Document:

<PAGE>

                                                                     EXHIBIT 4.4

                             DECLARATION OF TRUST
                                      OF
                            ASTORIA CAPITAL TRUST I

          THIS DECLARATION OF TRUST is made as of October 18, 1999  (this
"Declaration"), by and among Astoria Financial Corporation, a Delaware
corporation, as sponsor (the "Sponsor"), and Wilmington Trust Company, a
Delaware banking corporation, as Delaware trustee (the "Trustee"). The Sponsor
and the Trustee hereby agree as follows:

          1.   The trust created hereby shall be known as "Astoria Capital Trust
I" (the "Trust"), in which name the Trustee or the Sponsor, to the extent
provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.

          2.   The Sponsor hereby assigns, transfers, conveys and sets over to
the Trust the sum of $10.  The Trustee hereby acknowledges receipt of such
amount in trust from the Sponsor, which amount shall constitute the initial
trust estate.  The Trustee hereby declares that it will hold the trust estate in
trust for the Sponsor.  It is the intention of the parties hereto that the Trust
created hereby constitute a business trust under Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. (S) 3801, et seq. (the "Business Trust Act"), and that
                  ------            -- ---
this Declaration constitute the governing instrument of the Trust.  The Trustee
is hereby authorized and directed to execute and file a certificate of trust
with the Secretary of State of the State of Delaware in the form attached to
this Declaration.

          3.   The Sponsor and the Trustee will enter into an amended and
restated Declaration of Trust satisfactory to each such party to provide for the
contemplated operation of the Trust created hereby and the issuance by the Trust
of the Capital Securities and Common Securities referred to therein.  Prior to
the execution and delivery of such amended and restated Declaration of Trust (i)
the Trustee shall not have any duty or obligation hereunder or with respect to
the trust estate, except as otherwise required by applicable law, and (ii) the
Sponsor shall take or cause to be taken any action as may be necessary to obtain
prior to such execution and delivery any licenses, consents or approvals
required by applicable law or otherwise.  Notwithstanding the foregoing, the
Trustee may take all actions which the Sponsor deems necessary, convenient or
incidental to effect the transactions contemplated herein. The Trustee shall not
have any duty or obligation under or in connection with this Declaration or any
document contemplated hereby, except as expressly provided by the terms of this
Declaration, and no implied duties or obligations shall be read into this
Declaration against the Trustee.  The right of the Trustee to perform any
discretionary act enumerated herein shall not be construed as a duty.

          4.   The Sponsor hereby agrees to (i) reimburse the Trustee for all
reasonable expenses (including reasonable fees and expenses of counsel and other
experts), (ii) indemnify, defend and hold harmless the Trustee and the officers,
directors, employees and agents of the Trustee (collectively, including the
Trustee in its individual capacity, the "Indemnified Persons") from and against
any and all losses, damages, liabilities, claims, actions, suits, costs,
expenses, disbursements (including the reasonable fees and expenses of counsel),
taxes and penalties of any kind and nature
<PAGE>

whatsoever (collectively, "Expenses"), to the extent that such Expenses arise
out of or are imposed upon or asserted at any time against such Indemnified
Persons with respect to the performance of this Declaration, the creation,
operation, administration or termination of the Trust, or the transactions
contemplated hereby; provided, however, that the Sponsor shall not be required
                     --------  -------
to indemnify an Indemnified Person for Expenses to the extent such Expenses
result from the willful misconduct, bad faith or gross negligence of such
Indemnified Person, and (iii) advance to each such Indemnified Person Expenses
(including reasonable fees and expenses of counsel) incurred by such Indemnified
Person, in defending any claim, demand, action, suit or proceeding prior to the
final disposition of such claim, demand, action, suit or proceeding upon receipt
by the Sponsor of an undertaking, by or on behalf of such Indemnified Person, to
repay such amount if it shall be determined that such Indemnified Person is not
entitled to be indemnified therefor under this Section 4. The obligations of the
Sponsor under this Section 4 shall survive the resignation or removal of the
Trustee, shall survive the termination, amendment, supplement, and/or
restatement of this Declaration, and shall survive the transfer by the Sponsor
of any or all of its interest in the Trust pursuant to Section 5 below or
otherwise.

          5.   The Sponsor, as sponsor of the Trust, is hereby authorized, in
its discretion, (i) to prepare and distribute one or more offering memoranda in
preliminary and final form, including any necessary or desirable amendments,
relating to the offering and sale of Capital Securities of the Trust in a
transaction exempt from the registration requirements of the Securities Act of
1933, as amended (the "1933 Act"), and such forms or filings as may be required
by the 1933 Act, the Securities Exchange Act of 1934, as amended, or the Trust
Indenture Act of 1939, as amended, in each case relating to the Capital
Securities of the Trust; (ii) to prepare, execute and file on behalf of the
Trust, such applications, reports, surety bonds, irrevocable consents,
appointments of attorney for service of process and other papers and documents
that shall be necessary or desirable to register or establish the exemption from
registration of the Capital Securities of the Trust under the securities or
"Blue Sky" laws of such jurisdictions as the Depositor, on behalf of the Trust,
may deem necessary or desirable; (iii) to prepare, execute and file an
application, and all other applications, statements, certificates, agreements
and other instruments that shall be necessary or desirable, to have the Capital
Securities listed on the Private Offerings, Resales and Trading through
Automated Linkages ("PORTAL") Market and, if and at such time as determined by
the Depositor, with the New York Stock Exchange or any other national stock
exchange or the Nasdaq National Market for listing or quotation of the Capital
Securities of the Trust; (iv) to prepare, execute and deliver letters or
documents to, or instruments for filing with, a depository relating to the
Capital Securities of the Trust; (v) to negotiate, execute, deliver and perform
on behalf of the Trust one or more purchase agreements, registration rights
agreements, dealer/manager agreements, escrow agreements, subscription
agreements and other similar or related agreements providing for or relating to
the sale and issuance of the Capital Securities of the Trust and/or any other
interests in the Trust; and (vi) to prepare, execute and deliver on behalf of
the Trust any and all documents, certificates, papers, instruments and other
writings as it deems desirable in connection with any of the foregoing.

          In the event that any filing referred to in this Section 5 is required
by the rules and regulations of Securities and Exchange Commission (the
"Commission"), PORTAL or state securities or Blue Sky laws to be executed on
behalf of the Trust by a trustee, the Trustee, in its

                                       2
<PAGE>

capacity as a trustee of the Trust, so required to execute such filings is
hereby authorized and directed to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being understood that the
Trustee, in its capacity as a trustee of the Trust, shall not be required to
join in any such filing or execute on behalf of the Trust any such document
unless required to do so by the rules and regulations of the Commission, PORTAL
or applicable state securities or Blue Sky laws.

          6.   The Trustee is authorized to take such action or refrain from
taking such action under this Declaration as it may be directed in writing by
the Sponsor from time to time; provided, however, that the Trustee shall not be
                               --------  -------
required to take or refrain from taking any such action if it shall have
determined, or shall have been advised by counsel, that such performance is
likely to involve the Trustee in personal liability or is contrary to the terms
of this Declaration or of any document contemplated hereby to which the Trust or
the Trustee is a party or is otherwise contrary to law.  If at any time the
Trustee determines that it requires or desires guidance regarding the
application of any provision of this Declaration or any other document, or
regarding compliance with any direction it received hereunder, then the Trustee
may deliver a notice to the Sponsor requesting written instructions as to the
course of action desired by the Sponsor, and such instructions shall constitute
full and complete authorization and protection for actions taken and other
performance by the Trustee in reliance thereon.  Until the Trustee has received
such instructions after delivering such notice, it may refrain from taking any
action with respect to the matters described in such notice.

          7.   This Declaration may be executed in one or more counterparts.

          8.   The number of trustees of the Trust initially shall be one (1)
and thereafter the number of trustees of the Trust shall be such number as shall
be fixed from time to time by a written instrument signed by the Sponsor which
may increase or decrease the number of trustees of the Trust; provided, however,
                                                              --------  -------
to the extent required by the Business Trust Act, there shall at all times be
one trustee of the Trust that shall either be a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware and otherwise meets the
requirements of applicable law.  Subject to the foregoing, the Sponsor is
entitled to appoint or remove without cause any trustee of the Trust at any
time.  Any trustee of the Trust may resign upon thirty days' prior notice to the
Sponsor.

          9.   This Declaration shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles).

                           [SIGNATURE PAGE FOLLOWS]

                                       3
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Declaration of
Trust to be duly executed as of the day and year first above written.

                              ASTORIA FINANCIAL CORPORATION,
                              as Sponsor

                              By:/s/ Alan P. Eggleston
                                 ------------------------------------------
                                    Name:   Alan P. Eggleston
                                    Title:  Executive Vice President &
                                            General Counsel

                              WILMINGTON TRUST COMPANY, as Trustee

                              By: /s/ Donald G. MacKelcan
                                 ----------------------------------------
                                    Name:   Donald G. MacKelcan
                                    Title:  Vice President

                                       4<PAGE>

                                                                     EXHIBIT 4.5

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

                   AMENDED AND RESTATED DECLARATION OF TRUST

                                      OF

                            ASTORIA CAPITAL TRUST I

                         Dated as of October 28, 1999

================================================================================
<PAGE>

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
                                                                                                               Page

                                    ARTICLE I
                         INTERPRETATION AND DEFINITIONS

<S>                  <C>                                                                                         <C>
SECTION 1.1          Definitions..................................................................................2

                                   ARTICLE II
                               TRUST INDENTURE ACT

SECTION 2.1          Trust Indenture Act; Application............................................................10
SECTION 2.2          Lists of Holders of Securities..............................................................10
SECTION 2.3          Reports by the Property Trustee.............................................................11
SECTION 2.4          Periodic Reports to Property Trustee........................................................11
SECTION 2.5          Evidence of Compliance with Conditions Precedent............................................11
SECTION 2.6          Events of Default; Waiver...................................................................11
SECTION 2.7          Default; Notice.............................................................................13

                                   ARTICLE III
                                  ORGANIZATION

SECTION 3.1          Name........................................................................................14
SECTION 3.2          Office......................................................................................14
SECTION 3.3          Purpose.....................................................................................14
SECTION 3.4          Authority...................................................................................14
SECTION 3.5          Title to Property of the Trust..............................................................14
SECTION 3.6          Powers and Duties of the Administrative Trustees............................................14
SECTION 3.7          Prohibition of Actions by the Trust and the Trustees........................................18
SECTION 3.8          Powers and Duties of the Property Trustee...................................................19
SECTION 3.9          Certain Duties and Responsibilities of the Property Trustee.................................21
SECTION 3.10         Certain Rights of Property Trustee..........................................................23
SECTION 3.11         Delaware Trustee............................................................................25
SECTION 3.12         Execution of Documents......................................................................25
SECTION 3.13         Not Responsible for Recitals or Issuance of Securities......................................25
SECTION 3.14         Duration of Trust...........................................................................26
SECTION 3.15         Mergers.....................................................................................26

                                   ARTICLE IV
                                     SPONSOR

SECTION 4.1          Sponsor's Purchase of Common Securities.....................................................28
SECTION 4.2          Responsibilities of the Sponsor.............................................................28
SECTION 4.3          Right to Proceed............................................................................29
SECTION 4.4          Right to Dissolve Trust.....................................................................29
</TABLE>

                                        i
<PAGE>

<TABLE>
<CAPTION>

                                    ARTICLE V
                                    TRUSTEES
<S>                  <C>                                                                                         <C>
SECTION 5.1          Number of Trustees; Appointment of Co-Trustee...............................................29
SECTION 5.2          Delaware Trustee............................................................................30
SECTION 5.3          Property Trustee; Eligibility...............................................................30
SECTION 5.4          Certain Qualifications of Administrative Trustees and Delaware
                     Trustee Generally...........................................................................31
SECTION 5.5          Administrative Trustees.....................................................................31
SECTION 5.6          Appointment, Removal and Resignation of Trustees............................................32
SECTION 5.7          Vacancies among Trustees....................................................................34
SECTION 5.8          Effect of Vacancies.........................................................................34
SECTION 5.9          Meetings....................................................................................35
SECTION 5.10         Delegation of Power.........................................................................35
SECTION 5.11         Merger, Conversion, Consolidation or Succession to Business.................................35

                                   ARTICLE VI
                                  DISTRIBUTIONS

SECTION 6.1          Distributions...............................................................................37

                                   ARTICLE VII
                             ISSUANCE OF SECURITIES

SECTION 7.1          General Provisions Regarding Securities.....................................................37
SECTION 7.2          Execution and Authentication................................................................38
SECTION 7.3          Form and Dating.............................................................................39
SECTION 7.4          Registrar, Paying Agent and Exchange Agent..................................................40
SECTION 7.5          Paying Agent to Hold Money in Trust.........................................................41
SECTION 7.6          Replacement Securities......................................................................41
SECTION 7.7          Outstanding Capital Securities..............................................................41
SECTION 7.8          Capital Securities in Treasury..............................................................42
SECTION 7.9          Temporary Securities........................................................................42
SECTION 7.10         Cancellation................................................................................43
SECTION 7.11         CUSIP Numbers...............................................................................44

                                  ARTICLE VIII
                              DISSOLUTION OF TRUST

SECTION 8.1          Dissolution of Trust........................................................................44
</TABLE>

                                       ii
<PAGE>

<TABLE>
<CAPTION>

                                   ARTICLE IX
                              TRANSFER OF INTERESTS

<S>                  <C>                                                                                         <C>
SECTION 9.1          Transfer of Securities......................................................................45
SECTION 9.2          Transfer Procedures and Restrictions........................................................46
SECTION 9.3          Deemed Security Holders.....................................................................55
SECTION 9.4          Book-Entry Interests........................................................................56
SECTION 9.5          Notices to Clearing Agency..................................................................57
SECTION 9.6          Appointment of Successor Clearing Agency....................................................57

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

SECTION 10.1         Liability...................................................................................57
SECTION 10.2         Exculpation.................................................................................57
SECTION 10.3         Fiduciary Duty..............................................................................58
SECTION 10.4         Indemnification.............................................................................59
SECTION 10.5         Outside Businesses..........................................................................62

                                   ARTICLE XI
                                   ACCOUNTING

SECTION 11.1         Fiscal Year.................................................................................62
SECTION 11.2         Certain Accounting Matters..................................................................62
SECTION 11.3         Banking.....................................................................................63
SECTION 11.4         Withholding.................................................................................63

                                   ARTICLE XII
                             AMENDMENTS AND MEETINGS

SECTION 12.1         Amendments..................................................................................64
SECTION 12.2         Meetings of the Holders; Action by Written Consent..........................................66

                                  ARTICLE XIII
                       REPRESENTATIONS OF PROPERTY TRUSTEE
                              AND DELAWARE TRUSTEE

SECTION 13.1         Representations and Warranties of Property Trustee..........................................68
SECTION 13.2         Representations and Warranties of Delaware Trustee..........................................68

                                   ARTICLE XIV
                               REGISTRATION RIGHTS

SECTION 14.1         Registration Rights Agreement; Liquidated Damages...........................................69
</TABLE>

                                       iii
<PAGE>

<TABLE>
<CAPTION>

                                   ARTICLE XV
                                  MISCELLANEOUS
<S>                  <C>                                                                                         <C>
SECTION 15.1         Notices.....................................................................................69
SECTION 15.2         Governing Law...............................................................................71
SECTION 15.3         Intention of the Parties....................................................................71
SECTION 15.4         Headings....................................................................................71
SECTION 15.5         Successors and Assigns......................................................................71
SECTION 15.6         Partial Enforceability......................................................................71
SECTION 15.7         Counterparts................................................................................71
TERMS OF
         9.75% CAPITAL SECURITIES, SERIES A/SERIES B
         9.75% COMMON SECURITIES................................................................................I-1
EXHIBIT A-1

         FORM OF CAPITAL SECURITY CERTIFICATE..................................................................A1-1
EXHIBIT A-2

         FORM OF COMMON SECURITY CERTIFICATE...................................................................A2-1
</TABLE>

                                       iv
<PAGE>

                                              CROSS-REFERENCE TABLE*

<TABLE>
<CAPTION>

Section of
Trust Indenture
Act of 1939, as                                                                                     Section of
amended                                                                                            Declaration
---------------                                                                                  ---------------
<S>                                                                                                    <C>
        310(a)          ...................................................................            5.3
        310(b)          ...................................................................       5.3(c), 5.3(d)
        311(a)          ...................................................................           2.2(b)
        311(b)          ...................................................................           2.2(b)
        312(a)          ...................................................................           2.2(a)
        312(b)          ...................................................................           2.2(b)
         313            ...................................................................            2.3
        314(a)          ...................................................................    2.4; 2.7(c); 3.6(j)
        314(c)          ...................................................................            2.5
        315(a)          ...................................................................        3.6(j); 3.9
        315(b)          ...................................................................           2.7(a)
        315(c)          ...................................................................           3.9(a)
        315(d)          ...................................................................           3.9(b)
        316(a)          ...................................................................            2.6
        316(c)          ...................................................................           3.6(e)
        317(a)          ...................................................................       3.8(e); 3.8(h)
        317(b)          ...................................................................        3.8(i); 7.5
</TABLE>

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

                                        v

<PAGE>

                             AMENDED AND RESTATED
                             DECLARATION OF TRUST
                                      OF
                            ASTORIA CAPITAL TRUST I

                         Dated as of October 28, 1999

          AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of October 28, 1999, by and among the Trustees (as defined herein),
the Sponsor (as defined herein) and the Holders (as defined herein), from time
to time, of undivided beneficial interests in the assets of the Trust to be
issued pursuant to this Declaration;

          WHEREAS, the Trustees and the Sponsor established Astoria Capital
Trust I (the "Trust"), a trust created under the Delaware Business Trust Act
pursuant to a Declaration dated as of October 18, 1999 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on October 19, 1999, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust, investing the proceeds thereof in certain Debentures of the
Debenture Issuer (each as hereinafter defined), and engaging in only those
activities necessary, advisable or incidental thereto; and

          WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;

          WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
ratify the actions of each Trustee taken prior to the date hereof;

          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 declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration and, in consideration
of the mutual covenants contained herein and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties,
intending to be legally bound hereby, agree as follows:
<PAGE>

                                   ARTICLE I
                        INTERPRETATION AND DEFINITIONS

SECTION 1.1    Definitions.
               -----------

               Unless the context otherwise requires:

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

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

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

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

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

               (f) a term defined in the Indenture (as defined herein) has the
               same meaning when used in this Declaration unless otherwise
               defined in this Declaration or the context otherwise requires;
               and

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

               "Administrative Trustee" has the meaning set forth in Section
                ----------------------
                5.1.

