Document:

<PAGE>   1
                                                                    EXHIBIT 4.9

                                     AMENDED

                                       AND

                                    RESTATED

                              DECLARATION OF TRUST

<PAGE>   2

<TABLE>
<CAPTION>
                                                    TABLE OF CONTENTS

<S>       <C>                                                                                                    <C>
ARTICLE 1: INTERPRETATION AND DEFINITIONS.........................................................................1

   SECTION 1.1       INTERPRETATION AND DEFINITIONS...............................................................1

ARTICLE 2: TRUST INDENTURE ACT...................................................................................12

   SECTION 2.1       TRUST INDENTURE ACT; APPLICATION............................................................12
   SECTION 2.2       LISTS OF HOLDERS OF THE SECURITIES..........................................................13
   SECTION 2.3       REPORTS BY THE PROPERTY TRUSTEE.............................................................13
   SECTION 2.4       PERIODIC REPORTS TO THE PROPERTY TRUSTEE....................................................13
   SECTION 2.5       EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT............................................13
   SECTION 2.6       TRUST ENFORCEMENT EVENTS; WAIVER............................................................14
   SECTION 2.7       TRUST ENFORCEMENT EVENT; NOTICE.............................................................15

ARTICLE 3: ORGANIZATION..........................................................................................15

   SECTION 3.1       NAME AND ORGANIZATION.......................................................................15
   SECTION 3.2       OFFICE......................................................................................15
   SECTION 3.3       PURPOSE.....................................................................................16
   SECTION 3.4       AUTHORITY...................................................................................16
   SECTION 3.5       TITLE TO PROPERTY OF THE TRUST..............................................................16
   SECTION 3.6       POWERS AND DUTIES OF THE REGULAR TRUSTEES...................................................17
   SECTION 3.7       PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES........................................19
   SECTION 3.8       POWERS AND DUTIES OF THE PROPERTY TRUSTEE...................................................20
   SECTION 3.9       CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY TRUSTEE.................................22
   SECTION 3.10      CERTAIN RIGHTS OF PROPERTY TRUSTEE..........................................................23
   SECTION 3.11      DELAWARE TRUSTEE............................................................................25
   SECTION 3.12      EXECUTION OF DOCUMENTS......................................................................26
   SECTION 3.13      NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES......................................26
   SECTION 3.14      DURATION OF TRUST...........................................................................26
   SECTION 3.15      MERGERS.....................................................................................26
   SECTION 3.16      PROPERTY TRUSTEE MAY FILE PROOFS OF CLAIM...................................................28
   SECTION 3.17      REGISTRATION STATEMENT AND RELATED MATTERS..................................................29

ARTICLE 4: THE SPONSOR...........................................................................................30

   SECTION 4.1       RESPONSIBILITIES OF THE SPONSOR.............................................................30
   SECTION 4.2       INDEMNIFICATION AND EXPENSES OF THE TRUSTEES................................................30

ARTICLE 5: THE HOLDERS OF THE COMMON SECURITIES..................................................................31

   SECTION 5.1       SENIOR DEFERRABLE NOTES ISSUER'S PURCHASE OF THE COMMON SECURITIES..........................31
   SECTION 5.2       COVENANTS OF THE SENIOR DEFERRABLE NOTES ISSUER.............................................31
   SECTION 5.3       HOLDER OF THE COMMON SECURITIES.............................................................31
   SECTION 5.4       EXCHANGES...................................................................................31

ARTICLE 6: THE TRUSTEES..........................................................................................32

   SECTION 6.1       NUMBER OF TRUSTEES..........................................................................32
   SECTION 6.2       DELAWARE TRUSTEE; ELIGIBILITY...............................................................33
   SECTION 6.3       PROPERTY TRUSTEE; ELIGIBILITY...............................................................33
   SECTION 6.4       QUALIFICATIONS OF THE REGULAR TRUSTEES GENERALLY............................................34
   SECTION 6.5       INITIAL REGULAR TRUSTEES....................................................................34
   SECTION 6.6       APPOINTMENT, REMOVAL AND RESIGNATION OF THE TRUSTEES........................................34
   SECTION 6.7       VACANCIES AMONG TRUSTEES....................................................................35
   SECTION 6.8       EFFECT OF VACANCIES.........................................................................35
</TABLE>

<PAGE>   3

<TABLE>

<S>                  <C>                                                                                        <C>
   SECTION 6.9       MEETINGS....................................................................................35
   SECTION 6.10      DELEGATION OF POWER BY THE REGULAR TRUSTEES.................................................36
   SECTION 6.11      MERGER, CONSOLIDATION, CONVERSION OR SUCCESSION TO BUSINESS.................................36

ARTICLE 7: TERMS OF THE SECURITIES...............................................................................36

   SECTION 7.1       GENERAL PROVISIONS REGARDING THE SECURITIES.................................................36
   SECTION 7.2       DISTRIBUTIONS...............................................................................39
   SECTION 7.3       REDEMPTION OF SECURITIES....................................................................41
   SECTION 7.4       REDEMPTION PROCEDURES.......................................................................41
   SECTION 7.5       VOTING RIGHTS OF THE PREFERRED SECURITIES...................................................43
   SECTION 7.6       VOTING RIGHTS OF THE COMMON SECURITIES......................................................45
   SECTION 7.7       PAYING AGENT................................................................................46
   SECTION 7.8       LISTING.....................................................................................46
   SECTION 7.9       TRANSFER OF THE SECURITIES..................................................................46
   SECTION 7.10      MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES...........................................47
   SECTION 7.11      DEEMED HOLDERS..............................................................................48
   SECTION 7.12      GLOBAL SECURITIES...........................................................................48
   SECTION 7.13      REMARKETING.................................................................................50

ARTICLE 8: DISSOLUTION AND TERMINATION OF THE TRUST..............................................................53

   SECTION 8.1       DISSOLUTION AND TERMINATION OF THE TRUST....................................................53
   SECTION 8.2       LIQUIDATION DISTRIBUTION UPON DISSOLUTION OF THE TRUST......................................53

ARTICLE 9: LIMITATION OF LIABILITY OF HOLDERS OF THE SECURITIES, THE DELAWARE TRUSTEE AND OTHERS.................55

   SECTION 9.1       LIABILITY...................................................................................55
   SECTION 9.2       EXCULPATION.................................................................................55
   SECTION 9.3       FIDUCIARY DUTY..............................................................................56
   SECTION 9.4       INDEMNIFICATION.............................................................................57
   SECTION 9.5       OUTSIDE BUSINESSES..........................................................................57

ARTICLE 10: ACCOUNTING...........................................................................................58

   SECTION 10.1      FISCAL YEAR.................................................................................58
   SECTION 10.2      CERTAIN ACCOUNTING MATTERS..................................................................58
   SECTION 10.3      BANKING.....................................................................................59
   SECTION 10.4      WITHHOLDING.................................................................................59

ARTICLE 11: AMENDMENTS AND MEETINGS..............................................................................59

   SECTION 11.1      AMENDMENTS..................................................................................59
   SECTION 11.2      MEETINGS OF THE HOLDERS OF THE SECURITIES; ACTION BY WRITTEN CONSENT........................61

ARTICLE 12: REPRESENTATIONS OF THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE.....................................63

   SECTION 12.1      REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE......................................63
   SECTION 12.2      REPRESENTATIONS AND WARRANTIES OF THE DELAWARE TRUSTEE......................................63

ARTICLE 13: MISCELLANEOUS........................................................................................64

   SECTION 13.1      NOTICES.....................................................................................64
   SECTION 13.2      GOVERNING LAW...............................................................................65
   SECTION 13.3      INTENTION OF THE PARTIES....................................................................65
   SECTION 13.4      HEADINGS....................................................................................65
   SECTION 13.5      SUCCESSORS AND ASSIGNS......................................................................65
   SECTION 13.6      PARTIAL ENFORCEABILITY......................................................................66
   SECTION 13.7      COUNTERPARTS................................................................................66
</TABLE>

                                       ii

<PAGE>   4

                    AMENDED AND RESTATED DECLARATION OF TRUST

         This Amended and Restated Declaration of Trust of VEC Trust I
("Declaration"), dated as of [insert closing date - 3.7(a)(xi)], 2000, by and
among Valero Energy Corporation, a Delaware corporation, as Sponsor, Jay D.
Browning, ______________, and ______________, as the initial Regular Trustees,
The Bank of New York, as the initial Property Trustee, and The Bank of New York
(Delaware), as the initial Delaware Trustee, not in their individual capacities
but solely as Trustees, and the Holders, from time to time, of the Securities
representing undivided beneficial ownership interests in the assets of the Trust
to be issued pursuant to this Declaration.

         WHEREAS, certain of the Trustees and the Sponsor established VEC Trust
I (the "Trust"), a business trust under the Business Trust Act, pursuant to a
Declaration of Trust dated as of March 22, 2000, (the "Original Declaration")
and a Certificate of Trust (the "Certificate of Trust") filed with the Secretary
of State of the State of Delaware on March 22, 2000; and

         WHEREAS, the sole purpose of the Trust shall be to sell and issue
certain securities representing undivided beneficial interests in the assets of
the Trust, to invest the proceeds from such sales in the Senior Deferrable Notes
issued by the Senior Deferrable Notes Issuer and to engage in only those
activities necessary or incidental thereto; and

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

         NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
trustees hereby declare that all assets contributed to the Trust 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.

                   ARTICLE 1: INTERPRETATION AND DEFINITIONS

         SECTION 1.1 Interpretation and Definitions. Unless the context
otherwise requires:

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

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

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

         (d) all references in this Declaration to Articles, Sections, Recitals
and Exhibits shall be to Articles and Sections of, or Recitals and Exhibits to,
this Declaration unless otherwise specified;

<PAGE>   5

         (e) unless otherwise defined in this Declaration, a term defined in the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), shall have
the same meaning when used in this Declaration; and

         (f) a reference to the singular shall include the plural and vice
versa, and a reference to any masculine form of a term shall include the
feminine or neuter form of a term, as applicable.

         (g) the following terms shall have the following meanings:

              "Affiliate" of any specified Person shall mean any other Person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person shall mean the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" shall have meanings correlative to
the foregoing.

              "Applicable Margin" shall mean the spread determined as set forth
below, based on the prevailing rating of the senior notes of the Senior
Deferrable Notes Issuer in effect at the close of business on the Business Day
immediately preceding the date of a Failed Remarketing:

                      Prevailing Rating                             Spread
                      -----------------                             ------

                       AA/"Aa"............................           3.00%
                       A/"a"..............................           4.00%
                       BBB/"Baa"..........................           5.00%
                       Below BBB/"Baa"....................           7.00%

For purposes of this definition, the "prevailing rating" of the Remarketed
Securities shall be:

          (i) AA/"Aa" if the senior notes of the Senior Deferrable Notes Issuer
     have a credit rating of AA or better by S&P and "Aa3" or better by Moody's
     or the equivalent of such ratings by such agencies or a comparable rating
     agency or comparable rating agencies selected by the Remarketing Agent
     (after consultation with the Company);

          (ii) if not under clause (i) above, then A/"a" if the senior notes of
     the Senior Deferrable Notes Issuer have a credit rating of A- or better by
     S&P and "A3" or better by Moody's or the equivalent of such ratings by such
     agencies or a comparable rating agency or comparable rating agencies
     selected by the Remarketing Agent (after consultation with the Company);

          (iii) if not under clauses (i) or (ii) above, then BBB/"Baa" if the
     senior notes of the Senior Deferrable Notes Issuer have a credit rating of
     BBB- or better by S&P and "Baa" or better by Moody's or the equivalent of
     such ratings by such agencies or a comparable rating agency or comparable
     rating agencies selected by the Remarketing Agent (after consultation with
     the Company); or

          (iv) if not under clauses (i) through (iii) above, then Below
     BBB/"Baa".

                                       2
<PAGE>   6

Notwithstanding the foregoing, (A) if (i) the credit rating of the senior notes
of the Company by S&P shall be on the "Credit Watch" of S&P with a designation
of "negative implications" or "developing," or (ii) the credit rating of the
senior notes of the Company by Moody's shall be on the "Corporate Credit Watch
List" of Moody's with a designation of "downgrade" or "uncertain," or, in each
case, on any successor list of S&P or Moody's with a comparable designation, the
prevailing ratings of the senior notes of the Company shall be deemed to be
within a range one full level lower in the above table than those actually
assigned to the senior notes of the Company by Moody's and S&P and (B) if the
senior notes of the Company are rated by only one rating agency on or before the
Remarketing Date, the prevailing rating shall at all times be determined without
reference to the rating of any other rating agency; provided that if no such
rating agency shall have in effect a rating for the senior notes of the Company,
and the Remarketing Agent is unable to identify a comparable rating agency or
rating agencies, as required above, the prevailing rating shall be Below BBB/
"baa."

              "Applicable Ownership Interest" shall mean, with respect to a PEPS
Units and the U.S. treasury securities in the Treasury Portfolio, (A) a 1/40, or
2.5%, undivided beneficial ownership interest in a $1,000 face amount of a
principal or interest strip in a U.S. treasury security included in such
Treasury Portfolio that matures on or prior to ______________ and (B) for each
scheduled interest payment date on the Senior Deferrable Notes after the Tax
Event Redemption Date, a 1/40, or 2.5%, undivided beneficial ownership interest
in a $1,000 face amount of a principal or interest strip in a U.S. treasury
security that matures on or prior to such date.

              "Applicable Principal Amount" shall mean either (A) if the Tax
Event Redemption Date occurs prior to the Purchase Contract Settlement Date, the
aggregate principal amount of the Senior Deferrable Notes corresponding to the
aggregate stated liquidation amount of the Preferred Securities that are
components of the PEPS Units on the Tax Event Redemption Date or (B) if the Tax
Event Redemption Date occurs on or after the Purchase Contract Settlement Date,
the aggregate principal amount of the Senior Deferrable Notes corresponding to
the aggregate stated liquidation amount of the Preferred Securities outstanding
on such Tax Event Redemption Date.

              "Authorized Officer" of a Person shall mean any Person that is
authorized to bind such Person.

              "Beneficial Owner" shall mean, with respect to a Global Security,
a Person who is the beneficial owner of such book-entry interest as reflected on
the books of the Depositary or on the books of a Person maintaining an account
with such Depositary (directly as a Depositary Participant or as an indirect
participant, in each case in accordance with the rules of such Depositary).

              "Business Day" shall mean any day other than a Saturday or Sunday
or a day on which banking institutions in the city of New York, New York or San
Antonio, Texas are authorized or required by law or executive order to remain
closed or a day on which the principal office of the Indenture Trustee or the
Property Trustee is closed for business.

                                       3
<PAGE>   7

              "Business Trust Act" shall mean 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.

              "Cash Settlement" shall have the meaning specified in the Purchase
Contract Agreement.

              "Certificate" shall mean a Common Security Certificate or a
Preferred Security Certificate.

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

              "Closing Date" shall mean the date on which the Preferred
Securities are issued and sold.

              "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation. A reference to a specific
section of the Code refers not only to-such specific section but also to any
corresponding provision of any federal tax statute enacted after the date of
this Declaration, as such specific section or corresponding provision is in
effect on the date of application of the provisions of this Declaration
containing such reference.

              "Collateral Agent" shall mean ___________________________.

              "Commission" shall mean the Securities and Exchange Commission.

              "Common Security" shall have the meaning specified in Section
7.1(a).

              "Common Security Certificate" shall mean a definitive certificate
in fully registered form representing a Common Security, substantially in the
form of Exhibit B hereto.

              "Company" shall mean Valero Energy Corporation, a Delaware
corporation, the Sponsor, Senior Deferrable Notes Issuer, and the parent of the
Trust.

              "Compounded Distributions" shall have the meaning specified in
Section 7.2(b).

              "Corporate Trust Office" shall mean the principal office of the
Property Trustee at which, at any particular time, its corporate trust business
shall be administered, which office at the date hereof is located at
____________________________, Attn: Corporate Trust Services Division.

              "Covered Person" shall mean (A) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the
Sponsor, (ii) the Sponsor's Affiliates, (iii) the Trust or (iv) the Trust's
Affiliates and (B) any Holder.

                                       4
<PAGE>   8

              "Depositary" shall mean, with respect to Securities issuable in
whole or in part in-the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as depositary for
such Securities, and initially shall be The Depository Trust Company.

              "Depositary Agreement" shall mean the agreement among the Trust,
the Property Trustee and the Depositary dated as of the Closing Date, as the
same may be amended or supplemented from time to time.

              "Depositary Participant" shall mean a member of, or participant
in, the Depositary.

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

              "Distribution" shall mean a distribution payable to the Holders in
accordance with Section 7.2.

              "Exchange Act" shall mean the Securities Exchange Act of 1934 and
any statute successor thereto, in each case as amended from time to time, and
the rules and regulations promulgated thereunder.

              "Failed Remarketing" shall have the meaning specified in Section
7.13(h).

              "Fiscal Year" shall have the meaning specified in Section 10.1.

              "Foreign Person" shall mean any Person that is not a United States
Person.

              "Global Certificate" shall have the meaning specified in Section
7.1(h).

              "Global Security" shall mean a global Preferred Security
Certificate registered in the name of a Depositary or its nominee.

              "Guarantee" shall mean the Guarantee Agreement, dated as of
____________, 2000, of the Sponsor, as may be amended from time to time, in
respect of the Preferred Securities.

              "Holder" shall mean any holder of Preferred Securities or Common
Securities, as registered on the books and records of the Trust, such holder
being a beneficial owner within the meaning of the Business Trust Act, provided
that in determining whether the Holders of the requisite liquidation amount of
Preferred Securities have voted on any matter provided for in this Declaration,
then for the purpose of such determination only (and not for any other purpose
hereunder), if the Preferred Securities remain in the form of one or more Global
Securities and if the Depositary that is the holder of such Global Securities
has sent an omnibus proxy to the Depositary Participants to whose accounts the
Preferred Securities are credited on the record date, the term "Holders" shall
mean such Depositary Participants acting at the direction of the Beneficial
Owners.

                                       5
<PAGE>   9

              "Indemnified Person" shall mean any Trustee, any Affiliate of any
Trustee, any Paying Agent, any officers, directors, shareholders, members,
partners, employees, representatives or agents of any Trustee, Affiliate of a
Trustee or Paying Agent, or any officer, employee or agent of the Trust or any
of its Affiliates.

              "Indenture" shall mean the indenture dated as of _____________,
2000, as supplemented by a supplemental indenture relating to the Senior
Deferrable Notes, dated as of ____________, 2000, between the Senior Deferrable
Notes Issuer and the Indenture Trustee (including the provisions of the Trust
Indenture Act that are deemed incorporated therein), pursuant to which the
Senior Deferrable Notes are to be issued.

              "Indenture Event of Default" shall have the meaning given to the
term "Event of Default" in the Indenture.

              "Indenture Trustee" shall mean The Bank of New York, in its
capacity as trustee under the Indenture, until a successor is appointed
thereunder, and thereafter shall mean such successor trustee.

              "Investment Company" shall mean an investment company as defined
in the Investment Company Act and the regulations promulgated thereunder.

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

              "Legal Action" shall have the meaning specified in Section 3.6(f).

              "List of Holders" shall have the meaning specified in Section
2.2(a).

              "Majority in Liquidation Amount" shall mean, except as provided by
the Trust Indenture Act, Holders of outstanding Securities, voting together as a
single class, or, as the context may require, Holders of outstanding Preferred
Securities or Holders of the outstanding Common Securities, voting separately as
a class, who are the record owners of more than 50% of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accumulated and unpaid Distributions to the date
upon which the voting percentages are determined) of all outstanding Securities,
Preferred Securities or Common Securities, as the case may be.

              "Moody's" shall mean Moody's Investors Service, Inc.

              "New York Stock Exchange" shall mean the New York Stock Exchange,
Inc or any successor thereto.

              "Officers' Certificate" shall mean, when delivered by the Trust, a
certificate signed by a majority of the Regular Trustees of the Trust and, when
delivered by the Sponsor, a certificate signed by (A) the Chairman of the Board,
President or a Vice President of the Sponsor and (B) the Treasurer, Assistant
Treasurer or Secretary of the Sponsor. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Declaration shall include, where applicable:

                                       6
<PAGE>   10

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

              (ii) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;

              (iii) 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

              (iv) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.

              "Over-allotment Option" shall mean any over-allotment option
contained in an underwriting agreement pursuant to which the PEPS Units are
sold.

              "Paying Agent" shall have the meaning specified in Section 3.8(h).

              "Payment Amount" shall have the meaning specified in Section
7.2(c).

              "PEPS Units" shall mean a security consisting of a unit comprised
of (A) a purchase contract under which (i) the holder of the unit will purchase
from the Company, for $_____ in cash, a certain number of shares of common
stock, par value $.01 per share, of the Company and (ii) the Senior Deferrable
Notes Issuer will pay such holder contract adjustment payments and (B)
beneficial ownership of a Preferred Security or Senior Deferrable Note, or in
certain circumstances following the occurrence of a Tax Event, the appropriate
Applicable Ownership Interest of the Treasury Portfolio.

