name:
                                        ----------------------------------------
                                  Title:
                                         ---------------------------------------


                                      -53-
<PAGE>
                                     ANNEX I

                                    TERMS OF
                           ____% PREFERRED SECURITIES
                             ____% COMMON SECURITIES

         Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of [__________] (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities (collectively, the "Securities") are set out below (each capitalized
term used but not defined herein has the meaning set forth in the Declaration
or, if not defined in such Declaration, as defined in the Indenture):

         1. Designation and Number.

                  (a) Preferred Securities. [______] Preferred Securities of the
Trust, with an aggregate Liquidation Amount with respect to the assets of the
Trust of [____________] dollars ($[__________]), and with a Liquidation Amount
with respect to the assets of the Trust of $____ per Security, are hereby
designated for the purposes of identification only as "[  ]% [Preferred
Securities]" (the "Preferred Securities"). The certificates evidencing the
Preferred Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange or quotation system on which the Preferred Securities are
listed or quoted.

                  (b) Common Securities. [_______] Common Securities of the
Trust with an aggregate Liquidation Amount with respect to the assets of the
Trust of [________________] dollars ($[___________]) and a Liquidation Amount
with respect to the assets of the Trust of $[_____] per Security, are hereby
designated for the purposes of identification only as "[___]% Common Securities"
(the "Common Securities"). The certificates evidencing the Common Securities
shall be substantially in the form of Exhibit A-2 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.

         2. Distributions.

                  (a) Distributions payable on each Security will be fixed at a
rate per annum of [  ]% (the "Coupon Rate") of the Liquidation Amount of
$[______] per Security (the "Liquidation Amount"), such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one [semi-annual] period will bear
additional distributions thereon compounded [semi-annually] at the Coupon Rate
(to the extent permitted by applicable law). The term "Distributions", as used
herein, includes any such additional distributions unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds on hand legally available therefor.

                  (b) Distributions on the Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if no Distributions have been paid,


                                   Annex I-1
<PAGE>

from and including [_______], but excluding the related Distribution Date (as
defined below) or the date of redemption, and will be payable [semi-annually] in
arrears on [_______] and [________] of each year, commencing on
[__________________], except as otherwise described below. The amount of
Distributions payable for any period will be computed on the basis of a 360-day
year consisting of twelve 30-day months and for any period of less than a full
calendar month on the basis of the actual number of days elapsed in such month.
If any date on which Distributions are payable on the Securities is not a
Business Day, then payment of the Distribution payable on such date shall be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay), except that, if such Business
Day is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on the date such payment was originally payable (each date on which
Distributions are payable in accordance with the foregoing, a "Distribution
Date").

         [So long as no Event of Default (as defined in the Indenture) has
occurred and is continuing, the Debenture Issuer has the right under the
Indenture to defer the payment of interest on the Debentures by extending the
interest payment period at any time and from time to time for a period not
exceeding [___] consecutive [semi-annual] periods, including the first such
[semi-annual] period during such period (each an "Extension Period"), provided
that no Extension Period shall extend beyond the Maturity Date of the
Debentures. Distributions will be deferred during any Extension Period.
Notwithstanding such deferral, Distributions to which Holders are entitled shall
continue to accumulate additional Distributions thereon (to the extent permitted
by applicable law but not at a rate greater than the rate at which interest is
then accruing on the Debentures) at the Coupon Rate compounded [semi-annually]
from the relevant Distribution Dates during any Extension Period. Prior to the
expiration of any Extension Period, the Debenture Issuer may further defer
payments of interest by further extending such Extension Period; provided that
such Extension Period, together with all previous and further extensions, if
any, within such Extension Period, may not exceed [___] consecutive
[semi-annual] periods, including the first [semi-annual] period during such
Extension Period, or extend beyond the Maturity Date of the Debentures. Upon the
expiration of any Extension Period and the payment of all amounts then due, the
Debenture Issuer may commence a new Extension Period, subject to the above
requirements. [Payments of Distributions that have accumulated but not been paid
during any Extension Period will be payable to Holders as they appear on the
books and records of the Trust on the record date for the first scheduled
Distribution Date following the expiration of such Extension Period and prior to
the commencement of any new Extension Period.] The Debenture Issuer must give
the Property Trustee, the Administrative Trustees and the Debenture Trustee
notice of its election of any Extension Period or any extension thereof at least
one Business Day prior to the earlier of (i) the date the Distributions on the
Preferred Securities would have been payable except for the election to begin or
extend such Extension Period and (ii) the date the Administrative Trustees are
required to give notice to any securities exchange or to Holders of the
Preferred Securities of the record date or the date such Distributions are
payable, but in any event not less than one Business Day prior to such record
date. There is no limitation on the number of times that the Debenture Issuer
may elect to begin an Extension Period.]