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

               "Agent" means any Paying Agent, Registrar or Exchange Agent.
                -----

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

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

                                       2
<PAGE>

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

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

          "Capital Securities" means, collectively, the Series A Capital
           ------------------
Securities and the Series B Capital Securities.

          "Capital Securities Guarantee" means, collectively, the Series A
           ----------------------------
Capital Securities Guarantee and the Series B Capital Securities Guarantee.

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

          "Capital Security Certificate" has the meaning set forth in Section
           ----------------------------
9.4.

          "Clearing Agency" means an organization registered as a "Clearing
           ---------------
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Capital 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 Capital Securities.

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

          "Closing Time" means the "Closing Time" as defined in the Purchase
           ------------
Agreement.

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

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

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

          "Common Security Certificate" means a certificate evidencing ownership
           ---------------------------
of Common Securities, substantially in the form attached as Exhibit A-2.

                                       3
<PAGE>

          "Common Securities Guarantee" means the Common Securities Guarantee
           ---------------------------
Agreement, dated as of the Closing Time, entered into by Astoria Financial
Corporation, with respect to the Common Securities.

          "Common Securities Subscription Agreement" means the Common
           ----------------------------------------
Securities Subscription Agreement, dated as of the Closing Time, between the
Trust and Astoria Financial Corporation relating to the Common Securities.

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

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

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

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

          "Debenture Subscription Agreement" means the Debenture Subscription
           --------------------------------
Agreement, dated as of the Closing Time, between the Debenture Issuer and the
Trust in respect of the Series A Debentures.

          "Debenture Trustee" means Wilmington Trust Company, a Delaware banking
           -----------------
corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.

          "Debentures" means, collectively, the Series A Debentures and the
           ----------
Series B Debentures.

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

          "Definitive Capital Securities" has the meaning set forth in Section
           -----------------------------
7.3(c).

          "Delaware Trustee" has the meaning set forth in Section 5.1.
           ----------------

          "Direct Action" has the meaning set forth in Section 3.8(e).
           -------------

                                       4
<PAGE>

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

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

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

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

          "Exchange Agent" has the meaning set forth in Section 7.4.
           --------------

          "Exchange Offer" means the offer that may be made pursuant to the
           --------------
Registration Rights Agreement (i) by the Trust to exchange Series B Capital
Securities for Series A Capital Securities and (ii) by the Debenture Issuer to
exchange Series B Debentures for Series A Debentures and to execute the Series B
Capital Securities Guarantee in respect of the Series B Capital Securities.

          "Federal Reserve Board" means the Board of Governors of the Federal
           ---------------------
Reserve System.

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

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

          "Global Capital Security'' has the meaning set forth in Section
           -----------------------
7.3(a).

          "Holder" means a Person in whose name a Security or Successor Security
           ------
is registered on the register maintained by or on behalf of the Registrar, such
Person being a beneficial owner of the Trust within the meaning of the Business
Trust Act.

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

          "Indenture" means the Indenture, dated as of the Closing Time, between
           ---------
the Debenture Issuer and the Debenture Trustee, as amended from time to time.

          "Initial Optional Redemption Date" has the meaning set forth in
           --------------------------------
Section 4(b) of Annex I hereto.

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

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

                                       5
<PAGE>

          "Investment Company Event" has the meaning set forth in Section 4(c)
           ------------------------
of Annex I hereto.

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

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

          "Liquidated Damages Agreement" means the Liquidated Damages Agreement,
           ----------------------------
dated as of October 25, 1999, by and among the Debenture Issuer, the Trust and
the Initial Purchaser named therein, as amended from time to time.

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

          "Majority in Liquidation Amount " means, with respect to the Trust
           ------------------------------
Securities, except as provided in the terms of the Capital Securities or by the
Trust Indenture Act, Holders of outstanding Trust Securities voting together as
a single class or, as the context may require, Holders of outstanding Capital
Securities or Holders of outstanding Common Securities voting separately as a
class, excluding the Trust and the Debenture Issuer and any Affiliate thereof,
who are the record owners of more than 50% of the aggregate liquidation amount
(including the amount that would be paid on redemption, liquidation or
otherwise, plus accumulated and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the relevant
class.

          "Offering Memorandum" has the meaning set forth in Section
           -------------------
     3.6(b)(i).

          "Officers' Certificate" means, with respect to any Person, a
           ---------------------
certificate signed by an Authorized Officer of such Person. Any Officers'
Certificate delivered by the Trust shall be signed by at least one
Administrative Trustee.  Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Declaration shall
include:

          (a) a statement that each officer signing the Certificate has read
     the covenants or conditions and the definitions relating thereto;

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

          (c) a statement that each such officer has made such examination or
     investigation as, in such officer's opinion, is necessary to enable such
     officer to express an informed opinion as to whether or not such covenant
     or condition has been complied with; and

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

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

                                       6
<PAGE>

          "Participants" has the meaning specified in Section 7.3(b).
           ------------

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

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

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

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

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

          "Purchase Agreement" means the Purchase Agreement relating to the
           ------------------
Series A Capital Securities, dated October 25, 1999, by and among the Trust, the
Debenture Issuer and the Initial Purchaser named therein.

          "QIBs" shall mean qualified institutional buyers as defined in Rule
           ----
144A.

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

          "Redemption Price" has the meaning set forth in Section 4(a) of
           ----------------
Annex I hereto.

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

          "Registration Rights Agreement" means the Registration Rights
           -----------------------------
Agreement, dated as of October 25, 1999, by and among the Trust, the Debenture
Issuer and the Initial Purchaser named therein, as amended from time to time.

          "Registration Statement" has the meaning set forth in the
           ----------------------
Registration Rights Agreement.

          "Regulatory Capital Event" has the meaning set forth in Section 4(c)
           ------------------------
of Annex I hereto.

          "Related Party" means, with respect to the Sponsor, any direct or
           -------------
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.

          "Responsible Officer" means any officer within the Corporate Trust
           -------------------
Office of the Property Trustee with direct responsibility for the administration
of this Declaration and also means, with respect to a particular corporate trust
matter, any other officer of the Property Trustee to whom

                                       7
<PAGE>

such matter is referred because of such officer's knowledge of and familiarity
with the particular subject.

          "Restricted Capital Security" means a Capital Security required by
           ---------------------------
Section 9.2 to contain a Restricted Securities Legend.

          "Restricted Definitive Capital Securities" has the meaning set forth
           ----------------------------------------
in Section 7.3(c).

           "Restricted Securities Legend" has the meaning set forth in Section
            ----------------------------
9.2(i).

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

           "Rule 144" means Rule 144 under the Securities Act, as such rule may
            --------
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.

           "Rule 144A" means Rule 144A under the Securities Act, as such rule
            ---------
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.

           "Securities" or "Trust Securities" means the Common Securities and
            ----------      ----------------
the Capital Securities.

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

           "Securities Guarantees" means the Common Securities Guarantee and
            ---------------------
the Capital Securities Guarantee.

           "Series A Capital Securities" has the meaning specified in Section
            ---------------------------
7.1(a).

           "Series A Capital Securities Guarantee" means the Series A Capital
            -------------------------------------
Securities Guarantee Agreement, dated as of the Closing Time, by, Astoria
Financial Corporation in respect of the Series A Capital Securities.

          "Series A Debentures" means the 9.75% Junior Subordinated Deferrable
           -------------------
Interest Debentures due November 1, 2029, Series A, of the Debenture Issuer
issued pursuant to the Indenture.

          "Series B Capital Securities" has the meaning specified in Section
           ---------------------------
7.1(a).

          "Series B Capital Securities Guarantee" means the Series B Capital
           -------------------------------------
Securities Guarantee Agreement to be entered into in connection with the
Exchange Offer by Astoria Financial Corporation, in respect of the Series B
Capital Securities.

                                       8
<PAGE>

          "Series B Debentures" means the 9.75% Junior Subordinated Deferrable
           -------------------
Interest Debentures due November 1, 2029, Series B, of the Debenture Issuer to
be issued pursuant to the Indenture in connection with the Exchange Offer.

          "Special Event" has the meaning set forth in Section 4(e) of Annex I
           -------------
hereto.

          "Special Event Redemption Price" has the meaning set forth in
           ------------------------------
Section 4(c) of Annex I hereto.

          "Sponsor" means Astoria Financial Corporation, a Delaware corporation,
           -------
or any successor entity resulting from any merger, consolidation, amalgamation
or other business combina  tion, in its capacity as sponsor of the Trust.

          "Successor Delaware Trustee" has the meaning set forth in Section
           --------------------------
5.6(b)(ii).

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

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

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

          "Super Majority" has the meaning set forth in Section 2.6(a) (ii).
           --------------

          "Tax Event" has the meaning set forth in Section 4(c) of Annex I
           ---------
hereto.

          "10% in Liquidation Amount" means, with respect to the Trust
           -------------------------
Securities, except as provided in the terms of the Capital Securities or by the
Trust Indenture Act, Holders of outstanding Trust Securities voting together as
a single class or, as the context may require, Holders of outstanding Capital
Securities or Holders of outstanding Common Securities voting separately as a
class, excluding the Trust and the Debenture Issuer and any Affiliate thereof,
who are the record owners of 10% or more of the aggregate liquidation amount
(including the amount that would be paid on redemption, liquidation or
otherwise, plus accumulated and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the relevant
class.

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

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

          "Trust Property" means (a) the Debentures, (b) any cash on deposit in
           --------------
or owing to the Property Trustee Account and (c) all proceeds and rights in
respect of the foregoing and any other property and assets for the time being
held or deemed to be held by the Property Trustee pursuant to this Declaration.

                                       9
<PAGE>

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

              "Unrestricted Global Capital Security" has the meaning set forth
               ------------------------------------
in Section 9.2(b).

                                  ARTICLE II
                              TRUST INDENTURE ACT

 SECTION 2.1  Trust Indenture Act; Application.
              --------------------------------

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

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

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

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

 SECTION 2.2  Lists of Holders of Securities.
              ------------------------------

              (a) Each of the Sponsor and the Administrative Trustees on behalf
              of the Trust shall provide the Property Trustee, unless the
              Property Trustee is Registrar for the Securities, (i) within 14
              days after each record date for payment of Distributions, a list,
              in such form as the Property Trustee may reasonably require, of
              the names and addresses of the Holders ("List of Holders") as of
              such record date, provided that, neither the Sponsor nor the
                                -------- ----
              Administrative Trustees on behalf of the Trust shall be obligated
              to provide such List of Holders at any time that the List of
              Holders does not differ from the most recent List of Holders given
              to the Property Trustee by the Sponsor and the Administrative
              Trustees on behalf of the Trust, and (ii) at any other time,
              within 30 days of receipt by the Trust of a written request for a
              List of Holders as of a date no more than 14 days before such List
              of Holders is given to the Property Trustee. The Property Trustee
              shall preserve, in as current a form as is reasonably practicable,
              all information contained in Lists of Holders given to it or which
              it receives in the capacity as Paying Agent

                                       10
<PAGE>

              (if acting in such capacity), provided that the Property Trustee
              may destroy any List of Holders previously given to it on receipt
              of a new List of Holders.
              (b) The Property Trustee shall comply with its obligations under
              (S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act.

 SECTION 2.3  Reports by the Property Trustee.
              -------------------------------

              Within 60 days after the date hereof, and no later than the
anniversary date hereof in each succeeding year, the Property Trustee shall
provide to the Holders of the Capital Securities such reports as are required by
(S) 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by (S) 313 of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of (S) 313(d) of the Trust Indenture Act.

 SECTION 2.4  Periodic Reports to Property Trustee.
              ------------------------------------

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

 SECTION 2.5  Evidence of Compliance with Conditions Precedent.
              ------------------------------------------------

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

 SECTION 2.6  Events of Default; Waiver.
              -------------------------

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

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

              (ii) requires the consent or vote of greater than a majority in
              aggregate principal amount of the holders of the Debentures (a
              "Super Majority") to be waived under the Indenture, the Event of
              Default under the Declaration may only be waived by the vote of
              the Holders of at least the proportion in aggregate liquidation
              amount of the Capital Securities that the relevant Super Majority
              represents of the aggregate principal amount of the Debentures
              outstanding.

                                       11
<PAGE>

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

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

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

               (ii) requires the consent or vote of a Super Majority to be
               waived, except where the Holders of the Common Securities are
               deemed to have waived such Event of Default under the Declaration
               as provided below in this Section 2.6(b), the Event of Default
               under the Declaration may only be waived by the vote of the
               Holders of at least the proportion in aggregate liquidation
               amount of the Common Securities that the relevant Super Majority
               represents of the aggregate principal amount of the Debentures
               outstanding;

provided further, each Holder of Common Securities will be deemed to have waived
-------- -------
any such Event of Default and all Events of Default with respect to the Common
Securities and their consequences if all Events of Default with respect to the
Capital Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Capital Securities and only the Holders of the Capital Securities will have
the right to direct the Property Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu of
(S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such (S)(S)
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
such waiver, any such Default shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have been
cured for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other Default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.

                                       12
<PAGE>

              (c) A waiver of an Event of Default under the Indenture by the
              Property Trustee, at the direction of the Holders of the Capital
              Securities, constitutes a waiver of the corresponding Event of
              Default under this Declaration. The foregoing provisions of this
              Section 2.6(c) shall be in lieu of (S) 316(a)(1)(B) of the Trust
              Indenture Act and such (S) 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  Default; Notice.
              ---------------

              (a) The Property Trustee shall, within 90 days after a Responsible
              Officer has actual knowledge of the occurrence of a Default with
              respect to the Securities, transmit by mail, first class postage
              prepaid, to the Holders, notices of all such Defaults, unless such
              Defaults have been cured before the giving of such notice or
              previously waived; provided, however, that except in the case of a
                                 --------  -------
              Default arising from the nonpayment of principal of (or premium,
              if any) or interest (including Compounded Interest and Additional
              Sums (as such terms are defined in the Indenture), if any) or
              Liquidated Damages, if any (as defined in the Registration Rights
              Agreement), on any of the Debentures, the Property Trustee shall
              be protected in withholding such notice if and so long as a
              Responsible Officer in good faith determines that the withholding
              of such notice is in the interests of the Holders.

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

                  (i)   a Default or Event of Default under Sections 5.01(a)
                  (other than the payment or nonpayment of Compounded Interest,
                  Additional Sums and Liquidated Damages) and 5.01(b) of the
                  Indenture; or

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

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

                                  ARTICLE III
                                 ORGANIZATION

 SECTION 3.1  Name.
              ----

                                       13
<PAGE>

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

 SECTION 3.2  Office.
              ------

              The address of the principal office of the Trust is c/o Astoria
Financial Corporation, One Astoria Federal Plaza, Lake Success, New York 11042.
On ten Business Days' prior written notice to the Delaware Trustee, the Property
Trustee and the Holders of Securities, the Administrative Trustees may designate
another principal office.

 SECTION 3.3  Purpose.
              -------

              The exclusive purposes and functions of the Trust are (a) to issue
and sell Securities, (b) use the proceeds from the sale of the Securities to
acquire the Debentures, and (c) except as otherwise limited herein, to engage in
only those other activities necessary, advisable or incidental thereto,
including without limitation, those activities specified in Sections 3.6, 3.8,
3.9, 3.10, 3.11 and/or 3.12. The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments, mortgage or pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.