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

              "Pledge Agreement" shall mean the Pledge Agreement dated as of
___________, 2000 among the Company, the Collateral Agent, ___________________,
as Securities Intermediary, and the Purchase Contract Agent.

              "Preferred Security" shall have the meaning specified in Section
7.1(a).

              "Preferred Security Certificate" shall mean a definitive
certificate in fully registered form representing a Preferred Security,
substantially in the form of Exhibit A.

              "Primary Treasury Dealer" shall mean a primary U.S. government
securities dealer in New York City.

              "Property Account" shall have the meaning specified in Section
3.8(c).

                                       7
<PAGE>   11

              "Property Trustee" shall mean the Trustee meeting the eligibility
requirements set forth in Section 6.3.

              "Pro Rata" shall mean pro rata to each Holder according to the
aggregate liquidation amount of the Securities held by such Holder in relation
to the aggregate liquidation amount of all Securities outstanding.

              "Purchase Contract Agent" shall mean ________________________.

              "Purchase Contract Agreement" shall mean the Purchase Contract
Agreement dated as of _____________, 2000 between the Company and
__________________, as Purchase Contract Agent.

              "Purchase Contract Settlement Date" shall mean _________________.

              "Quorum" shall mean a majority of the Regular Trustees or, if
there are only two Regular Trustees, both of them.

              "Quotation Agent" shall mean (A) Morgan Stanley & Co. Incorporated
and any respective successor, provided that if Morgan Stanley & Co. Incorporated
or any respective successor ceases to be a Primary Treasury Dealer, the Sponsor
shall substitute another Primary Treasury Dealer therefor or (B) any other
Primary Treasury Dealer selected by the Sponsor.

              "Redemption Amount" shall mean, for each Senior Deferrable Note,
the product of the principal amount of such Senior Deferrable Note and a
fraction, the numerator of which shall be the Treasury Portfolio Purchase Price
and the denominator of which shall be the Applicable Principal Amount.

              "Redemption/Distribution Notice" shall have the meaning specified
in Section 7.4(a).

              "Redemption Price" shall mean the amount for which the Securities
will be redeemed, which amount will equal the lesser of (i) the redemption price
paid by the Senior Deferrable Notes Issuer to repay or redeem, in whole or in
part, the Senior Deferrable Notes held by the Trust plus an amount equal to
accumulated and unpaid Distributions on such Securities through the date of
their redemption or (ii) the amount received by the Trust in respect of the
Senior Deferrable Notes so repaid or redeemed.

              "Regular Trustee" shall mean any trustee of the Trust other than
the Property Trustee and the Delaware Trustee.

              "Remarketing" shall mean the operation of the procedures for
remarketing specified in Section 7.13.

              "Remarketed Securities" shall mean (i) so long as the Trust has
not been dissolved, the Preferred Securities or (ii) if the Trust has been
dissolved, the Senior Deferrable Notes.

                                       8
<PAGE>   12

              "Remarketing Agent" shall mean Morgan Stanley & Co. Incorporated
or if the Remarketing Agent is removed, any successor remarketing agent selected
by the Sponsor.

              "Remarketing Agreement" shall mean the Remarketing Agreement dated
as of _______________ among the Company, the Trust and the Remarketing Agent.

              "Remarketing Date" shall mean the third Business Day preceding
_______________.

              "Remarketing Settlement Date" shall mean the date, if any, on
which the settlement of the Remarketed Securities has occurred through the
normal settlement procedures in effect at such time of the Depositary or any
successor Depositary.

              "Reset Rate" shall mean the distribution rate per annum, as
determined by the Remarketing Agent, that results from the Remarketing pursuant
to Section 7.13.

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

              "Rule 3a-5" shall mean Rule 3a-5 under the Investment Company Act
or any successor rule thereunder.

              "S&P" shall mean Standard & Poor's Corporation.

              "Scheduled Remarketing Settlement Date" shall mean the date, if
any, on which the settlement of the Remarketed Securities is scheduled to occur.

              "Securities" shall mean the Common Securities and the Preferred
Securities.

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

              "Security Registrar" shall have the meaning specified in Section
7.9(a)(iv).

              "Senior Deferrable Notes" shall mean the series of senior
deferrable notes to be issued by the Senior Deferrable Notes Issuer under the
Indenture and to be purchased by the Trust and held by the Property Trustee.

              "Senior Deferrable Notes Issuer" shall mean Valero Energy
Corporation, a Delaware corporation, or any successor entity in a merger,
consolidation, conversion, amalgamation or replacement by or conveyance,
transfer or lease of its properties substantially as an entirety, in its
capacity as issuer of the Senior Deferrable Notes under the Indenture.

              "66 2/3% in Liquidation Amount" shall mean Holders of outstanding
Securities, voting together as a single class, or, as the context may require,
Holders of outstanding Preferred Securities voting separately as a class, who
are the record owners of 66 2/3% or more of the

                                       9
<PAGE>   13

aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Securities or Preferred Securities, as the case may be.

              "Sponsor" shall mean Valero Energy Corporation, a Delaware
corporation, or any successor entity in a merger, consolidation, conversion,
amalgamation or replacement by or conveyance, transfer or lease of its
properties substantially as an entirety, in its capacity as sponsor of the
Trust.

              "Successor Delaware Trustee" shall have the meaning specified in
Section 6.6(b).

              "Successor Entity" shall have the meaning specified in Section
3.15(b)(i).

              "Successor Property Trustee" shall have the meaning specified in
Section 6.6(b).

              "Successor Security" shall have the meaning specified in Section
3.15(b)(i)(B).

              "Supermajority" shall have the meaning specified in Section
2.6(a)(ii).

              "Tax Event" shall mean the receipt by the Sponsor and the Trust of
an opinion of a law firm having a recognized national tax practice, to the
effect that, as a result of any amendment to, change in or announced proposed
change in the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, or as a result of
any official administrative decision, pronouncement, judicial decision or action
interpreting or applying such laws or regulations, which amendment or change is
effective or which proposed change, pronouncement, action or decision is
announced on or after the Closing Date, there is more than an insubstantial
increase in the risk that (i) the Trust is, or within 90 days of the date of
such opinion will be, subject to United States federal income tax with respect
to income received or accrued on the Senior Deferrable Notes, (ii) interest
payable by the Senior Deferrable Notes Issuer on the Senior Deferrable Notes is
not, or within 90 days of the date of such opinion will not be, deductible by
the Senior Deferrable Notes Issuer, in whole or in part, for United States
federal income tax purposes, or (iii) the Trust is, or within 90 days of the
date of such opinion will be, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.

              "Tax Event Redemption" shall mean that a Tax Event has occurred
and is continuing and the Senior Deferrable Notes have been called for
redemption pursuant to the Indenture.

              "Tax Event Redemption Date" shall mean the date of the Tax Event
Redemption specified by the Senior Deferrable Notes Issuer.

              "10% in Liquidation Amount" shall mean, except as provided by the
Trust Indenture Act, Holder(s) of outstanding 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 (including the stated amount that would be paid on redemption,

                                       10
<PAGE>   14

liquidation or otherwise, plus accumulated and unpaid Distributions to the date
upon which the voting percentages are determined) of all outstanding Securities
of the relevant class.

              "Termination Event" shall have the meaning set forth in Section
1.1 of the Purchase Contract Agreement.

              "Treasury PEPS Units" shall mean a PEPS Units with respect to
which Treasury Securities have been substituted for the Preferred Securities or
Applicable Ownership Interest of the Treasury Portfolio component, as
applicable.

              "Treasury Portfolio" shall mean, with respect to the Applicable
Principal Amount of Senior Deferrable Notes, a portfolio of zero-coupon U.S.
treasury securities consisting of (i) principal or interest strips of U.S.
treasury securities that mature on or prior to the Purchase Contract Settlement
Date in an aggregate amount at maturity equal to the Applicable Principal Amount
and (ii) with respect to each scheduled interest payment date on the Senior
Deferrable Notes that occurs after the Tax Event Redemption Date, principal or
interest strips of U.S. treasury securities that mature on or prior to such date
in an aggregate amount at maturity equal to the aggregate interest payment that
would have been due on the Applicable Principal Amount of the Senior Deferrable
Notes on such date.

              "Treasury Portfolio Purchase Price" shall mean the lowest
aggregate price quoted by a Primary Treasury Dealer, to the Quotation Agent on
the third Business Day preceding the Tax Event Redemption Date for the purchase
of the Treasury Portfolio for settlement the Tax Event Redemption Date.

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

              "Treasury Securities" shall mean zero-coupon U.S. Treasury
Securities (CUSIP Number 912833 FR6) with a principal amount at maturity equal
to $1,000 and maturing on November 15, 2002, the business day preceding the
Purchase Contract Settlement Date.

              "Trust" shall have the meaning specified in the Recitals hereto.

              "Trust Enforcement Event" in respect of the Securities shall mean
that an Indenture Event of Default has occurred and is continuing in respect of
the Senior Deferrable Notes.

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

              "Trustee" or "Trustees" shall mean each Person that has signed
this Declaration as a trustee, so long as such Person continues in office in
accordance with the terms hereof, and all other Persons that from time to time
may 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.

                                       11
<PAGE>   15

              "Two-Year Benchmark Treasury Rate" shall mean the bid side rate
displayed at 10:00 A.M., New York City time, on the third Business Day
immediately preceding the Purchase Contract Settlement Date for direct
obligations of the United States (which may be obligations traded on a
when-issued basis only) having a maturity comparable to the remaining term to
maturity of the Senior Deferrable Notes, as agreed upon by the Company and the
Remarketing Agent in the Telerate system (or if the Telerate system is (a) no
longer available on the third Business Day immediately preceding the Purchase
Contract Settlement Date or (b) in the opinion of the Remarketing Agent (after
consultation with the Company) no longer an appropriate system from which to
obtain such rate, such other nationally recognized quotation system as, in the
opinion of the Remarketing Agent (after consultation with the Company) is
appropriate. If such rate is not so displayed, the rate for the Two-Year
Benchmark Treasury Rate shall be, as calculated by the Remarketing Agent, the
yield to maturity for the Preferred Securities, expressed as a bond equivalent
on the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis, and computed by taking the arithmetic mean of the secondary market bid
rates, as of 10:30 A.M., New York City time, on the third Business Day
immediately preceding the Purchase Contract Settlement Date of three leading
United States government securities dealers selected by the Remarketing Agent
(after consultation with the Company) (which may include the Remarketing Agent
or an affiliate thereof).

              "United States Person" shall mean a United States person for
United States federal income tax purposes.

              "Underwriting Agreement" means the Underwriting Agreement dated as
of __________, ____ among the Trust, the Sponsor and _______ and _________, as
[REPRESENTATIVES OF THE SEVERAL] underwriters [NAMED THEREIN].

                         ARTICLE 2: 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 and, to the
extent applicable, shall be governed by such provisions.

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

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

         (d) The application of the Trust Indenture Act to this Declaration
shall not affect the Trust's classification as a grantor trust for United States
federal income tax purposes and shall not affect the nature of the Securities as
equity securities representing undivided beneficial interests in the assets of
the Trust.

                                       12
<PAGE>   16

         SECTION 2.2 Lists of Holders of the Securities.

         (a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Property Trustee a list of the names and addresses of the
Holders of the Securities in such form as the Property Trustee may reasonably
require ("List of Holders") (i) as of the record date relating to the payment of
any Distribution, at least one Business Day prior to the date for payment of
such Distribution, except while the Preferred Securities are represented by one
or more Global Securities, and (ii) at any other time, within 30 days of receipt
by the Trust of a written request from the Property Trustee for a List of
Holders as of a date no more than 15 days before such List of Holders is
provided to the Property Trustee. If at any time the List of Holders does not
differ from the most recent List of Holders provided to the Property Trustee by
the Sponsor and the Regular Trustees on behalf of the Trust, then neither the
Sponsor nor the Regular Trustees shall be obligated to deliver such List of
Holders. The Property Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of Holders provided
to it or that it receives in its capacity as Paying Agent (if acting in such
capacity); provided that the Property Trustee may destroy any List of Holders
previously provided to it on receipt of a new List of Holders.

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

         SECTION 2.3 Reports by the Property Trustee.

              Within 60 days after __________ of each year (commencing with the
year of the first anniversary of the issuance of the Preferred Securities), 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 also shall comply with the requirements of Section 313(d)
of the Trust Indenture Act.

         SECTION 2.4 Periodic Reports to the Property Trustee.

              Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.

         SECTION 2.5 Evidence of Compliance with Conditions Precedent.

              Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, 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) may be given in the form of an Officers' Certificate.

                                       13
<PAGE>   17

         SECTION 2.6 Trust Enforcement Events; Waiver.

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

               (i) is not waivable under the Indenture, then the Trust
          Enforcement Event under this Declaration also shall not be waivable;
          and

               (ii) requires the vote or consent of the holders of greater than
          a majority in principal amount of the Senior Deferrable Notes (a
          "Supermajority") to be waived under the Indenture, the related Trust
          Enforcement Event under this Declaration only may be waived by the
          vote or written consent of the Holders of at least the same
          Supermajority in aggregate stated liquidation amount of the Preferred
          Securities outstanding.

The foregoing provisions of this Section 2.6 shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act, and 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
Trust Enforcement Event in respect of the Preferred Securities shall be deemed
to have been cured for every purpose of this Declaration and the Preferred
Securities, but no such waiver shall extend to any subsequent or other Trust
Enforcement Event with respect to the Preferred Securities or impair any right
consequent thereon. Any waiver by the Holders of the Preferred Securities of a
Trust Enforcement Event with respect to the Preferred Securities also shall be
deemed to constitute a waiver by the Holders of the Common Securities of any
such Trust Enforcement Event 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.

         (b) The Holders of the Common Securities may waive, by vote or written
consent, any past Trust Enforcement Event in respect of the Common Securities
and its consequences, provided that if the underlying Indenture Event of Default
is not waivable under the Indenture, then, except where the Holders of the
Common Securities have been deemed to have waived such Trust Enforcement as
provided below in this Section 2.6(b), the related Trust Enforcement Event under
this Declaration also shall not be waivable. The Holders of the Common
Securities shall be deemed to have waived any and all Trust Enforcement Events
in respect of the Common Securities and the consequences thereof until all Trust
Enforcement Events in respect of the Preferred Securities have been cured,
waived or otherwise eliminated. Until all Trust Enforcement Events in respect of
the Preferred Securities have been so cured, waived or otherwise eliminated, the
Property Trustee shall be deemed to be acting solely on behalf of the Holders of
the Preferred Securities, and only the Holders of the Preferred Securities shall
have the right to direct the Property Trustee. 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 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 cure, waiver or other elimination,
any Trust Enforcement Event in respect of the Common Securities shall be deemed
to have been cured for every purpose of this Declaration and the Common
Securities, but no such waiver shall

                                       14
<PAGE>   18

extend to any subsequent or other Trust Enforcement Event with respect to the
Common Securities or impair any right consequent thereon.

         (c) A waiver of an Indenture Event of Default under the Indenture by
the Property Trustee at the direction of the Holders of the Preferred Securities
shall constitute a waiver of the corresponding Trust Enforcement Event under
this Declaration. Any such waiver by the Holders of the Preferred Securities
also shall be deemed to constitute a waiver by the Holders of the Common
Securities of any such Trust Enforcement Event 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. 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 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 Trust Enforcement Event; Notice.

         (a) Within 90 days after the occurrence of a Trust Enforcement Event
actually known to a Responsible Officer of the Property Trustee, the Property
Trustee shall transmit by mail, first class postage prepaid, to the Holders of
the Securities, notice of such Trust Enforcement Event, unless such Trust
Enforcement Event has 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 on any of the Senior Deferrable Notes, the Property Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Property Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Securities.

         (b) The Property Trustee shall not be deemed to have knowledge of any
Trust Enforcement Event except for:

               (i) a default under Section 6.01(a)(1) and (2)(i) of the
          Indenture; or

               (ii) any default as to which the Property Trustee shall have
          received written notice or of which a Responsible Officer of the
          Property Trustee charged with the administration of this Declaration
          shall have actual knowledge.

                             ARTICLE 3: ORGANIZATION

         SECTION 3.1 Name and Organization.

         The Trust hereby continued is named "VEC Trust I," as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of the Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.

         SECTION 3.2 Office.

         The address of the principal office of the Trust is One Valero Place,
San Antonio, Texas 78212. On ten Business Days' written notice to the Holders of
the Securities, the Regular Trustees may designate another principal office.

                                       15
<PAGE>   19

         SECTION 3.3 Purpose.

              The exclusive purposes and functions of the Trust are (a) to issue
and sell the Securities, (b) to use the gross proceeds from such sale to acquire
the Senior Deferrable Notes and (c) except as otherwise limited herein, to
engage in only those other activities necessary or incidental thereto. The Trust
shall not borrow money, issue debt, reinvest proceeds derived from investments,
pledge any of its assets or otherwise undertake (or permit to be undertaken) any
activity that would cause the Trust not to be classified as a grantor trust for
United States federal income tax purposes.

              By the acceptance of this Trust, none of the Trustees, the
Sponsor, the Holders of the Preferred Securities or the Common Securities or the
Beneficial Owners of the Preferred Securities will take any position that is
contrary to the classification of the Trust as a grantor trust for United State
federal income tax purposes.

         SECTION 3.4 Authority.

         (a) Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive authority to carry out the purposes of the Trust. Any action taken by
the Regular Trustees in accordance with their powers shall constitute the act of
and shall serve to bind the Trust, and any action taken by the Property Trustee
in accordance with its powers shall constitute the act of and shall 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.

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

         (c) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee may delegate to any other natural person over the age of 21, by power of
attorney consistent with applicable law, his or her power for the purposes of
signing any documents that the Regular Trustees have power and authority to
cause the Trust to execute pursuant to Section 3.6.

         SECTION 3.5 Title to Property of the Trust.

              Except as provided in Section 3.8 with respect to the Senior
Deferrable Notes and the Property Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders of the Securities shall not have legal title to any part of
the assets of the Trust but shall have undivided beneficial ownership interests
in the assets of the Trust.

                                       16
<PAGE>   20

         SECTION 3.6 Powers and Duties of the Regular Trustees.

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

         (a) to issue and sell the Securities in accordance with this
Declaration; provided that the Trust may issue no more than one series of
Preferred Securities and no more than one series of Common Securities; and
provided further that there shall be no interests in the Trust other than the
Securities, and the issuance of the Securities shall be limited to a one-time,
simultaneous issuance of both Preferred Securities and Common Securities on the
Closing Date, subject to the issuance of additional Securities pursuant to the
exercise of any Over-allotment Option;

         (b) to acquire the Senior Deferrable Notes with the proceeds of the
sale of the Securities; provided that the Regular Trustees shall cause legal
title to the Senior Deferrable Notes to be held of record in the name of the
Property Trustee for the benefit of the Holders of the Securities;

         (c) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Tax Event; provided that the Regular Trustees shall
consult with the Sponsor and the Property Trustee before taking or refraining
from taking any action in relation to any such Tax Event;

         (d) to establish a record date with respect to all actions to be taken
hereunder that require a record date to 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 the Securities as to such actions and applicable
record dates;

         (e) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of this Declaration;

         (f) 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;

         (g) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants to conduct only those services that the Regular Trustees have
authority to conduct directly, and to pay reasonable compensation for such
services, provided that any Person so employed or engaged is a United States
Person;

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

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

                                       17
<PAGE>   21

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

         (k) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;

         (l) to take all action that may be necessary or appropriate for the
preservation and continuation of the Trust's valid existence, rights, franchise
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 of the Securities or to enable the
Trust to effect the purposes for which it was created;

         (m) to take any action not inconsistent with applicable law that the
Regular Trustees determine in their discretion to be necessary or desirable in
carrying out the purposes and functions of the Trust as set forth in Section 3
or the activities of the Trust as set forth in this Section 3.6, including:

               (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 to be classified as a grantor trust for
          United States federal income tax purposes; and

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

         (n) 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;

         (o) to prepare, execute and file a certificate of cancellation of the
Certificate of Trust of the Trust pursuant to Section 8.1(b);

         (p) in connection with the issuance of the Preferred Securities, to
execute, deliver and perform the Depositary Agreement on behalf of the Trust;

         (q) if and to the extent that the Sponsor on behalf of the Trust has
not already done so, to cause the Trust to enter into the Underwriting Agreement
and/or such other agreements and arrangements as may be necessary or desirable
in connection with the sale of the Preferred Securities to the initial
purchasers thereof and the consummation thereof, and to take all action, and
exercise all discretion, as may be necessary or desirable in connection with the
consummation thereof; and

         (r) 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 Regular Trustees shall 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

                                       18
<PAGE>   22

Regular Trustees shall have no power to, and 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 Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.

         Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Senior Deferrable Notes 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. In particular, the Trust shall not
and the Trustees (including the Property Trustee) shall cause the Trust not to:

               (i) invest any proceeds received by the Trust in connection with
          its ownership of the Senior Deferrable Notes, but the Property Trustee
          shall distribute all such proceeds to the Holders of the Securities
          pursuant to the terms of this Declaration and of the Securities;

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

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

               (iv) make any loans or incur any indebtedness;

               (v) possess any power or otherwise act in such a way as to vary
          the Trust's assets;

               (vi) possess any power or otherwise act in such a way as to vary
          the terms of the Securities in any way whatsoever (except to the
          extent expressly authorized in this Declaration or by the terms of the
          Securities);

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

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

                                       19
<PAGE>   23

               (ix) take any action inconsistent with the status of the Trust as
          grantor trust for United States federal income tax purposes;

               (x) revoke any action previously authorized or approved by vote
          of the Holders of the Preferred Securities; or

               (xi) after the date hereof, enter into any contract or agreement
          (other than any depositary agreement or any agreement with any
          securities exchange or automated quotation system) that does not
          expressly provide that the Holders of Preferred Securities, in their
          capacities as such, have limited liability (in accordance with the
          provisions of the Business Trust Act) for the liabilities and
          obligations of the Trust, which express provision shall be in
          substantially the following form:

               The Holders of the Preferred Securities, in their capacities as
               such, shall not be personally liable for any liabilities or
               obligations of the Trust arising out of this Agreement, and the
               parties hereto hereby agree that the Holders of the Preferred
               Securities, in their capacities as such, 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.

         SECTION 3.8 Powers and Duties of the Property Trustee.

         (a) The legal title to the Senior Deferrable Notes 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 of the Securities. The right, title and interest of
the Property Trustee to the Senior Deferrable Notes shall vest automatically in
each Person that hereafter may be appointed as Property Trustee in accordance
with Section 6.6. To the fullest extent permitted by law, such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Senior Deferrable Notes have been executed and delivered.

         (b) The Property Trustee shall not transfer its right, title and
interest in the Senior Deferrable Notes to the Regular Trustees nor 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 Account") in the name of and under the
          exclusive control of the Property Trustee on behalf of the Holders of
          the Securities and, upon the receipt of payments of funds made in
          respect of the Senior Deferrable Notes, deposit such funds into the
          Property Account and make payments to the Holders of the Securities
          from the Property Account in accordance with Section 7.2. Funds in the
          Property Account shall be held uninvested until disbursed in
          accordance with this Declaration. The Property Account shall be an
          account that is maintained with a banking institution, the rating on
          whose long-term unsecured indebtedness is at least equal to the rating
          assigned to

                                       20
<PAGE>   24

          the Company's senior notes by a "nationally recognized statistical
          rating organization" within the meaning of Rule 436(g)(2) under the
          Securities Act;

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

               (iii) upon written direction by the Sponsor to dissolve the
          Trust, to engage in such ministerial activities as shall be necessary
          or appropriate to effect the distribution of the Senior Deferrable
          Notes to the Holders of the Securities in exchange for the Securities;
          and

               (iv) be a United States Person.

         (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
this Declaration and the Securities.

         (e) The Property Trustee shall take any Legal Action that arises out of
or in connection with (i) a Trust Enforcement Event of which a Responsible
Officer of the Property Trustee has actual knowledge or (ii) the Property
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act; provided that if a Trust Enforcement Event has occurred and is continuing
and such event is attributable to the failure of the Senior Deferrable Notes
Issuer to pay interest or principal on the Senior Deferrable Notes on the date
such interest or principal is otherwise payable (or in the case of redemption,
on the redemption date), then a Holder of Preferred Securities may institute a
proceeding directly against the Senior Deferrable Notes Issuer to enforce
payment to such Holder of the principal or interest on Senior Deferrable Notes
having an aggregate principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such Holder (a "Direct Action"). In connection
with such Direct Action, the Senior Deferrable Notes Issuer will be subrogated
to the rights of such Holder of Preferred Securities to the extent of any
payment made by the Senior Deferrable Notes Issuer to such Holders of Preferred
Securities in such Direct Action.

         (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 have been distributed to the Holders of the Securities
          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 6.6.

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

                                       21
<PAGE>   25

         (h) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") 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
Paying Agent may be removed by the Property Trustee at any time, and a successor
Paying Agent or additional Paying Agents may be appointed at any time by the
Property Trustee.

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

         The Property Trustee shall 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 the Property Trustee shall have no power
to, and shall not, take any action that is inconsistent with the purposes and
functions of the Trust set out in Section 3.3.

         SECTION 3.9 Certain Duties and Responsibilities of the Property
Trustee.

         (a) The Property Trustee, before the occurrence of any Trust
Enforcement Event and after the cure or waiver of all Trust Enforcement Events
that may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration, and no implied covenants shall be
read into this Declaration against the Property Trustee. If a Trust Enforcement
Event has occurred (that has not been cured or waived pursuant to Section 2.6)
of which a Responsible Officer of the Property Trustee has actual knowledge, the
Property Trustee shall exercise such of the rights and powers vested in it by
this Declaration and shall use the same degree of care and skill in its 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 a Trust Enforcement Event and
          after the cure or waiver of all such Trust Enforcement Events 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 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 no implied covenants or obligations
                         shall be read into this Declaration 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; but
                         in the case of any such certificates or opinions that
                         by any provision

                                      22
<PAGE>   26

                        hereof are specifically required to be furnished to the
                        Property Trustee, the Property Trustee shall be under a
                        duty to examine such certificates or opinions 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 of the Property
          Trustee, unless it has been proven 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 without negligence, 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 has 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;

               (v) the Property Trustee's sole duty with respect to the custody,
          safe-keeping and physical preservation of the Senior Deferrable Notes
          and the Property 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 Senior Deferrable Notes 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 otherwise may agree 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 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 Regular 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 Regular
          Trustees or the Sponsor.

          SECTION 3.10      Certain Rights of Property Trustee.

          (a)      Subject to the provisions of Section 3.9:

                                       23
<PAGE>   27

               (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 contemplated by this
          Declaration shall 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 request, in the absence of bad faith on its part, and
          conclusively rely upon an Officers' Certificate which, upon receipt of
          such request, shall be promptly delivered by the Sponsor.

               (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 registration thereof.

               (v) The Property Trustee may consult with counsel of its choice
          or other experts, and the advice or opinion of such counsel and
          experts with respect to legal matters or advice within the scope of
          such experts' area of expertise shall be full and complete
          authorization and protection in respect of any action taken, suffered
          or omitted by it hereunder in good faith and in accordance with such
          advice or opinion. Such counsel may be counsel to the 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 of Securities, unless such
          Holder of Securities has provided to the Property Trustee security and
          indemnity, reasonably satisfactory to the Property Trustee, against
          the costs, expenses (including 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; provided that nothing contained in
          this Section 3.10(a) shall be taken to relieve the Property Trustee,
          upon the occurrence of an Indenture Event of Default, of its
          obligation to exercise the rights and powers vested in it by this
          Declaration.

               (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 sees fit.

                                       24
<PAGE>   28

               (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, provided that
          any such action (other than ministerial action) executed or performed
          by such agent or attorney is executed or performed by an agent or an
          attorney that is a United States Person, 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 of the Securities, 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 evidenced
          conclusively 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 (A) may request instructions from the
          Holders of the Securities, which instructions only may 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 this
          Declaration in respect of such remedy, right or action, (B) may
          refrain from enforcing such remedy or right or taking such other
          action until such instructions are received and (C) 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.

               (xii) The Property Trustee shall not be liable for any action
          taken, suffered or omitted to be taken by it without negligence, in
          good faith and reasonably believed by it to be authorized or within
          the discretion, 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 6.2, the Delaware Trustee shall not be entitled to exercise any powers
of, nor shall the Delaware Trustee have any of the duties and responsibilities
of, the trustees described in this Declaration.

                                       25
<PAGE>   29

Except as set forth in Section 6.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807(a)
of the Business Trust Act and shall be a United States Person. If the Property
Trustee, meeting the requirements of Section 6.2, also acts as Delaware Trustee,
this Section 3.11 shall not apply.

         SECTION 3.12 Execution of Documents.

              Except as otherwise required by the Business Trust Act or
applicable law, any Regular Trustee is authorized to execute on behalf of the
Trust any documents that the Regular Trustees have the power and authority to
execute pursuant to Section 3.6.

         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, the Securities, the Senior Deferrable Notes or the Indenture.

         SECTION 3.14 Duration of Trust.

              The Trust shall exist until dissolved pursuant to the provisions
of Article 8 hereof.

         SECTION 3.15 Mergers.

         (a) The Trust may not consolidate with, convert into, amalgamate or
merge with or into, be replaced by or convey, transfer or lease its properties
and assets substantially as an entirety to any corporation or other body, except
as described in Section 3.15(b) and (c) or Section 8.2.

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

               (i) if the Trust is not the successor entity, such successor
          entity (the "Successor Entity") either:

                    (A)  expressly assumes all of the obligations of the Trust
                         with respect to the Securities; or

                    (B)  substitutes for the Securities other securities having
                         substantially the same terms as the Securities (the
                         "Successor Securities"), so long as such Successor
                         Securities rank the same as the Securities with respect
                         to Distributions and payments upon liquidation,
                         redemption and otherwise;

                                       26
<PAGE>   30

               (ii) the Senior Deferrable Notes Issuer expressly appoints a
          trustee of such Successor Entity that possesses the same powers and
          duties as the Property Trustee as the holder of the Senior Deferrable
          Notes;

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

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

               (v) such consolidation, conversion, amalgamation, merger,
          replacement, conveyance, transfer or lease does not adversely affect
          the rights, preferences and privileges of the Holders of the Preferred
          Securities (including any Successor Securities) in any material
          respect;

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

               (vii) prior to such consolidation, conversion, amalgamation,
          merger, replacement, conveyance, transfer or lease, the Sponsor has
          received an opinion of independent counsel to the Trust experienced in
          such matters to the effect that:

                    (A)  such consolidation, conversion, amalgamation, merger,
                         replacement, conveyance, transfer or lease does not
                         adversely affect the rights, preferences and privileges
                         of the Holders of the Securities (including any
                         Successor Securities) in any material respect;

                    (B)  following such consolidation, conversion, amalgamation,
                         merger, replacement, conveyance, transfer or lease,
                         neither the Trust nor such Successor Entity will be
                         required to register as an Investment Company under the
                         Investment Company Act; and

                    (C)  following such consolidation, conversion, amalgamation
                         or merger, replacement, conveyance, transfer or lease,
                         the Trust (or such Successor Entity) will continue to
                         be classified as a grantor trust for United States
                         federal income tax purposes;

               (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 Guarantee; and

               (ix) such Successor Entity expressly assumes all of the
          obligations of the Trust.

                                       27
<PAGE>   31

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

         SECTION 3.16 Property Trustee May File Proofs of Claim.

              In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other similar judicial proceeding relative to the Trust or any other obligor
upon the Securities or the property of the Trust or of such other obligor or
their creditors, the Property Trustee (irrespective of whether any Distributions
on the Securities are then due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee has
made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:

         (a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Securities (or, if the Securities are
original issue discount securities, such portion of the liquidation amount as
may be specified in the terms of such securities) and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Property Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents and counsel) and
of the Holders of the Securities allowed in such judicial proceeding; and

         (b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities to make such payments to the Property Trustee and, in
the event the Property Trustee consents to the making of such payments directly
to the Holders, to pay to the Property Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Property
Trustee, its agents and counsel, and any other amounts due the Property Trustee.

         Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt, on behalf of any Holder
of Securities, any plan of reorganization, arrangement, adjustment or
compensation affecting the Securities or the rights of any Holder thereof or to
authorize the Property Trustee to vote in respect of the claim of any Holder of
Securities in any such proceeding.

                                       28
<PAGE>   32

         SECTION 3.17 Registration Statement and Related Matters.

              In accordance with the Original Declaration, the Sponsor was
authorized (a) to prepare and file with the Commission and execute, in each case
on behalf of the Trust, (i) a Registration Statement on Form S-3 (Registration
Nos. 333-33846, 333-33846-01 and 333-33846-02) (the "1933 Act Registration
Statement"), including any pre-effective or post-effective amendments thereto,
relating to the registration under the Securities Act of the Preferred
Securities and certain other securities of the Sponsor and (ii) if the Sponsor
deemed it desirable, a Registration Statement on Form 8-A (the "1934 Act
Registration Statement"), including all pre-effective and post-effective
amendments thereto, relating to the registration of the Preferred Securities
under Section 12 of the Exchange Act; (b) if the Sponsor deemed it desirable, to
prepare and file with New York Stock Exchange, Inc. or any other automated
quotation system, exchange or over-the-counter market (collectively, the
"Exchanges") and execute on behalf of the Trust a listing application or
applications and all other applications, statements, certificates, agreements
and other instruments as shall be necessary or desirable to cause the Preferred
Securities to be listed on any Exchange; (c) to prepare and file and execute on
behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and other papers and
documents as the Sponsor, on behalf of the Trust, deemed necessary or desirable
to register the Preferred Securities under the securities or "Blue Sky" laws of
such jurisdictions as the Sponsor, on behalf of the Trust, deemed necessary or
desirable; (d) to negotiate the terms of and execute on behalf of the Trust the
Underwriting Agreement; and (e) to execute and deliver on behalf of the Trust
letters or documents to, or instruments for filing with, the Clearing Agency
relating to the Preferred Securities. In the event that any filing referred to
in clauses (a)-(c) above is required by the rules and regulations of the
Commission, any Exchange, the National Association of Securities Dealers, Inc.
or state securities or blue sky laws, to be executed on behalf of the Trust by
the Regular Trustees, the Regular Trustees, in their capacities as Trustee of
the Trust, are hereby authorized to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing. In connection with all of the
foregoing, each Regular Trustee, solely in its capacity as Trustee of the Trust,
has constituted and appointed, and hereby confirms the appointment of,
___________, ___________ and ___________, and each of them, as his, her or its,
as the case may be, true and lawful attorneys-in-fact, and agents, with full
power of substitution and resubstitution, for such Trustee or in such Trustee's
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to the 1933 Act Registration Statement and
the 1934 Act Registration Statement and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Commission,
granting unto said attorneys-in-fact and agents full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as such Trustee might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his or her substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Notwithstanding anything in this Section 3.17 to the contrary, no Foreign Person
(acting in its capacity as attorney-in-fact or agent of any Foreign Person)
shall be authorized to take or perform any action on behalf of the Trust
pursuant to this Section 3.17 at any time on or after the Closing Date.

                                       29
<PAGE>   33

                             ARTICLE 4: THE SPONSOR

         SECTION 4.1 Responsibilities of the Sponsor.

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

         (a) to prepare, execute and file with the Commission, on behalf of the
Trust, a registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments or supplements thereto, and to take any
other action relating to the registration and sale of the Preferred Securities
under federal and state securities laws;

         (b) if necessary, to determine the states in which to take appropriate
action to qualify or register for sale all or part of the PEPS Units and to do
any and all such acts, other than actions that must be taken by the Trust, and
advise the Trust of actions it must take; to prepare, execute and file, on
behalf of the Trust, any documents it deems necessary or advisable in order to
comply with the applicable laws of any such states; and to prepare, execute and
file, on behalf of the Trust, any such documents or take any acts determined by
it to be necessary in order to qualify or register all or part of the PEPS Units
in any state in which it has determined to qualify or register such PEPS Units
for sale;

         (c) if necessary, to prepare, execute and file on behalf of the Trust,
an application to the New York Stock Exchange or any other national stock
exchange or the Nasdaq National Market for listing upon notice of issuance of
any Preferred Securities;

         (d) if necessary, to prepare, execute and file with the Commission, on
behalf of the Trust, a registration statement on Form 8-A relating to the
registration of the Preferred Securities under Section 12 of the Exchange Act,
including any amendments thereto; and

         (e) to negotiate the terms of, and execute and enter into, an
Underwriting Agreement providing for the sale of the PEPS Units and a
Remarketing Agreement providing for the Remarketing.

         SECTION 4.2 Indemnification and Expenses of the Trustees.

              To the fullest extent permitted by law, the Sponsor, in its
capacity as Senior Deferrable Notes Issuer, agrees to indemnify the Regular
Trustees, the Property Trustee and the Delaware Trustee for, and to hold each of
them harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Regular Trustees, the Property
Trustee or the Delaware Trustee, as the case may be, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending either of them against
any claim or liability in connection with the exercise or performance of any of
their respective powers or duties hereunder. The provisions of this Section 4.2
shall survive the resignation or removal of the Regular Trustees, the Delaware
Trustee or the Property Trustee and the termination of this Declaration.

                                       30
<PAGE>   34

                ARTICLE 5: THE HOLDERS OF THE COMMON SECURITIES

         SECTION 5.1 Senior Deferrable Notes Issuer's Purchase of the Common
Securities.

              On the Closing Date, the Senior Deferrable Notes Issuer shall
purchase all of the Common Securities issued by the Trust, in an aggregate
liquidation amount equal to at least three percent of the total capital of the
Trust, at such time as the Preferred Securities are sold and issued. If any
additional Preferred Securities are issued pursuant to the exercise of any
Over-allotment Option, then the Senior Deferrable Notes Issuer shall purchase,
on the date of such issuance, an amount of additional Common Securities such
that the aggregate number of Common Securities held by the Senior Deferrable
Notes Issuer, upon such purchase, will equal at least three percent of the total
capital of the Trust.

              The aggregate stated liquidation amount of the Common Securities
outstanding at any time shall not be less than three percent of the total
capital of the Trust.

         SECTION 5.2 Covenants of the Senior Deferrable Notes Issuer.

              For so long as the Preferred Securities remain outstanding, the
Senior Deferrable Notes Issuer shall covenant (i) to maintain, directly or
indirectly, 100% ownership of the Common Securities, (ii) to cause the Trust to
remain a statutory business trust and not to voluntarily dissolve, wind up,
liquidate or be terminated, except as permitted by this Declaration, (iii) to
use its commercially reasonable efforts to ensure that the Trust will not be an
Investment Company required to be registered under the Investment Company Act
and (iv) not to take any action that would be reasonably likely to cause the
Trust to be classified as an association or a publicly traded partnership
taxable as a corporation for United States federal income tax purposes.

         SECTION 5.3 Holder of the Common Securities.

              Each Holder of the Common Securities shall at all times hold the
Common Securities in its individual capacity on its own behalf and shall not, in
its capacity as a Holder of the Common Securities, be under (or subject to) the
control or direction of any Foreign Person (pursuant to a contractual
arrangement or otherwise) other than by virtue of such Foreign Person's direct
or indirect stock ownership, if any, of the Holder of Common Securities.
Notwithstanding anything in this Declaration to the contrary, each Holder of the
Common Securities shall at all times be a United States Person and shall be
authorized to give any direction hereunder with respect to the Trust as shall be
necessary for the Trust not to be considered a foreign trust for United States
Federal income tax purposes.

         SECTION 5.4 Exchanges.

         (a) If at any time the Senior Deferrable Notes Issuer or any of its
Affiliates (in either case, a "Issuer Affiliated Holder") is the Holder of any
Preferred Securities, such Issuer Affiliated Holder shall have the right to
deliver to the Property Trustee all or such portion of its Preferred Securities
as it elects and receive, in exchange therefor, Senior Deferrable Notes in an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest

                                       31
<PAGE>   35

rate identical to the distribution rate of, and accrued and unpaid interest
equal to accumulated and unpaid Distributions on, such Preferred Securities.
Such election (i) shall be exercisable effective on any Distribution payment
date by such Issuer Affiliated Holder delivering to the Property Trustee a
written notice of such election specifying the aggregate liquidation amount of
the Preferred Securities with respect to which such election is being made and
the Distribution payment date on which such exchange shall occur, which
Distribution payment date shall be not less than ten Business Days after the
date of receipt by the Property Trustee of such election notice and (ii) shall
be conditioned upon such Issuer 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
Distribution payment date 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 Senior Deferrable Notes Issuer or
its Affiliate(s) with respect to such Preferred Securities will cease.

         (b) In the case of an exchange described in Section 5.4(a), the Trust
will, on the date of such exchange, exchange Senior Deferrable Noes 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
5.4(a) divided by the aggregate liquidation amount of the Preferred Securities
outstanding immediately prior to such exchange, for such proportional amount of
Common Securities held by the Senior Deferrable Notes Issuer (which
contemporaneously shall be canceled and no longer be deemed to be outstanding);
provided, that the Senior Deferrable Notes Issuer delivers or causes 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 Distribution
payment date on which such exchange is to occur.

                            ARTICLE 6: THE TRUSTEES

         SECTION 6.1 Number of Trustees.

         The number of Trustees initially shall be five, and:

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

         (b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of the Common Securities at a
meeting of the Holders of the Common Securities or by written consent without
prior notice in lieu of such meeting;

provided that the number of Trustees shall be at least three; and provided
further that: (i) the Delaware Trustee, in the case of a natural person, shall
be a person who is a resident of the State of Delaware or that, if not a natural
person, is an entity that has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable law; (ii) at least a
majority of the Trustees shall be employees or officers of, or are affiliates
of, the Sponsor; (iii) 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 Property Trustee also may serve as Delaware Trustee if
it meets the applicable requirements; (iv) each Trustee shall be a United

                                       32
<PAGE>   36

States Person; and (v) each Trustee, or any delegee of, any Trustee, shall at
all times act as Trustee in its individual capacity on its own behalf and will
not, at any time, in its capacity as Trustee, be under (or subject to) the
control or direction of any Foreign Person (pursuant to a contractual
arrangement or otherwise).

         SECTION 6.2 Delaware Trustee; Eligibility.