                  (c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
record dates, which shall be [the


                                   Annex I-2
<PAGE>

Business Day prior to the relevant Distribution date as long as the Preferred
Securities are held in global form by a Clearing Agency, and the 15th day of the
last month in each distribution period (even if not a Business Day) if the
Preferred Securities are issued in certificated form]. Subject to any applicable
laws and regulations and the provisions of the Declaration, each such payment in
respect of the Preferred Securities will be made as follows: (i) if the
Preferred Securities are held in global form by a Clearing Agency (or its
nominee), in accordance with the procedures of the Clearing Agency; and (ii) if
the Preferred Securities are held in definitive form, by check mailed to the
address of the Holder thereof as reflected in the records of the Registrar
unless otherwise agreed by the Trust. The relevant record dates for the Common
Securities shall be the same as the record dates for the Preferred Securities.
Distributions payable on any Securities that are not punctually paid on any
Distribution Date will cease to be payable to the Holder on the relevant record
date, and such defaulted Distribution will instead be payable to the Person in
whose name such Securities are registered on the special record date or other
specified date determined in accordance with the Indenture.

                  [(d) In the event of an election by the Holder to convert its
Securities through the Conversion Agent into [securities] pursuant to the terms
of the Securities as set forth in this Annex I to the Declaration, no payment,
allowance or adjustment shall be made with respect to accumulated and unpaid
Distributions on such Securities, or be required to be made; provided that
Holders of Securities at the close of business on any record date for the
payment of Distributions will be entitled to receive the Distributions payable
on such Securities on the corresponding payment date notwithstanding the
conversion of such Securities into [securities] following such record date.]

                  (e) In the event that there is any money or other property
held by or for the Trust that is not accounted for hereunder, such property
shall be distributed Pro Rata (as defined herein) among the Holders of the
Securities.

         3. Liquidation Distribution Upon Dissolution.

         [The Debenture Issuer will have the right at any time to dissolve the
Trust and, after satisfaction of the liabilities of the Trust to creditors of
the Trust, cause the Debentures to be distributed to the Holders of the Trust
Securities in Liquidation of the Trust].

         In the event of any dissolution of the Trust pursuant to Sections
8.1(a)(i), (ii), (iv) or (vi) of the Declaration, the Trust shall be liquidated
by the Administrative Trustees as expeditiously as the Administrative Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the Holders of the
Securities a Like Amount (as defined below) of the Debentures, unless such
Distribution is determined by the Property Trustee not to be practicable, in
which event such Holders will be entitled to receive out of the assets of the
Trust legally available for Distribution to Holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the aggregate of the Liquidation Amount of $_____ per Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution").

         "Like Amount" means (i) with respect to a redemption of the Securities,
Securities having a Liquidation Amount equal to the principal amount of
Debentures to be paid in


                                   Annex I-3
<PAGE>

accordance with their terms and (ii) with respect to a distribution of
Debentures upon the dissolution of the Trust, Debentures having a principal
amount equal to the Liquidation Amount of the Securities of the Holder to whom
such Debentures are distributed.

         On and from the date fixed by the Administrative Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Securities will
no longer be deemed to be outstanding; (ii) the Clearing Agency or its nominee,
as the Holder of the Securities, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon such distribution;
and (iii) any Securities not held by the Clearing Agency or its nominee will be
deemed to represent beneficial interests in a Like Amount of Debentures, and
bearing accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on such Securities, until such Securities are presented to
the Registrar or its agent for cancellation, whereupon the Debenture Issuer will
issue, and the Debenture Trustee will authenticate, a certificate representing
such Debentures.

         If, upon any such liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets on hand legally available
to pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.

         4. Redemption and Distribution.

                  (a) Upon the repayment of the Debentures on the Maturity Date
thereof [or redemption thereof (in whole or in part) prior thereto in accordance
with the terms thereof], the proceeds from such repayment or redemption shall be
simultaneously applied by the Property Trustee (subject to the Property Trustee
having received notice no later than 45 days prior to such repayment or
redemption) to redeem a Like Amount of the Securities at a redemption price
equal to (i) in the case of the repayment of the Debentures on the Maturity
Date, the Maturity Redemption Price (as defined below), [(ii) in the case of the
optional redemption of the Debentures prior to [___________] upon the occurrence
and continuation of a [Special Event] (as defined below), the Special Event
Redemption Price (as defined below)] and [(iii) in the case of the optional
redemption of the Debentures other than as contemplated in clause (ii) above,
the Optional Redemption Price (as defined below)]. The [Maturity Redemption
Price, the Special Event Redemption Price and the Optional Redemption Price] are
referred to collectively as the "Redemption Price."

                  (b) (i) The "Maturity Redemption Price" shall mean a price
equal to 100% of the Liquidation Amount of the Securities to be redeemed plus
accumulated and unpaid Distributions thereon, if any, to the date of redemption.

                  [(ii) "Optional Redemption Price" shall mean a price equal to
the percentage of the Liquidation Amount of Securities to be redeemed plus
accumulated and unpaid Distributions thereon, if any, to the date of such
redemption if redeemed during the 12 month period beginning [______] of the
years indicated below:


                                   Annex I-4
<PAGE>

<Table>
<Caption>
                           Year                  Percentage
<S>                                              <C>
                                                         %
</Table>

         and thereafter at 100% of the Liquidation Amount of Securities to be
redeemed.].

                  [(iii) "Special Event Redemption Price" shall mean a price
equal to [__________], plus, in either case, accumulated and unpaid
Distributions thereon, if any, to the date of such redemption.]