 SECTION 3.4  Authority.
              ---------

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

 SECTION 3.5  Title to Property of the Trust.
              ------------------------------

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

 SECTION 3.6  Powers and Duties of the Administrative Trustees.
              ------------------------------------------------

                                       14
<PAGE>

              Subject to Section 5.5, the Administrative Trustees acting
individually or together shall have the exclusive right, power, duty and
authority, and are hereby authorized and directed, to cause the Trust to engage
in the following activities:

              (a) to execute, enter into and deliver the Common Securities
              Subscription Agreement and to execute, deliver, issue and sell the
              Securities in accordance with this Declaration; provided, however,
                                                              --------  -------
              that except as contemplated in Section 7.1(a), (i) the Trust may
              issue no more than one series of Capital Securities and no more
              than one series of Common Securities, (ii) there shall be no
              interests in the Trust other than the Securities, and (iii) the
              issuance of Securities shall be limited to a simultaneous issuance
              of both Capital Securities and Common Secu rities at the Closing
              Time;

              (b) in connection with the issue and sale of the Capital
              Securities and the consummation of the Exchange Offer, at the
              direction of the Sponsor, to:

                (i)   prepare and execute, if necessary, an offering memorandum
              (the "Offering Memorandum") in preliminary and final form
              prepared by the Sponsor, in relation to the offering and sale of
              Series A Capital Securities to QIBs in reliance on Rule 144A and
              to institutional "accredited investors" (as defined in Rule
              501(a)(1), (2), (3) or (7) under the Securities Act), and to
              execute and file with the Commission, at such time as is
              determined by the Sponsor, any Registration Statement, including
              any amendments thereto, as contemplated by the Registration
              Rights Agreement;

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

                (iii) execute and file an application, prepared by the Sponsor,
              to permit the Capital Securities to trade or be quoted or listed
              in or on any securities exchange, quotation system or the Nasdaq
              Stock Market's National Market;

                (iv)  execute, enter into, deliver and perform the Common
              Securities Subscription Agreement, the Purchase Agreement, the
              Registration Rights Agreement, the Liquidated Damages Agreement
              and letters, documents, or instruments with DTC and other
              Clearing Agencies relating to the Capital Securities; and

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

              (c) to execute, enter into and deliver the Debenture Subscription
              Agreement, to acquire the Series A Debentures with the proceeds of
              the sale of the Series A Capital Securities and the Common
              Securities and to exchange the Series A

                                       15
<PAGE>

              Debentures for a like principal amount of Series B Debentures,
              pursuant to the Exchange Offer; provided, however, that the
                                              --------  -------
              Administrative Trustees shall cause legal title to the Debentures
              to be held of record in the name of the Property Trustee for the
              benefit of the Holders;

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

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

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

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

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

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

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

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

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

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

              (n) to take all action that may be necessary or appropriate for
              the preservation and the continuation of the Trust's valid
              existence, rights, franchises and privileges as a statutory
              business trust under the laws of the State of Delaware

                                       16
<PAGE>

              and of each other jurisdiction in which such existence is
              necessary to protect the limited liability of the Holders or to
              enable the Trust to effect the purposes for which the Trust was
              created;

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

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

                (ii)   causing the Trust to continue to be classified for United
              States federal income tax purposes as a grantor trust; and

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

              (p) to take all action necessary to consummate the Exchange Offer
              or otherwise cause the Capital Securities to be registered
              pursuant to an effective registration statement in accordance with
              the provisions of the Registration Rights Agree ment;

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

              (r) to execute and deliver all documents, agreements, certificates
              and instruments, exercise all rights and powers, perform all
              duties and do all things for and on behalf of the Trust in all
              matters necessary, advisable or incidental to the foregoing or the
              transactions contemplated thereby.

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

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

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

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

                                       17
<PAGE>

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

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

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

                (iii) possess Trust Property for other than a Trust purpose or
              execute any mortgage in respect of, or pledge, any Trust Property;

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

                (v)   possess any power or otherwise act in such a way as to
              vary the Trust Property or the terms of the Securities in any way
              whatsoever;

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

                (vii) other than as provided in this Declaration or Annex I
              hereto, (A) direct the time, method and place of conducting any
              proceeding with respect to any remedy available to the Debenture
              Trustee, or exercising any trust or power conferred upon the
              Debenture Trustee with respect to the Debentures, (B) waive any
              past default that is waivable under the Indenture, or (C) exercise
              any right to rescind or annul any declaration that the principal
              of all the Debentures shall be due and payable; or

                (viii) consent to any amendment, modification or termination of
              the Indenture or the Debentures where such consent shall be
              required unless the Trust shall have received an opinion of
              independent tax counsel experienced in such matters to the effect
              that such amendment, modification or termination will not cause
              more than an insubstantial risk that the Trust will not be
              classified as a grantor trust for United States federal income tax
              purposes.

 SECTION 3.8  Powers and Duties of the Property Trustee.
              -----------------------------------------

              (a) The legal title to the Debentures shall be owned by and held
     of record in the name of the Property Trustee in trust for the benefit of
     the Trust and the Holders. The right, title and interest of the Property
     Trustee to the Debentures shall vest automatically in each Person who may
     hereafter be appointed as Property Trustee in accordance with Section 5.6.
     Such vesting and cessation of title shall be effective whether or not
     conveyancing documents with regard to the Debentures have been executed and
     delivered.

                                       18
<PAGE>

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

            (c) The Property Trustee shall:

                (i)   establish and maintain a segregated non-interest bearing
          trust account (the "Property Trustee Account") in the name of and
          under the exclusive control of the Property Trustee on behalf of the
          Holders and, upon the receipt of payments of funds made in respect of
          the Debentures held by the Property Trustee, deposit such funds into
          the Property Trustee Account and make payments or cause the Paying
          Agent to make payments to the Holders from the Property Trustee
          Account in accordance with Section 6.1; funds in the Property Trustee
          Account shall be held uninvested until disbursed in accordance with
          this Declaration; and the Property Trustee Account shall be an account
          that is maintained with a banking institution the rating on whose
          long-term unsecured indebtedness by a "nationally recognized
          statistical rating organization," as that term is defined for purposes
          of Rule 436(g)(2) under the Securities Act, is at least equal to the
          rating assigned to the Capital Securities, unless the Capital
          Securities are not rated, in which case the banking institution's
          long-term unsecured indebtedness shall be rated at least investment
          grade by a "nationally recognized statistical rating organization";

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

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

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

          (e) Subject to Section 3.9(a), the Property Trustee shall take any
     Legal Action which arises out of or in connection with an Event of Default
     of which a Responsible Officer has actual knowledge or the Property
     Trustee's duties and obligations under this Declaration or the Trust
     Indenture Act; and if the Property Trustee shall have failed to take such
     Legal Action following a written request from the Holders, the Holders of
     the Capital Securities may, to the fullest extent permitted by law, take
     such Legal Action, to the same extent as if such Holders of Capital
     Securities held an aggregate principal amount of Debentures equal to the
     aggregate liquidation amount of such Capital Securities, without first
     proceeding against the Property Trustee or the Trust; provided, however,
                                                           --------  -------
     that if

                                       19
<PAGE>

     an Event of Default has occurred and is continuing and such event is
     attributable to the failure of the Debenture Issuer to pay the principal of
     or premium, if any, or interest (including Compounded Interest and
     Additional Sums, if any) or Liquidated Damages, if any, on the Debentures
     on the date such principal, premium, if any, or interest (including
     Compounded Interest and Additional Sums, if any) or Liquidated Damages, if
     any, is otherwise payable (or in the case of redemption, on the redemption
     date), then a Holder of Capital Securities may directly institute a
     proceeding for enforcement of payment to such Holder of the principal of or
     premium, if any, or interest (including Compounded Interest and Additional
     Sums, if any) or Liquidated Damages, if any, on the Debentures having a
     principal amount equal to the aggregate liquidation amount of the Capital
     Securities of such Holder (a "Direct Action") on or after the respective
     due date specified in the Debentures. In connection with such Direct
     Action, the Holders of the Common Securities will be subrogated to the
     rights of such Holder of Capital Securities to the extent of any payment
     made by the Debenture Issuer to such Holder of Capital Securities in such
     Direct Action. Except as provided in the preceding sentences, the Holders
     of Capital Securities will not be able to exercise directly any other
     remedy available to the holders of the Debentures.

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

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

            (ii)   a successor Property Trustee has been appointed and has
     accepted that appointment in accordance with Section 5.6 (a "Successor
     Property Trustee").

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

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

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

                                       20
<PAGE>

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

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

SECTION 3.9  Certain Duties and Responsibilities of the Property Trustee.
             -----------------------------------------------------------

             (a) The Property Trustee, before the occurrence of any Event of
             Default (of which, other than in the case of Events of Default
             under Sections 5.01(a) and 5.01(b) of the Indenture, which the
             Property Trustee is deemed to have knowledge of as provided in
             Section 2.7(b) hereof, a Responsible Officer of the Property
             Trustee has actual knowledge) and after the curing or waiving of
             all such Events of Default that may have occurred, shall undertake
             to perform only such duties as are specifically set forth in this
             Declaration and in the Securities and no implied covenants shall be
             read into this Declaration against the Property Trustee. In case an
             Event of Default has occurred (that has not been cured or waived
             pursuant to Section 2.6) of which a Responsible Officer has actual
             knowledge, the Property Trustee shall exercise such of the rights
             and powers vested in it by this Declaration, and use the same
             degree of care and skill in their exercise, as a prudent person
             would exercise or use under the circumstances in the conduct of his
             or her own affairs.

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

                 (i) prior to the occurrence of an Event of Default (of which,
             other than in the case of Events of Default under Sections 5.01(a)
             and 5.01(b) of the Indenture, which the Property Trustee is deemed
             to have knowledge of as provided in Section 2.7(b) hereof, a
             Responsible Officer of the Property Trustee has actual knowledge)
             and after the curing or waiving of all such Events of Default that
             may have occurred:

                 (A)  the duties and obligations of the Property Trustee shall
                      be determined solely by the express provisions of this
                      Declaration and in the Securities and the Property Trustee
                      shall not be liable except for the performance of such
                      duties and obligations as are specifically set forth in
                      this Declaration and in the Securities, and no implied
                      covenants or obligations shall be read into this
                      Declaration against the Property Trustee; and

                                       21
<PAGE>

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

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

              (iii)   the Property Trustee shall not be liable with respect to
          any action taken or omitted to be taken by it in good faith in
          accordance with the direction of the Holders of 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;

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

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

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

              (viii)  the Property Trustee shall not be responsible for
          monitoring the compliance by the Administrative Trustees or the
          Sponsor with their respective

                                       22
<PAGE>

              duties under this Declaration, nor shall the Property Trustee be
              liable for any default or misconduct of the Administrative
              Trustees or the Sponsor.

 SECTION 3.1  Certain Rights of Property Trustee.
              ----------------------------------

              (a) Subject to the provisions of Section 3.9:

                  (i)    the Property Trustee may conclusively rely and shall be
              fully protected in acting or refraining from acting upon any
              resolution, certificate, statement, instrument, opinion, report,
              notice, request, direction, consent, order, bond, debenture, note,
              other evidence of indebtedness or other paper or document believed
              by it to be genuine and to have been signed, sent or presented by
              the proper party or parties;

                  (ii)   any direction or act of the Sponsor or the
              Administrative Trustees contemplated by this Declaration may be
              sufficiently evidenced by an Officers' Certificate;

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

                  (iv)   the Property Trustee shall have no duty to see to any
              recording, filing or registration of any instrument (including any
              financing or continuation statement or any filing under tax or
              securities laws) or any rerecording, refiling or registration
              thereof;

                  (v)    the Property Trustee may consult with counsel or other
              experts of its selection, 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; and the Property Trustee shall have the
              right at any time to seek instructions concerning the
              administration of this Declaration from any court of competent
              jurisdiction;

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

                                       23
<PAGE>

              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, however, that, nothing
                                       --------  -------
              contained in this Section 3.10(a)(vi) shall be taken to relieve
              the Property Trustee, upon the occurrence of an Event of Default
              (of which, other than in the case of Events of Default under
              Sections 5.01(a) and 5.01(b) of the Indenture, which the Property
              Trustee is deemed to have knowledge of as provided in Section
              2.7(b) hereof, a Responsible Officer of the Property Trustee has
              actual knowledge), 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 may see fit;

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

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

                  (x)     whenever in the administration of this Declaration the
              Property Trustee shall deem it desirable to receive instructions
              with respect to enforcing any remedy or right or taking any other
              action hereunder, the Property Trustee (i) may request
              instructions from the Holders which instructions may only be given
              by the Holders of the same proportion in liquidation amount of the
              Securities as would be entitled to direct the Property Trustee
              under the terms of the Securities in respect of such remedy, right
              or action, (ii) may refrain from enforcing such remedy or right or
              taking such other action until such instructions are received, and
              (iii) shall be protected in conclusively relying on or acting in
              accordance with such instructions ;

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

                                       24
<PAGE>

                  (xii)   the Property Trustee shall not be liable for any
              action taken, suffered, or omitted to be taken by it in good
              faith, without negligence or willful misconduct, and reasonably
              believed by it to be authorized or within the discretion or rights
              or powers conferred upon it by this Declaration.

              (b) No provision of this Declaration shall be deemed to impose any
              duty or obligation on the Property Trustee to perform any act or
              acts or exercise any right, power, duty or obligation conferred or
              imposed on it, in any jurisdiction in which it shall be illegal,
              or in which the Property Trustee shall be unqualified or
              incompetent in accordance with applicable law, to perform any such
              act or acts, or to exercise any such right, power, duty or
              obligation. No permissive power or authority available to the
              Property Trustee shall be construed to be a duty.

 SECTION 3.11  Delaware Trustee.
               ----------------

               Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Trustees described in this Declaration (except as
required under the Business Trust Act). Except as set forth in Section 5.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of (S) 3807 of the Business Trust Act. In the event
the Delaware Trustee shall at any time be required to take any action or perform
any duty hereunder, the Delaware Trustee shall be entitled to the benefits of
Section 3.9(b)(ii) to (viii), inclusive, and Section 3.10. No implied covenants
or obligations shall be read into this Declaration against the Delaware Trustee.

SECTION 3.12  Execution of Documents.
              ----------------------

              Unless otherwise required by applicable law, each Administrative
Trustee, individually, is authorized to execute and deliver on behalf of the
Trust any documents, agreements, instruments or certificates that the
Administrative 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 Trust Property or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.

SECTION 3.14  Duration of Trust.
              -----------------

              The Trust, unless earlier dissolved pursuant to the provisions of
Article VIII hereof, shall dissolve on November 1, 2034.

                                       25
<PAGE>

SECTION 3.15  Mergers.
              -------

              (a) The Trust may not merge with or into, consolidate, amalgamate,
              or be replaced by, or convey, transfer or lease its properties and
              assets as an entirety or substantially as an entirety to any
              Person, except as described in Section 3.15(b) and (c) and except
              with respect to the distribution of Debentures to Holders pursuant
              to Section 8.1(a)(iii) of this Declaration or Section 3 of Annex
              I.

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

                     (i)  such successor entity (the "Successor Entity") either:

                     (A)  expressly assumes all of the obligations of the Trust
                          under the Securities; or

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

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

                     (iii)the Successor Securities (excluding any securities
              substituted for the Common Securities) are listed, quoted or
              included for trading, or any Successor Securities will be listed,
              quoted or included for trading upon notification of issuance, on
              any national securities exchange or with any other organization on
              which the Capital Securities are then listed, quoted or included;

                     (iv) such merger, consolidation, amalgamation, replacement,
              conveyance, transfer or lease does not cause the Capital
              Securities (including any Successor Securities) or the Debentures
              to be downgraded by any nationally recognized statistical rating
              organization that publishes a rating on the Capital Securities or
              the Debentures;

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

                                       26
<PAGE>

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

                     (vii)prior to such merger, consolidation, amalgamation,
              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 merger, consolidation, amalgamation, replacement,
                          conveyance, transfer or lease does not adversely
                          affect the rights, preferences and privileges of the
                          Holders (including the holders of any Successor
                          Securities) in any material respect (other than with
                          respect to any dilution of the interests of such
                          Holders or holders, as the case may be, in the
                          Successor Entity);

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

                     (C)  following such merger, consolidation, amalgamation,
                          replacement, conveyance, transfer or lease, the Trust
                          (or the 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 of
              the Sponsor owns all of the common securities of the Successor
              Entity and guarantees the obligations of the Successor Entity
              under the Successor Securities at least to the extent provided by
              the Securities Guarantees; and

                    (ix)  there shall have been furnished to the Property
              Trustee an Officers' Certificate and an Opinion of Counsel, each
              to the effect that all conditions precedent in this Declaration to
              such transaction have been satisfied.

              (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, amalgamate, merge with or
              into, or be replaced by, or convey, transfer or lease its
              properties and assets as an entirety or substantially as an
              entirety to, any other Person or permit any other Person to
              consolidate, amalgamate, merge with or into, or replace it if such
              consolidation, amalgamation, merger, replacement, conveyance,
              transfer or lease would cause the Trust or the Successor Entity
              not to be classified as a grantor trust for United States federal
              income tax purposes.

                                       27
<PAGE>

                                  ARTICLE IV
                                   SPONSOR

SECTION 4.1  Sponsor's Purchase of Common Securities.
             ---------------------------------------

             At the Closing Time, pursuant to the Common Securities Subscription
Agreement, the Sponsor will purchase all of the Common Securities then issued by
the Trust, in an amount equal to at least 3% of the total capital of the Trust,
at the same time as the Series A Capital Securities are issued and sold.

SECTION 4.2  Responsibilities of the Sponsor.
             -------------------------------

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

             (a) to prepare the Offering Memorandum, in preliminary and final
             form, and to prepare for filing by the Trust with the Commission
             any Registration Statement, including any amendments thereto, as
             contemplated by the Registration Rights Agreement;

             (b) to determine the States in which to take appropriate action to
             qualify or register for sale all or part of the Capital Securities
             and to do any and all such acts, other than actions which must be
             taken by the Trust, and advise the Trust of actions it must take,
             and prepare for execution and filing any documents to be executed
             and filed by the Trust, as the Sponsor deems necessary or advisable
             in order to comply with the applicable laws of any such States;

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

             (d) to prepare for filing by the Trust with the Commission a
             registration statement on Form 8-A, including any amendments
             thereto, relating to the registration of the Capital Securities
             under Section 12(b) or 12(g) of the Exchange Act, as the case may
             be, including any amendments thereto; and

             (e) to negotiate the terms of, execute, enter into and deliver the
             Purchase Agreement, the Registration Rights Agreement and the
             Liquidated Damages Agreement.

SECTION 4.3  Right to Proceed.
             ----------------

             The Sponsor acknowledges the rights of the Holders of Capital
Securities, in the event that a failure of the Trust to pay Distributions on the
Capital Securities is attributable to the failure of the Debenture Issuer to pay
the principal of or premium (if any) or interest on the

                                       28
<PAGE>

Debentures, to institute a proceeding directly against the Debenture Issuer for
enforcement of its payment obligations in respect of the Debentures.