         If required by the Business Trust Act, one Trustee (which may be the
Property 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 that 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 also shall be the Delaware Trustee and
Section 3.11 shall have no application.

         SECTION 6.3 Property Trustee; Eligibility.

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

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

               (ii) be a corporation that is a United States Person organized
          and doing business under the law of the United States of America or
          any state or territory thereof or of the District of Columbia, or a
          corporation or other Person that is a United States 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 fifty
          million U.S. dollars ($50,000,000) and subject to supervision or
          examination by federal, state, territorial or District of Columbia
          authority. If such corporation 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 purpose of this
          Section 6.3(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 6.3(a), the Property Trustee immediately shall resign in
the manner and with the effect set forth in Section 6.6(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 Holders of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall comply
in all respects with the provisions of Section 310(b) of the Trust Indenture
Act.

                                       33
<PAGE>   37

         (d) The Guarantee 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.

         SECTION 6.4 Qualifications of the Regular Trustees Generally.

              Each Regular 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 6.5 Initial Regular Trustees.

              The initial Regular Trustees shall be Jay D. Browning, _________,
and _______________, the business address of all of whom is in care of Valero
Energy Corporation, One Valero Place, San Antonio, Texas 78212.

         SECTION 6.6 Appointment, Removal and Resignation of the Trustees.

         (a) Subject to Sections 6.6(b) and 7.5(k), the 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; and

               (ii) after the issuance of any Securities, by a vote of the
          Holders of a Majority in Liquidation Amount of the Common Securities
          at a meeting of the Holders of the Common Securities or by written
          consent without prior notice in lieu of such meeting.

         (b) The Property Trustee shall not be removed in accordance with
Section 6.6(a) or Section 7.5(k) until a successor Trustee possessing the
qualifications to act as Property Trustee under Section 6.3(a) (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 Regular Trustees and the Sponsor. The Delaware Trustee shall not be removed
in accordance with Section 6.6(a) or Section 7.5(k) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 6.2 and
6.4 (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 Regular Trustees and the Sponsor.

         (c) A Trustee appointed to office shall hold office until a successor
has been appointed, until death or dissolution or until removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by written instrument executed by such Trustee and delivered to the
Sponsor and the other Trustees, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided that:

               (i) no such resignation of the Property Trustee shall be
          effective:

                    (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 Regular Trustees, the Sponsor and the
                         resigning Property Trustee; or

                                       34
<PAGE>   38

                    (B)  until the assets of the Trust have been completely
                         liquidated and the proceeds thereof distributed to the
                         Holders of the Securities; and

               (ii) no such resignation of the Delaware Trustee shall be
          effective until 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 Regular Trustees, the
          Sponsor and the resigning Delaware Trustee.

         (d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may-be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 6.6.

         (e) If no Successor Property Trustee or Successor Delaware Trustee, as
the case may be, has been appointed and accepted appointment as provided in this
Section 6.6 within 60 days after delivery of an instrument of resignation or
removal, the resigning or removed Property Trustee or Delaware Trustee, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee, as applicable. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, 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 6.7 Vacancies among Trustees.

              If a Trustee ceases to hold office for any reason and the number
of Trustees is not reduced pursuant to Section 6.1, or if the number of Trustees
is increased pursuant to Section 6.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 6.6.

         SECTION 6.8 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 annul, dissolve or terminate the Trust nor to
terminate this Declaration. Whenever a vacancy in the number of Regular Trustees
shall occur until such vacancy is filled by the appointment of a Regular Trustee
in accordance with Section 6.6, the Regular Trustees in office, regardless of
the number, shall have all the powers granted to the Regular Trustees and shall
discharge all the duties imposed upon the Regular Trustees by this Declaration.

         SECTION 6.9 Meetings.

              If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular

                                       35
<PAGE>   39

Trustees may be held at a time and place fixed by resolution of the Regular
Trustees. Notice of any in-person meetings of the Regular Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 48 hours before such meeting. Notice of
any telephonic meetings of the Regular 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 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 a Regular Trustee
at a meeting shall constitute a waiver of notice of such meeting except where a
Regular 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 provided otherwise in this Declaration, any action of
the Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
vote with respect to such matter, provided a Quorum is present, or without a
meeting and without prior notice by the unanimous written consent of the Regular
Trustees. In the event there is only one Regular Trustee, any and all action of
such Regular Trustee shall be evidenced by a written consent of such Regular
Trustee.

         SECTION 6.10 Delegation of Power by the Regular Trustees.

         (a) Any Regular Trustee may delegate to any natural person over the age
of 21 that is a United States Person, by power of attorney consistent with
applicable law, his, her or its power for the purpose of executing any documents
contemplated in Section 3.6.

         (b) The Regular Trustees shall have the power to delegate from time to
time to such of their number or to officers of the Trust or any other Person the
doing of such things and the execution of such instruments either in the name of
the Trust or the names of the Regular Trustees or otherwise as the Regular
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 6.11 Merger, Consolidation, Conversion or Succession to
Business.

              Any entity into which the Property Trustee, the Delaware Trustee
or any Regular Trustee that is not a natural person may be merged or converted
or with such Trustee may be consolidated, or any entity resulting from any
merger, conversion or consolidation to which such Trustee is a party, or any
entity succeeding to all or substantially all the corporate trust business of
such Trustee, shall be the successor of such Trustee hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such entity otherwise is qualified and eligible
under this Article.

                       ARTICLE 7: TERMS OF THE SECURITIES

         SECTION 7.1 General Provisions Regarding the Securities.

         (a) The Regular Trustees shall issue, on behalf of the Trust, one class
of preferred securities representing undivided beneficial interests in the
assets of the Trust (the "Preferred Securities") and one class of common
securities representing undivided beneficial interests in the assets of the
Trust (the "Common Securities").

                                       36
<PAGE>   40

               (i) Preferred Securities. The Preferred Securities of the Trust
          shall have an aggregate stated liquidation amount with respect to the
          assets of the Trust of __________________ dollars ($_________)
          (subject to increase to not more than __________________ dollars
          ($_________) in the event of the exercise of any Over-allotment
          Option) and a stated liquidation amount with respect to the assets of
          the Trust of $____ per Preferred Security. The Preferred Securities
          are hereby designated for identification purposes only as the
          Preferred Securities. The Preferred Security Certificates shall be
          substantially in the form of Exhibit A hereto, with such changes and
          additions thereto or deletions therefrom as may be required by
          ordinary usage, custom or practice.

               (ii) Common Securities. The Common Securities of the Trust shall
          have an aggregate liquidation amount with respect to the assets of the
          Trust of __________________ dollars ($_________) (subject to increase
          to not more __________________ dollars ($_________) in the event of
          the exercise of any Over-allotment Option) and a liquidation amount
          with respect to the assets of the Trust of $____ per Common Security.
          The Common Securities are hereby designated for identification
          purposes only as the Common Securities. The Common Security
          Certificates shall be substantially in the form of Exhibit B hereto,
          with such changes and additions thereto or deletions therefrom as may
          be required by ordinary usage, custom or practice.

         (b) Payment of Distributions on, and any payment of the Redemption
Price upon a redemption of, the Preferred Securities and the Common Securities,
as applicable, shall be made Pro Rata based on the liquidation amount of such
Preferred Securities and Common Securities; provided that if on any date on
which amounts payable on distribution or redemption, an Indenture Event of
Default has occurred and is continuing, then such amounts payable shall not be
made on any of the Common Securities, and no other payment on account of the
redemption, liquidation or other acquisition of such Common Securities shall be
made, until all accumulated and unpaid Distributions, or payments of the
Redemption Price, as the case may be, on all of the outstanding Preferred
Securities for which Distributions are to be paid or that have been called for
redemption, as the case may be, are fully paid. All funds available to the
Property Trustee shall first be applied to the payment in full in cash of all
Distributions on, or the Redemption Price of, the Preferred Securities then due
and payable.

         (c) 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.

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

         (e) Every Person, by virtue of having become a Holder of Securities or
a Beneficial Owner of Preferred Securities 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,

                                       37
<PAGE>   41

the Guarantee, the Indenture, the Purchase Contract Agreement, the Pledge
Agreement and the Senior Deferrable Notes.

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

         (g) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any Regular Trustee. If a Regular Trustee of the Trust who has signed any of the
Certificates ceases to be a Regular Trustee before such signed Certificates have
been delivered by the Trust, such Certificates nevertheless may be delivered as
though the Person who signed such Certificates had not ceased to be a Regular
Trustee. Any Certificate may be signed on behalf of the Trust by such Persons
who, at the actual date of execution of such Certificate, shall be the Regular
Trustees of the Trust, although at the date of the execution and delivery of
this Declaration any such Person was not such a Regular Trustee. Certificates
shall be printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Regular Trustees, as evidenced by
their execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply with any law or
with any rule or regulation of any stock exchange on which the Securities may be
listed, or to conform to usage.

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

              Upon a written order of the Trust signed by one Regular Trustee,
the Property Trustee shall authenticate the Preferred Security Certificates for
original issue. The aggregate number of Preferred Securities outstanding at any
time (including the Over-allotment Option) shall not exceed the liquidation
amount set forth in Section 7.1(a)(i).

              The Property Trustee may appoint an authenticating agent
acceptable to the Trust, as determined by the Regular Trustees on behalf of the
Trust, to authenticate Certificates. An authenticating agent may authenticate
Certificates whenever the Property Trustee may do so. Each reference in this
Declaration to authentication by the Property Trustee shall include
authentication by such agent. An authenticating agent shall have the same rights
as the Property Trustee to deal with the Sponsor or an Affiliate of the Sponsor.

         (h) The Preferred Securities Certificates, upon original issuance
(including Preferred Securities, if any, issued pursuant to the exercise of any
Over-allotment Option), shall be issued as Global Securities in the form of one
or more fully registered global Preferred Security Certificates (each a "Global
Certificate"), to be delivered to The Depository Trust Company, the initial
Depositary, by or on behalf of the Trust. Such Global Certificates initially
shall be registered on the books and records of the Trust in the name of "Cede &
Co.," the nominee of the initial Depositary. No Beneficial Owner of Preferred
Securities shall receive a definitive Preferred Security Certificate
representing such Beneficial Owner's interests in such Global Certificates,
except as provided in Section 7.12. Unless and until definitive, fully
registered Preferred Security Certificates have been issued to the Beneficial
Owners of Preferred Securities pursuant to Section 7.12,

                                       38
<PAGE>   42

               (i) the provisions of this Section 7.1 shall be in full force and
          effect;

               (ii) the Trust and the Trustees shall be entitled to deal with
          the Depositary for all purposes of this Declaration (including the
          payment of Distributions on the Global Certificates and receiving
          approvals, votes or consents thereunder) as the Holder of the
          Preferred Securities and the sole of Holder of the Global Certificates
          and, except as set forth herein or in Rule 3a-7 (if the Trust is
          excluded from the definition of an Investment Company solely by reason
          of Rule 3a-7) with respect to the Property Trustee, shall have no
          obligation to the Beneficial Owners of the Preferred Securities;

               (iii) to the extent that the provisions of this Section 7.1
          conflict with any other provisions of this Declaration, the provisions
          of this Section 7.1 shall control; and

               (iv) the rights of the Beneficial Owners of the Preferred
          Securities shall be exercised only through the Depositary and shall be
          limited to those established by law and agreements between such
          Beneficial Owners and the clearing agency and/or the Depositary
          Participants. The Depositary shall make book-entry transfers among
          Depositary Participants and receive and transmit Distributions on the
          Global Certificates to such Depositary Participants; provided that
          solely for the purposes of 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 rely
          conclusively on, and shall be protected in relying on, any written
          instrument (including a proxy) delivered to the Trustees by the
          Depositary setting forth the votes of the Beneficial Owners of the
          Preferred Securities or assigning the right to vote on any matter to
          any other Persons either in whole or in part.

              Whenever a notice or other communication to the Holder of the
Preferred Securities is required to be given under this Declaration, unless and
until definitive Preferred Security Certificates have been issued pursuant to
Section 7.1(g), the Trustees shall deliver all such notices and communications
specified herein to be given to the Holders of the Preferred Securities to the
Depositary, and, with respect to any Preferred Security Certificate registered
in the name of a Depositary or the nominee of a Depositary, 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 Depositary
setting forth the votes of the Beneficial Owners of the Preferred Securities or
assigning the right to vote on any matter or any other Persons either in whole
or in part.

         SECTION 7.2 Distributions.

         (a) Holders of the Securities shall be entitled to receive
Distributions that shall accumulate and be payable at the rate per annum of
____% of the stated liquidation amount of $____ per Security until __________,
____, and at the Reset Rate thereafter. The amount of Distributions payable for
any period shall be computed (i) for any full quarterly distribution

                                       39
<PAGE>   43

period, on the basis of a 360-day year of twelve 30-day months and (ii) for any
period shorter than a full quarterly distribution period, on the basis of a
30-day month and, for any period of less than one month, on the basis of the
actual number of days elapsed per 30-day month. Subject to Section 7.1(b),
Distributions shall be made on the Securities on a Pro Rata basis. Distributions
on the Securities shall accumulate from ___________, ____, shall be cumulative
and shall be payable quarterly, in arrears, on __________, __________,
__________ and __________ of each year, commencing ____________, when, as and if
available for payment, by the Property Trustee, except as otherwise described
below. Distributions shall be payable only to the extent that payments are made
to the Trust in respect of the Senior Deferrable Notes held by the Property
Trustee and to the extent that the Trust has funds available for the payment of
such Distributions in the Property Account.

         (b) Distributions not paid on the scheduled payment date shall
accumulate and compound quarterly at the rate of ____% per annum through and
including ____________ and at the Reset Rate thereafter ("Compounded
Distributions"). "Distributions" shall mean ordinary cumulative distributions
together with any Compounded Distributions.

         (c) If and to the extent that the Senior Deferrable Notes Issuer makes
a payment of principal of and any premium or interest on the Senior Deferrable
Notes 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 Pro Rata distribution of the
Payment Amount to Holders, subject to Section 7.1(b).

         (d) Distributions on the Securities shall be payable to the Holders
thereof as they appear on the register of the Trust as of the close of business
on the relevant record dates. If the Preferred Securities are represented by one
or more Global Securities, the relevant record dates shall be the close of
business on the Business Day preceding such Distribution payment date, unless a
different regular record date is established or provided for the corresponding
interest payment date on the Senior Deferrable Notes. The relevant record dates
for the Common Securities shall be the same as for the Preferred Securities. If
the Preferred Securities are not represented by one or more Global Securities,
the relevant record dates for the Preferred Securities shall be selected by the
Regular Trustees and shall be the fifteenth Business Day prior to the relevant
Distribution payment dates. At all times, the Distribution payment dates shall
correspond to the interest payment dates on the Senior Deferrable Notes.
Distributions payable on any Securities that are not punctually paid on any
Distribution payment date, as a result of the Senior Deferrable Notes Issuer
having failed to make a payment under the Senior Deferrable Notes, shall cease
to be payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution instead shall 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 this Declaration. 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 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
calendar year, such payment shall be made on the preceding Business Day, with
the same force and effect as if made on such payment date.

                                       40
<PAGE>   44

         (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 among the Holders of the Securities, subject to Section
7.1(b).

         SECTION 7.3 Redemption of Securities.

         (a) Upon the repayment or redemption, in whole or in part, of the
Senior Deferrable Notes held by the Trust, whether at the stated maturity of the
Senior Deferrable Notes or upon earlier redemption as provided in the Indenture,
the proceeds from such repayment or redemption shall be simultaneously applied
Pro Rata (subject to Section 7.1(b)) to redeem Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Senior
Deferrable Notes so repaid or redeemed at the Redemption Price. Holders of the
Securities shall be given not less than 30 nor more than 60 days notice of such
redemption in accordance with Section 7.4.

         (b) If the Senior Deferrable Notes Issuer redeems the Senior Deferrable
Notes upon the occurrence and continuance of a Tax Event, the proceeds from such
redemption shall be applied by the Property Trustee to redeem the Securities in
whole (but not in part) at a redemption price per Security equal to the
Redemption Amount plus any accumulated and unpaid Distributions thereon to the
Tax Event Redemption Date. If, following the occurrence of a Tax Event, the
Senior Deferrable Notes Issuer exercises its option to redeem the Senior
Deferrable Notes, the Senior Deferrable Notes Issuer shall appoint the Quotation
Agent; if a Tax Event Redemption occurs prior to the Purchase Contract
Settlement Date, the redemption price payable in liquidation of the Securities
will be distributed to __________________________, acting as the securities
intermediary under the Pledge Agreement, which in turn will apply that amount to
purchase the Treasury Portfolio and remit the remaining portion, if any, of such
price to __________________________, acting as the purchase contract agent under
the Purchase Contract Agreement, for payment to the Holders of the Securities.
If a Tax Event Redemption occurs after the Purchase Contract Settlement Date,
the Treasury Portfolio shall not be purchased and the Property Trustee shall
distribute to the Holders of the Securities on the Tax Event Redemption Date the
Redemption Price payable in liquidation of such Holders' interests in the assets
of the Trust.

         SECTION 7.4 Redemption Procedures.

         (a) Notice of any redemption of, or notice of distribution of Senior
Deferrable Notes in exchange for, the Securities (a "Redemption/Distribution
Notice"), which notice shall be irrevocable, shall be given by the Trust by mail
to each Holder of Securities to be redeemed or exchanged at least 30 but no more
than 60 days before the date fixed for redemption or exchange thereof which, in
the case of a redemption, shall be the date fixed for redemption of the Senior
Deferrable Notes. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this Section
7.4(a), 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 the Holders
of the Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of the Securities at the address of each such Holder appearing in the
register 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.

                                       41
<PAGE>   45

         (b) Subject to the Trust's fulfillment of the notice requirements set
forth in Section 7.4(a), if Securities are to be redeemed, then (provided that
the Senior Deferrable Notes Issuer has paid the Property Trustee a sufficient
amount of cash in connection with the related redemption or maturity of the
Senior Deferrable Notes) (i) with respect to the Preferred Securities
represented by one or more Global Securities, by 12:00 noon, New York City time,
on the redemption date, the Property Trustee will deposit irrevocably with the
Depositary or its nominee funds sufficient to pay the applicable Redemption
Price, and the Property Trustee shall give the Depositary irrevocable
instructions and authority to pay the Redemption Price to the Beneficial Owners
of the Preferred Securities, and (ii) with respect to Securities not represented
by one or more Global Securities, the Property Trustee shall pay the applicable
Redemption Price to the Holders of such Securities by check mailed to the
address of each Holder appearing on the register of the Trust on the redemption
date. If any date fixed for redemption of Securities is not a Business Day, then
payment of the Redemption Price payable on such date shall be made on the next
Business Day (without any interest thereon), except that if such Business Day
falls in the next calendar year, such payment shall be made on the preceding
Business Day, in each case with the same force and effect as if made on such
date fixed for redemption. Notwithstanding the foregoing, so long as the Holder
of any Preferred Securities is the Collateral Agent or the Purchase Contract
Agent, the payment of the Redemption Price in respect of the Preferred
Securities held by the Collateral Agent or the Purchase Contract Agent shall be
made no later than 12:00 noon, New York City time, on the redemption date by
check or wire transfer in immediately available funds at such place and to such
account as may be designated by the Collateral Agent or the Purchase Contract
Agent. If payment of the Redemption Price in respect of any Securities is
improperly withheld or refused and not paid either by the Trust or by the
Sponsor as guarantor pursuant to the Guarantee, then Distributions on such
Securities shall continue to accumulate at the then applicable rate, from the
original redemption date to the actual date of payment, in which case the actual
payment date shall be the date fixed for redemption for purposes of calculating
the Redemption Price. For these purposes, the applicable Redemption Price shall
not include Distributions that are being paid to Holders of Securities who were
not Holders of Securities on a relevant record date. If a
Redemption/Distribution Notice has been given and funds have been deposited or
paid as required, then immediately prior to the close of business on the date of
such deposit or payment, Distributions will cease to accumulate on the
Securities called for redemption, and all rights of Holders of such Securities
so called for redemption shall cease, except the right of the Holders of such
Securities to receive the Redemption Price, but without interest on such
Redemption Price, and from and after the date fixed for redemption, such
Securities will cease to be outstanding.

              Neither the Regular Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Securities that have been
called for redemption, except for the unredeemed portion of any Securities being
redeemed in part.

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

                                       42
<PAGE>   46

         SECTION 7.5 Voting Rights of the Preferred Securities.

         (a) Except as provided under this Section 7.5 and Section 11.1 and as
otherwise required by the Business Trust Act, the Trust Indenture Act and other
applicable law, the Holders of the Preferred Securities shall have no voting
rights.