         ["Special Event" shall mean _____________________________________.]

                  (c) The Trust may not redeem fewer than all the outstanding
Securities unless all accumulated and unpaid Distributions have been paid on all
Securities for all Distribution periods that expire on or before the date of
redemption.

                  (d) The procedure with respect to redemptions of Securities or
distributions of Debentures shall be as follows:

                           (i) Notice of any redemption of, or notice of
distribution of Debentures in exchange for, the Securities (a
"Redemption/Distribution Notice") will be given by the Trust by mail to each
Holder to be redeemed or exchanged not fewer than 30 nor more than 60 days
before the date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for repayment or redemption of the
Debentures. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this Section
4(d)(i), a Redemption/Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to Holders.
Each Redemption/Distribution Notice shall be addressed to the Holders at the
address of each such Holder appearing in the books and records of the Trust. No
defect in the Redemption/Distribution Notice or in the mailing of either thereof
with respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.

                           (ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed shall be redeemed
Pro Rata from each Holder, it being understood that, in respect of Preferred
Securities registered in the name of and held of record by a Clearing Agency or
its nominee, the distribution of the proceeds of such redemption will be made to
the Clearing Agency or its nominee and disbursed by such Clearing Agency in
accordance with the procedures applied by such agency or nominee.

                           (iii) If Securities are to be redeemed and the Trust
gives a Redemption/Distribution Notice, such notice shall be irrevocable and (A)
with respect to Preferred Securities registered in the name of or held of record
by a Clearing Agency or its nominee, by 12:00 noon, New York City time, on the
redemption date, provided that the Debenture Issuer has paid the Property
Trustee a sufficient amount of cash in connection with the related maturity or
redemption of the Debentures by 10:00 a.m., New York City time, on the Maturity
Date or the date of redemption, as the case may be, the Property Trustee or the
Paying Agent will pay to the Clearing Agency or its nominee funds sufficient to
pay the applicable


                                   Annex I-5
<PAGE>

Redemption Price with respect to such Preferred Securities, and (B) with respect
to Preferred Securities issued in certificated form and Common Securities,
provided that the Debenture Issuer has paid the Property Trustee a sufficient
amount of cash in connection with the related maturity or redemption of the
Debentures, the Property Trustee or the Paying Agent will pay the relevant
Redemption Price to the Holders of such Securities against presentation to the
Registrar of the certificates therefor. If a Redemption/Distribution Notice
shall have been given and funds deposited with the Property Trustee to pay the
Redemption Price (including all unpaid Distributions) with respect to the
Securities called for redemption, then immediately prior to the close of
business on the redemption date, Distributions will cease to accumulate on the
Securities so called for redemption and all rights of Holders of such Securities
so called for redemption will cease, except the right of the Holders of such
Securities to receive the Redemption Price, but without interest on such
Redemption Price, and such Securities shall cease to be outstanding.

                           (iv) Payment of accumulated and unpaid Distributions
on the redemption date of any Securities will be subject to the rights of
Holders of such Securities on the close of business on a regular record date in
respect of a Distribution Date occurring on or prior to such Redemption Date.

                           (v) Neither the Administrative Trustees nor the Trust
shall be required to register or cause to be registered the transfer of (A) any
Securities beginning on the opening of business 15 days before the day of
mailing of a Redemption/Distribution Notice or (B) any Securities selected for
redemption (except the unredeemed portion of any Security being redeemed). If
any date fixed for redemption of Securities is not a Business Day, then payment
of the Redemption Price payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date fixed
for redemption. If payment of the Redemption Price in respect of any Securities
is improperly withheld or refused and not paid on the date fixed for redemption
either by the Property Trustee or the Paying Agent or by the Sponsor as
guarantor pursuant to the Preferred Securities Guarantee, on the date fixed for
redemption, (A) Distributions on such Securities will continue to accumulate
from such redemption date to the actual date of payment, and (B) the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.

                           (vi) Subject to the foregoing and applicable law
(including, without limitation, United States federal securities laws), the
Sponsor or any of its Affiliates may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or by private
agreement.

         [5. Conversion Rights.

         The Holders shall have the right at any time, beginning ____________
through the close of business on ____________ (or, in the case of Securities
called for redemption, prior to the close of business on the Business Day prior
to the redemption date), at their option, to cause the Conversion Agent to
convert Securities, on behalf of the converting Holders, into [other securities]
in the manner described herein on and subject to the following terms and
conditions:


                                   Annex I-6
<PAGE>

                  (a) The Securities will be convertible or exchangeable at the
office of the Conversion Agent into fully paid and nonassessable [other
securities] pursuant to the Holder's direction to the Conversion Agent [in the
form of Exhibit ___ hereto] to exchange such Securities for a portion of the
Debentures theretofore held by the Trust on the basis of one Security per $____
principal amount of Debentures, and immediately convert such amount of
Debentures into fully paid and nonassessable [other securities] at an initial
rate of _______________ per $________ principal amount of Debentures (which is
equivalent to a conversion price of $ ____per [other Sponsor security], subject
to certain adjustments set forth in [Article XIII] of the Indenture (as so
adjusted, the "Conversion Price")).