SECTION 4.4  Right to Dissolve Trust.
             -----------------------

             The Sponsor will have the right at any time to dissolve the Trust
and, after satisfaction of liabilities to creditors of the Trust as required by
applicable law, to cause the Debentures to be distributed to the Holders in
liquidation of the Trust. Such right is subject to the Sponsor's having received
(i) an Opinion of Counsel to the effect that such distribution will not cause
the Holders of Capital Securities to recognize gain or loss for United States
federal income tax purposes and (ii) all required regulatory approvals.

                                   ARTICLE V
                                   TRUSTEES

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

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

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

             (b) after the issuance of any Securities, the number of Trustees
             may be increased or decreased by vote of the Holders of a Majority
             in Liquidation Amount of the Common Securities voting as a class at
             a meeting of the Holders of the Common Securities;

provided, however, that, the number of Trustees shall in no event be less than
--------  -------
two (2); provided further that (1) one Trustee, 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 which has its principal place of business in the
State of Delaware (the "Delaware Trustee"); (2) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with, the Sponsor (an
"Administrative Trustee"); and (3) one Trustee shall be the Property Trustee for
so long as this Declaration is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements. Notwithstanding the above, unless an Event of
Default shall have occurred and be continuing, at any time or times, for the
purpose of meeting the legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust Property may at the time be located,
the Holders of a Majority in Liquidation Amount of the Common Securities acting
as a class at a meeting of the Holders of the Common Securities, and the
Administrative Trustees shall have power to appoint one or more Persons either
to act as a co-trustee, jointly with the Property Trustee, of all or any part of
the Trust Property, or to act as separate trustee of any such property, in
either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or Persons in such capacity any
property, title, right or power deemed necessary or desirable, subject to the
provisions of this Declaration. In case an Event of Default has occurred and is
continuing, the Property Trustee alone shall have power to make any such
appointment of a co-trustee.

                                       29
<PAGE>

SECTION 5.2  Delaware Trustee.
             ----------------

             For so long as required by the Business Trust Act, the Delaware
Trustee shall be:

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

            (b) if not a natural person, an entity which has its principal place
            of business in the State of Delaware, and otherwise meets the
            requirements of applicable law,

provided, however, that, if the Property Trustee has its principal place of
--------  -------
business in the State of Delaware and otherwise meets the requirements of
applicable law, then the Property Trustee shall also be the Delaware Trustee and
Section 3.11 shall have no application.

            The initial Delaware Trustee shall be:

            Wilmington Trust Company
            Rodney Square North
            1100 North Market Street
            Wilmington, Delaware 19890-0001
            Telephone: (302) 651-1000
            Telecopier: (302) 651-8882

SECTION 5.3  Property Trustee; Eligibility.
             -----------------------------

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

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

                (ii)  be a 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 indenture trustee under the
            Trust Indenture Act, authorized under such laws to exercise
            corporate trust powers, having a combined capital and surplus of at
            least fifty million U.S. dollars ($50,000,000), and subject to
            supervision or examination by federal, state, territorial or
            District of Columbia authority. 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 Section 5.3(a)(ii), the
            combined capital and surplus of such corporation shall be deemed to
            be its combined capital and surplus as set forth in its most recent
            report of condition so published.

            (b) If at any time the Property Trustee shall cease to be eligible
            to so act under Section 5.3(a), the Property Trustee shall
            immediately resign in the manner and with the effect set forth in
            Section 5.6(c).

                                       30
<PAGE>

            (c) If the Property Trustee has or shall acquire any "conflicting
            interest" within the meaning of (S) 330(b) of the Trust Indenture
            Act, the Property Trustee and the Holder of the Common Securities
            (as if it were the obligor referred to in (S) 310(b) of the Trust
            Indenture Act) shall in all respects comply with the provisions of
            (S) 310(b) of the Trust Indenture Act.

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

            (e) The initial Property Trustee shall be:

            Wilmington Trust Company
            Rodney Square North
            1100 North Market Street
            Wilmington, Delaware 19890-0001
            Telephone: (302) 651-1000
            Telecopier: (302) 651-8882

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

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

SECTION 5.5  Administrative Trustees.
             -----------------------

             The initial Administrative Trustees shall be:

             Monte N. Redman
             Frank E. Fusco
             Thomas E. Lavery
             One Astoria Federal Plaza
             Lake Success, New York  11042
             Telephone: (516) 372-7892
             Telecopier: (516) 327-7860

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

             (b) Unless otherwise required by the Business Trust Act or other
             applicable law, any Administrative Trustee acting alone is
             authorized to execute on behalf of the Trust any documents which
             the Administrative Trustees have the power and authority to cause
             the Trust to execute pursuant to Section 3.6.

                                       31
<PAGE>

             (c) An Administrative Trustee may, by power of attorney consistent
             with applicable law, delegate to any other natural person over
             the age of 21 his or her power for the purposes of signing any
             documents which the Administrative Trustees have power and
             authority to cause the Trust to execute pursuant to Section 3.6.

 SECTION 5.6 Appointment, Removal and Resignation of Trustees.
             ------------------------------------------------

             (a) Subject to Section 5.6(b) hereof and to Section 6(b) of Annex I
             hereto, Trustees may be appointed or removed without cause at any
             time:

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

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

                 (iii) if an Event of Default shall have occurred and be
             continuing after the issuance of the Securities, with respect to
             the Property Trustee or the Delaware Trustee, by vote of Holders of
             a Majority in Liquidation Amount of the Capital Securities voting
             as a class at a meeting of Holders of the Capital Securities, and
             with respect to the Administrative Trustees, in the manner set
             forth in Section 5.6(a)(ii) hereof.

             (b) (i)   The Trustee that acts as Property Trustee shall not be
             removed in accordance with Section 5.6(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 removed Property Trustee, the
             Administrative Trustees and the Sponsor; and

                 (ii)  the Trustee that acts as Delaware Trustee shall not be
             removed in accordance with this Section 5.6(a) until a successor
             Trustee possessing the qualifications to act as Delaware Trustee
             under Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has
             been appointed and has accepted such appointment by written
             instrument executed by such Successor Delaware Trustee and
             delivered to the removed Delaware Trustee, the Property Trustee (if
             the removed Delaware Trustee is not also the Property Trustee), the
             Administrative Trustees and the Sponsor.

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

                                       32
<PAGE>

            (i)  No such resignation of the Trustee that acts as the Property
          Trustee shall be effective:

               (A)  until a Successor Property Trustee has been appointed and
                    has accepted such appointment by instrument executed by such
                    Successor Property Trustee and delivered to the Trust, the
                    Sponsor, the Delaware Trustee (if the resigning Property
                    Trustee is not also the Delaware Trustee) and the resigning
                    Property Trustee; or

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

               (ii) no such resignation of the Trustee that acts as the Delaware
     Trustee shall be effective until a Successor Delaware Trustee has been
     appointed and has accepted such appointment by instrument executed by such
     Successor Delaware Trustee and delivered to the Trust, the Property Trustee
     (if the resigning Delaware Trustee is not also the Property Trustee), the
     Sponsor and the resigning Delaware Trustee.

     (d) The Holders of the Common Securities or, if an Event of Default
     shall have occurred and be continuing after the issuance of the Securities,
     the Holders of the Capital 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 5.6.

     (e) If no Successor Property Trustee or Successor Delaware Trustee
     shall have been appointed and accepted appointment as provided in this
     Section 5.6 within 60 days after delivery of an instrument of resignation
     or removal, the Property Trustee or Delaware Trustee resigning or being
     removed, as applicable, may petition any court of competent jurisdiction
     for appointment of a Successor Property Trustee or Successor Delaware
     Trustee. Such court may thereupon, after prescribing such notice, if any,
     as it may deem proper to prescribe, appoint a Successor Property Trustee or
     Successor Delaware Trustee, as the case may be.

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

     (g) At the time of resignation or removal of the Property Trustee or
     the Delaware Trustee, the Sponsor shall pay to such Trustee any amounts
     that may be owed to such Trustee pursuant to Section 10.4.

     (h) Any successor Delaware Trustee shall file an amendment to the
     Certificate of Trust with the Secretary of State of the State of Delaware
     identifying the name and principal place of business of such Successor
     Delaware Trustee in the State of Delaware.

                                       33
<PAGE>

SECTION 5.7 Vacancies among Trustees.
            ------------------------

            If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.l, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Administrative Trustees or, if
there are more than two, a majority of the Administrative Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.6.

SECTION 5.8 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 dissolve, liquidate or annul the Trust or to
terminate this Declaration. Whenever a vacancy in the number of Administrative
Trustees shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 5.6, the Administrative
Trustees in office, regardless of their number, shall have all the powers
granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Declaration.

SECTION 5.9  Meetings.
             --------

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

SECTION 5.10 Delegation of Power.
             -------------------

     (a) Any Administrative Trustee may, by power of attorney consistent with
     applicable law, delegate to any other natural person over the age of 21 his
     or her

                                       34
<PAGE>

     power for the purpose of executing any documents contemplated
     in Section 3.6, including any registration statement or amendment thereto
     filed with the Commission, or making any other governmental filing.

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

SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.
             -----------------------------------------------------------

             Any Person into which the Property Trustee or the Delaware Trustee
or any Administrative Trustee that is not a natural person, as the case may be,
may be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Property
Trustee or the Delaware Trustee, as the case may be, shall be a party, or any
Person succeeding to all or substantially all the corporate trust business of
the Property Trustee or the Delaware Trustee, as the case may be, shall be the
successor of the Property Trustee or the Delaware Trustee, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, provided such Person shall be otherwise
qualified and eligible under this Article and provided further that such Person
shall file an amendment to the Certificate of Trust with the Delaware Secretary
of State as contemplated in Section 5.6(h).

                                  ARTICLE VI
                                 DISTRIBUTIONS

SECTION 6.1  Distributions.
             -------------

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

                                       35
<PAGE>

                                  ARTICLE VII
                            ISSUANCE OF SECURITIES

SECTION 7.1  General Provisions Regarding Securities.
             ---------------------------------------

     (a) The Administrative Trustees shall, on behalf of the Trust, issue
     one class of capital securities representing undivided preferred beneficial
     interests in the assets of the Trust having such terms as are set forth in
     Annex I (the "Series A Capital Securities") and one class of common
     securities representing undivided common beneficial interests in the assets
     of the Trust having such terms as are set forth in Annex I (the "Common
     Securities"). The Administrative Trustees shall, on behalf of the Trust,
     issue one class of capital securities representing undivided preferred
     beneficial interests in the assets of the Trust having such terms as set
     forth in Annex I (the "Series B Capital Securities") in exchange for the
     Series A Capital Securities accepted for exchange in the Exchange Offer,
     which Series B Capital Securities shall not bear the legends required by
     Section 9.2(i) unless the Holder of such Series A Capital Securities is
     either (A) a broker-dealer who purchased such Series A Capital Securities
     directly from the Trust for resale pursuant to Rule 144A or any other
     available exemption under the Securities Act, (B) a Person participating in
     the distribution of the Series A Capital Securities or (C) a Person who is
     an Affiliate of the Sponsor or the Trust. The Trust shall issue no
     securities or other interests in the assets of the Trust other than the
     Capital Securities and the Common Securities.

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

     (c) Upon issuance of the Securities as provided in this Declaration, the
     Securities so issued shall be deemed to be validly issued and, subject to
     the terms of this Declaration, fully paid and nonassessable undivided
     beneficial interests in the assets of the Trust and entitled to the
     benefits of this Declaration, and the Holders thereof shall be entitled to
     the benefits of this Declaration.

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

SECTION 7.2  Execution and Authentication.
             ----------------------------

     (a) The Securities shall be signed on behalf of the Trust by an
     Administrative Trustee. In case any Administrative Trustee of the Trust who
     shall have signed any of the Securities shall cease to be such
     Administrative Trustee before the Securities so signed shall be delivered
     by the Trust, such Securities nevertheless may be delivered as though the
     Person who signed such Securities had not ceased

                                       36
<PAGE>

     to be such Administrative Trustee; and any Securities may be signed on
     behalf of the Trust by such persons who, at the actual date of execution of
     such Security, shall be the Administrative Trustees of the Trust, although
     at the date of the execution and delivery of this Declaration any such
     person was not an Administrative Trustee.

     (b) One Administrative Trustee shall sign the Capital Securities for the
     Trust by manual or facsimile signature. Unless otherwise determined by an
     Administrative Trustee on behalf of the Trust, an Administrative Trustee
     shall sign the Common Securities for the Trust by manual signature.

     A Capital Security shall not be valid until authenticated by the manual
signature of an authorized signatory of the Property Trustee. The signature
shall be conclusive evidence that the Capital Security has been authenticated
under this Declaration. A Common Security shall be valid upon execution by an
Administrative Trustee without any act of the Property Trustee.

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

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

SECTION 7.3  Form and Dating.
             ---------------

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

                                       37
<PAGE>

     (a) Global Capital Security. Capital Securities offered and sold to
         -----------------------
     QIBs in reliance on Rule 144A, as provided in the Purchase Agreement, shall
     be issued in the form of a single permanent global Capital Security in
     definitive, fully registered form without distribution coupons with the
     appropriate global legends and Restricted Securities Legend set forth in
     Exhibit A-1 hereto (the "Global Capital Security"), which shall be
     deposited on behalf of the purchasers of the Capital Securities represented
     thereby with the Property Trustee, at its Corporate Trust Office, as
     custodian for the Clearing Agency, and registered in the name of the
     Clearing Agency or a nominee of the Clearing Agency, duly executed by the
     Trust and authenticated by the Property Trustee as hereinafter provided.
     The number of Capital Securities represented by the Global Capital Security
     may from time to time be increased or decreased by adjustments made on the
     records of the Property Trustee and the Clearing Agency or its nominee as
     hereinafter provided.

     (b) Book-Entry Provisions. This Section 7.3(b) shall apply only to
         ---------------------
     the Global Capital Security and such other Capital Securities in global
     form as may be authorized by the Trust to be deposited with or on behalf of
     the Clearing Agency.

     An Administrative Trustee shall execute and the Property Trustee shall, in
accordance with this Section 7.3, authenticate and make available for delivery
initially a single Global Capital Security that (i) shall be registered in the
name of Cede & Co. or other nominee of such Clearing Agency, and (ii) shall be
delivered by the Property Trustee to such Clearing Agency or pursuant to such
Clearing Agency's written instructions or, if no such written instructions are
received by the Property Trustee, held by the Property Trustee as custodian for
the Clearing Agency.

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

     (c) Definitive Capital Securities. Except as provided in Section 7.9
         -----------------------------
     or 9.2(f)(i), owners of beneficial interests in the Global Capital Security
     will not be entitled to receive physical delivery of certificated Capital
     Securities ("Definitive Capital Securities"). Purchasers of Securities who
     are "accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7)
     under the Securities Act) and who are not QIBs will receive Capital
     Securities in the form of individual certificates in definitive, fully
     registered form without distribution coupons and with the Restricted
     Securities Legend set forth in Exhibit A-1 hereto ("Restricted Definitive
     Capital

                                       38
<PAGE>

     Securities"); provided, however, that upon registration of transfer of
                   --------  -------
     such Restricted Definitive Capital Securities to a QIB, such Restricted
     Definitive Capital Securities will, unless the Global Capital Security has
     previously been exchanged, be exchanged for an interest in the Global
     Capital Security pursuant to the provisions of Section 9.2. Restricted
     Definitive Capital Securities will bear the Restricted Securities Legend
     set forth on Exhibit A-1 unless removed in accordance with this Section 7.3
     or Section 9.2.

SECTION 7.4  Registrar, Paying Agent and Exchange Agent.
             ------------------------------------------

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

          The Trust initially appoints the Property Trustee as Registrar, Paying
Agent and Exchange Agent for the Capital Securities.

SECTION 7.5  Paying Agent to Hold Money in Trust.
             -----------------------------------

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

SECTION 7.6  Replacement Securities.
             ----------------------

                                       39
<PAGE>

          If a Holder claims that a Security owned by it has been lost,
destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Capital Securities to the
Property Trustee, an Administrative Trustee shall execute and the Property
Trustee shall authenticate and make available for delivery a replacement
Security if the Property Trustee's requirements are met. An indemnity bond must
be provided by the Holder which, in the judgment of the Property Trustee, is
sufficient to protect the Trustees, the Sponsor, the Trust or any authenticating
agent from any loss which any of them may suffer if a Security is replaced. The
Trust may charge such Holder for its expenses in replacing a Security.

 SECTION 7.7 Outstanding Capital Securities.
             ------------------------------

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

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

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

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

 SECTION 7.8  Capital Securities in Treasury.
              ------------------------------

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

 SECTION 7.9  Temporary Securities.
              --------------------

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

              (b) The Global Capital Security deposited with the Clearing Agency
     or with the Property Trustee as custodian for the Clearing Agency pursuant
     to Section 7.3

                                       40
<PAGE>

     shall be transferred to the beneficial owners thereof in the form of
     Definitive Capital Securities only if such transfer complies with Section
     9.2 and (i) the Clearing Agency notifies the Sponsor that it is unwilling
     or unable to continue as Clearing Agency for such Global Capital Security
     or if at any time such Clearing Agency ceases to be a "clearing agency"
     registered under the Exchange Act, and, in each case, a clearing agency is
     not appointed by the Sponsor within 90 days of receipt of such notice or of
     becoming aware of such condition, (ii) a Default or an Event of Default has
     occurred and is continuing, or (iii) the Trust at its sole discretion
     elects to cause the issuance of Definitive Capital Securities.