         (b) Subject to the requirement of the Property Trustee obtaining a tax
opinion in certain circumstances set forth in Section 7.5(d), the Holders of a
Majority in Liquidation Amount of the Preferred Securities, voting separately as
a class, shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Property Trustee, or to direct
the exercise of any trust or power conferred upon the Property Trustee under
this Declaration, including the right to direct the Property Trustee, as Holder
of the Senior Deferrable Notes, to (i) exercise the remedies available to it
under the Indenture, (ii) consent to any amendment or modification of the
Indenture or the Senior Deferrable Notes where such consent is required or (iii)
waive any past default and its consequences that are waivable under the
Indenture; provided that if an Indenture Event of Default has occurred and is
continuing, then the Holders of 25% of the aggregate stated liquidation amount
of the Preferred Securities may direct the Property Trustee to declare the
principal of and interest on the Senior Deferrable Notes due and payable; and
provided further that where a consent or action under the Indenture would
require the consent or act of the Holders of more than a majority of the
aggregate principal amount of Senior Deferrable Notes affected thereby, the
Property Trustee only may give such consent or take such action at the direction
of the Holders of at least the same proportion in aggregate stated liquidation
amount of the Preferred Securities.

         (c) If the Property Trustee fails to enforce its rights under the
Senior Deferrable Notes after a Holder of Preferred Securities has made a
written request, such Holder of Preferred Securities may institute, to the
fullest extent permitted by law, a legal proceeding directly against the Senior
Deferrable Notes Issuer to enforce the Property Trustee's rights under the
Indenture without first instituting any legal proceeding against the Property
Trustee or any other Person. In addition, if a Trust Enforcement Event has
occurred and is continuing and such event is attributable to the failure of the
Senior Deferrable Notes Issuer to make any interest, principal or other required
payments when due under the Indenture, then a Holder of Preferred Securities may
institute a Direct Action against the Senior Deferrable Notes Issuer on or after
the respective due date specified in the Senior Deferrable Notes. In connection
with such Direct Action, the Senior Deferrable Notes Issuer will be subrogated
to the rights of such Holder of Preferred Securities to the extent of any
payment made by the Senior Deferrable Notes Issuer to such Holders of Preferred
Securities in such Direct Action.

         (d) The Property Trustee shall notify all Holders of the Preferred
Securities of any notice of any Indenture Event of Default received from the
Senior Deferrable Notes Issuer with respect to the Senior Deferrable Notes. Such
notice shall state that such Indenture Event of Default also constitutes a Trust
Enforcement Event. Except with respect to directing the time, method, and place
of conducting a proceeding for a remedy, the Property Trustee shall be under no
obligation to take any of the actions described in clauses (i) and (ii) of
Section 7.5(b) above, unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that the Trust will not fail to be
classified as a grantor trust for United States federal income tax

                                       43
<PAGE>   47

purposes as a result of such action, and that each Holder of Preferred
Securities shall be treated as owning an undivided beneficial ownership interest
in the Senior Deferrable Notes.

         (e) If the consent of the Property Trustee, as the Holder of the Senior
Deferrable Notes, is required under the Indenture with respect to any amendment
or modification of the Indenture, the Property Trustee shall request the
direction of the Holders of the Securities with respect to such amendment or
modification and shall vote with respect to such amendment or modification as
directed by a Majority in Liquidation Amount of the Securities voting together
as a single class; provided that where a consent under the Indenture would
require the consent of the Holders of more than a majority of the aggregate
principal amount of the Senior Deferrable Notes, the Property Trustee only may
give such consent at the direction of the Holders of at least the same
proportion in aggregate stated liquidation amount of the Securities. The
Property Trustee shall not take any such action in accordance with the
directions of the Holders of the Securities unless the Property Trustee has
obtained an opinion of independent tax counsel to the effect that the Trust will
not be classified as other than a grantor trust for United States federal income
tax purposes as a result of such action, and that each Holder will be treated as
owning an undivided beneficial ownership interest in the Senior Deferrable
Notes.

         (f) A waiver of an Indenture Event of Default with respect to the
Senior Deferrable Notes shall constitute a waiver of the corresponding Trust
Enforcement Event.

         (g) Any required approval or direction of the Holders of the Preferred
Securities may be given at a separate meeting of the Holders of the Preferred
Securities convened for such purpose, at a meeting of all of the Holders of the
Securities or pursuant to written consent without prior notice. The Regular
Trustees shall cause a notice of any meeting at which Holders of the Preferred
Securities are entitled to vote to be mailed to each Holder of record of
Preferred Securities. Each such notice shall include a statement setting forth:
(i) the date of such meeting; (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote; and (iii)
instructions for the delivery of proxies.

         (h) No vote or consent of the Holders of the Preferred Securities shall
be required for the Trust to redeem and cancel the Preferred Securities or
distribute the Senior Deferrable Notes in accordance with this Declaration and
the terms of the Securities.

         (i) Notwithstanding that the Holders of the Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Preferred Securities that are owned at such time by the Senior Deferrable
Notes Issuer the Trustees or any entity directly or indirectly controlled by, or
under direct or indirect common control with, the Senior Deferrable Notes Issuer
or any Trustee shall not be entitled to vote or consent and shall be treated,
for purposes of such vote or consent, as if such Preferred Securities were not
outstanding.

         (j) Except as provided under Section 7.5(k), the Holders of the
Preferred Securities shall have no rights to appoint or remove the Trustees,
who, subject to Section 6.6, may be appointed, removed or replaced by the
Holders of the Common Securities.

                                       44
<PAGE>   48

         (k) If an Indenture Event of Default has occurred and is continuing,
the Property Trustee and the Delaware Trustee may be removed and replaced,
subject to Section 6.6(b), at such time by a Majority in Liquidation Amount of
the Preferred Securities.

         SECTION 7.6 Voting Rights of the Common Securities.

         (a) Except as provided under Section 6.1(b), this Section 7.6 and
Section 11.1 and as otherwise required by the Business Trust Act, the Trust
Indenture Act or other applicable law or provided by this Declaration, the
Holders of the Common Securities shall have no voting rights.

         (b) Subject to Section 7.5(k), the Holders of the Common Securities
shall be entitled to vote to appoint, remove or replace any Trustee or to
increase or decrease the number of Trustees in accordance with Article 6.

         (c) Subject to Section 2.6 and only after all Trust Enforcement Events
with respect to the Preferred Securities have been cured, waived, or otherwise
eliminated and subject to the requirement of the Property Trustee obtaining a
tax opinion in certain circumstances set forth in this paragraph (c), the
Holders of the Common Securities shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Property
Trustee, or to direct the exercise of any trust or power conferred upon the
Property Trustee under this Declaration, including the right to direct the
Property Trustee, as Holder of the Senior Deferrable Notes, to (i) exercise the
remedies available to it under the Indenture, (ii) consent to any amendment or
modification of the Indenture or the Senior Deferrable Notes where such consent
is required or (iii) waive any past default and its consequences that are
waivable under the Indenture; provided that where a consent or action under the
Indenture would require the consent or act of the Holders of more than a
majority of the aggregate principal amount of Senior Deferrable Notes affected
thereby, only the Holders of at least the same proportion of the aggregate
stated liquidation amount of the Common Securities may direct the Property
Trustee to give such consent or take such action. Except with respect to
directing the time, method, and place of conducting a proceeding for a remedy,
the Property Trustee shall be under no obligation to take any of the actions
described in clause 7.6(c)(i) and (ii) above unless the Property Trustee has
obtained an opinion of independent tax counsel to the effect that, as a result
of such action, for United States federal income tax purposes the Trust will not
fail to be classified as a grantor trust and each Holder will be treated as
owning an undivided beneficial ownership interest in the Senior Deferrable
Notes.

         (d) If the Property Trustee fails to enforce its rights under the
Senior Deferrable Notes after the Holders of the Common Securities have made a
written request, the Holders of the Common Securities may institute, to the
fullest extent permitted by law, a legal proceeding directly against the Senior
Deferrable Notes Issuer to enforce the Property Trustee's rights under the
Senior Deferrable Notes without first instituting any legal proceeding against
the Property Trustee or any other Person.

         (e) A waiver of an Indenture Event of Default with respect to the
Senior Deferrable Notes shall constitute a waiver of the corresponding Trust
Enforcement Event.

                                       45
<PAGE>   49

         (f) Any required approval or direction of the Holders of the Common
Securities may be given at a separate meeting of the Holders of the Common
Securities convened for such purpose, at a meeting of all of the Holders of the
Securities or pursuant to written consent without prior notice. The Regular
Trustees shall cause a notice of any meeting at which the Holders of the Common
Securities are entitled to vote to be mailed to the Holders of the Common
Securities. Such notice shall include a statement setting forth: (i) the date of
such meeting; (ii) a description of any resolution proposed for adoption at such
meeting on which the Holders of the Common Securities are entitled to vote; and
(iii) instructions for the delivery of proxies.

         (g) No vote or consent of the Holders of the Common Securities shall be
required for the Trust to redeem and cancel the Common Securities or to
distribute Senior Deferrable Notes in accordance with this Declaration and the
terms of the Securities.

         SECTION 7.7 Paying Agent.

              If any Preferred Securities are not represented by one or more
Global Securities, the Trust shall maintain in the Borough of Manhattan, New
York City, State of New York, an office or agency where the Preferred Securities
may be presented for payment ("Paying Agent"). The Regular Trustees shall
appoint the paying agent (which shall be a bank or trust company acceptable to
the Senior Deferrable Notes Issuer) and may appoint one or more additional
paying agents in such other locations as they shall determine. The term "Paying
Agent" includes any additional paying agent. The Regular Trustees may change any
Paying Agent without prior notice to the Holders of the Securities. The Regular
Trustees shall notify the Property Trustee of the name and address of any Paying
Agent not a party to this Declaration. If the Regular Trustees, on behalf of the
Trust, fail to appoint or maintain another entity as Paying Agent, the Property
Trustee shall act as such. The Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Property Trustee and the Senior
Deferrable Notes Issuer.

         SECTION 7.8 Listing.

              The Sponsor shall use its best efforts to cause the PEPS Units to
be listed for quotation on the New York Stock Exchange.

         SECTION 7.9 Transfer of the Securities.

         (a) (i) The Preferred Securities initially shall be pledged, pursuant
to the terms of the Pledge Agreement, as collateral to secure the obligations of
the Holders of PEPS Units to purchase common shares of the Company in accordance
with the terms of the Purchase Contract Agreement.

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

                                       46
<PAGE>   50

         (iii) Subject to this Section 7.9 and Section 7.12, the Preferred
Securities shall be freely transferable.

         (iv) The Trust shall cause to be kept at the Corporate Trust Office a
register in which, subject to such reasonable regulations as it may prescribe,
the Trust shall provide for the registration of Preferred Securities and of
transfers of Preferred Securities. The Property Trustee is hereby appointed
"Security Registrar" for the purpose of registering Preferred Securities and
transfers of Preferred Securities as herein provided.

         (v) Upon surrender for registration of transfer of any Preferred
Securities at an office or agency of the Trust designated for such purpose, a
Regular Trustee shall execute, and the Property Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Preferred Securities of any authorized denominations and of a like aggregate
principal amount.

         (vi) At the option of the Holder, Securities may be exchanged for other
Preferred Securities of any authorized denominations and of a like aggregate
principal amount, upon surrender of the Preferred Securities to be exchanged at
such office or agency. Whenever any Preferred Securities are so surrendered for
exchange, a Regular Trustee shall execute, and the Property Trustee shall
authenticate and deliver, the Preferred Securities that the Holder making the
exchange is entitled to receive.

         (vii) If so required by the Trust or the Property Trustee, every
Preferred Security presented or surrendered for registration of transfer or for
exchange shall be duly endorsed, or accompanied by a duly executed written
instrument of transfer in form satisfactory to the Trust and the Security
Registrar, by the Holder thereof or his attorney duly authorized in writing.

         (viii) No service charge shall be made for any registration of transfer
or exchange of Preferred Securities, but the Trust may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Preferred
Securities.

         (b) The Senior Deferrable Notes Issuer may not transfer the Common
Securities except in connection with the transactions permitted under Section
801 of the Indenture; provided, that each Holder of the Common Securities shall
at all times be a United States Person. To the fullest extent permitted by law,
any attempted transfer of the Common Securities other than as set forth in this
Section 7.9(b) shall be null and void.

         SECTION 7.10 Mutilated, Destroyed, Lost or Stolen Certificates.

         If:

         (a) any mutilated Certificates are surrendered to the Regular Trustees,
or if the Regular Trustees receive evidence to their satisfaction of the
destruction, loss or theft of any Certificate; and

                                       47
<PAGE>   51

         (b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of the Sponsor and the Trust
harmless, then, in the absence of notice that such Certificate has been acquired
by a bona fide purchaser, any Regular Trustee shall execute and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like denomination. In connection with the
issuance of any new Certificate under this Section 7.10, the Regular Trustees
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section 7.10 shall constitute conclusive
evidence of an ownership interest in the relevant Securities, as if originally
issued, whether or not the lost, stolen or destroyed Certificate is found at any
time.

         SECTION 7.11 Deemed Holders.

              The Trustees may treat the Person in whose name any Certificate is
registered on the register of the Trust as the sole holder of such Certificate
and of the Securities represented thereby for purposes of receiving
Distributions and for all other purposes whatsoever. Accordingly, the Trustees
shall not be bound to recognize any equitable or other claim to or interest in
such Certificate or in the Securities represented by such Certificate on the
part of any Person, whether or not the Trust has actual or other notice thereof.

         SECTION 7.12 Global Securities.

              The Preferred Securities initially shall be issued in the form of
one or more Global Securities. A Regular Trustee on behalf of the Trust shall
execute, and the Property Trustee shall authenticate and deliver, one or more
Global Securities that (i) shall represent and be denominated in an amount equal
to the aggregate stated liquidation amount of all of the Preferred Securities to
be issued in the form of Global Securities and not yet canceled, (ii) shall be
registered in the name of the Depositary for the Preferred Securities or the
nominee of such Depositary and (iii) shall be delivered by the Property Trustee
to such Depositary or pursuant to such Depositary's instructions. Global
Securities shall bear a legend substantially to the following effect:

          "This Preferred Security is a Global Security within the meaning of
          the Declaration and is registered in the name of The Depository Trust
          Company, a New York corporation (the "Depositary"), or a nominee of
          the Depositary. This Preferred Security is exchangeable for Preferred
          Securities registered in the name of a person other than the
          Depositary or its nominee only in the limited circumstances described
          in the Declaration, and no transfer of this Preferred Security (other
          than a transfer of this Preferred Security as a whole by the
          Depositary to a nominee of the Depositary or by a nominee of the
          Depositary to the Depositary or another nominee of the Depositary) may
          be reregistered except in limited circumstances.

          Unless this certificate is presented by an authorized representative
          of the Depositary to VEC Trust I or its agent for registration of

                                       48
<PAGE>   52

          transfer, exchange or payment, and any certificate issued is
          registered in the name of Cede & Co. or such other name as requested
          by an authorized representative of the Depositary (and any payment
          hereon is made to Cede & Co. or to such other entity as is requested
          by an authorized representative of the Depositary), and except as
          otherwise provided in the Amended and Restated Declaration of VEC
          Trust I dated ___________, 2000, as amended from time to time, ANY
          TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
          ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co.,
          has an interest herein."

         Preferred Securities not represented by a Global Security issued in
exchange for all or a part of a Global Security pursuant to this Section 7.12
shall be registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Property Trustee. Upon execution and
authentication, the Property Trustee shall deliver any Preferred Securities not
represented by a Global Security to the Persons in whose names such definitive
Preferred Securities are so registered.

         At such time as all interests in Global Securities have been redeemed,
repurchased or canceled, such Global Securities shall be canceled, upon receipt
thereof, by the Property Trustee in accordance with standing procedures of the
Depositary. At any time prior to such cancellation, if any interest in a Global
Security is exchanged for Preferred Securities not represented by a Global
Security, redeemed, canceled or transferred to a transferee who receives
Preferred Securities not represented by a Global Security, or if any Preferred
Security not represented by a Global Security is exchanged or transferred for
part of a Global Security, then, in accordance with the standing procedures of
the Depositary, the liquidation amount of such Global Security shall be reduced
or increased, as the case may be, and an endorsement shall be made on such
Global Security by the Property Trustee to reflect such reduction or increase.

         The Trust and the Property Trustee, as the authorized representative of
the Holders of the Preferred Securities, may deal with the Depositary for all
purposes of this Declaration, including the making of payments due on the
Preferred Securities and exercising the rights of Holders of the Preferred
Securities hereunder. The rights of any Beneficial Owner shall be limited to
those established by law and agreements between such owners and Depository
Participants; provided that no such agreement shall give to any Person any
rights against the Trust or the Property Trustee without the written consent of
the parties so affected. Multiple requests and directions from and votes of the
Depositary as the Holder of the Preferred Securities represented by Global
Securities with respect to any particular matter shall not be deemed
inconsistent to the extent they do not represent an amount of Preferred
Securities in excess of those held in the name of the Depositary or its nominee.

         If at any time the Depositary notifies the Trust that it is unwilling
or unable to continue as Depositary for the Preferred Securities or if at any
time the Depositary no longer is eligible under this Section 7.12, the Regular
Trustees shall appoint a successor Depositary with respect to the Preferred
Securities. If a successor Depositary is not appointed by the Trust within 90
days after

                                       49
<PAGE>   53

the Trust receives such notice or becomes aware of such ineligibility, the
Trust's election that the Preferred Securities be represented by one or more
Global Securities shall no longer be effective, and a Regular Trustee shall
execute, and the Property Trustee will authenticate and deliver, Preferred
Securities in definitive registered form, in any authorized denominations, in an
aggregate stated liquidation amount equal to the aggregate stated liquidation
amount of the Global Securities representing the Preferred Securities in
exchange for such Global Securities.

         A Regular Trustee on behalf of the Trust at any time and in its sole
discretion may determine that the Preferred Securities issued in the form of one
or more Global Securities shall no longer be represented by Global Securities.
In such event a Regular Trustee on behalf of the Trust shall execute, and the
Property Trustee shall authenticate and deliver, Preferred Securities in
definitive registered form, in any authorized denominations, in an aggregate
stated liquidation amount equal to the aggregate stated liquidation amount of
the Global Securities representing the Preferred Securities, in exchange for
such Global Securities.

         Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in Section 7.9), Global Securities may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.

         Interests of Beneficial Owners may be transferred or exchanged for
Preferred Securities not represented by a Global Security, and Preferred
Securities not represented by a Global Security may be transferred or exchanged
for a Global Security or Securities, in accordance with rules of the Depositary
and the provisions of Section 7.9.

         SECTION 7.13 Remarketing.

         (a) So long as the Preferred Securities, the PEPS Units and the
Treasury Securities are evidenced by one or more global certificates held by the
Depositary, the Senior Deferrable Notes Issuer shall request, not later than 15
nor more than 30 calendar days prior to the Remarketing Date, that the
Depositary notify the Holders of the Preferred Securities and the holders of
PEPS Units and the Treasury PEPS Units of the Remarketing and of the procedures
that must be followed if a Holder of Preferred Securities wishes to make a Cash
Settlement.

         (b) Not later than 5:00 P.M., New York City time, on the seventh
Business Day preceding _____________, each Holder of Preferred Securities may
elect to have the Preferred Securities held by such Holder remarketed in the
Remarketing. Under Section [5.4] of the Purchase Contract Agreement, holders of
PEPS Units that do not give notice of their intention to make a Cash Settlement
of the Purchase Contract component of their PEPS Units prior to such time in the
manner specified in such Section, or have given such notice but fail to deliver
cash prior to 11:00 A.M., New York City time, on or prior to the fifth Business
Day preceding _____________, shall be deemed to have consented to the
disposition of the Preferred Securities comprising a component of their PEPS
Units in the Remarketing. Holders of the Preferred Securities that are not a
component of PEPS Units wishing to elect to have their Preferred Securities
remarketed shall give to the Property Trustee notice of their election prior to
11:00 A.M., New York City time on the fifth Business Day prior to _____________.
Any such notice

                                       50
<PAGE>   54

shall be irrevocable and may not be conditioned upon the level at which the
Reset Rate is established in the Remarketing. Promptly after 11:00 A.M., New
York City time, on such fifth Business Day, the Property Trustee, based on the
notices received by it prior to such time (including notices from the Purchase
Contract Agent as to Purchase Contracts for which Cash Settlement has been
elected and cash received), shall notify the Trust, the Sponsor and the
Remarketing Agent of the number of Preferred Securities to be tendered for
purchase in the Remarketing.

         (c) If any Holder of PEPS Units does not give a notice of its intention
to make a Cash Settlement or gives such notice but fails to deliver cash
as-described in Section 7.13(b), or gives a notice of election to have Preferred
Securities that are not a component of PEPS Units remarketed, then the Preferred
Securities of such Holder shall be deemed tendered for purchase in the
Remarketing, notwithstanding any failure by such Holder to deliver or properly
deliver such Preferred Securities to the Remarketing Agent for purchase.

         (d) The right of each Holder to have Preferred Securities tendered for
purchase shall be limited to the extent that (i) the Remarketing Agent conducts
a Remarketing pursuant to the terms of the Remarketing Agreement, (ii) the
Remarketing Agent is able to find a purchaser or purchasers for the tendered
Preferred Securities and (iii) such purchaser or purchasers deliver the purchase
price therefor to the Remarketing Agent.

         (e) On the Remarketing Date, the Remarketing Agent shall use
commercially reasonable efforts to remarket, at a price equal to 100.25% of the
aggregate stated liquidation amount thereof, the Preferred Securities tendered
or deemed tendered for purchase.