                  (b) In order to convert Securities into [other securities] the
Holder shall submit to the Conversion Agent at the office referred to above an
irrevocable request to convert Securities on behalf of such Holder (the
"Conversion Request"), together, if the Securities are in certificated form,
with such certificates. The Conversion Request shall (i) set forth the number of
Securities to be converted and the name or names, if other than the Holder, in
which the [other securities] should be issued and (ii) direct the Conversion
Agent (a) to exchange such Securities for a portion of the Debentures held by
the Trust (at the rate of exchange specified in the preceding paragraph) and (b)
to immediately convert such Debentures on behalf of such Holder into [other
securities] (at the conversion rate specified in the preceding paragraph). The
Conversion Agent shall notify the Trust of the Holder's election to exchange
Securities for a portion of the Debentures held by the Trust (a "Notice of
Conversion") and the Trust shall, upon receipt of such notice, deliver to the
Conversion Agent the appropriate principal amount of Debentures for exchange in
accordance with this Section. The Conversion Agent shall thereupon notify the
Sponsor of the Holder's election to convert such Debentures into [other
securities]. Holders at the close of business on a Distribution record date will
be entitled to receive the [Distribution payable on such Securities on the
corresponding Distribution payment date notwithstanding the conversion of such
Securities following such record date but prior to such distribution payment
date. Except as provided above, neither the Trust nor the Sponsor will make, or
be required to make, any payment, allowance or adjustment upon any conversion on
account of any accumulated and unpaid Distributions accrued on the Securities
surrendered for conversion, or on account of any accumulated and unpaid
dividends on the [other securities] issued upon such conversion.] Securities
shall be deemed to have been converted immediately prior to the close of
business on the day on which a Notice of Conversion relating to such Securities
is received by the Trust in accordance with the foregoing provision (the
"Conversion Date"). The Person or Persons entitled to receive [other securities]
issuable upon conversion of the Debentures shall be treated for all purposes as
the record holder or holders of such [other securities] at such time. As
promptly as practicable on or after the Conversion Date, the Sponsor shall issue
and deliver at the office of the Conversion Agent a certificate or certificates
for the number of full [other securities] issuable upon such conversion,
together with the cash payment, if any, in lieu of any fraction of any share to
the Person or Persons entitled to receive the same, unless otherwise directed by
the Holder in the Notice of Conversion and the Conversion Agent shall distribute
such certificate or certificates to such Person or Persons.

                  (c) Each Holder of a Security by his acceptance thereof
appoints the Property Trustee as "Conversion Agent" for the purpose of effecting
the conversion or exchange of Securities in accordance with this Section. In
effecting the conversion or exchange and transactions described in this Section,
the Conversion Agent shall be acting as agent of the


                                   Annex I-7
<PAGE>

Holders directing it to effect such conversion or exchange transactions. The
Conversion Agent is hereby authorized (i) to exchange Securities from time to
time for Debentures held by the Trust in connection with the conversion or
exchange of such Securities in accordance with this Section and (ii) to convert
all or a portion of the Debentures into [other securities] and thereupon to
deliver such [other securities] in accordance with the provisions of this
Section and to deliver to the Trust a new Debenture or Debentures for any
resulting unconverted principal amount.

                  (d) No fractional [other securities] will be issued as a
result of conversion or exchange, but in lieu thereof, such fractional interest
will be paid in cash by the Sponsor to the Conversion Agent, which in turn will
make such payment to the Holder or Holders so converted.

                  (e) The Sponsor shall at all times reserve and keep available
out of its authorized and unissued [other securities], solely for issuance upon
the conversion or exchange of the Debentures, free from any preemptive or other
similar rights, such number of [other securities] as shall from time to time be
issuable upon the conversion or exchange of all the Debentures then outstanding.
Notwithstanding the foregoing, the Sponsor shall be entitled to deliver upon
conversion or exchange of Debentures, [other securities] reacquired and held in
the treasury of the Sponsor (in lieu of the issuance of authorized and unissued
[other securities]), so long as any such treasury shares are free and clear of
all liens, charges, security interests or encumbrances. Any [other securities]
issued upon conversion or exchange of the Debentures shall be duly authorized,
validly issued and fully paid and nonassessable. The Trust shall deliver the
[other securities] received upon conversion or exchange of the Debentures to the
converting Holder free and clear of all liens, charges, security interests and
encumbrances, except for United States withholding taxes. Each of the Sponsor
and the Trust shall prepare and shall use its best efforts to obtain and keep in
force such governmental or regulatory permits or other authorizations as may be
required by law, and shall comply with all applicable requirements as to
registration or qualification of [other securities], in order to enable the
Sponsor to lawfully issue [other securities] to the Trust upon conversion or
exchange of the Debentures and the Trust to lawfully deliver [other securities]
to each Holder upon conversion or exchange of the Securities.