              (c) Any Global Capital Security that is transferable to the
     beneficial owners thereof in the form of Definitive Capital Securities
     pursuant to this Section 7.9 shall be surrendered by the Clearing Agency to
     the Property Trustee to be so transferred, in whole or from time to time in
     part, without charge, and the Property Trustee shall authenticate and make
     available for delivery, upon such transfer of each portion of such Global
     Capital Security, an equal aggregate liquidation amount of Capital
     Securities of authorized denominations in the form of Definitive Capital
     Securities. Any portion of the Global Capital Security transferred pursuant
     to this Section shall be registered in such names as the Clearing Agency
     shall direct. Any Definitive Capital Security delivered in exchange for an
     interest in the Restricted Global Capital Security shall, except as
     otherwise provided by Sections 7.3 and 9.1, bear the Restricted Securities
     Legend set forth in Exhibit A-l hereto.

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

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

SECTION 7.10  Cancellation.
              ------------

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

                                       41
<PAGE>

SECTION 7.11 CUSIP Numbers.
             -------------

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

                                 ARTICLE VIII
                             DISSOLUTION OF TRUST

 SECTION 8.1  Dissolution of Trust.
              --------------------

          (a) The Trust shall automatically dissolve:

             (i)   upon the bankruptcy of the Sponsor;

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

             (iii) following the distribution of a Like Amount of the Debentures
          to the Holders, provided that, the Property Trustee has received
                          -------------
          written notice from the Sponsor directing the Property Trustee to
          dissolve the Trust (which direction is optional, and except as
          otherwise expressly provided below, within the discretion of the
          Sponsor), and provided, further, that such direction and such
                        --------  -------
          distribution is conditioned on (a) the receipt by the Sponsor of any
          and all required regulatory approvals, and (b) the Sponsor's receipt
          and delivery to the Administrative Trustees of an opinion of
          independent tax counsel experienced in such matters, which opinion may
          rely on public or private rulings of the Internal Revenue Service, to
          the effect that the Holders of the Capital Securities will not
          recognize any gain or loss for United States federal income tax
          purposes as a result of the dissolution of the Trust and the
          distribution of Debentures;

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

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

                                       42
<PAGE>

             (vi)  upon the redemption or repayment of the Debentures or at such
          time as no Debentures are outstanding; or

             (vii) the expiration of the term of the Trust provided in Section
          3.14.

     (b) As soon as is practicable upon completion of winding up of the
     Trust following the occurrence of an event referred to in Section 8.1(a)
     and the satisfaction of creditors of the Trust in accordance with
     applicable law, the Administrative Trustees shall terminate the Trust by
     filing a certificate of cancellation with the Secretary of State of the
     State of Delaware in accordance with the Business Trust Act.

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

                                  ARTICLE IX
                             TRANSFER OF INTERESTS

SECTION 9.1  Transfer of Securities.
             ----------------------

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

     (b) Subject to this Article IX, Capital Securities may only be
     transferred, in whole or in part, 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 Security not made in
     accordance with this Declaration shall be null and void.

     (c) For so long as the Securities remain outstanding, the Sponsor
     agrees (i) not to transfer ownership of the Common Securities of the Trust,
     provided that any permitted successor of the Sponsor under the Indenture
     may succeed to the Sponsor's ownership of the Common Securities, (ii) not
     to cause, as Sponsor of the Trust, or to permit, as Holder of the Common
     Securities, the dissolution, winding-up or liquidation of the Trust, except
     as provided in this Declaration and (iii) to use its best efforts to cause
     the Trust (a) to remain a business trust, except in connection with the
     distribution of Debentures to the Holders in liquidation of the Trust, the
     redemption of all of the Securities, or certain mergers, consolidations or
     amalgamations, each as permitted by this Declaration, and (b) to otherwise
     continue to be classified as a grantor trust for United States federal
     income tax purposes.

                                       43
<PAGE>

     (d) The Registrar shall provide for the registration of Capital
     Securities and of the transfer of Capital Securities, which will be
     effected without charge but only upon payment (with such indemnity as the
     Registrar may require) in respect of any tax or other governmental charges
     that may be imposed in relation to it. Upon surrender for registration of
     transfer of any Capital Securities, an Administrative Trustee shall cause
     one or more new Capital Securities to be issued in the name of the
     designated transferee or transferees. Every Capital Security surrendered
     for registration of transfer shall be accompanied by a written instrument
     of transfer in form satisfactory to the Registrar duly executed by the
     Holder or such Holder's attorney duly authorized in writing. Each Capital
     Security surrendered for registration of transfer shall be delivered to the
     Registrar and canceled in accordance with Section 7.10. A transferee of a
     Capital Security shall be entitled to the rights and subject to the
     obligations of a Holder hereunder upon the receipt by such transferee of a
     Capital Security. By acceptance of a Capital Security or any interest
     therein, each transferee shall be deemed to have agreed to be bound by this
     Declaration.

SECTION 9.2  Transfer Procedures and Restrictions.
             ------------------------------------

     (a) General. Except as otherwise provided in Section 9.2(b), if
         -------
     Capital Securities are issued upon the transfer, exchange or replacement of
     Capital Securities bearing the Restricted Securities Legend set forth in
     Exhibit A-1 hereto, or if a request is made to remove such Restricted
     Securities Legend on Capital Securities, the Capital Securities so issued
     shall bear the Restricted Securities Legend, or the Restricted Securities
     Legend shall not be removed, as the case may be, unless there is delivered
     to the Trust and the Property Trustee such satisfactory evidence, which
     shall include an Opinion of Counsel, as may be reasonably required by the
     Trust and the Property Trustee, that neither the Restricted Securities
     Legend nor the restrictions on transfer set forth therein are required to
     ensure that transfers thereof are made pursuant to an exception from the
     registration requirements of the Securities Act or, with respect to
     Restricted Capital Securities, that such Securities are not "restricted"
     within the meaning of Rule 144. Upon provision of such satisfactory
     evidence, the Property Trustee, at the written direction of an
     Administrative Trustee on behalf of the Trust, shall authenticate and
     deliver Capital Securities that do not bear the legend.

     (b) Transfers After Effectiveness of a Registration Statement. After
         ---------------------------------------------------------
     the effectiveness of a Registration Statement with respect to any Capital
     Securities, all requirements pertaining to legends on such Capital
     Securities will cease to apply (other than the legend requiring that
     transfers of Capital Securities be made in blocks having an aggregate
     liquidation amount of not less than $100,000 (100 Capital Securities) and
     multiples of $1,000 in excess thereof), and beneficial interests in the
     Global Capital Security without legends will be available to transferees of
     such Capital Securities, upon exchange of the transferring Holder's
     Restricted Definitive Capital Security or directions to transfer such
     Holder's beneficial interest in the Global Capital Security, as the case
     may be. No such

                                       44
<PAGE>

     transfer or exchange of a Restricted Definitive Capital Security or of an
     interest in the Global Capital Security shall be effective unless the
     transferor delivers to the Property Trustee a certificate in a form
     substantially similar to that attached hereto as the form of "Assignment"
     in Exhibit A-1. Except as otherwise provided in Section 9.2(m), after the
     effectiveness of a Registration Statement, an Administrative Trustee on
     behalf of the Trust shall issue and the Property Trustee, upon a written
     order of the Trust signed by one Administrative Trustee, shall authenticate
     a Global Capital Security without the Restricted Securities Legend (the
     "Unrestricted Global Capital Security") to deposit with the Clearing Agency
     to evidence transfers of beneficial interests from the Global Capital
     Security and Restricted Definitive Capital Securities.

     (c) Transfer and Exchange of Definitive Capital Securities. When
         ------------------------------------------------------
     Definitive Capital Securities are presented to the Registrar or co-
     registrar:

     (x) to register the transfer of such Definitive Capital Securities; or

     (y) to exchange such Definitive Capital Securities which became mutilated,
destroyed, defaced, stolen or lost, for an equal number of Definitive
Capital Securities, the Registrar or co-registrar shall register the
transfer or make the exchange as requested if its reasonable requirements
for such transaction are met;

provided, however, that the Definitive Capital Securities surrendered for
--------  -------
registration of transfer or exchange:

            (i)   shall be duly endorsed or accompanied by a written instrument
          of transfer in form reasonably satisfactory to the Trust and the
          Registrar or co-registrar, duly executed by the Holder thereof or his
          attorney duly authorized in writing; and

            (ii)  in the case of Definitive Capital Securities that are
          Restricted Definitive Capital Securities:

            (A)     if such Restricted Capital Securities are being delivered to
                    the Registrar by a Holder for registration in the name of
                    such Holder, without transfer, certification(s) from such
                    Holder to that effect; or

            (B)     if such Restricted Capital Securities are being transferred:
                    (i) certification(s) in a form substantially similar to that
                    attached hereto as the form of "Assignment" in Exhibit A-1,
                    and (ii) if the Trust or Registrar so requests, evidence
                    reasonably satisfactory to them as to the compliance with
                    the restrictions set forth in the Restricted Securities
                    Legend.

     (d) Restrictions on Transfer of a Definitive Capital Security for a
         ---------------------------------------------------------------
     Beneficial Interest in the Global Capital Security. A Definitive Capital
     --------------------------------------------------
     Security may not be

                                       45
<PAGE>

     exchanged for a beneficial interest in the Global Capital Security except
     upon satisfaction of the requirements set forth below. Upon receipt by the
     Property Trustee of a Definitive Capital Security, duly endorsed or
     accompanied by appropriate instruments of transfer, in form satisfactory to
     the Property Trustee, together with:

              (i)   if such Definitive Capital Security is a Restricted Capital
          Security, certification(s) in a form substantially similar to that
          attached hereto as the form of "Assignment" in Exhibit A-1; and

              (ii)  whether or not such Definitive Capital Security is a
          Restricted Capital Security, written instructions directing the
          Property Trustee to make, or to direct the Clearing Agency to make, an
          adjustment on its books and records with respect to the Global Capital
          Security to reflect an increase in the number of the Capital
          Securities represented by such Global Capital Security,

then the Property Trustee shall cancel such Definitive Capital Security and
cause, or direct the Clearing Agency to cause, the aggregate number of Capital
Securities represented by the Global Capital Security to be increased
accordingly. If the Global Capital Security is not then outstanding, an
Administrative Trustee on behalf of the Trust shall issue and the Property
Trustee shall authenticate, upon written order of any Administrative Trustee, a
new Global Capital Security representing an appropriate number of Capital
Securities.

     (e) Transfer and Exchange of the Global Capital Security. Subject to
                ----------------------------------------------------
     Section 9.2(f), the transfer and exchange of  the Global Capital Security
     or beneficial interests therein shall be effected through the Clearing
     Agency in accordance with this Declaration (including applicable
     restrictions on transfer set forth herein, if any) and the procedures of
     the Clearing Agency therefor.

     (f) Transfer of a Beneficial Interest in the Global Capital Security
         ----------------------------------------------------------------
     for a Definitive Capital Security.
     ---------------------------------

              (i) Any Person having a beneficial interest in the Global Capital
          Security may upon request, but only upon 20 days prior notice to the
          Property Trustee, and if accompanied by the information specified
          below, exchange such beneficial interest for a Definitive Capital
          Security representing the same number of Capital Securities. Upon
          receipt by the Property Trustee from the Clearing Agency or its
          nominee on behalf of any Person having a beneficial interest in the
          Global Capital Security of written instructions or such other form of
          instructions as is customary for the Clearing Agency or the Person
          designated by the Clearing Agency as having such a beneficial interest
          in a Restricted Capital Security and certification(s) from the
          transferor in a form substantially similar to that attached hereto as
          the form of "Assignment" in Exhibit A-1, which may be submitted by
          facsimile, then the Property Trustee will cause the aggregate number
          of Capital Securities represented by the Global Capital Security to be
          reduced on its books and records and, following such reduction, the
          Trust will execute and the

                                       46
<PAGE>

          Property Trustee will authenticate and make available for delivery to
          the transferee a Definitive Capital Security.

              (ii)  Definitive Capital Securities issued in exchange for a
          beneficial interest in the Global Capital Security pursuant to this
          Section 9.2(f) shall be registered in such names and in such
          authorized denominations as the Clearing Agency, pursuant to
          instructions from its Clearing Agency Participants or indirect
          participants or otherwise, shall instruct the Property Trustee in
          writing. The Property Trustee shall deliver such Capital Securities to
          the Persons in whose names such Capital Securities are so registered
          in accordance with such instructions of the Clearing Agency.

     (g) Restrictions on Transfer and Exchange of the Global Capital
         -----------------------------------------------------------
     Security. Notwithstanding any other provisions of this Declaration (other
     --------
     than the provisions set forth in subsection (h) of this Section 9.2), the
     Global Capital Security may not be transferred as a whole except by the
     Clearing Agency to a nominee of the Clearing Agency or another nominee of
     the Clearing Agency or by the Clearing Agency or any such nominee to a
     successor Clearing Agency or a nominee of such successor Clearing Agency.

     (h) Authentication of Definitive Capital Securities. If at any time:
         -----------------------------------------------

            (i) a Default or an Event of Default has occurred and is continuing,

            (ii)  the Trust, in its sole discretion, notifies the Property
          Trustee in writing that it elects to cause the issuance of Definitive
          Capital Securities under this Declaration, or

            (iii) the Clearing Agency notifies the Sponsor that it is unwilling
          or unable to continue as Clearing Agency for such Global Capital
          Security or if at any time such Clearing Agency ceases to be a
          "clearing agency" registered under the Exchange Act, and, in each
          case, a clearing agency is not appointed by the Sponsor within 90 days
          of receipt of such notice or of becoming aware of such condition,

then an Administrative Trustee on behalf of the Trust will execute, and the
Property Trustee, upon receipt of a written order of the Trust signed by one
Administrative Trustee requesting the authentication and delivery of Definitive
Capital Securities to the Persons designated by the Trust, will authenticate and
make available for delivery Definitive Capital Securities, equal in number to
the number of Capital Securities represented by the Global Capital Security, in
exchange for such Global Capital Security.

          (i) Legend.
              ------

            (i) Except as permitted by the following paragraph (ii), each
          Capital Security Certificate evidencing the Global Capital Security
          and each Definitive Capital Security (and all Capital Securities
          issued in exchange therefor or

                                       47
<PAGE>

             substitution thereof) shall bear a legend (the "Restricted
             Securities Legend") in substantially the following form:

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

             THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES
             TO OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR
             TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS
             TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND
             THE LAST DATE ON WHICH  ASTORIA FINANCIAL CORPORATION (THE
             "CORPORATION") OR ANY "AFFILIATE" OF THE CORPORATION WAS THE OWNER
             OF THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL
             SECURITY) ONLY (A) TO THE CORPORATION, (B) PURSUANT TO A
             REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
             SECURITIES ACT, (C) SO LONG AS THIS CAPITAL SECURITY IS ELIGIBLE
             FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
             144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
             INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR
             ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
             BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
             RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
             INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR
             (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
             CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
             INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT
             WITH A VIEW TO, OR FOR

                                       48
<PAGE>

             OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
             THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
             FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
             SUBJECT TO THE RIGHT OF ASTORIA CAPITAL TRUST I (THE "TRUST") AND
             THE CORPORATION PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i)
             PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION
             OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO
             EACH OF THEM, AND (ii) PURSUANT TO CLAUSE (D) TO REQUIRE THAT THE
             TRANSFEROR DELIVER TO THE TRUST A LETTER FROM THE TRANSFEREE
             SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE OFFERING MEMORANDUM
             DATED OCTOBER 25, 1999. SUCH HOLDER FURTHER AGREES THAT IT WILL
             DELIVER TO EACH PERSON TO WHOM THIS CAPITAL SECURITY IS TRANSFERRED
             A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

             THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF ALSO
             AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT,
             INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT
             TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
             AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE
             OF 1986, AS AMENDED, (THE "CODE") (EACH A "PLAN"), OR AN ENTITY
             WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY
             PLAN'S INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN
             ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THE CAPITAL SECURITIES OR
             ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE
             FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR
             PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR
             84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING
             OF CAPITAL SECURITIES IS NOT PROHIBITED BY SECTION 406 OF ERISA OR
             SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING.
             ANY PURCHASER OR HOLDER OF THE

                                       49
<PAGE>

             CAPITAL SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE
             REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT
             IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3)
             OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS
             APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN
             EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING
             THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH
             PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED
             TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE
             FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE
             EXEMPTION.

In all circumstances, each Capital Security Certificate shall bear the following
legend:

             THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY
             IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000
             (100 CAPITAL SECURITIES) AND MULTIPLES OF $1,000 IN EXCESS THEREOF.
             ANY ATTEMPTED TRANSFER OF CAPITAL SECURITIES IN A BLOCK HAVING A
             LIQUIDATION AMOUNT OF LESS THAN $100,000 (100 CAPITAL SECURITIES)
             SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY
             SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF
             SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED
             TO, THE RECEIPT OF DISTRIBUTIONS ON SUCH CAPITAL SECURITIES, AND
             SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
             WHATSOEVER IN SUCH CAPITAL SECURITIES.

               (ii)  Upon any sale or transfer of a Restricted Capital Security
          (including any Restricted Capital Security represented by the Global
          Capital Security) pursuant to an effective registration statement
          under the Securities Act or pursuant to Rule 144:

               (A)  in the case of any Restricted Capital Security that is a
                    Definitive Capital Security, the Registrar shall permit the
                    Holder thereof to exchange such Restricted Capital Security
                    for a Definitive Capital Security that does not bear the
                    Restricted Securities Legend and rescind any restriction on
                    the transfer of such Restricted Capital Security; and

                                       50
<PAGE>

               (B)  in the case of any Restricted Capital Security that is
                    represented by the Global Capital Security, the Registrar
                    shall permit the Holder of such Global Capital Security to
                    exchange such Global Capital Security for another Global
                    Capital Security that does not bear the Restricted
                    Securities Legend.