         (f) If, as a result of the efforts described in 7.13(e), the
Remarketing Agent has determined that it will be able to remarket all of the
Preferred Securities tendered or deemed tendered for purchase at a price of
100.25% of the aggregate stated liquidation amount of such Preferred Securities,
the Remarketing Agent shall determine the Reset Rate, which shall be the rate
per annum (rounded to the nearest one-thousandth (0.001) of one percent per
annum), adjusted up or down, sufficient to cause the then current aggregate
market value of the Preferred Securities to be equal to 100.25% of the aggregate
stated liquidation amount of such Preferred Securities, that the Remarketing
Agent determines, in its sole reasonable judgment, to be the lowest rate per
annum that will enable it to remarket all of the Preferred Securities tendered
or deemed tendered for Remarketing, but in no event shall the Reset Rate be
greater than the Two-Year Benchmark Treasury Rate plus ____%.

         (g) If none of the Holders of the Preferred Securities or the holders
of the PEPS Units elect to have Preferred Securities remarketed in the
Remarketing, the Reset Rate shall be the rate determined by the Remarketing
Agent, in its sole reasonable discretion, as the rate that would have been
established had a Remarketing been held on the Remarketing Date.

         (h) If, by 4:00 P.M., New York City time, on the Remarketing Date, the
Remarketing Agent is unable to remarket all of the Preferred Securities tendered
or deemed tendered for purchase, a failed Remarketing ("Failed Remarketing")
shall be deemed to have occurred and the Remarketing Agent shall so advise by
telephone the Depositary, the Property Trustee, the Trust and the Sponsor. In
the event of a Failed Remarketing, the Reset Rate shall equal the Two-Year
Benchmark Treasury Rate plus the Applicable Margin.

                                       51
<PAGE>   55

         (i) By approximately 4:30 P.M., New York City time, on the Remarketing
Date provided that there has not been a Failed Remarketing, the Remarketing
Agent shall advise, by telephone (i) the Depositary, the Property Trustee, the
Trust and the Sponsor of the Reset Rate determined in the Remarketing and the
number of Preferred Securities sold in the Remarketing, (ii) each purchaser (or
the Depositary Participant thereof) purchasing Preferred Securities sold in the
Remarketing of the Reset Rate and the number of Preferred Securities such
purchaser is to purchase and (iii) each purchaser to give instructions to its
Depositary Participant to pay the purchase price on the Purchase Contract
Settlement Date in same day funds against delivery of the Preferred Securities
purchased through the facilities of the Depositary.

         (j) In accordance with the Depositary's normal procedures, on the
Remarketing Settlement Date, the transactions described above with respect to
each Preferred Security tendered for purchase and sold in the Remarketing shall
be executed through the Depositary, and the accounts of the respective
Depositary Participants shall be debited and credited and such Preferred
Securities delivered by book-entry as necessary to effect purchases and sales of
such Preferred Securities. The Depositary shall make payment in accordance with
its normal procedures.

         (k) If any Holder of the Preferred Securities selling Preferred
Securities in the Remarketing fails to deliver such Preferred Securities, the
Depositary Participant of such selling holder and of any other Person that was
to have purchased Preferred Securities in the Remarketing may deliver to any
such other Person a number of Preferred Securities that is less than the number
of Preferred Securities that otherwise was to be purchased by such Person. In
such event, the number of Preferred Securities to be so delivered shall be
determined by such Depositary Participant, and delivery of such lesser number of
Preferred Securities shall constitute good delivery.

         (l) The Remarketing Agent is not obligated to purchase any Preferred
Securities that otherwise would remain unsold in the Remarketing. Neither the
Trust, any Trustee, the Sponsor nor the Remarketing Agent shall be obligated in
any case to provide funds to make payment upon tender of the Preferred
Securities for Remarketing.

         (m) Under the Remarketing Agreement, the Sponsor, in its capacity as
Senior Deferrable Notes Issuer, shall be liable for, and shall pay, any and all
costs and expenses incurred in connection with the Remarketing, and the Trust
shall not have any liabilities for such costs and expenses; provided, however,
that for the performance of its services, the Remarketing Agent will retain from
the proceeds of the Remarketing an amount equal to 0.25% of the aggregate stated
liquidation amount of all remarketed Preferred Securities.

         (n) The tender and settlement procedures set in this Section 7.13,
including provisions for payment by purchasers of the Preferred Securities in
the Remarketing, shall be subject to modification to the extent required by the
Depositary or if the book-entry system is no longer available for the Preferred
Securities at the time of the Remarketing, to facilitate the tendering and
remarketing of the Preferred Securities in certificated form. In addition, the
Remarketing Agent may modify the settlement procedures set forth herein in order
to facilitate the settlement process.

                                       52

<PAGE>   56

              ARTICLE 8: DISSOLUTION AND TERMINATION OF THE TRUST

         SECTION 8.1 Dissolution and Termination of the Trust.

         (a) The Trust shall dissolve upon the earliest of:

               (i) the bankruptcy of the Senior Deferrable Notes Issuer;

               (ii) the filing of a certificate of dissolution 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) the entry of a decree of judicial dissolution of the
          Sponsor or the Trust;

               (iv) the time when all of the Securities shall have been called
          for redemption and the amounts then due shall have been paid to the
          Holders of the Securities;

               (v) upon the direction by the Property Trustee, following the
          occurrence and continuation of a Tax Event pursuant to which the Trust
          has been dissolved and all of the Senior Deferrable Notes have been
          distributed to the Holders of the Securities in exchange for all of
          the Securities;

               (vi) at the Sponsor's sole discretion, by notice and direction to
          the Property Trustee to distribute the Senior Deferrable Notes to the
          Holders of the Securities in exchange for all of the Securities;
          provided that the Sponsor will be required to obtain an opinion of
          counsel that the distribution of the Senior Deferrable Notes will not
          be taxable to the holders of the Preferred Securities for United
          States federal income tax purposes; or

               (vii) the time when all of the Regular Trustees and the Sponsor
          have consented to dissolution of the Trust, provided such action is
          taken before the issuance of any Securities.

         (b) As soon as is practicable after the occurrence of an event referred
to in Section 8.1(a) and upon completion of the winding up and liquidation of
the Trust, the Regular Trustees shall terminate the Trust by executing and
filing a certificate of cancellation with the Secretary of State of the State of
Delaware.

         (c) The provisions of Section 4.2 and Article 9 shall survive the
termination of the Trust.

         SECTION 8.2 Liquidation Distribution Upon Dissolution of the Trust.

         (a) In the event of any voluntary or involuntary liquidation,
dissolution, or winding-up of the Trust (each a "Liquidation") based on the
occurrence of an event specified in Section

                                       53
<PAGE>   57

8.1(a) (other than clauses (iv) or (v)), the Holders of the Securities on the
date of the Liquidation shall be entitled to receive on a Pro Rata basis, after
satisfaction of the Trust's liabilities to creditors, Senior Deferrable Notes in
an aggregate principal amount equal to the aggregate stated liquidation amount
of, with an interest rate identical to the distribution rate of, and accrued and
unpaid interest equal to accumulated and unpaid Distributions on, such
Securities in exchange for such Securities; provided if the Liquidation occurs
prior to the Purchase Contract Settlement Date, the Senior Deferrable Notes
receivable by the Holders shall be transferred to the Collateral Account.

         (b) Notice of Liquidation shall be given by the Property Trustee by
first-class mail, postage prepaid mailed not later than 30 nor more than 60 days
prior to the date of the Liquidation to each Holder of Securities at such
Holder's address appearing in the Securities register. All notices of
Liquidation shall:

               (i) state the date of the Liquidation;

               (ii) state that from and after the date of the Liquidation, the
          Securities will no longer be deemed to be outstanding and any
          Certificates not surrendered for exchange will be deemed to represent
          the Senior Deferrable Notes in a principal amount equal to the stated
          liquidation amount of the Securities, bearing accrued and unpaid
          interest in an amount equal to the accumulated and unpaid Distribution
          on the Securities; and

               (iii) provide such information with respect to the mechanics by
          which Holders may exchange Certificates for Senior Deferrable Note, or
          if Section 8.2(d) applies receive a distribution, as the Property
          Trustee shall deem appropriate.

         (c) Except where Section 81(a)(iv) or (v) or Section 8.2(d) applies, in
order to affect the liquidation of the Trust and distribution of the Notes to
Holders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the date of the
Liquidation) and, either itself acting as exchange agent or through the
appointment of a separate exchange agent, shall establish such procedures as it
shall deem appropriate to effect the distribution of Senior Deferrable Notes in
exchange for the outstanding Certificates.

         (d) In the event that, notwithstanding the other provisions of this
Section 8.2, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Senior Deferrable Notes
in the manner provided herein is determined by the Property Trustee not to be
practical, the property of the Trust shall be liquidated, and the Trust shall be
wound-up and terminated, by the Property Trustee in such manner as the Property
Trustee determines. In such event, on the date of the winding-up and termination
of the Trust, the Holders of the Securities on the date of the Liquidation shall
be entitled to receive, out of the assets of the Trust available for
distribution to the Holders of the Securities after satisfaction of the Trust's
liabilities to creditors, if any, cash or other immediately available funds in
an amount equal to the aggregate of the stated liquidation amount of $25 per
Security plus accumulated and unpaid Distributions thereon to the date of
payment (such amount being the "Liquidation Distribution"); provided if the
Liquidation occurs prior to the Purchase Contract Settlement Date, the
Redemption Price payable to the Collateral Agent, in liquidation of the Holders'
interests in the Preferred Securities, will be distributed to the Collateral
Agent, which in turn will apply an

                                       54
<PAGE>   58

amount equal to the Redemption Amount of such Redemption Price to purchase the
Treasury Portfolio on behalf of the Holders of the Securities and remit the
remaining portion, if any, of such Redemption Price to the Purchase Contract
Agent for payment to the Holders. If, upon any such Liquidation, the Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
available to pay the aggregate Liquidation Distribution in full, then the
amounts payable directly by the Trust on the Securities shall be paid on a Pro
Rata basis. The Holders of the Common Securities shall be entitled to receive
the Liquidation Distribution Pro Rata with the Holders of the Preferred
Securities, except that if an Indenture Event of Default has occurred and is
continuing, then the Preferred Securities shall have a preference over the
Common Securities with regard to the Liquidation Distribution.

         (e) After the date fixed for any distribution of Senior Deferrable
Notes upon dissolution of the Trust, (i) the Securities no longer shall be
deemed to be outstanding and (ii) the Certificates shall be deemed to represent
the Senior Deferrable Notes in a principal amount equal to the stated
liquidation amount of the Securities, bearing accrued and unpaid interest in an
amount equal to the accumulated and unpaid Distributions on the Securities,
until such Certificates are presented to the Regular Trustees or agent for
transfer or reissuance.

                     ARTICLE 9: LIMITATION OF LIABILITY OF
           HOLDERS OF THE SECURITIES, THE DELAWARE TRUSTEE AND OTHERS

         SECTION 9.1 Liability.

         (a) Except as expressly set forth in this Declaration and the
Guarantee, the Sponsor:

               (i) shall not be personally liable for the return of any portion
          of the capital contributions (or any return thereon) of the Holders of
          the Securities that will be made solely from assets of the Trust; and

               (ii) shall not be required to pay to the Trust or to any Holder
          of the Securities any deficit, upon dissolution of the Trust or
          otherwise.

         (b) Pursuant to Section 3803(a) of the Business Trust Act, the Holder
of the Common Securities 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; provided that the
Holders of the Common Securities shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to the
extent such debts and obligations are not satisfied out of the Trust's assets.

         (c) Pursuant to Section 3803(a) of the Business Trust Act, the Holder
of the Preferred Securities 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.

         SECTION 9.2 Exculpation.

         (a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or to any Covered Person for any loss,
damage or claim incurred by reason

                                       55
<PAGE>   59

of any act or omission performed or omitted by such Indemnified Person in good
faith on behalf of the Trust and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this 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) Each 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 such
Indemnified Person reasonably believes to be 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 of the Securities might properly be paid.

         SECTION 9.3 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 a
          Covered Person and an 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.

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

                                       56
<PAGE>   60

                  (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 or by applicable law.

         SECTION 9.4 Indemnification.

         (a) To the fullest extent permitted by applicable law, the Sponsor, in
its capacity as Senior Deferrable Notes Issuer, shall indemnify and hold
harmless each Indemnified Person from and against any loss, damage or claim
incurred by such Indemnified Person 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 authority conferred on such Indemnified Person by this Declaration, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.

         (b) The provisions of this Section 9.4 shall survive the termination of
this Declaration or the resignation or removal of any Trustee.

         (c) The Sponsor or the Trust may purchase and maintain insurance on
behalf of any Person who is or was an Indemnified Person against any liability
asserted against him or her and incurred by him or her in any such capacity, or
arising out of his or her status as such, whether or not the Sponsor would have
the power to indemnify him or her against such liability under the provisions of
this Section 9.4.

         (d) For purposes of this Section 9.4, 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
9.4 with respect to the resulting or surviving entity as he or she would have
had with respect to such constituent entity if its separate existence had
continued.

         (e) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 9.4 shall continue, unless otherwise provided
when authorized or ratified, as to a Person who has ceased to be an Indemnified
Person and shall inure to the benefit of the heirs, executors and administrators
of such a Person.

         SECTION 9.5 Outside Businesses.

              Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee (subject to Section 6.3(c)) may engage in or possess an
interest in other business ventures of any

                                       57
<PAGE>   61

nature or description, independently or with others, similar or dissimilar to
the activities of the Trust, and the Trust and the Holders of the Securities
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 activities of the Trust, shall not be
deemed wrongful or improper. Each Covered Person, the Sponsor, the Delaware
Trustee and the Property Trustee shall not 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.

                             ARTICLE 10: ACCOUNTING

         SECTION 10.1 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 10.2 Certain Accounting Matters.

         (a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or shall 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 Trust shall use the accrual method of
accounting for United States federal income tax purposes. 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 Regular Trustees.

         (b) The Regular Trustees shall cause to be prepared and delivered to
each Holder of Securities, within 90 days after the end of each Fiscal Year of
the Trust, annual financial statements of the Trust, including a balance sheet
of the Trust as of the end of such Fiscal Year, and the related statements of
income or loss.

         (c) The Regular Trustees shall cause to be duly prepared and delivered
to each Holder of Securities an 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 Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.

         (d) The Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority an annual United States federal income tax
return, on Form 1041 or such other

                                       58
<PAGE>   62

form required by United States federal income tax law, and any other annual
income tax returns required to be filed on behalf of the Trust with any state or
local taxing authority.

         SECTION 10.3 Banking.

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

         SECTION 10.4 Withholding.

              The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Regular Trustees shall request, and the Holders of the Securities shall provide
to the Trust, such forms or certificates as are necessary to establish an
exemption from withholding with respect to each Holder of Securities and any
representations and forms as shall reasonably be requested by the Regular
Trustees to assist them in determining the extent of, and in fulfilling, the
Trust's withholding obligations. The Regular Trustees shall file required form
with applicable jurisdictions and, unless an exemption from withholding is
properly established by a Holder of Securities, shall remit amounts withheld
with respect to such 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 of Securities, the amount
withheld shall be deemed to be a distribution in the amount of the withholding
to such Holder. In the event of any claimed over withholding, a Holder 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 11: AMENDMENTS AND MEETINGS

         SECTION 11.1 Amendments.

         (a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may be amended only by a
written instrument approved and executed by the Sponsor and (i) the Regular
Trustees (or, if there are more than two Regular Trustees, a majority of the
Regular Trustees) and (ii) the Property Trustee (if the amendment affects the
rights, powers, duties, obligations or immunities of the Property Trustee) and
(iii) by the Delaware Trustee (if the amendment affects the rights, powers,
duties, obligations or immunities of the Delaware Trustee).

         (b) No amendment shall be made, and any such purported amendment shall
be void and ineffective:

               (i) unless, in the case of any proposed amendment, the Property
          Trustee first has received an Officers' Certificate from each of the
          Trust and the Sponsor that such

                                       59
<PAGE>   63

     amendment is permitted by, and conforms to, the terms of this Declaration
     (including the terms of the Securities);

          (ii) unless, in the case of any proposed amendment that affects the
     rights, powers, duties, obligations or immunities of the Property Trustee,
     the Property Trustee first has 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 (which 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

          (iii) to the extent the result of such amendment would be to

               (A)  cause the Trust to be classified other than as a grantor
                    trust for United States federal income tax purposes;

               (B)  reduce or otherwise adversely affect the powers of the
                    Property Trustee in contravention of the Trust Indenture
                    Act; or

               (C)  cause the Trust to be deemed to be an Investment Company
                    required to be registered under the Investment Company Act.

         (c) At such time after the Trust has issued any Securities that remain
outstanding, (i) any amendment that would (A) adversely affect the powers,
preferences or special rights of the Securities, whether by way of amendment to
this Declaration or otherwise or (B) result in the dissolution, winding-up or
termination of the Trust other than pursuant to the terms of this Declaration
shall not be effective except with the approval of the Holders of at least a
66 2/3% in Liquidation Amount of the Securities; provided that if any amendment
or proposal referred to in clause (A) above would adversely affect only the
Preferred Securities or the Common Securities, then only the affected class will
be entitled to vote on such amendment or proposal, and such amendment or
proposal shall not be effective except with the approval of a 66 2/3% in
Liquidation Amount of the class of Securities affected thereby; and (ii) any
amendment that would (X) change the amount or timing of any distribution of the
Securities or otherwise adversely affect the amount of any distribution require
to be made in respect of the Securities as of a specified date or (Y) restrict
the right of a Holder of Securities to institute suit for the enforcement of an
such payment on or after such date shall not be effective except with the
approval of each Holder of Securities affected thereby.

         (d) This Section 11.1 shall not be amended without the consent of all
of the Holders of the Securities.

         (e) Article 4 shall not be amended without the consent of the Holders
of the Common Securities.

                                       60
<PAGE>   64

         (f) The rights of the Holders of the Common Securities under Articles
to increase or decrease the number of, and appoint and remove, Trustees shall
not be amended without the consent of the Holders of the Common Securities.

         (g) Notwithstanding Section 11.1(c), this Declaration may be amended
without the consent of the Holders of the Securities, provided that such
amendment does not have a material adverse effect on the rights, preferences or
privileges of the Holders of the Securities:

               (i) to cure any ambiguity;

               (ii) to correct or supplement any provision in this Declaration
          that may be defective or inconsistent with any other provision of this
          Declaration;

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

               (iv) to conform to any change in Rule 3a-5 or written change in
          interpretation or application of Rule 3a-5 by any legislative body,
          court, government agency or regulatory authority;

               (v) to modify, eliminate and add to any provision of this
          Declaration to ensure that the Trust will be classified as a grantor
          trust for United States federal income tax purposes 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; provided that such modification, elimination or addition
          would not adversely affect in any material respect the rights,
          privileges or preferences of any Holder of Securities; or

               (vi) to facilitate the tendering, remarketing and settlement of
          the Preferred Securities as contemplated by Section 7.13(n).

         SECTION 11.2 Meetings of the Holders of the Securities; Action by
Written Consent.

         (a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular 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 or the rules of any
stock exchange on which the Preferred Securities are listed or admitted for
trading. The Regular Trustees shall call a meeting of the Holders of such class
if directed to do so by the Holders of at least 10% in Liquidation Amount of
such class of Securities. Such direction shall be given by delivering to the
Regular Trustees a writing stating that the signing Holders of the Securities
wish to call a meeting and indicating the general or-specific purpose for which
the meeting is to be called. The Holder or Holders of the Securities calling a
meeting shall specify in writing the Certificates held by such Holder or
Holders, 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 the Holders of
the Securities:

                                       61
<PAGE>   65

               (i) Notice of any such meeting shall be given to all the Holders
          of the Securities 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 of the Securities 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 of the Securities. Any action that may be taken at a
          meeting of the Holders of the Securities 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 of the Securities 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 of the Securities 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 of the Securities entitled to
          vote who have not consented in writing. The Regular Trustees may
          specify that any written ballot submitted to the Holders of the
          Securities for the purpose of taking any action without a meeting
          shall be returned to the Trust within the time specified by the
          Regular Trustees.

               (ii) Each Holder of the Securities may authorize any Person to
          act for it by proxy on any or all matters in which such 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 of Securities executing such proxy. 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 of the Securities were stockholders of a
          Delaware corporation.

               (iii) Each meeting of the Holders of the Securities shall be
          conducted by the Regular Trustees or by such other Person that the
          Regular Trustees may designate.

               (iv) Unless the Business Trust Act, this Declaration, the Trust
          Indenture Act or the listing rules of any stock exchange on which the
          Preferred Securities are then listed for trading otherwise provides,
          the Regular Trustees, in their sole discretion, shall establish all
          other provisions relating to meetings of Holders of the Securities,
          including notice of the time, place or purpose of any meeting at which
          any matter is to be voted on by any Holders of the Securities, waiver
          of any such notice, action by consent without a meeting without prior
          notice, 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.

                                       62
<PAGE>   66

              ARTICLE 12: REPRESENTATIONS OF THE PROPERTY TRUSTEE
                            AND THE DELAWARE TRUSTEE

         SECTION 12.1 Representations and Warranties of the Property Trustee.