                  (f) The Sponsor will pay any and all taxes that may be payable
in respect of the issue or delivery of the [other securities] on conversion or
exchange of Debentures and the delivery of the [other securities] by the Trust
upon conversion or exchange of the Securities. The Sponsor shall not, however,
be required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of the [other securities] in a name other
than that in which the Securities so converted were registered, and no such
issue or delivery shall be made unless and until the person requesting such
issue has paid to the Trust the amount of any such tax, or has established to
the satisfaction of the Trust that such tax has been paid.

                  (g) Nothing in the preceding paragraph (f) shall limit the
requirement of the Trust to withhold taxes pursuant to the terms of the
Securities or set forth in this Annex I to the Declaration or to the Declaration
itself or otherwise require the Property Trustee or the Trust to pay any amounts
on account of such withholdings.]


                                   Annex I-8
<PAGE>

         6. Voting Rights - Preferred Securities.

                  (a) Except as provided under Sections 6(b) and 8 and as
otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.

                  (b) Subject to the requirements set forth in this paragraph,
the Holders of a Majority in Liquidation Amount of the Preferred Securities,
voting separately as a class may, and the Trustees shall not, without obtaining
the prior approval of the Holders of a Majority in Liquidation Amount of all
outstanding Preferred Securities, (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on such Debenture Trustee with respect to
the Debentures, (ii) waive any past default that is waivable under Section
[5.07] of the Indenture, (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the Debentures
or (iv) consent to any amendment, modification or termination of the Indenture
or the Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a Majority in Liquidation Amount
of all outstanding Preferred Securities; provided, that where a consent or other
action under the Indenture with respect to the Debentures would require the
consent or act of holders of all outstanding Debentures, no consent or act shall
be given or taken except by the Holders of all outstanding Preferred Securities.
The Trustees shall not revoke any action previously authorized or approved by a
vote of the Holders of the Preferred Securities except by subsequent vote of
such Holders. Subject to Section 2.7 of the Declaration, the Property Trustee
shall notify each Holder of Preferred Securities of any notice of default with
respect to the Debentures. In addition to obtaining the foregoing approvals of
such Holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Trustees shall obtain an Opinion of Counsel experienced in such
matters to the effect that the Trust will not be classified as an association
taxable as a corporation for United States federal income tax purposes on
account of such action.

         If an Event of Default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay principal of or premium, if any, or interest on the Debentures on any due
date (including any Interest Payment Date or redemption date or the Maturity
Date), then a Holder of Preferred Securities may directly institute a legal
proceeding against the Debenture Issuer for enforcement of payment to such
Holder of the principal of or premium, if any, or interest on a Like Amount of
Debentures (a "Direct Action") on or after the respective due date specified in
the Debentures. In connection with such Direct Action, the rights of the Holders
of the Common Securities will be subrogated to the rights of such Holder of
Preferred Securities to the extent of any payment made by the Debenture Issuer
to such Holder of Preferred Securities in such Direct Action. Except as provided
in this paragraph, the Holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.

         Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Preferred Securities or pursuant
to written consent. The Property Trustee will cause a notice of any meeting at
which Holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Preferred Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote


                                   Annex I-9
<PAGE>

or of such matter upon which written consent is sought, and (iii) instructions
for the delivery of proxies or consent.

         No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.

         Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.

         7. Voting Rights - Common Securities.

                  (a) Except as provided under Sections 7(b), 7(c), and 8 or as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.

                  (b) Unless an Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by the Holder of the Common
Securities. If an Event of Default has occurred and is continuing, the Property
Trustee and the Delaware Trustee may be removed at such time by the Holders of a
Majority in Liquidation Amount of the outstanding Preferred Securities. In no
event will the Holders of the Preferred Securities have the right to vote to
appoint, remove or replace the Administrative Trustees, which voting rights are
vested exclusively in the Sponsor as the Holder of the Common Securities. No
resignation or removal of a Trustee and no appointment of a successor trustee
shall be effective until the acceptance of appointment by the successor trustee
in accordance with the provisions of the Declaration.

                  (c) Subject to Section 2.6 of the Declaration and only after
the Event of Default with respect to the Preferred Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class, may, and the Trustees
will not, (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Debenture Trustee, or executing any trust or power
conferred on such Debenture Trustee with respect to the Debentures, (ii) waive
any past default that is waivable under Section [5.07] of the Indenture, (iii)
exercise any right to rescind or annul a declaration of acceleration of the
maturity of the principal of the Debentures or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures, where such
consent shall be required, without, in each case, obtaining the prior approval
of the Holders of a Majority in Liquidation Amount of all outstanding Common
Securities; provided, that where a consent or other action under the Indenture
with respect to the Debentures would require the consent or act of holders of
all outstanding Debentures no consent or act shall be given or taken except by
the Holders of all outstanding Common Securities. The Trustees shall not revoke
any action previously authorized or approved by a vote of the Holders of the
Common Securities except by subsequent vote of such Holders. The Property
Trustee shall notify each Holder of Common Securities of any notice of default
with respect to the Debentures. In addition to obtaining the foregoing approvals
of such Holders of the Common Securities, prior to taking any of the


                                   Annex I-10
<PAGE>

foregoing actions, the Trustees shall obtain an Opinion of Counsel experienced
in such matters to the effect that the Trust will not be classified as an
association taxable as a corporation for United States federal income tax
purposes on account of such action.