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

     (k) Obligations with Respect to Transfers and Exchanges of Capital
         --------------------------------------------------------------
     Securities.
     ----------

            (i)    To permit registrations of transfers and exchanges, the Trust
          shall execute and the Property Trustee shall authenticate Definitive
          Capital Securities and the Global Capital Security at the Registrar's
          or co-registrar's request in accordance with the terms of this
          Declaration.

            (ii)   Registrations of transfers or exchanges will be effected
          without charge, but only upon payment (with such indemnity as the
          Trust or the Sponsor may require) in respect of any tax or other
          governmental charge that may be imposed in relation to it.

            (iii)  The Registrar or co-registrar shall not be required to
          register the transfer of or exchange of (a) Capital Securities during
          a period beginning at the opening of business 15 days before the day
          of mailing of a notice of redemption or any notice of selection of
          Capital Securities for redemption and ending at the close of business
          on the day of such mailing or (b) any Capital Security so selected for
          redemption in whole or in part, except the unredeemed portion of any
          Capital Security being redeemed in part.

            (iv)   Prior to the due presentation for registration of transfer of
          any Capital Security, the Trust, the Property Trustee, the Paying
          Agent, the Registrar or any co-registrar may deem and treat the Person
          in whose name a Capital Security is registered as the absolute owner
          of such Capital Security for the purpose of receiving Distributions on
          such Capital Security and for all other purposes whatsoever, and none
          of the Trust, the Property Trustee, the Paying Agent, the Registrar or
          any co-registrar shall be affected by notice to the contrary.

                                       51
<PAGE>

            (v) All Capital Securities issued upon any registration of transfer
          or exchange pursuant to the terms of this Declaration shall evidence
          the same security and shall be entitled to the same benefits under
          this Declaration as the Capital Securities surrendered upon such
          registration of transfer or exchange.

          (l) No Obligation of the Property Trustee.
                -------------------------------------

            (i) The Property Trustee shall have no responsibility or obligation
          to any Capital Security Beneficial Owner, a Participant in the
          Clearing Agency or other Person with respect to the accuracy of the
          records of the Clearing Agency or its nominee or of any Participant
          thereof, with respect to any ownership interest in the Capital
          Securities or with respect to the delivery to any Participant,
          beneficial owner or other Person (other than the Clearing Agency) of
          any notice (including any notice of redemption) or the payment of any
          amount, under or with respect to such Capital Securities. All notices
          and communications to be given to the Holders and all payments to be
          made to Holders under the Capital Securities shall be given or made
          only to or upon the order of the registered Holders (which shall be
          the Clearing Agency or its nominee in the case of the Global Capital
          Security). The rights of Capital Security Beneficial Owners shall be
          exercised only through the Clearing Agency subject to the applicable
          rules and procedures of the Clearing Agency. The Property Trustee may
          conclusively rely and shall be fully protected in relying upon
          information furnished by the Clearing Agency or any agent thereof with
          respect to its Participants and any Capital Security Beneficial
          Owners.

            (ii)  The Property Trustee and the Registrar shall have no
          obligation or duty to monitor, determine or inquire as to compliance
          with any restrictions on transfer imposed under this Declaration or
          under applicable law with respect to any transfer of any interest in
          any Capital Security (including any transfers between or among
          Clearing Agency Participants or Capital Security Beneficial Owners)
          other than to require delivery of such certificates and other
          documentation or evidence as are expressly required by, and to do so
          if and when expressly required by, the terms of this Declaration, and
          to examine the same to determine substantial compliance as to form
          with the express requirements hereof.

     (m) Exchange of Series A Capital Securities for Series B Capital
         ------------------------------------------------------------
     Securities. The Series A Capital Securities shall be exchanged for Series B
     ----------
     Capital Securities pursuant to the terms of the Exchange Offer if the
     following conditions are satisfied:

     The Sponsor shall present the Property Trustee with an Officers'
Certificate certifying the following:

                                       52
<PAGE>

               (A)  upon issuance of the Series B Capital Securities, the
                    transactions contemplated by the Exchange Offer have been
                    consummated; and

               (B)  the number of Series A Capital Securities properly tendered
                    in the Exchange Offer that are represented by the Global
                    Capital Security and the number of Series A Capital
                    Securities properly tendered in the Exchange Offer that are
                    represented by Definitive Capital Securities, the name of
                    each Holder of such Definitive Capital Securi  ties, the
                    liquidation amount of Capital Securities properly tendered
                    in the Exchange Offer by each such Holder and the name and
                    address to which Definitive Capital Securities for Series B
                    Capital Securities shall be registered and sent for each
                    such Holder.

          The Property Trustee, upon receipt of (i) such Officers' Certificate,
(ii) an Opinion of Counsel (x) to the effect that the Series B Capital
Securities and the Series B Capital Securities Guarantee have been registered
under Section 5 of the Securities Act and that this Declaration and the Series B
Capital Securities Guarantee have been qualified under the Trust Indenture Act
and (y) with respect to the matters set forth in Section 3(q) of the
Registration Rights Agreement, shall authenticate (A) the Global Capital
Security, executed and delivered by the Trust to the Property Trustee, for
Series B Capital Securities in aggregate liquidation amount equal to the
aggregate liquidation amount of Series A Capital Securities represented by the
Global Capital Security indicated in such Officers' Certificate as having been
properly tendered and (B) Definitive Capital Securities, executed and delivered
by the Trust to the Property Trustee, representing Series B Capital Securities
registered in the names and in the liquidation amounts indicated in such
Officers' Certificate.

          If, upon consummation of the Exchange Offer, less than all the
outstanding Series A Capital Securities shall have been properly tendered and
not withdrawn, the Property Trustee shall make an endorsement on the Global
Capital Security for Series A Capital Securities indicating the reduction in the
number and aggregate liquidation amount represented thereby as a result of the
Exchange Offer.

          The Trust shall deliver such authenticated Definitive Capital
Securities for Series B Capital Securities to the Holders thereof as indicated
in such Officers' Certificate.

            (n) Minimum Transfers. Series A Capital Securities and, if and when
                -----------------
     issued, Series B Capital Securities may only be transferred in minimum
     blocks of $100,000 aggregate liquidation amount (100 Capital Securities)
     and multiples of $1,000 in excess thereof. Any attempted transfer of Series
     A Capital Securities or Series B Capital Securities in a block having an
     aggregate liquidation amount of less than $100,000 shall be deemed to be
     voided and of no legal effect whatsoever. Any such purported transferee
     shall be deemed not to be a Holder of such Series A Capital Securities or
     Series B Capital Securities for any purpose, including, but not limited to,
     the receipt of Distributions on such Capital Securities, and such purported
     transferee shall be deemed to have no interest whatsoever in such Capital
     Securities.

                                       53
<PAGE>

SECTION 9.3 Deemed Security Holders.
            -----------------------

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

SECTION 9.4  Book-Entry Interests.
             --------------------

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

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

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

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

     (d) the rights of the Capital Security Beneficial Owners shall be
     exercised only through the Clearing Agency and shall be limited to those
     established by law and agreements between such Capital Security Beneficial
     Owners and the Clearing Agency and/or the Clearing Agency Participants, and
     the Clearing Agency shall receive and transmit payments of Distributions on
     the Global Capital Security to such Clearing Agency Participants; provided,
                                                                       --------
     however, that solely for the purposes of determining whether the Holders of
     -------
     the requisite amount of Capital Securities have voted on any matter
     provided for in this Declaration, the Trustees, with respect to the Global
     Capital Security, may conclusively rely on, and shall be protected in
     relying on, any written instrument (including a proxy) delivered to the
     Trustees by the Clearing Agency setting forth the Capital Security
     Beneficial Owners' votes or assigning the right to vote on any matter to
     any other Persons either in whole or in part; and the Clearing Agency will
     also make book-entry transfers among the Clearing Agency Participants.

                                       54
<PAGE>

SECTION 9.5  Notices to Clearing Agency.
             --------------------------

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

SECTION 9.6  Appointment of Successor Clearing Agency.
             ----------------------------------------

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

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

 SECTION 10.1  Liability.
               ---------

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

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

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

     (b) The Sponsor shall be liable for all of the debts and obligations
     of the Trust (other than in respect of the Securities) to the extent not
     satisfied out of the Trust's assets.

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

SECTION 10.2  Exculpation.
              -----------

     (a) No Indemnified Person shall be liable, responsible or accountable in
     damages or otherwise to the Trust or any Covered Person for any loss,
     damage or claim incurred by reason of any act or omission performed or
     omitted by such Indemnified Person in good faith on behalf of the Trust and
     in a manner such Indemnified Person reasonably believed to be within the
     scope of the authority conferred on such Indemnified Person by this
     Declaration or by law, except that an Indemnified Person shall be liable
     for any such loss, damage or claim incurred by reason of such Indemnified
     Person's gross negligence (or in the case of the

                                       55
<PAGE>

     Property Trustee or the Delaware Trustee, negligence) or willful misconduct
     with respect to such acts or omissions.

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

SECTION 10.3  Fiduciary Duty.
              --------------

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

     (b) Unless otherwise expressly provided herein:

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

            (ii)  whenever this Declaration or any other agreement contemplated
     herein or therein provides that an Indemnified Person shall act in a
     manner that is, or provides terms that are, fair and reasonable to the
     Trust or any Holder of Securities,

the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indem  nified 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>

            (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 10.4  Indemnification.
              ---------------

     (a) (i) The Sponsor shall indemnify, to the full extent permitted by law,
     any Company Indemnified Person who was or is a party or is threatened to be
     made a party to any threatened, pending or completed action, suit or
     proceeding, whether civil, criminal, administrative or investigative (other
     than an action by or in the right of the Trust) by reason of the fact that
     he is or was a Company Indemnified Person, against expenses (including
     attorneys' fees and expenses), judgments, fines and amounts paid in
     settlement actually and reasonably incurred by him in connection with such
     action, suit or proceeding if he acted in good faith and in a manner he
     reasonably believed to be in or not opposed to the best interests of the
     Trust, and, with respect to any criminal action or proceeding, had no
     reasonable cause to believe his conduct was unlawful. The termination of
     any action, suit or proceeding by judgment, order, settlement, conviction,
     or upon a plea of nolo contendere or its equivalent, shall not, of itself,
     create a presumption that the Company Indemnified Person did not act in
     good faith and in a manner which he reasonably believed to be in or not
     opposed to the best interests of the Trust, and, with respect to any
     criminal action or proceeding, had reasonable cause to believe that his
     conduct was unlawful.

          (ii) The Sponsor shall indemnify, to the full extent permitted by law,
any Company Indemnified Person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action or suit by or in the
right of the Trust to procure a judgment in its favor by reason of the fact that
he is or was a Company Indemnified Person against expenses (including attorneys'
fees and expenses) actually and reasonably incurred by him in connection with
the defense or settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the Trust and except that no such indemnification shall be made in respect of
any claim, issue or matter as to which such Company Indemnified Person shall
have been adjudged to  be liable to the Trust unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such Person is
fairly and reasonably entitled to indemnity for such expenses which such Court
of Chancery or such other court shall deem proper.

          (iii) To the extent that a Company Indemnified Person shall
be successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of liability)
in defense of any action, suit or proceeding referred to in

                                       57
<PAGE>

paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any claim,
issue or matter therein, he or she shall be indemnified, to the full extent
permitted by law, against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection therewith.

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

          (v) Expenses (including attorneys' fees and expenses) incurred by a
Company Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a) shall be paid by the Sponsor in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such Company Indemnified Person to repay such amount if it shall
ultimately be determined that he or she is not entitled to be indemnified by the
Sponsor as authorized in this Section 10.4(a). Notwithstanding the foregoing, no
advance shall be made by the Sponsor if a determination is reasonably and
promptly made (i) by the Administrative Trustees by a majority vote of a Quorum
of disinterested Administrative Trustees, (ii) if such a Quorum is not
obtainable, or, even if obtainable, if a Quorum of disinterested Administrative
Trustees so directs, by independent legal counsel in a written opinion or (iii)
by the Common Security Holder of the Trust, that, based upon the facts known to
the Administrative Trustees, counsel or the Common Security Holder at the time
such determination is made, such Company Indemnified Person acted in bad faith
or in a manner that the Common Security Holder did not believe to be in, or
believed was opposed to, the best interests of the Trust, or, with respect to
any criminal proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his or her conduct was unlawful. In no event shall
any advance be made in instances where the Administrative Trustees, independent
legal counsel or Common Security Holder reasonably determine that a Company
Indemnified Person deliberately breached his or her duty to the Trust or its
Common or Capital Security Holders.

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

                                       58
<PAGE>

          (vii)  The Sponsor or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified Person
against any liability asserted against him 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 Debenture Issuer would have the power to indemnify him or her against such
liability under the provisions of this Section 10.4(a).

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

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

     (b) The Sponsor agrees to indemnify the (i) Property Trustee, (ii)
     the Delaware Trustee, (iii) any Affiliate of the Property Trustee or the
     Delaware Trustee, and (iv) any officers, directors, shareholders, members,
     partners, employees, represen  tatives, custodians, nominees or agents of
     the Property Trustee or the Delaware Trustee (each of the Persons in (i)
     through (iv), including the Property Trustee and the Delaware Trustee in
     their respective individual capacities, being referred to as a "Fiduciary
     Indemnified Person") for, and to hold each Fiduciary Indemnified Person
     harmless against, any and all loss, liability, damage, action, suit, claim
     or expense including taxes (other than taxes based on the income of such
     Fiduciary Indemnified Person) of any kind and nature whatsoever incurred
     without negligence or bad faith on the part of such Fiduciary Indemnified
     Person, arising out of or in connection with the acceptance or
     administration of the trust or trusts hereunder, including the costs and
     expenses (including reasonable legal fees and expenses) of defending
     against or investigating any claim or liability in connection with the
     exercise or performance of any of the powers or duties of such Fiduciary
     Indemnified Person hereunder. The obligation to indemnify as set forth in
     this Section 10.4(b) shall survive the resignation or removal of the
     Property Trustee or the Delaware Trustee and the satisfaction and discharge
     of this Declaration.

            (c) The Sponsor agrees to pay the Property Trustee and the Delaware
     Trustee, from time to time, such compensation for all services rendered by
     the Property Trustee and the Delaware Trustee hereunder as may be mutually
     agreed upon in writing by the Sponsor and the Property Trustee or the
     Delaware Trustee, as the case may be, and, except as otherwise expressly
     provided herein, to reimburse the Property Trustee and the Delaware Trustee
     upon its or their request for all

                                       59
<PAGE>

     reasonable expenses (including legal fees and expenses), disbursements and
     advances incurred or made by the Property Trustee or the Delaware Trustee,
     as the case may be, in accordance with the provisions of this Declaration,
     except any such expense, disbursement or advance as may be attributable to
     its or their negligence or bad faith.

SECTION 10.5 Outside Businesses.
             ------------------
          Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee (subject to Section 5.3(c)) may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Property Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Property Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for, or act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.

                                  ARTICLE XI
                                  ACCOUNTING

 SECTION 11.1 Fiscal Year.
              -----------

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

 SECTION 11.2 Certain Accounting Matters.
              --------------------------

            (a) At all times during the existence of the Trust, the
     Administrative Trustees shall keep, or cause to be kept, full books of
     account, records and supporting documents, which shall reflect in
     reasonable detail each transaction of the Trust. The books of account shall
     be maintained on the accrual method of accounting, in accordance with
     generally accepted accounting principles, consistently applied. The 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
     Administrative Trustees.

                                       60
<PAGE>

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

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

 SECTION 11.3 Banking.
              -------

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

 SECTION 11.4 Withholding.
              -----------

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

                                       61
<PAGE>

                                  ARTICLE XII
                            AMENDMENTS AND MEETINGS

 SECTION 12.1 Amendments.
              ----------

            (a) Except as otherwise provided in this Declaration (including
     Section 7 of Annex I hereto) or by any applicable terms of the Securities,
     this Declaration may only be amended by a written instrument approved and
     executed by:

                (i)   the Sponsor and the Administrative Trustees (or, if there
          are more than two Administrative Trustees, a majority of the
          Administrative Trustees);

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

                (iii) if the amendment affects the rights, powers, duties,
          obligations or immunities of the Delaware Trustee, 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 shall have first received 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);

                (iii) unless, in the case of any proposed amendment which
          affects the rights, powers, duties, obligations or immunities of the
          Property Trustee, the Property Trustee shall have first received:

                (A) an Officers' Certificate from each of the Trust and the
                    Sponsor that such amendment is permitted by, and conforms
                    to, the terms of this Declaration (including the terms of
                    the Securities); and

                (B) an Opinion of Counsel (who may be counsel to the Sponsor or
                    the Trust) that such amendment is permitted by, and conforms
                    to, the terms of this Declaration (including the terms of
                    the Securities) and that all conditions precedent to the
                    execution and delivery of such amendment have been
                    satisfied;

provided, however, that the Property Trustee shall not be required to sign any
--------  -------
such amendment; and

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

                (A) cause the Trust to fail to continue to be classified for
                    purposes of United States federal income taxation as a
                    grantor trust;

                                       62
<PAGE>

               (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, any amendment that would adversely affect the rights,
     privileges or preferences of any Holder (other than an amendment pursuant
     to (g) below) may be effected only with such additional requirements as may
     be set forth in the terms of such Securities;

            (d) Section 10.1(c) and this Section 12.1 shall not be amended
     without the consent of all of the Holders;

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

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

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

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

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

            (iii) to modify, eliminate or add any provisions of the Declaration
          to such extent as shall be necessary to enable the Trust or the
          Sponsor to conduct an Exchange Offer in the manner contemplated by the
          Registration Rights Agreement;

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

                                       63
<PAGE>

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

            (a) Meetings of the Holders of any class of Securities may be called
     at any time by the Administrative Trustees (or as provided in the terms of
     the Securities) to consider and act on any matter on which Holders of such
     class of Securities are entitled to act under the terms of this
     Declaration, the terms of the Securities or the rules of any stock exchange
     on which the Capital Securities are listed or admitted for trading. The
     Administrative Trustees shall call a meeting of the Holders of such class
     if directed to do so by the Holders of at least 10% in Liquidation Amount
     of such class of Securities. Such direction shall be given by delivering to
     the Administrative Trustees one or more notices in writing stating that the
     signing Holders wish to call a meeting and indicating the general or
     specific purpose for which the meeting is to be called. Any Holders calling
     a meeting shall specify in writing the Capital Security Certificates held
     by the Holders exercising the right to call a meeting and only those
     Securities specified shall be counted for purposes of determining whether
     the required percentage set forth in the second sentence of this paragraph
     has been met.