         The 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 such
Successor Property Trustee's acceptance of its appointment as Property Trustee,
that:

         (a) the Property Trustee is a corporation or national banking
association duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization, with trust power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of, this Declaration;

         (b) the Property Trustee satisfies the requirements set forth in
Section 6.3(a);

         (c) the execution, delivery and performance by the Property Trustee of
this Declaration have 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 it 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);

         (d) the execution, delivery and performance of this Declaration by the
Property Trustee do not conflict with, nor constitute a breach of, the articles
of association or incorporation, as the case may be, or the by-laws (or other
similar organizational documents) of the Property Trustee; and

         (e) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution
delivery or performance by the Property Trustee of this Declaration.

         SECTION 12.2 Representations and Warranties of the Delaware Trustee.

         The 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 such
Successor Delaware Trustee's acceptance of its appointment as Delaware Trustee,
that:

         (a) the Delaware Trustee satisfies the requirements set forth in
Section 6.2 and has the power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration and, if it
is not a natural person, is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation or
organization;

                                       63
<PAGE>   67

         (b) the Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and this Declaration; and this Declaration
constitutes a legal, valid and binding obligation of the Delaware Trustee under
Delaware law, 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) and

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

                           ARTICLE 13: MISCELLANEOUS

         SECTION 13.1 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 registered or certified mail, as follows:

         (a) if given to the Trust, in care of the Regular 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 of
the Securities):

                  VEC Trust I
                  One Valero Place
                  San Antonio, Texas  78212
                  Attention:  _____________
                  Telephone No:  (210) 370-2000
                  Fax No:  _____________

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

                  The Bank of New York (Delaware)
                  White Clay Center
                  Route 273
                  Newark, Delaware  19711
                  Attention:  _____________
                  Telephone No:
                  Fax No: ________________

         (c) if given to the Property Trustee, at its Corporate Trust Office
(telephone no. __________ and fax no. __________) (or such other address as the
Property Trustee may give notice of to the Regular Trustees, the Delaware
Trustee and the Holders of the Securities);

                                       64
<PAGE>   68

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

                  Valero Energy Corporation
                  One Valero Place
                  San Antonio, Texas  78212
                  Attention:  _____________
                  Telephone No:  (210) 370-2000
                  Fax No:  _____________

         (e) if given to any Holder of Preferred Securities, at such Holder's
address as set forth in the register 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 13.2 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, without regard to principles of conflicts of laws.

         SECTION 13.3 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 in a manner consistent with such
classification.

         SECTION 13.4 Headings.

         The 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 13.5 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 Trustee shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.

                                       65
<PAGE>   69

         SECTION 13.6 Partial Enforceability.

         If any provision of this Declaration or the application of such
provision to any Person or circumstance is 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 13.7 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 to one of such counterpart signature pages. All 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.

                                       66
<PAGE>   70

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

                              VALERO ENERGY CORPORATION,
                              as Sponsor,  Senior  Deferrable Notes Issuer and
                              Common Securities Holder

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

                              THE BANK OF NEW YORK,
                              as Property Trustee

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

                              THE BANK OF NEW YORK (DELAWARE),
                              as Delaware Trustee

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

                              -------------------------------------------------
                              Jay D. Browning, as Regular Trustee

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

                                             , as Regular Trustee
                              ---------------

                              -------------------------------------------------
                                             , as Regular Trustee
                              ---------------

                                       67
<PAGE>   71

                                    EXHIBIT A

         [IF THE PREFERRED SECURITY IS TO BE A GLOBAL SECURITY, INSERT THE
FOLLOWING: This Preferred Security is a Global Security within the meaning of
the Amended and Restated Declaration of VEC TRUST I hereinafter referred to and
is registered in the name of The Depository Trust Company, a New York
corporation (the "Depositary"), or a nominee of the Depositary. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration, and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered, except
in limited circumstances.

         Unless this Preferred Security Certificate is presented by an
authorized representative of the Depositary to the issuer or its agent for
registration of transfer, exchange or payment, and any Preferred Security
Certificate issued is registered in the name of Cede & Co. or such other name as
registered by an authorized representative of the Depositary (and any payment
hereon is made to Cede & Co. or to such other entity as is requested by an
authorized representative of the Depositary), and except as otherwise provided
in the Amended and Restated Declaration of VEC Trust I dated _____________,
2000, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL, since the registered owner hereof, Cede & Co., has an
interest herein.]

<TABLE>

<S>                                                            <C>
Certificate No. _______________                               Number of Preferred Securities: _______________

CUSIP No. ________________                                    Aggregate Liquidation Amount: $________________
</TABLE>

                   Certificate Evidencing Preferred Securities
                                       of
                                   VEC Trust I

                              Preferred Securities
                (liquidation amount $____ per Preferred Security)

         VEC Trust I, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the "Holder")
is the registered owner of ____ preferred securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the
Preferred Securities (liquidation amount $____ per Preferred Security) (the
"Preferred Securities"). The Preferred Securities are transferable on the
register of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in the Declaration (as defined below). The designation rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities represented hereby are issued and shall in all respect be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust, dated as of ___________, 2000 (as the same may be amended from time
to time (the "Declaration"), among Valero Energy Corporation, as Sponsor, Jay D.
Browning, _____________ and _____________, as Regular Trustees, The Bank of New
York, as Property Trustee, The Bank of New York (Delaware), as Delaware

                                       A-1
<PAGE>   72

Trustee, and the holders from time to time, of undivided beneficial interests in
the assets of the Trust. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Guarantee Agreement, dated as of ____________, 2000, as the same
may be amended from time to time, of Valero Energy Corporation, in respect of
the Preferred Securities. The Sponsor will provide a copy of the Declaration,
the Guarantee and the Indenture to a Holder without charge upon written request
to the Sponsor at its principal place of business.

         Upon receipt of this certificate, the Holder is bound by the terms of
the Declaration and is entitled to the benefits thereunder.

         By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Senior Deferrable Notes as indebtedness of the Sponsor
and the Preferred Securities as evidence of undivided indirect beneficial
ownership interests in the Senior Deferrable Notes.

         IN WITNESS WHEREOF, the Trust has executed this certificate
this      day of             ,2000.
     ----        ------------

                                    VEC TRUST I

                                    -------------------------------------------
                                    By:
                                       ----------------------------------------
                                       Regular Trustee

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

                                             THE BANK OF NEW YORK, as
                                             Property Trustee

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

                                      A-2

<PAGE>   73

                                    EXHIBIT B

           THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN
                       THE DECLARATION (AS DEFINED BELOW)

Certificate No.______                    Number of Common Securities: _______
                                         Aggregate Liquidation Amount: $______

                    Certificate Evidencing Common Securities
                                       of
                                   VEC Trust I

                                Common Securities
                 (liquidation amount $____ per Common Security)

         VEC Trust I, 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 _________________ common securities of
the Trust representing an undivided beneficial interest in the assets of the
Trust designated the Common Securities (liquidation amount $____ per Common
Security) (the "Common Securities"). Except as provided in the Declaration (as
defined below), the Common Securities are not transferable, and any attempted
transfer thereof shall be void. 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 ____________, 2000 (as the same may be amended from time to time,
the "Declaration"), among Valero Energy Corporation, as Sponsor, Jay D.
Browning, ____________ and _____________, as Regular Trustees, The Bank of New
York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee,
and the holders, from time to time, of undivided beneficial ownership interests
in the assets of the Trust. The Sponsor will provide a copy of the Declaration
and the Indenture to the Holder without charge upon written request to the
Sponsor at its principal place of business.

         Upon receipt of this certificate, the Holder is bound by the terms of
the Declaration and is entitled to the benefits thereunder.

         By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Senior Deferrable Notes as indebtedness of the Sponsor
and the Common Securities as evidence of an undivided indirect beneficial
ownership interest in the Senior Deferrable Notes.

                                      B-1

<PAGE>   74

         IN WITNESS WHEREOF, the Trust has executed this certificate this ______
day of ______________________, 1999.

                                      VEC TRUST I

                                      -----------------------------------------
                                      By:
                                         --------------------------------------
                                         Regular Trustee

                                      B-2<PAGE>   1
                                                                    EXHIBIT 4.12

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

                                     FORM OF

                            VALERO ENERGY CORPORATION

                               GUARANTEE AGREEMENT

                               VEC TRUST [I] [II]

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

                         Dated as of             ,
                                     -------- ---  ----

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

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

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----
<S>               <C>                                                                                          <C>
                                                     ARTICLE I
                                                    DEFINITIONS

SECTION 1.01      Definitions.....................................................................................1

                                                    ARTICLE II
                                                TRUST INDENTURE ACT

SECTION 2.01      Trust Indenture Act; Application................................................................5
SECTION 2.02      Lists of Holders of Preferred Securities........................................................5
SECTION 2.03      Reports by the Guarantee Trustee................................................................6
SECTION 2.04      Periodic Reports to the Guarantee Trustee.......................................................6
SECTION 2.05      Evidence of Compliance with Conditions Precedent................................................6
SECTION 2.06      Events of Default; Waiver.......................................................................6
SECTION 2.07      Disclosure of Information.......................................................................7
SECTION 2.08      Conflicting Interest............................................................................7

                                                    ARTICLE III
                                POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

SECTION 3.01      Powers and Duties of the Guarantee Trustee......................................................7
SECTION 3.02      Certain Rights and Duties of the Guarantee Trustee..............................................8
SECTION 3.03      Not Responsible for Recitals or Issuance of Guarantee..........................................10
SECTION 3.04      The Guarantee Trustee May Own Preferred Securities.............................................11
SECTION 3.05      Moneys Received by the Guarantee Trustee to Be Held in Trust Without
                  Interest.......................................................................................11
SECTION 3.06      Compensation and Expenses of Guarantee Trustee.................................................11

                                                    ARTICLE IV
                                                 GUARANTEE TRUSTEE

SECTION 4.01      Qualifications.................................................................................12
SECTION 4.02      Appointment, Removal and Resignation of the Guarantee Trustee..................................12

                                                     ARTICLE V
                                                     GUARANTEE

SECTION 5.01      Guarantee......................................................................................13
SECTION 5.02      Waiver of Notice...............................................................................13
SECTION 5.03      Obligations Not Affected.......................................................................13
SECTION 5.04      Enforcement of Guarantee.......................................................................14
SECTION 5.05      Guarantee of Payment...........................................................................15
SECTION 5.06      Subrogation....................................................................................15
SECTION 5.07      Independent Obligations........................................................................15
</TABLE>

                                        i

<PAGE>   3

<TABLE>
<S>               <C>                                                                                          <C>
                                                    ARTICLE VI
                                     LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 6.01      Limitation of Transactions.....................................................................16
[SECTION 6.02     Subordination..................................................................................17

                                                    ARTICLE VII
                                                    TERMINATION

SECTION 7.01      Termination....................................................................................17

                                                   ARTICLE VIII
                                     LIMITATION OF LIABILITY; INDEMNIFICATION

SECTION 8.01      Exculpation....................................................................................17
SECTION 8.02      Indemnification................................................................................18
SECTION 8.03      Survive Termination............................................................................18

                                                    ARTICLE IX
                                                   MISCELLANEOUS

SECTION 9.01      Successors and Assigns.........................................................................18
SECTION 9.02      Amendments.....................................................................................19
SECTION 9.03      Notices........................................................................................19
SECTION 9.04      Genders........................................................................................20
SECTION 9.05      Benefit........................................................................................20
SECTION 9.06      Governing Law..................................................................................20
SECTION 9.07      Counterparts...................................................................................20
SECTION 9.08      [Exercise of Overallotment Option..............................................................20
SECTION 9.09      Limited Liability..............................................................................20
</TABLE>

                                       ii

<PAGE>   4

                               GUARANTEE AGREEMENT

                  This GUARANTEE AGREEMENT, dated as of __________, ____, is
executed and delivered by VALERO ENERGY CORPORATION, a Delaware corporation (the
"Guarantor"), and The Bank of New York, a national banking association, as the
initial Guarantee Trustee (as defined herein) for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of VEC Trust [I] [II], a Delaware statutory business trust (the
"Issuer").

                  WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of ______________, ____ among the trustees
of the Issuer named therein, Valero Energy Corporation, as Sponsor, and the
Holders from time to time of preferred undivided beneficial interests in the
assets of the Issuer, the Issuer may issue up to $_____________ aggregate
liquidation amount of its _____% [Convertible] Trust Preferred Securities (the
"Preferred Securities") representing preferred undivided beneficial interests in
the assets of the Issuer and having the terms set forth in the Declaration [, of
which $_____________ liquidation amount of Preferred Securities is being issued
as of the date hereof. Up to the remaining $______________ liquidation amount of
Preferred Securities may be issued by the Issuer if and to the extent that the
over-allotment option granted by the Guarantor and the Issuer pursuant to the
Underwriting Agreement (as defined in the Declaration) is exercised by the
Underwriters named in the Underwriting Agreement]; and

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

                  NOW, THEREFORE, in consideration of the purchase by the
initial purchasers thereof of Preferred Securities, which purchase the Guarantor
hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers
this Guarantee Agreement for the benefit of the Holders from time to time.

                                    ARTICLE I
                                   DEFINITIONS

         SECTION 1.01 Definitions.

                  (a) Capitalized terms used in this Guarantee Agreement but not
defined in the preamble or recitals above have the respective meanings assigned
to them in this Section 1.01.

                  (b) A term defined anywhere in this Guarantee Agreement has
the same meaning throughout.

                                        1

<PAGE>   5

                  (c) All references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented
or amended from time to time.

                  (d) All references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified.

                  (e) A term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires.

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

                  "Additional Amounts" has the meaning set forth in the
Indenture.

                  "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, such specified Person. For purposes of this definition,
"control" of a Person shall mean the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.

                  "Business Day" has the meaning set forth in the Indenture.

                  "Commission" means the Securities and Exchange Commission.

                  "Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer and having the terms
set forth in Exhibit C to the Declaration.

                  "Common Stock" means the common stock, _____ par value per
share, of the Guarantor, including associated preferred share purchase rights.

                  "Debentures" means the series of [convertible] unsecured
[junior subordinated] [senior] debentures issued to the Property Trustee by the
Guarantor under the Indenture and entitled the "___% [Convertible] [Junior
Subordinated] [Senior] Debentures due _____."

                  "Declaration" has the meaning set forth in the recitals above.

                  "Distributions" means the periodic distributions and other
payments payable to Holders in accordance with the terms of the Preferred
Securities set forth in Exhibit B to the Declaration.

                  "Dollar" has the meaning set forth in the Indenture.

                                        2

<PAGE>   6

                  "Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement; provided,
however, that, except with respect to a default in payment of any Guarantee
Payment, any such default shall constitute an Event of Default only if the
Guarantor shall have received notice of such default and shall not have cured
such default within 60 days after receipt of such notice.

                  "Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities, to
the extent not paid or made by or on behalf of the Issuer: (i) any accumulated
and unpaid Distributions, any Additional Amounts payable with respect to the
Preferred Securities in accordance with the terms thereof and the Redemption
Price, including all accumulated and unpaid Distributions and Additional Amounts
to the date of redemption, with respect to the Preferred Securities called for
redemption by the Issuer but only if and to the extent that in each case the
Guarantor has made a payment to the Property Trustee of principal of, any
premium or interest on or any Additional Amounts with respect to the Debentures
and (ii) upon a voluntary or involuntary dissolution, winding-up or termination
of the Issuer (other than in connection with the distribution of Debentures to
Holders in exchange for Preferred Securities or the redemption of the Preferred
Securities in full upon the maturity or redemption of the Debentures as provided
in the Declaration), the lesser of (a) the aggregate of the liquidation amount
and all accumulated and unpaid Distributions and Additional Amounts on the
Preferred Securities to the date of payment, to the extent the Issuer has funds
on hand legally available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer as
required by applicable law.

                  "Guarantee Trustee" means The Bank of New York, a national
banking association, until a Successor Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Guarantee Agreement,
and thereafter means each such Successor Guarantee Trustee.

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

                  "Indemnified Person" means the Guarantee Trustee, any
Affiliate of the Guarantee Trustee, and any officers, directors, shareholders,
members, partners, employees, representatives or agents of the Guarantee
Trustee.

                  "Indenture" means the Indenture dated as of _________, ____
between the Guarantor and The Bank of New York, as trustee, as supplemented by
the ________ Supplemental Indenture thereto dated as of _______ __, ____ (the
"Supplemental Indenture"), pursuant to which the Debentures are to be issued to
the Property Trustee.

                                        3

<PAGE>   7

                  "Majority of Outstanding Preferred Securities" means Holder(s)
of outstanding Preferred Securities, voting together as a single class, who are
the record owners of Preferred Securities representing more than 50% of the
outstanding Preferred Securities.

                  "Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman of the Board, the President, any Vice
Chairman of the Board, any Vice President, the chief financial officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Assistant Secretary of such Person, and delivered to the Guarantee Trustee. One
of the officers signing an Officers' Certificate given pursuant to Section 2.04
shall be the principal executive, financial or accounting officer of the
Guarantor. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Guarantee Agreement shall include:

                  (i) a statement that the person making such certificate has
         read such covenant or condition;

                  (ii) a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate are based;

                  (iii) a statement that, in the opinion of such person, he has
         made such examination or investigation as is necessary to enable him to
         express an informed opinion as to whether or not such covenant or
         condition has been complied with; and

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

                  "Person" means any individual, corporation, partnership,
limited liability company, joint venture, incorporated or unincorporated
association, joint stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof or other entity of
any kind.

                  "Preferred Securities" has the meaning set forth in the
recitals above.

                  "Property Trustee" means the Person acting as Property Trustee
under the Declaration.

                  "Redemption Price" means the amount payable on redemption of
the Preferred Securities in accordance with the terms of the Preferred
Securities.

                  "Responsible Officer" means, when used with respect to the
Guarantee Trustee, any officer within the corporate trust department of the
Guarantee Trustee, including any vice president, assistant vice president,
assistant secretary, assistant treasurer, trust officer or any other officer of
the Guarantee Trustee who customarily performs functions similar to those
performed by the Persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred

                                        4

<PAGE>   8

because of such Person's knowledge of and familiarity with the particular
subject and, in either case, who shall have direct responsibility for the
administration of this Guarantee Agreement.

                  "Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as a Guarantee Trustee under
Section 4.01.

                  "Supplemental Indenture" has the meaning specified in the
definition of Indenture.

                  "Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.

                                   ARTICLE II
                               TRUST INDENTURE ACT

         SECTION 2.01 Trust Indenture Act; Application.

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

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

                  (c) The application of the Trust Indenture Act to this
Guarantee Agreement shall not affect the nature of the Preferred Securities as
equity securities representing preferred undivided beneficial interests in the
assets of the Issuer.

         SECTION 2.02 Lists of Holders of Preferred Securities.

                  (a) The Guarantor shall provide the Guarantee Trustee (unless
the Guarantee Trustee is the registrar of the Preferred Securities) (i) within
14 days after each record date for payment of Distributions, a list, in such
form as the Guarantee Trustee may reasonably require, of the names and addresses
of the Holders ("List of Holders") as of such date, and (ii) at any other time,
within 30 days of receipt by the Guarantor of a written request for a List of
Holders as of a date no more than 15 days before such List of Holders is given
to the Guarantee Trustee; provided that in each case the Guarantor shall not 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 Guarantee
Trustee by the Guarantor. The Guarantee Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in the Lists of
Holders given to it; provided that the Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.

                                        5

<PAGE>   9

                  (b) The Guarantee Trustee shall comply with its obligations
under Section 312(b) of the Trust Indenture Act.

         SECTION 2.03 Reports by the Guarantee Trustee.

                  Within 60 days after May 15 of each year, commencing May 15,
____, the Guarantee Trustee shall deliver to the Holders such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form, in the
manner and at the times provided by Section 313 of the Trust Indenture Act. The
Guarantee Trustee shall also comply with the other requirements of Section 313
of the Trust Indenture Act. A copy of each such report shall, at the time of
such transmission to the Holders, be filed by the Guarantee Trustee with the
Guarantor, with each stock exchange or quotation system upon which any Preferred
Securities are listed or traded (if so listed or traded) and also with the
Commission. The Guarantor agrees to notify the Guarantee Trustee when any
Preferred Securities become listed on any stock exchange or quotation system and
of any delisting thereof.

         SECTION 2.04 Periodic Reports to the Guarantee Trustee.

                  The Guarantor shall provide to the Guarantee Trustee, the
Commission and the Holders, as applicable, such documents, reports and
information (if any) as required by Section 314(a)(1)-(3) of the Trust Indenture
Act and the compliance certificates required by Section 314(a)(4) and (c) of the
Trust Indenture Act, any such certificates to be provided in the form, in the
manner and at the times required by Section 314(a)(4) and (c) of the Trust
Indenture Act (provided that any certificate to be provided pursuant to Section
314(a)(4) of the Trust Indenture Act shall be provided within 120 days of the
end of each fiscal year of the Issuer). Delivery of such reports, information
and documents to the Guarantee Trustee is for informational purposes only and
the Guarantee Trustee's receipt of such shall not constitute constructive notice
of any information contained therein, including the Guarantor's compliance with
any of its covenants hereunder (as to which the Guarantee Trustee is entitled to
rely exclusively on Officers' Certificates or on certificates provided pursuant
to this Section 2.04).