         If an Event of Default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay principal of or premium, if any, or interest on the Debentures on the due
date (including any Interest Payment Date or redemption date or the Maturity
Date), then a Holder of Common Securities may institute a Direct Action for
enforcement of payment to such Holder of the principal of or premium, if any, or
interest on a Like Amount of Debentures on or after the respective due date
specified in the Debentures. Except as provided in this paragraph, the Holders
of Common Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.

         Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Common Securities in the Trust or pursuant
to written consent. The Administrative Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.

         No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.

         8. Amendments to Declaration.

         In addition to the circumstances and requirements set out in Section
12.1 of the Declaration, the Declaration may be amended by the Trustees and the
Sponsor with (i) the consent of Holders representing a Majority in Liquidation
Amount of all outstanding Securities, and (ii) receipt by the Trustees of an
Opinion of Counsel to the effect that such amendment or the exercise of any
power granted to the Trustees in accordance with such amendment will not affect
the Trust's status as a grantor trust for United States federal income tax
purposes or the Trust's exemption from status as an investment company under the
Investment Company Act, provided that, without the consent of each Holder, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Securities as of a specified
date or (ii) restrict the right of a Holder to institute suit for the
enforcement of any such payment on or after such date.

         9. Pro Rata.

         A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
according to the aggregate Liquidation


                                   Annex I-11
<PAGE>

Amount of the Securities held by the relevant Holder in relation to the
aggregate Liquidation Amount of all Securities outstanding unless, in relation
to any payment, an Event of Default under the Declaration has occurred and is
continuing, in which case any funds available to make such payment shall be paid
first to each Holder of the Preferred Securities pro rata according to the
aggregate Liquidation Amount of Preferred Securities held by the relevant Holder
relative to the aggregate Liquidation Amount of all Preferred Securities
outstanding, and only after satisfaction of all amounts owed to the Holders of
the Preferred Securities, to each Holder of Common Securities pro rata according
to the aggregate Liquidation Amount of Common Securities held by the relevant
Holder relative to the aggregate Liquidation Amount of all Common Securities
outstanding.

         10. Ranking.

         The Preferred Securities rank pari passu with the Common Securities and
payment thereon shall be made Pro Rata with the Common Securities, except that,
if an Event of Default under the Declaration occurs and is continuing, no
payments in respect of Distributions on, or payments upon liquidation,
redemption or otherwise with respect to, the Common Securities shall be made
until the Holders of the Preferred Securities shall be paid in full the
Distributions, Redemption Price, Liquidation Distribution and other payments to
which they are entitled at such time.

         11. Acceptance of Preferred Securities Guarantee and Indenture.

         Each Holder of Preferred Securities by the acceptance thereof, agrees
to the provisions of the Preferred Securities Guarantee, including the
subordination provisions therein and to the provisions of the Indenture.

         12. No Preemptive Rights.

         The Holders of the Securities shall have no preemptive or similar
rights to subscribe for any additional securities.

         13. Miscellaneous.

         These terms in this Annex I constitute a part of the Declaration. The
Sponsor will provide a copy of the Declaration, the Preferred Securities
Guarantee and the Indenture (including any supplemental indenture) to a Holder
without charge on written request to the Sponsor at its principal place of
business.


                                   Annex I-12
<PAGE>


                                   EXHIBIT A-1

                     FORM OF PREFERRED SECURITY CERTIFICATE
                           [FORM OF FACE OF SECURITY]

         [IF THIS PREFERRED SECURITY IS A GLOBAL PREFERRED SECURITY, INSERT:
THIS PREFERRED SECURITY IS A GLOBAL PREFERRED SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT AND NO
TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED
SECURITY AS A WHOLE BY THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY
OR BY A NOMINEE OF THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE
OF THE CLEARING AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

         UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

Certificate No. _____                     Number of Preferred Securities _______

CUSIP NO. _____________

                                   CERTIFICATE

                   CERTIFICATE EVIDENCING PREFERRED SECURITIES

                                       OF

                     CONTINENTAL AIRLINES FINANCE TRUST III

                            ___% PREFERRED SECURITIES

              (LIQUIDATION AMOUNT $_______ PER PREFERRED SECURITY)


                                Exhibit A-1 - 1
<PAGE>

         Continental Airlines Finance Trust III, a statutory business trust
created under the laws of the State of Delaware (the "Trust"), hereby certifies
that ______________ (the "Holder") is the registered owner of [$_________ in
aggregate Liquidation Amount of Preferred Securities of the Trust](1) [the
aggregate Liquidation Amount of Preferred Securities of the Trust specified in
Schedule A hereto](2) representing undivided beneficial interests in the assets
of the Trust designated the Series __ ___% Preferred Securities (Liquidation
Amount $_______ per Preferred Security) (the "Preferred Securities"). Subject to
the Declaration (as defined below), the Preferred Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for
transfer. The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Preferred Securities represented hereby are
issued and shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of ______, __, as the same
may be amended from time to time (the "Declaration"), including the designation
of the terms of the Preferred Securities as set forth in Annex I to the
Declaration. Capitalized terms used but not defined herein shall have the
meaning given them in the Declaration. The Sponsor will provide a copy of the
Declaration, the Preferred Securities Guarantee, the Common Securities Guarantee
(as may be appropriate), and the Indenture (including any supplemental
indenture) to a Holder without charge upon written request to the Trust at its
principal place of business.

         Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Preferred Securities Guarantee to the extent provided therein.

         By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.


----------

(1) Insert in Definitive Preferred Securities only.

(2) Insert in Global Preferred Securities only.


                                Exhibit A-1 - 2
<PAGE>


         IN WITNESS WHEREOF, the Trust has duly executed this certificate.

         Dated:
                --------------
                                          CONTINENTAL AIRLINES
                                          FINANCE TRUST III


                                          By:
                                              ----------------------------------
                                          Name:
                                                --------------------------------
                                                Administrative Trustee



                                Exhibit A-1 - 3
<PAGE>

                PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Preferred Securities referred to in the within-
mentioned Declaration.

                                             ______________________,

                                             as Property Trustee


                                             By:
                                                 -------------------------------
                                                 Authorized Signatory


                                Exhibit A-1 - 4
<PAGE>

                          [FORM OF REVERSE OF SECURITY]

         Distributions payable on each Preferred Security will be fixed at a
rate per annum of [  ]% (the "Coupon Rate") of the Liquidation Amount of $_____
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one [semi-annual period] will bear interest thereon compounded
[semi-annually] at the Coupon Rate (to the extent permitted by applicable law).
The term "Distributions", as used herein, includes such cash distributions and
any such interest payable unless otherwise stated. A Distribution is payable
only to the extent that payments are made in respect of the Debentures held by
the Property Trustee and to the extent the Property Trustee has funds on hand
legally available therefor.

         Distributions on the Preferred Securities will be cumulative, will
accumulate from and including the most recent date to which Distributions have
been paid or, if no Distributions have been paid, from and including [   ], [  ]
to but excluding the related Distribution Date or any date fixed for redemption,
and will be payable [semi-annually] in arrears on [   ] and [   ] of each year,
commencing on [   ], [  ], except as otherwise described below and in the
Declaration. Distributions will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period of less than a full
calendar month, the number of days elapsed in such month.

         [As long as no Event of Default (as defined in the Indenture) has
occurred and is continuing, the Debenture Issuer has the right under the
Indenture to defer the payment of interest on the Debentures at any time and
from time to time for a period not exceeding [____] consecutive calendar
[semi-annual] periods, including the first such [semi-annual period] during such
extension period (each, an "Extension Period"), provided that no Extension
Period shall extend beyond the Maturity Date of the Debentures. Distributions
will be deferred during any Extension Period. Notwithstanding such deferral,
[semi-annual] Distributions will continue to accumulate with interest thereon
(to the extent permitted by applicable law, but not at a rate exceeding the rate
of interest then accruing on the Debentures) at the Coupon Rate compounded
[semi-annually] during any Extension Period. Prior to the termination of any
Extension Period, the Debenture Issuer may further defer payments of interest by
further extending such Extension Period; provided that such Extension Period,
together with all previous and further extensions, if any, within such Extension
Period, may not exceed [____] consecutive [semi-annual] periods, including the
first semi-annual period during such Extension Period, or extend beyond the
Maturity Date of the Debentures. [Payments of Distributions that have
accumulated but not been paid during any Extension Period will be payable to
Holders as they appear on the books and records of the Trust on the record date
for the first scheduled Distribution payment date following the expiration of
such Extension Period and prior to the commencement of any new Extension Period.
Upon the expiration of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.]

         [Subject to the conditions set forth in the Declaration and the
Indenture, the Property Trustee shall, at the direction of the Sponsor, at any
time dissolve the Trust and, upon satisfaction of the liabilities to creditors
of the Trust as provided by law, cause the Debentures to be distributed to the
holders of the Securities in liquidation of the Trust [or, simultaneously with


                                Exhibit A-1 - 5
<PAGE>

any redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.]

         [The Preferred Securities shall be redeemable as provided in the
Declaration.]

         [The Preferred Securities shall be convertible or exchangeable into
[___________] as provided in the Declaration.]


                                Exhibit A-1 - 6
<PAGE>

         ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers
this Preferred Security Certificate to:
                                        ----------------------------------------

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

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

(Insert assignee's social security or tax identification number)
                                                                 ---------------

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

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

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

(Insert address and zip code of assignee) and irrevocably appoints
                                                                   -------------

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

--------------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.

Date:
      -----------------------
Signature:
           ------------------

(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)

Signature Guarantee***



----------

*** Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities and Exchange Act of 1934, as amended.


                                Exhibit A-1 - 7
<PAGE>

                                  SCHEDULE A*

         The initial number of Preferred Securities evidenced by the Certificate
to which this Schedule is attached is _______ (having an aggregate Liquidation
Amount of $______). The notations in the following table evidence decreases and
increases in the number of Preferred Securities evidenced by such Certificate.

         Number of Preferred Decrease in Number Increase in Number Securities
Remaining of Preferred of Preferred After Such Decrease Notation Securities or
Increase by Registrar
                      ----------------------------------------------------------

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

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

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


----------

* Append to Global Preferred Securities only.