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

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

            (ii)  each Holder may authorize any Person to act for it by proxy on
          all matters in which a Holder is entitled to participate, including
          waiving notice of any meeting, or voting or participating at a
          meeting; no proxy shall be valid after the expiration of eleven months
          from the date thereof unless otherwise provided in the proxy; every
          proxy shall be revocable at the pleasure of the Holder executing it;
          and, 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

                                       64
<PAGE>

          thereunder, as if the Trust were a Delaware corporation and the
          Holders were stockholders of a Delaware corporation;

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

            (iv)   unless the Business Trust Act, this Declaration, the terms of
          the Securities, the Trust Indenture Act or the listing rules of any
          stock exchange on which the Capital Securities are then listed or
          trading, otherwise provides, the Administrative Trustees, in their
          sole discretion, shall establish all other provisions relating to
          meetings of Holders, including notice of the time, place or purpose of
          any meeting at which any matter is to be voted on by any Holders,
          waiver of any such notice, action by consent without a meeting, the
          establishment of a record date, quorum requirements, voting in person
          or by proxy or any other matter with respect to the exercise of any
          such right to vote.

                                    ARTICLE
                      REPRESENTATIONS OF PROPERTY TRUSTEE
                              AND DELAWARE TRUSTEE

 SECTION 13.1  Representations and Warranties of Property Trustee.
               --------------------------------------------------

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

            (a) the Property Trustee is a Delaware banking corporation, a
     national banking association or a bank or trust company, duly organized,
     validly existing and in good standing under the laws of the United States
     or the State of Delaware as the case may be, with corporate power and
     authority to execute and deliver, and to carry out and perform its
     obligations under the terms of, this Declaration;

            (b) the execution, delivery and performance by the Property Trustee
     of this Declaration has been duly authorized by all necessary corporate
     action on the part of the Property Trustee; and this Declaration has been
     duly executed and de  livered by the Property Trustee and under Delaware
     law (excluding any securities laws) constitutes a legal, valid and binding
     obligation of the Property Trustee, enforceable against it in accordance
     with its terms, subject to applicable bank  ruptcy, 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);

                                       65
<PAGE>

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

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

 SECTION 13.2  Representations and Warranties of Delaware Trustee.
               --------------------------------------------------

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

            (a) the Delaware Trustee is a Delaware banking corporation, a
     national banking association or a bank or trust company, duly organized,
     validly existing and in good standing under the laws of the United States
     or the State of Delaware, as the case may be, with corporate power and
     authority to execute and deliver, and to carry out and perform its
     obligations under the terms of, this Declaration;

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

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

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

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

                                       66
<PAGE>

                                  ARTICLE XV
                              REGISTRATION RIGHTS

 SECTION 14.1  Registration Rights Agreement; Liquidated Damages.
               -------------------------------------------------

          The Holders of the Series A Capital Securities, the Series A
Debentures and the Series A Capital Securities Guarantee are entitled to the
benefits of the Registration Rights Agreement and the Liquidated Damages
Agreement. In certain limited circumstances set forth in the Registration Rights
Agreement and the Liquidated Damages Agreement, the Debenture Issuer shall be
required to pay liquidated damages with respect to the Series A Debentures.
Unless otherwise stated, the term "Distribution," as used in this Declaration,
includes any and all liquidated damages.

                                  ARTICLE XV
                                 MISCELLANEOUS

 SECTION 15.1  Notices.
               -------

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

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

     Astoria Capital Trust I
     c/o Astoria Financial Corporation
     One Astoria Federal Plaza
     Lake Success, New York  11042
     Attention.: Monte N. Redman
     Telephone: (516) 327-7892
     Telecopier: (516) 327-7860

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

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

                                       67
<PAGE>

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

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

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

     Astoria Financial Corporation
     One Astoria Federal Plaza
     Lake Success, New York  11042
     Attention.:  Alan P. Eggleston, Esq.
     Telephone: (516) 327-7876
     Telecopier: (516) 327-7860

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

          All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.

 SECTION 15.2  Governing Law.
               -------------

          This Declaration and the rights of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of Delaware
without regard to conflict of laws principles thereof.

 SECTION 15.3  Intention of the Parties.
               ------------------------

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

                                       68
<PAGE>

 SECTION 15.4  Headings.
               --------

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

 SECTION 15.5  Successors and Assigns.
               ----------------------

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

 SECTION 15.6  Partial Enforceability.
               ----------------------

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

 SECTION 15.7  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 or more of such counterpart signature
pages. All of such counterpart signature pages shall be read as though one, and
they shall have the same force and effect as though all of the signers had
signed a single signature page.

                                       69
<PAGE>

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

                              /s/ Frank E. Fusco
                              ------------------
                              Frank E. Fusco
                              as Administrative Trustee

                              /s/ Monte N. Redman
                              -------------------
                              Monte N. Redman
                              as Administrative Trustee

                              /s/ Thomas E. Lavery
                              --------------------
                              Thomas E. Lavery
                              as Administrative Trustee

                              WILMINGTON TRUST COMPANY,
                              as Delaware Trustee

                              By: /s/ James P. Lawler
                                  -------------------
                                 Name: James P. Lawler
                                 Title:  Vice President

                              WILMINGTON TRUST COMPANY,
                              as Property Trustee

                              By: /s/ James P. Lawler
                                  -------------------
                                 Name:  James P. Lawler
                                 Title:  Vice President

                              ASTORIA FINANCIAL CORPORATION,
                              as Sponsor and Debenture Issuer

                              By:/s/ George L. Engelke, Jr.
                                 --------------------------
                                 George L. Engelke, Jr.
                                 Chairman of the Board, President
                                 and Chief Executive Officer

                                       70
<PAGE>

                                    ANNEX I

                                    TERMS OF
                  9.75% CAPITAL SECURITIES, SERIES A/SERIES B
                            9.75% COMMON SECURITIES

          Pursuant to Section 7.1 of the Amended and Restated Declaration, dated
as of October 28, 1999 (as amended from time to time, the "Declaration"), the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Securities are set out below (each capitalized term used but
not defined herein has the meaning set forth in the Declaration or, if not
defined in such Declaration, as defined in the Offering Memorandum referred to
below in Section 2(c) of this Annex I):

     1.   Designation and Number.
          ----------------------

          (a) Capital Securities. 125,000 Series A Capital Securities of the
              ------------------
Trust and 125,000 Series B Capital Securities of the Trust, each series with an
aggregate liquidation amount with respect to the assets of the Trust One Hundred
Twenty Five Million Dollars ($125,000,000) and with a liquidation amount with
respect to the assets of the Trust of One Thousand Dollars ($1,000) (the
"Liquidation Amount") per security, are hereby designated for the purposes of
identification only as "9.75% Capital Securities, Series A" and "9.75% Capital
Securities, Series B," respectively (collectively, the "Capital Securities").
The certificates evidencing the Capital Securities shall be substantially in the
form of Exhibit A-1 to the Declaration, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or practice
or to conform to the rules of any exchange or quotation system on or in which
the Capital Securities are listed, traded or quoted.

          (b) Common Securities. 3,866 Common Securities of the Trust with an
              -----------------
aggregate liquidation amount with respect to the assets of the Trust of Three
Million Eight Hundred Sixty Six Thousand  Dollars ($3,866,000) and a liquidation
amount with respect to the assets of the Trust of $1,000 per security, are
hereby designated for the purposes of identification only as "9.75% Common
Securities" (the "Common Securities"). The certificates evidencing the Common
Securities shall be substantially in the form of Exhibit A-2 to the Declaration,
with such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice.

     2.   Distributions.
          -------------

          (a) Distributions on each Security will be payable at a fixed rate per
annum of 9.75%  (the "Coupon Rate") of the liquidation amount of $1000 per
Security, such rate being the rate of interest payable on the Debentures to be
held by the Property Trustee. Distributions in arrears for more than one semi-
annual period will bear additional Distributions thereon compounded semi-
annually at the Coupon Rate (to the extent permitted by applicable law).
Pursuant to the Registration Rights Agreement and the Liquidated Damages
Agreement, in certain limited circumstances the Debenture Issuer will be
required to pay Liquidated Damages (as defined in the Registration Rights
Agreement and the Liquidated Damages Agreement) with respect to the Debentures.
The term

                                      I-1
<PAGE>

"Distributions," as used herein, includes distributions of any and all such
interest and Liquidated Damages, if any, payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made with respect
to the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds legally available therefor.

          (b) Distributions on the Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from October 28, 1999 and will be payable
semi-annually in arrears on May 1/st/  and November 1/st/ , of each year,
commencing May 1, 2000 (each, a "Distribution Date"), except as otherwise
described below. Distributions will be computed on the basis a 360-day year of
twelve 30-day months. As long as no Event of Default has occurred and is
continuing under the Indenture, the Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment period
at any time and from time to time on the Debentures for a period not exceeding
10 consecutive semi-annual periods, including the first such semi-annual period
during such period (each an "Extension Period"), during which Extension Period
no interest shall be due and payable on the Debentures, provided that no
                                                        -------- ----
Extension Period shall end on a date other than an Interest Payment Date for the
Debentures or extend beyond the Maturity Date of the Debentures. As a
consequence of such defer  ral, Distributions (other than Liquidated Damages, if
any) will also be deferred. Notwithstanding such deferral, Distributions will
continue to accumulate with additional Distributions thereon (to the extent
permitted by applicable law but not at a rate greater than the rate at which
interest is then accruing on the Debentures) at the Coupon Rate compounded semi-
annually during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further defer payments of interest by
further extending such Extension Period, provided that such extension does not
                                         -------- ----
cause such Extension Period, together with all such previous and further
extensions within such Extension Period, to exceed 10 consecutive semi-annual
periods, including the first semi-annual period during such Extension Period,
end on a date other than an Interest Payment Date for the Debentures or extend
beyond the Maturity Date of the Debentures. Upon the termination of any
Extension Period and the payment of all amounts then due, the Debenture Issuer
may commence a new Extension Period, subject to the above requirements.

          (c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the close of
business on the 15th day of the month immediately preceding the month in which
relevant the Distribution Date occurs, which Distribution Dates correspond to
the Interest Payment Dates for the Debentures. Subject to any applicable laws
and regulations and the provisions of the Declaration, each such payment with
respect to the Capital Securities will be made as described under the heading
"Description of Capital Securities--Form, Denomination, Book-Entry Procedures
and Transfer" in the Offering Memorandum dated October 25, 1999 of the Debenture
Issuer and the Trust relating to the Securities and the Debentures. The relevant
record dates for the Common Securities shall be the same as the record dates for
the Capital Securities. Distributions payable on any Securities that are not
punctually paid on any Distribution Date, as a result of the Debenture Issuer
having failed to make a payment under the Debentures, will cease to be payable
to the Holder on the relevant record date, and such defaulted Distribution will
instead be payable to the Person in whose name such Securities are registered on
the special record date or other specified date determined in accordance with
the Indenture. If any date on which Distributions are payable on the Securities
is not a Business Day, then payment of the Distributions payable on such date
will be made on the next succeeding day that is a Business Day (and without

                                      I-2
<PAGE>

any interest or other payment in respect of any such delay), except that if such
next succeeding Business Day falls in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day with the same
force and effect as if made on such date.

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

     3.   Liquidation Distribution Upon Dissolution.
          -----------------------------------------

          In the event of any dissolution of the Trust, the Trust shall be
liquidated by the Administrative Trustees as expeditiously as the Administrative
Trustees determine to be possible by distributing to the Holders, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, a Like Amount (as defined below) of the Debentures, unless such
distribution is determined by the Property Trustee not to be practicable, in
which event such Holders will be entitled to receive out of the assets of the
Trust legally available for distribution to Holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the aggregate of the liquidation amount of $1,000 per Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution").

          "Like Amount" means (i) with respect to a redemption of the
Securities, Securities having a Liquidation Amount equal to the principal amount
of Debentures to be paid in accordance with their terms and (ii) with respect to
a distribution of Debentures upon the liquidation of the Trust, Debentures
having a principal amount equal to the Liquidation Amount of the Securities of
the Holder to whom such Debentures are distributed.

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

     4.   Redemption and Distribution.
          ---------------------------

          (a) Upon the repayment of the Debentures (with premium, if any) in
whole or in part, at maturity or otherwise (either at the option of the
Debenture Issuer or pursuant to a Special Event, as described below), the
proceeds from such repayment shall be simultaneously applied by the Property
Trustee (subject to the Property Trustee having received written notice no later
than 45 days prior to such repayment) to redeem a Like Amount of the Securities
at a redemption price equal to (i) in the case of the repayment of the
Debentures on the Maturity Date, the Maturity Redemption Price (as defined
below), (ii) in the case of the optional prepayment of the Debentures prior to
the Initial Optional Redemption Date and upon the occurrence and continuation of
a Special Event, the Special Event Redemption Price (as defined below) and (iii)
in the case of the optional prepayment of the Debentures on or after the Initial
Optional Redemption Date, the Optional Redemption Price (as defined below). The
Maturity Redemption Price, the Special Event Redemption Price and the Optional
Redemption Price are referred to collectively as the "Redemption Price". Holders
will be given not less than 30 nor more than 60 days prior written notice of
such redemption.

                                      I-3
<PAGE>

          (b)  (i)  The "Maturity Redemption Price" shall mean an amount equal
to 100% of the principal of, plus accrued and unpaid interest (including
Compounded Interest and Additional Sums, if any, thereon to the date of
redemption) on, the Debentures as of the Maturity Date thereof.

               (ii) The Debenture Issuer shall have the right (subject to the
conditions in the Indenture) to elect to prepay the Debentures, in whole or in
part, at any time on or after November 1/st/ , 2009 (the "Initial Optional
Redemption Date"), and, simultaneous with such prepayment, to cause a Like
Amount of the Securities to be redeemed by the Trust at the Optional Redemption
Price on a Pro Rata basis. "Optional Redemption Price" shall mean an amount
equal to the applicable redemption price set forth below plus accumulated and
unpaid Distributions thereon, if any, to the date of such redemption if redeemed
during the 12-month period beginning November 1/st/ , of the years indicated
below:

                                        Percentage of
                       Year          Liquidation Amount
                     -------------   --------------------
                        2009                  104.875%
                        2010                  104.388%
                        2011                  103.900%
                        2012                  103.413%
                        2013                  102.925%
                        2014                  102.438%
                        2015                  101.950%
                        2016                  101.463%
                        2017                  100.975%
                        2018                  100.488%
                        2019 and thereafter   100.000%

          (c) If at any time an Investment Company Event, a Regulatory Capital
Event or a Tax Event (each as defined below, and each a "Special Event") occurs,
the Debenture Issuer shall have the right (subject to the conditions set forth
in the Indenture) at any time prior to the Initial Optional Redemption Date, to
prepay the Debentures in whole, but not in part, within the 90 days following
the occurrence of such Special Event (the ''90 Day Period"), and, simultaneous
with such prepayment, to cause a Like Amount of the Securities to be redeemed by
the Trust at the Special Event Redemption Price on a Pro Rata basis.

          "Investment Company Event" shall mean the receipt by the Debenture
Issuer and the Trust of an opinion of independent securities counsel experienced
in such matters to the effect that as a result of (a) any amendment to, or
change (including any announced prospective change) in, the

                                     I-4
<PAGE>

laws or any regulations thereunder of the United States or any rules, guidelines
or policies of any applicable regulatory authority for the Debenture Issuer or
(b) any official administrative pronouncement or judicial decision interpreting
or applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of original
issuance of the Securities, the Trust is, or within 90 days of the date of such
opinion will be, considered an Investment Company that is required to be
registered under the Investment Company Act.

          "Regulatory Capital Event" shall mean the receipt by the Debenture
Issuer and the Trust of an opinion of independent bank regulatory counsel
experienced in such matters to the effect that as a result of (a) any amendment
to, or change (including any announced prospective change) in, the laws or any
regulations thereunder of the United States or any rules, guidelines or policies
of an applicable regulatory authority for the Debenture Issuer or (b) any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after  the date of original
issuance of the Securities, the Capital Securities do not constitute, or within
90 days of the date of such opinion will not constitute, Tier 1 Capital (or its
then equivalent if the Sponsor were subject to such capital requirement);

provided, however, that the distribution of the Debentures in connection with
--------  -------
the liquidation of the Trust by the Debenture Issuer shall not in and of itself
constitute a Regulatory Capital Event.