         SECTION 2.05 Evidence of Compliance with Conditions Precedent.

                  The Guarantor shall provide to the Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Guarantee Agreement which 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) may be given in the form of an
Officers' Certificate.

         SECTION 2.06 Events of Default; Waiver.

                  (a) The Holders of a Majority of Outstanding Preferred
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be

                                        6

<PAGE>   10

deemed to have been cured, for every purpose of this Guarantee Agreement, but no
such waiver shall extend to any subsequent or other default or Event of Default,
or impair any right consequent thereon.

                  (b) The right of any Holder to receive payment of the
Guarantee Payments in accordance with this Guarantee Agreement, or to institute
suit for the enforcement of any such payment, shall not be impaired without the
consent of each such Holder.

         SECTION 2.07 Disclosure of Information.

                  The disclosure of information as to the names and addresses of
the Holders in accordance with Section 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, shall not be
deemed to be a violation of any existing law, or any law hereafter enacted which
does not specifically refer to Section 312 of the Trust Indenture Act, nor shall
the Guarantee Trustee be held accountable by reason of mailing any material
pursuant to a request made under Section 312(b) of the Trust Indenture Act.

         SECTION 2.08 Conflicting Interest.

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

                  (b) The Guarantee Trustee shall comply with its obligations
under Sections 310(b) and 311 of the Trust Indenture Act.

                                   ARTICLE III
               POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

         SECTION 3.01 Powers and Duties of the Guarantee Trustee.

                  (a) This Guarantee Agreement shall be held by the Guarantee
Trustee in trust for the benefit of the Holders. The Guarantee Trustee shall not
transfer its right, title and interest in this Guarantee Agreement to any Person
except a Successor Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Guarantee Trustee or to a Holder exercising
his or her rights pursuant to Section 5.04(iv). The right, title and interest of
the Guarantee Trustee to this Guarantee Agreement shall vest automatically in
each Person who may hereafter be appointed as Guarantee Trustee in accordance
with Article IV. Such vesting and cessation of title shall be effective whether
or not conveyancing documents have been executed and delivered.

                  (b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.

                                        7

<PAGE>   11

                  (c) This Guarantee Agreement and all moneys received by the
Guarantee Trustee in respect of the Guarantee Payments will not be subject to
any right, charge, security interest, lien or claim of any kind in favor of, or
for the benefit of, the Guarantee Trustee or its agents or their creditors.

                  (d) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default actually known to a Responsible Officer of the
Guarantee Trustee, transmit by mail, first class postage prepaid, to the
Holders, as their names and addresses appear upon the List of Holders, notice of
all such Events of Default, unless such defaults shall have been cured before
the giving of such notice; provided that the Guarantee Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Guarantee Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders. The Guarantee Trustee shall
not be deemed to have knowledge of any Event of Default except any Event of
Default as to which the Guarantee Trustee shall have received written notice or
a Responsible Officer charged with the administration of this Guarantee
Agreement shall have obtained written notice of such Event of Default.

                  (e) The Guarantee Trustee shall continue to serve as a trustee
until a Successor Guarantee Trustee has been appointed and accepted that
appointment in accordance with Article IV.

         SECTION 3.02 Certain Rights and Duties of the Guarantee Trustee.

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

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

                  (i) prior to the occurrence of 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 Guarantee
                  Trustee shall be determined solely by the express provisions
                  of this Guarantee Agreement, and the Guarantee Trustee shall
                  not be liable except for the performance of such duties and
                  obligations as are specifically set forth in this Guarantee
                  Agreement, and no implied

                                        8

<PAGE>   12

                  covenants or obligations shall be read into this Guarantee
                  Agreement against the Guarantee Trustee; and

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

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

                  (iii) the Guarantee 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 a Majority of
         Outstanding Preferred Securities relating to the time, method and place
         of conducting any proceeding for any remedy available to the Guarantee
         Trustee, or exercising any trust or power conferred upon the Guarantee
         Trustee under this Guarantee Agreement; and

                  (iv) no provision of this Guarantee Agreement shall require
         the Guarantee Trustee to expend or risk its own funds or otherwise
         incur personal financial liability in the performance of any of its
         duties or in the exercise of any of its rights or powers, if 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
         Guarantee Agreement or adequate indemnity against such risk or
         liability is not reasonably assured to it.

         (c) Subject to the provisions of Section 3.02(a) and (b):

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

                                        9

<PAGE>   13

                  (ii) the Guarantee Trustee (A) may consult with counsel (which
         may be counsel to the Guarantor or any of its Affiliates and may
         include any of its employees) selected by it in good faith and with due
         care and the written advice or opinion of such counsel with respect to
         legal matters shall be full and complete authorization and protection
         in respect of any action taken, suffered or omitted by it hereunder in
         good faith and in reliance thereon and in accordance with such advice
         and opinion and (B) shall have the right at any time to seek
         instructions concerning the administration of this Guarantee Agreement
         from any court of competent jurisdiction;

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

                  (iv) the Guarantee Trustee shall be under no obligation to
         exercise any of the rights or powers vested in it by this Guarantee
         Agreement at the request or direction of any Holder, unless such Holder
         shall have offered to the Guarantee Trustee security and indemnity
         satisfactory to the Guarantee Trustee against the costs, expenses
         (including attorneys' fees and expenses) and liabilities that might be
         incurred by it in complying with such request or direction; provided
         that nothing contained in this clause (iv) shall relieve the Guarantee
         Trustee of the obligation, upon the occurrence of an Event of Default
         (which has not been cured or waived) to exercise such of the rights and
         powers vested in it by this Guarantee Agreement, and to use the same
         degree of care and skill in this exercise as a prudent person would
         exercise or use under the circumstances in the conduct of his own
         affairs; and

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

         SECTION 3.03 Not Responsible for Recitals or Issuance of Guarantee.

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

                                       10

<PAGE>   14

         SECTION 3.04 The Guarantee Trustee May Own Preferred Securities.

                  The Guarantee Trustee, in its individual or any other
capacity, may become the owner or pledgee of Preferred Securities and may
otherwise deal with the Guarantor with the same rights it would have if it were
not the Guarantee Trustee.

         SECTION 3.05 Moneys Received by the Guarantee Trustee to Be Held in
                      Trust Without Interest.

                  All moneys received by the Guarantee Trustee in respect of
Guarantee Payments shall, until used or applied as herein provided, be held in
trust for the purposes for which they were received, but need not be segregated
from other funds except to the extent required by law. The Guarantee Trustee
shall be under no liability for interest on any moneys received by it hereunder
except such as it may agree in writing to pay thereon.

         SECTION 3.06 Compensation and Expenses of Guarantee Trustee.

                  The Guarantor covenants and agrees to pay to the Guarantee
Trustee from time to time, and the Guarantee Trustee shall be entitled to, such
compensation as the Guarantor and the Guarantee Trustee shall from time to time
agree in writing (which shall not be limited by any provision of law in regard
to the compensation of a Guarantee Trustee of an express trust) for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Guarantee Trustee, and the Guarantor will pay or reimburse the
Guarantee Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Guarantee Trustee in accordance with any of
the provisions of this Guarantee Agreement (including the reasonable
compensation and the reasonable expenses and disbursements of its counsel and of
all persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence or bad faith. The Guarantor also
covenants to indemnify each of the Guarantee Trustee or any predecessor
Guarantee Trustee and their officers, agents, directors and employees for, and
to hold them harmless against, any and all loss, liability, damage, claim or
expense including taxes (other than taxes based upon, measured by or determined
by the income, profit, franchise or doing business of the Guarantee Trustee)
incurred without negligence or bad faith on the part of the Guarantee Trustee
and arising out of or in connection with the acceptance or administration of
this trust, including the reasonable costs and expenses of defending itself
against any claim (whether asserted by the Guarantor, any Holder or any other
Person) of liability in the premises. The provisions of this Section 3.06 shall
survive the termination of this Guarantee Agreement and resignation or removal
of the Guarantee Trustee.

                                       11

<PAGE>   15

                                   ARTICLE IV
                                GUARANTEE TRUSTEE

         SECTION 4.01 Qualifications.

                  There shall at all times be a Guarantee Trustee that shall:

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

                  (ii) be a national banking association or corporation
         organized and doing business under the laws of the United States of
         America or any State or Territory thereof or of the District of
         Columbia, or a corporation or 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 $50,000,000, and subject to supervision
         or examination by Federal, State, Territorial or District of Columbia
         authority. If such corporation 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
         clause (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.

                  If at any time the Guarantee Trustee shall cease to satisfy
the requirements of clauses (i) and (ii) above, the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02. If
the Guarantee Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and
the Guarantor shall in all respects comply with the provisions of Section 310(b)
of the Trust Indenture Act.

         SECTION 4.02 Appointment, Removal and Resignation of the Guarantee
Trustee.

                  (a) Subject to Section 4.02(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.

                  (b) The Guarantee Trustee shall not be removed in accordance
with Section 4.02(a) until a Successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.01 has been appointed
and has accepted such appointment by written instrument executed by such
Successor Guarantee Trustee and delivered to the Guarantor and the Guarantee
Trustee being removed.

                  (c) The Guarantee Trustee appointed to office shall hold
office until its successor shall have been appointed or until its removal or
resignation.

                  (d) The Guarantee Trustee may resign from office (without need
for prior or subsequent accounting) by an instrument (a "Resignation Request")
in writing signed by the

                                       12

<PAGE>   16

Guarantee Trustee and delivered to the Guarantor, which resignation shall take
effect upon such delivery or upon such later date as is specified therein;
provided, however, that no such resignation of the Guarantee Trustee shall be
effective until a Successor Guarantee Trustee possessing the qualifications to
act as Guarantee Trustee under Section 4.01 has been appointed and has accepted
such appointment by instrument executed by such Successor Guarantee Trustee and
delivered to the Guarantor and the resigning Guarantee Trustee.

                  (e) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.02 within 60
days after delivery to the Guarantor of a Resignation Request, the resigning
Guarantee Trustee may petition any court of competent jurisdiction for
appointment of a Successor Guarantee Trustee. Such court may thereupon after
such notice, if any, as it may deem proper, appoint a Successor Guarantee
Trustee.

                                    ARTICLE V
                                    GUARANTEE

         SECTION 5.01 Guarantee.

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

         SECTION 5.02 Waiver of Notice.

                  The Guarantor hereby waives notice of acceptance of this
Guarantee Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands. Notwithstanding anything to the contrary herein, the
Guarantor retains all of its rights under the Indenture to extend the interest
payment period on the Debentures and the Guarantor shall not be obligated
hereunder to make any Guarantee Payment during any Extended Interest Payment
Period (as defined in the Supplemental Indenture) with respect to the
Distributions on the Preferred Securities.

         SECTION 5.03 Obligations Not Affected.

                  The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee Agreement shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:

                                       13

<PAGE>   17

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

                  (b) the extension of time for the payment by the Issuer of all
         or any portion of the Distributions (other than an extension of time
         for payment of Distributions that result from any Extended Interest
         Payment Period), Redemption Price, Liquidation Distribution (as defined
         in the Declaration) or any other sums payable under the terms of the
         Preferred Securities or the extension of time for the performance of
         any other obligation under, arising out of, or in connection with, the
         Preferred Securities (other than an extension of time for payment of
         Distributions that result from any Extended Interest Payment Period);

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

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

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

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

                  (g) any other circumstance whatsoever that might otherwise
         constitute a legal or equitable discharge or defense of a guarantor, it
         being the intent of this Section 5.03 that the obligations of the
         Guarantor with respect to the Guarantee Payments shall be absolute and
         unconditional under any and all circumstances.

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

         SECTION 5.04 Enforcement of Guarantee.

                  The Guarantor and the Guarantee Trustee expressly acknowledge
and agree that (i) this Guarantee Agreement will be deposited with the Guarantee
Trustee to be held for the benefit of the Holders; (ii) the Guarantee Trustee
has the right to enforce this Guarantee Agreement on behalf of the Holders;
(iii) Holders representing not less than a Majority of Outstanding Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any

                                       14

<PAGE>   18

remedy available to the Guarantee Trustee in respect of this Guarantee Agreement
or exercising any trust or other power conferred upon the Guarantee Trustee
under this Guarantee Agreement; and (iv) if the Guarantee Trustee fails to
enforce this Guarantee Agreement as provided in clauses (ii) and (iii) above,
any Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement, without first instituting a
legal proceeding against the Issuer, the Guarantee Trustee or any other Person.
Notwithstanding the foregoing, if the Guarantor has failed to make a Guarantee
Payment, a Holder may directly institute a proceeding against the Guarantor for
enforcement of this Guarantee Agreement for such payment without first
instituting a legal proceeding against the Issuer, the Guarantee Trustee or any
other Person.

         SECTION 5.05 Guarantee of Payment.

                  This Guarantee Agreement creates a guarantee of payment and
not merely of collection. This Guarantee Agreement will not be discharged except
by payment of the Guarantee Payments in full (without duplication of amounts
theretofore paid by the Issuer) or upon the distribution of the Debentures to
the Holders as provided in the Declaration.

         SECTION 5.06 Subrogation.

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

         SECTION 5.07 Independent Obligations.

                  The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.03 hereof.

                                       15

<PAGE>   19

                                   ARTICLE VI
                    LIMITATION OF TRANSACTIONS; SUBORDINATION

         SECTION 6.01 Limitation of Transactions.

                  So long as any Preferred Securities remain outstanding, the
Guarantor shall not (1) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities that rank junior to
the Debentures in the right of payment issued by the Guarantor, or (2) make any
guarantee payments with respect to any guarantee by the Guarantor of any
securities of any of its subsidiaries if such guarantee ranks junior to the
Debentures in right of payment or (3) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Guarantor's capital stock, except for or as a result
of (a) dividends or distributions in, or options, warrants or rights to
subscribe for or purchase, the Common Stock; (b) any declaration of a dividend
in connection with the implementation of a shareholder's rights plan, or the
issuance of shares under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto; (c) a reclassification of the
Guarantor's capital stock solely into shares of one or more classes or series of
the Guarantor's capital stock or the exchange or conversion of one class or
series of the Guarantor's capital stock for or into another class or series of
the Guarantor's capital stock; (d) the purchase of fractional interests in
shares of the Guarantor's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged;
and (e) the purchase of the Guarantor's common stock in connection with the
Guarantor's normal course issuer bid-purchases for the satisfaction by the
Guarantor of its obligations under any benefit plans for the Guarantor and the
Guarantor's subsidiaries' directors, officers or employees or under any of the
Guarantor's dividend reinvestment plans, if at such time (i) the Guarantor shall
be in default with respect to its Guarantee Payments or other payment
obligations hereunder, (ii) there shall have occurred and be continuing any
event of default under the Declaration or (iii) the Guarantor shall have given
notice of its election of an Extended Interest Payment Period and such period,
or any extension thereof, is continuing. In addition, so long as any Preferred
Securities remain outstanding, the Guarantor (i) will remain the sole direct or
indirect owner of all of the outstanding Common Securities and shall not cause
or permit the Common Securities to be transferred except to the extent such
transfer is permitted under Section [9.01] of the Declaration; provided that any
permitted successor of the Guarantor under the Indenture may succeed to the
Guarantor's direct or indirect ownership of the Common Securities, [(ii) will
cause the holder of the Common Securities to satisfy the requirements of Section
4.03 of the Declaration] and (iii) will use reasonable efforts to cause the
Issuer to continue to be treated as a grantor trust for United States federal
income tax purposes, except in connection with a distribution of Debentures as
provided in the Declaration.

                                       16

<PAGE>   20

         [SECTION 6.02 Subordination.

                  This Guarantee Agreement will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor and any guarantees of the
Guarantor relating to such liabilities, except in each case those made pari
passu or subordinate by their terms, and (ii) senior to all capital stock
[(other than the most senior preferred stock issued from time to time, if any,
by the Guarantor, which preferred stock will rank pari passu with this Guarantee
Agreement)] and to any guarantee now or hereafter entered into by the Guarantor
in respect of any of its capital stock [(other than the most senior preferred
stock issued by the guarantor)] now or hereafter issued by the Guarantor. The
Guarantor's obligations under this Guarantee Agreement will rank pari passu with
respect to obligations under other securities (other than capital stock) the
Guarantor may issue from time to time and other guarantee agreements which it
may enter into from time to time to the extent that (i) such agreements shall
provide for comparable guarantees by the Guarantor of payment on preferred
securities issued by other trusts, partnerships or other entities affiliated
with the Guarantor that are financing vehicles of the Guarantor and (ii) the
debentures or other evidences of indebtedness of the Guarantor relating to such
preferred securities are junior subordinated, unsecured indebtedness of the
Guarantor. The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the Guarantee Agreement, dated as of        , between the
Guarantor and the Guarantee Trustee.]

                                   ARTICLE VII
                                   TERMINATION

         SECTION 7.01 Termination.

                  This Guarantee Agreement shall terminate and be of no further
force and effect (i) upon full payment of the Redemption Price of all Preferred
Securities, (ii) upon the distribution of Debentures [, or any securities in to
which such Debentures are convertible,] to Holders and holders of Common
Securities in exchange for all of the Preferred Securities and Common Securities
or (iii) upon full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this
Guarantee Agreement will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder must restore payment of any sums paid
with respect to the Preferred Securities or under this Guarantee Agreement.

                                  ARTICLE VIII
                    LIMITATION OF LIABILITY; INDEMNIFICATION

         SECTION 8.01 Exculpation.

                  (a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Holder for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Guarantee
Agreement and in a manner such Indemnified Person reasonably believed to be
within

                                       17

<PAGE>   21

the scope of the authority conferred on such Indemnified Person by this
Guarantee Agreement or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.

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

         SECTION 8.02 Indemnification.

                  To the fullest extent permitted by applicable law, the
Guarantor shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by reason
of any act or omission performed or omitted by such Indemnified Person in good
faith in accordance with this Guarantee Agreement and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Guarantee Agreement, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions.

         SECTION 8.03 Survive Termination.

                  The provisions of Sections 8.01 and 8.02 shall survive the
termination of this Guarantee Agreement or the resignation or removal of the
Guarantee Trustee.

                                   ARTICLE IX
                                  MISCELLANEOUS

         SECTION 9.01 Successors and Assigns.

                  All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assignees, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Guarantee
Trustee and the Holders then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article X of the Indenture, the Guarantor shall not assign its obligations
hereunder.

                                       18

<PAGE>   22

         SECTION 9.02 Amendments.

                  Except with respect to any changes which do not adversely
affect the rights of Holders in any material respect (in which case no consent
of Holders will be required), this Guarantee Agreement may only be amended with
the prior approval of the Guarantor, the Guarantee Trustee and the Holders of
not less than a Majority of Outstanding Preferred Securities. The provisions of
Section [12.02] of the Declaration concerning meetings of Holders shall apply to
the giving of such approval.

         SECTION 9.03 Notices.

                  Any notice, request or other communication required or
permitted to be given hereunder shall be in writing, in English, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows:

                  (a) if given to the Guarantor, to the address set forth below
         or such other address as the Guarantor may give notice of to the
         Holders:

                  Valero Energy Corporation
                  7990 I.H. 10 West
                  San Antonio, Texas 78230
                  Attention: General Counsel

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

                  The Bank of New York

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

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

                  ---------------------------
                  Attention:

                  (c) if given to any Holder, at the address set forth on the
         books and records of the Issuer.

                  All notices hereunder shall be deemed to have been given when
(i) received in person, (ii) telecopied with receipt confirmed, or (iii) mailed
by first class mail, postage prepaid, when received, 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.

                                       19

<PAGE>   23

         SECTION 9.04 Genders.

                  The masculine, feminine and neuter genders used herein shall
include the masculine, feminine and neuter genders.

         SECTION 9.05 Benefit.

                  This Guarantee Agreement is solely for the benefit of the
Guarantee Trustee and the Holders and, subject to Section 3.01(a), is not
separately transferable from the Preferred Securities.

         SECTION 9.06 Governing Law.

                  THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).

         SECTION 9.07 Counterparts.

                  This Guarantee Agreement may be executed in counterparts, each
of which shall be an original; but such counterparts shall together constitute
one and the same instrument.

         SECTION 9.08 [Exercise of Overallotment Option.

                  If and to the extent that Preferred Securities are issued by
the Issuer upon exercise of the overallotment option referred to in the first
WHEREAS clause, the Guarantor agrees to give prompt notice thereof to the
Guarantee Trustee but the failure to give such notice shall not relieve the
Guarantor of any of its obligations hereunder.]

         SECTION 9.09 Limited Liability.

                  Neither the Guarantee Trustee nor the Holders, in their
capacities as such, shall be personally liable for any liabilities or
obligations of the Guarantor arising out of this Guarantee Agreement. The
parties further hereby agree that the Holders, in their capacities as such,
shall be entitled to the same limitation of personal liability extended to the
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.

                                       20

<PAGE>   24

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

                                          VALERO ENERGY CORPORATION

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

                                          THE BANK OF NEW YORK
                                               as Guarantee Trustee

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

                                       21

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}]]