                                Exhibit A-1 - 8
<PAGE>

                                   EXHIBIT A-2

                       FORM OF COMMON SECURITY CERTIFICATE

         THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW. NEITHER THIS COMMON SECURITY NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.

         THE COMMON SECURITIES ARE NOT TRANSFERABLE EXCEPT AS DESCRIBED IN THE
DECLARATION (AS DEFINED BELOW).

Certificate No. ______                    Number of Common Securities _______

CUSIP NO. ______________

                                   CERTIFICATE

                    CERTIFICATE EVIDENCING COMMON SECURITIES

                                       OF

                     CONTINENTAL AIRLINES FINANCE TRUST III

                             ___% COMMON SECURITIES

                (LIQUIDATION AMOUNT $_______ PER COMMON SECURITY)

         Continental Airlines Finance Trust III, a statutory business trust
created under the laws of the State of Delaware (the "Trust"), hereby certifies
that ______________ (the "Holder") is the registered owner of [$_________ in
aggregate Liquidation Amount of Common Securities of the Trust](3) [the
aggregate Liquidation Amount of Common Securities of the Trust specified in
Schedule A hereto](4) representing undivided beneficial interests in the assets
of the Trust designated the Series __ ___% Common Securities (Liquidation Amount
$_______ per Common Security) (the "Common Securities"). Subject to the
Declaration (as defined below), the Common Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities represented hereby are issued and shall in
all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of ______, __, as the same may be
amended from time to time (the "Declaration"), including the designation of the
terms of the Common Securities as set forth in Annex I to the Declaration.


----------

(3) Insert in Definitive Preferred Securities only.

(4) Insert in Global Preferred Securities only.



                                Exhibit A-2 - 1
<PAGE>

Capitalized terms used but not defined herein shall have the meaning given them
in the Declaration. The Sponsor will provide a copy of the Declaration, the
Common Securities Guarantee, the Common Securities Guarantee (as may be
appropriate), and the Indenture (including any supplemental indenture) to a
Holder without charge upon written request to the Trust at its principal place
of business.

         Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Common Securities Guarantee to the extent provided therein.

         By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.

         IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of __________, ____.

                                          Continental Airlines Finance Trust III


                                          By:
                                              ----------------------------------
                                          Name:
                                                --------------------------------
                                                Administrative Trustee


                                Exhibit A-2 - 2
<PAGE>

                          [FORM OF REVERSE OF SECURITY]

         Distributions payable on each Common Security will be fixed at a rate
per annum of [  ]% (the "Coupon Rate") of the Liquidation Amount of $______ per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
[semi-annual] period will bear interest thereon compounded semiannually at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions", as used herein, includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the Property
Trustee and to the extent the Property Trustee has funds available therefor.

         Distributions on the Common Securities will be cumulative, will
accumulate from and including the most recent date to which Distributions have
been paid or, if no Distributions have been paid, from and including [_____],
[___] to but excluding the related Distribution Date or any date fixed for
redemption, and will be payable [semi-annually] in arrears on [________] and
[_____] of each year, commencing on [________], [___], except as otherwise
described below and in the Declaration. Distributions will be computed on the
basis of a 360-day year consisting of twelve 30 day months and, for any period
of less than a full calendar month, the number of days elapsed in such month.

         [As long as no Event of Default (as defined in the Indenture) has
occurred and is continuing, the Debenture Issuer has the right under the
Indenture to defer the payment of interest on the Debenture at any time and from
time for a period not exceeding [___] consecutive calendar [semi-annual]
periods, including the first such semi-annual period during such extension
period (each an "Extension Period"), provided, that no Extension Period shall
extend beyond the Maturity Date of the Debentures. Distributions will be
deferred during any Extension Period. Notwithstanding such deferral,
Distributions will continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate of interest
then accruing on the Debentures) at the Coupon Rate compounded [semi-annually]
during any Extension Period. Prior to the termination of any Extension Period,
the Debenture Issuer may further defer payments of interest by further extending
such Extension Period; provided, that such Extension Period, together with all
previous and further extensions, if any, within such Extension Period, may not
exceed [___] consecutive [semi-annual] periods, including the first semi-annual
period during such Extension Period, or extend beyond the Maturity Date of the
Debentures. [Payments of Distributions that have accumulated but not been paid
during any Extension Period will be payable to Holders as they appear on the
books and records of the Trust on the record date for the first Distribution
Date following the expiration of such Extension Period. Upon the expiration of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.]

         [Subject to the conditions set forth in the Declaration and the
Indenture, the Property Trustee shall, at the direction of the Sponsor, at any
time dissolve the Trust and, upon satisfaction of the liabilities to creditors
of the Trust as provided by law, cause the Debentures to be distributed to the
holders of the Securities in liquidation of the Trust [or, simultaneously with
any redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.]


                                Exhibit A-2 - 3
<PAGE>

         [The Common Securities shall be redeemable as provided in the
Declaration.]

         [The Common Securities shall be convertible or exchangeable into
[_______] as provided in the Declaration.]



                                Exhibit A-2 - 4