          "Special Event Redemption Price" shall mean, with respect to any
redemption of the Securities following a Special Event, an amount in cash equal
to the greater of (i) 100% of the principal amount of the Securities or (ii) the
sum, as determined by a Quotation Agent (as defined in the Indenture), of the
present values of the remaining scheduled payments of principal and interest on
such Securities, discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate (as defined in the Indenture), plus, in the case of each of (i)
and (ii), any accrued and unpaid interest thereon (including Compounded Interest
and Additional Sums, if any) to the date of such redemption.

          A "Tax Event" shall occur upon receipt by the Debenture Issuer and the
Trust of an opinion of independent tax counsel experienced in such matters to
the effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws or any regulations thereunder of the
United States or any political subdivision or taxing authority thereof or
therein, or (b) any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after  the date
of original issuance of the Securities, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days of the date of such opinion,
subject to United States federal income tax with respect to income received or
accrued on the Debentures, (ii) the interest payable by the Debenture Issuer on
the Debentures is not, or within 90 days of the date of such opinion will not
be, deductible by the Debenture Issuer, in whole or in part, for United States
federal income tax purposes, or (iii) the Trust is, or will be within 90 days of
the date of such opinion, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.

          (d) In the case of an optional redemption, if fewer than all the
outstanding Securities are to be so redeemed, the Common Securities and the
Capital Securities shall be

                                      I-5
<PAGE>

redeemed Pro Rata and the Capital Securities to be redeemed will be determined
as described in Section 4(f)(ii) below. Upon the entry of an order for the
dissolution of the Trust by a court of competent jurisdiction, the Debentures
thereafter will be subject to optional redemption, in whole, but not in part, on
or after the Initial Optional Redemption Date.

          (e)  On and from the date fixed by the Administrative Trustees for any
distribution of Debentures and liquidation of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) the Clearing Agency or its nominee
(or any successor Clearing Agency or its nominee), as the Holder of the Capital
Securities, will receive a registered global certificate or cer  tificates
representing the Debentures to be delivered upon such distribution, and (iii)
any certificates representing Securities not held by the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee) will be deemed to
represent beneficial interests in a Like Amount of Debentures until such
certificates are presented to the Debenture Issuer or its agent for transfer or
reissue.

          (f)  The Trust may not redeem fewer than all the outstanding
Securities unless all accumulated and unpaid Distributions have been paid on all
Securities for all semi-annual Distribution periods terminating on or before the
date of redemption.

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

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

          (ii) In the event that fewer than all the outstanding Securities are
     to be redeemed, the particular Securities to be redeemed shall be selected
     on a Pro Rata basis (based upon Liquidation Amounts) not more than 60 nor
     less than 30 days prior to the date fixed for redemption from the
     outstanding Securities not previously called for redemption; provided,
                                                                  --------
     however, that with respect to Holders that would be required to hold less
     -------
     than 100 but more than zero Securities as a result of such redemption, the
     Trust shall redeem Securities of each such Holder so that after such
     redemption such Holder shall hold either 100 Securities or such Holder no
     longer holds any Securities, and shall use such method (including, without
     limitation, by lot) as the Trust shall deem fair and appropriate; provided,
                                                                       --------
     further, that any such redemption may be made on the basis of the aggregate
     -------
     Liquidation Amount of Securities held by each Holder thereof and may be
     made by making such adjustments as the

                                      I-6
<PAGE>

     Trust deems fair and appropriate in order that fractional Securities shall
     not thereafter remain outstanding. With respect to Capital Securities
     registered in the name of and held of record by the Clearing Agency or its
     nominee (or any successor Clearing Agency or its nominee) or any nominee,
     the distribution of the proceeds of such redemption will be made to the
     Clearing Agency and disbursed by such Clearing Agency in accordance with
     the procedures applied by such agency or nominee.

          (iii)  If Securities are to be redeemed and the Trust gives a
     Redemption/ Distribution Notice (which notice will be irrevocable), then
     (A) with respect to Capital Securities issued in book-entry form, by 12:00
     noon, New York City time, on the redemption date, provided that the
                                                       -------- ----
     Debenture Issuer has paid the Property Trustee a sufficient amount of cash
     in connection with the related redemption or maturity of the Debentures by
     10:00 a.m., New York City time, on the Maturity Date or the date of
     redemption, as the case re  quires, the Property Trustee will deposit
     irrevocably with the Clearing Agency or its nominee (or successor Clearing
     Agency or its nominee) immediately available funds sufficient to pay the
     applicable Redemption Price with respect to such Capital Securities and
     will give the Clearing Agency irrevocable instructions and authority to pay
     the Redemption Price to the relevant Clearing Agency Participants, and (B)
     with respect to Capital Securities issued in certificated form and Common
     Securities, provided that the Debenture Issuer has paid the Property
                 -------- ----
     Trustee a sufficient amount of cash in connection with the related
     redemption or maturity of the Debentures, the Property Trustee will
     irrevocably deposit with the paying agent for the Capital Securities (if
     other than the Property Trustee) funds sufficient to pay the applicable
     Redemption Price to the Holders by check mailed to the address of the
     relevant Holder appearing on the books and records of the Trust on the
     redemption date, and provided further, that any such payment shall become
                          ----------------
     due only upon surrender by the Holder of the related certificated Capital
     Securities. If a Redemption/ Distribution Notice shall have been given and
     funds deposited as required, if applicable, then immediately prior to the
     close of business on the date of such deposit, or on the redemption date,
     as applicable, Distributions will cease to accumulate on the Securities so
     called for redemption and all rights of Holders so called for redemption
     will cease, except the right of the Holders of such Securities to re  ceive
     the Redemption Price, but without interest on such Redemption Price, and
     such Securities shall cease to be outstanding.

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

          Neither the Administrative Trustees nor the Trust shall be required to
register or cause to be registered the transfer of (i) any Securities beginning
at the opening of business 15 days before the day of mailing of a notice of
redemption or any notice of selection of Securities for redemption or (ii) any
Securities selected for redemption, except the unredeemed portion of any
Security being redeemed. If any date fixed for redemption of Securities is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay). If payment of the Re  demption
Price with respect to any Securities is improperly withheld or refused and not
paid either

                                      I-7
<PAGE>

by the Property Trustee or by the Sponsor as guarantor pursuant to the relevant
Securities Guarantee, Distributions on such Securities will continue to
accumulate from the original redemption date to the actual date of payment, in
which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.

          (v)  Redemption/Distribution Notices shall be sent by the Property
     Trustee on behalf of the Trust to (A) with respect to Capital Securities
     issued in book-entry form, the Clearing Agency or its nominee (or any
     successor Clearing Agency or its nominee), (B) with respect to Capital
     Securities issued in certificated form, to the Holders thereof, and (C)
     with respect to the Common Securities, to the Holders thereof.

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

     5. Voting Rights - Capital Securities.
        ----------------------------------

        (a) Except as provided under Sections 5(b), 6(b) and 7 and as
otherwise required by law and the Declaration, the Holders of the Capital
Securities will have no voting rights.

        (b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee or executing any
trust or power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 5.07 of
the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a Majority in Liquidation Amount
of all outstanding Capital Securities; provided, however, that where a consent
                                       --------  -------
under the Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior approval of each Holder of the Capital Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Capital Securities except by subsequent vote of such Holders. The
Property Trustee shall notify each Holder of Capital Securities of any notice of
default with respect to the Debentures. In addition to obtaining the foregoing
approvals of such Holders of the Capital Securities, prior to taking any of the
foregoing actions, the Trustees shall obtain an opinion of counsel experienced
in such matters to the effect that the Trust will continue to be classified as a
grantor trust for United States federal income tax purposes after taking any
such action into account.

          If an Event of Default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay principal of or premium, if any, or interest on the Debentures on the due
date (or, in the case of redemption, on the redemption date), then a Holder of
Capital Securities may institute a proceeding directly against the Debenture
Issuer for enforcement of payment to such Holder of the principal of or interest
on a Like Amount of Debentures (a "Direct Action") on or after the respective
due date specified in the Debentures. In

                                      I-8
<PAGE>

connection with such Direct Action, the Common Securities Holder will be
subrogated to the rights of such Holder of Capital Securities to the extent of
any payment made by the Debenture Issuer to such Holder of Capital Securities in
such Direct Action. Except as provided in the second preceding sentence, or
except as set forth in the first sentence of Section 3.8(e) of the Declaration,
the Holders of Capital Securities will not be able to exercise directly any
other remedy available to the holders of the Debentures.

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

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

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

     6. Voting Rights - Common Securities.
        ---------------------------------

        (a) Except as provided under Sections 6(b), 6(c), and 7 or as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.

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

        (c) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 5.07 of
the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of

                                     I-9
<PAGE>

the principal of the Debentures or (iv) consent to any amendment, modification
or termination of the Indenture or the Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the Holders of
a Majority in Liquidation Amount of all outstanding Common Securities; provided,
                                                                       --------
however, that where a consent under the Indenture would require the consent of
-------
each holder of Debentures affected thereby, no such consent shall be given by
the Property Trustee without the prior approval of each Holder of the Common
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of the Common Securities except by subsequent
vote of such Holders. The Property Trustee shall notify each Holder of Common
Securities of any notice of default with respect to the Debentures. In addition
to obtaining the foregoing approvals of such Holders of the Common Securities,
prior to taking any of the foregoing actions, the Trustees shall obtain an
opinion of counsel experienced in such matters to the effect that the Trust will
continue to be classified as a grantor trust for United States federal income
tax purposes after taking any such action into account.

          If an Event of Default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay principal of or premium, if any, or interest on the Debentures on the due
date (or in the case of redemption, on the redemption date), then a Holder of
Common Securities may institute a Direct Action directly against the Debenture
Issuer for enforcement of payment to such Holder of the principal of or premium,
if any,  or interest on a Like Amount of Debentures on or after the respective
due date specified in the Debentures. In connection with such Direct Action, the
rights of the Common Securities Holder will be subordinated to the rights of
Holders of Capital Securities in respect of any payment from the Debenture
Issuer in such Direct Action. Except as provided in the second preceding
sentence, the Holders of Common Securities will not be able to exercise directly
any other remedy available to the holders of the Debentures.

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

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

     7. Amendments to Declaration.
        -------------------------

          In addition to the requirements set out in Section 12.1 of the
Declaration, the Declaration may be amended from time to time by the Sponsor,
the Property Trustee and the Administrative Trustees without the consent of the
Holders to (i) cure any ambiguity, correct or

                                      I-10
<PAGE>

supplement any provisions in the Declaration that may be inconsistent with any
other provisions, or make any other provisions with respect to matters or
questions arising under the Declaration which shall not be inconsistent with the
other provisions of the Declaration, (ii) modify, eliminate or add to any
provisions of the Declaration to such extent as shall be necessary to ensure
that the Trust will be classified for United States federal income tax purposes
as a grantor trust at all times that any Securities are outstanding or to ensure
that the Trust will not be required to register as an Investment Company under
the Investment Company Act or (iii) modify, eliminate or add any provisions of
the Declaration to such extent as shall be necessary to enable the Trust or the
Sponsor to conduct an Exchange Offer in the manner contemplated by the
Registration Rights Agreement; provided, however, that in each case, such
                               --------  -------
action shall not adversely affect in any material respect the interests of any
Holder, and any such amendments of the Declaration shall become effective when
notice thereof is given to the Holders. The Declaration may also be amended by
the Trustees and the Sponsor with (i) the consent of Holders representing a
Majority in Liquidation Amount of all outstanding Securities, and (ii) receipt
by the Trustees of an Opinion of Counsel to the effect that such amendment or
the exercise of any power granted to the Trustees in accordance with such
amendment will not affect the Trust's status as a grantor trust for United
States federal income tax purposes or the Trust's exemption from status as an
Investment Company under the Investment Company Act; provided, however, that,
                                                     --------  -------
without the consent of each Holder of Trust Securities, the Declaration may not
be amended to (i) change the amount or timing of any Distribution on, or the
payment required to be made in respect of, the Trust Securities as of a
specified date or (ii) restrict the right of a Holder of Trust Securities to
institute suit for the enforcement of any such payment on or after such date.

     8.   Pro Rata.
          --------

          A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
                                                         --------
according to the aggregate liquidation amount of the Securities held by such
Holder in relation to the aggregate liquidation amount of all Securities
outstanding unless, in relation to a payment, an Event of Default under the
Declaration has occurred and is continuing, in which case any funds available to
make such payment shall be paid first to each Holder of the Capital Securities
pro rata according to the aggregate liquidation amount of Capital Securities
--------
held by such Holder relative to the aggregate liquidation amount of all Capital
Securities outstanding and then, only after satisfaction of all amounts owed to
the Holders of the Capital Securities, to each Holder of Common Securities pro
rata according to the aggregate liquidation amount of Common Securities held by
such Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.

     9.   Ranking.
          -------

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

                                     I-11
<PAGE>

     10. Acceptance of Capital Securities Guarantee, Common Securities
         -------------------------------------------------------------
         Guarantee. Indenture and Debentures.
         -----------------------------------

         Each Holder of Capital Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Capital Securities
Guarantee, the Common Securities Guarantee, the Indenture and the Debentures, as
applicable, including the subordination provisions therein.

     11. No Preemptive Rights.
         --------------------

         Neither the issuance of Capital Securities, nor the issuance of Common
Securities is subject to preemptive or other similar rights. The Holders shall
have no preemptive or similar rights to subscribe for any additional securities.

     12. Miscellaneous.
         -------------

         These terms constitute a part of the Declaration.

         The Sponsor will provide a copy of the Declaration, the Capital
Securities Guarantee or the Common Securities Guarantee, as applicable, and the
Indenture (including any supplemental indenture) to a Holder without charge upon
written request to the Trust at its principal place of business.

                                     I-12
<PAGE>

                                  EXHIBIT A-1

                      FORM OF CAPITAL SECURITY CERTIFICATE

                           [FORM OF FACE OF SECURITY]

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

          UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE CLEARING AGENCY TO THE TRUST OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE CLEARING AGENCY AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO., 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.]

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

          THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH ASTORIA FINANCIAL
CORPORATION (THE "CORPORATION") OR ANY "AFFILIATE" OF THE CORPORATION WAS THE
OWNER OF THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY)
ONLY (A) TO THE CORPORATION, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN

                                      A1-1
<PAGE>

DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS CAPITAL
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7)
OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (E)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF ASTORIA CAPITAL TRUST I (THE
"TRUST") AND THE CORPORATION PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i)
PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii)
PURSUANT TO CLAUSE (D) TO REQUIRE THAT THE TRANSFEROR DELIVER TO THE TRUST A
LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE OFFERING
MEMORANDUM DATED OCTOBER 25, 1999. SUCH HOLDER FURTHER AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS CAPITAL SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

          THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF ALSO
AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH
A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON
OF ANY PLAN'S INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF
ANY PLAN MAY ACQUIRE OR HOLD THE CAPITAL SECURITIES OR ANY INTEREST THEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE
UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-
60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND
HOLDING OF CAPITAL SECURITIES IS NOT PROHIBITED BY SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER
OR HOLDER OF THE CAPITAL SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO
HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS
NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A
PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON
ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR
ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT

                                      A1-2
<PAGE>

PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN
A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE
FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

     THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 CAPITAL SECURITIES)
AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF CAPITAL
SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000 (100
CAPITAL SECURITIES) SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER
OF SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON SUCH CAPITAL SECURITIES, AND SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL
SECURITIES.

     THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO BE
BOUND BY THE REGISTRATION RIGHTS AGREEMENT DATED AS OF OCTOBER ___, 1999, BY AND
AMONG THE TRUST, THE SPONSOR AND THE INITIAL PURCHASER NAMED THEREIN, AS AMENDED
FROM TIME TO TIME.

                                      A1-3
<PAGE>

Certificate Number: [____________________]         Aggregate Liquidation Amount:
                                                   $[___________]
CUSIP Number:[___________]

                   Certificate Evidencing Capital Securities

                                       of

                         _____ Astoria Capital Trust I

                          Capital Securities, Series A
                (liquidation amount $1,000 per Capital Security)

          Astoria Capital Trust I, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that [Cede &
Co.]/1/ (the "Holder") is the registered owner of [$[___________] in aggregate
liquidation amount of Capital Securities of the Trust]/2/ [the aggregate
liquidation amount of Capital Securities of the Trust specified in Schedule A
hereto]/1/ representing undivided preferred beneficial interests in the assets
of the Trust designated the ___ Capital Securities, Series A (liquidation amount
$1,000 per Capital Security) (the "Capital Securities"). The Capital Securities
are transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of the Trust, dated as of October ____, 1999,
as the same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Capital Securities as set forth in Annex I to
the Declaration. Capitalized terms used but not defined herein shall have the
meaning given them in the Declaration. The Sponsor will provide a copy of the
Declaration, the Capital Securities Guarantee and the Indenture (including any
supplemental indenture) to a Holder without charge upon written request to the
Trust at its principal place of business.

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

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

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

     1    Insert in Global Capital Securities only.

     2    Insert in Definitive Capital Securities only.

                                      A1-4
<PAGE>

          IN WITNESS WHEREOF, the Trust has executed this certificate this
_______ day of _______________ ____.

                              ASTORIA CAPITAL TRUST I

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

                PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION

     This is one of the ____% Capital Securities, Series A of Astoria Capital
Trust I referred to in the within-mentioned Declaration.

Dated:              ,

                              WILMINGTON TRUST COMPANY,
                              not in its individual capacity but solely
                              as Property Trustee

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

                                      A1-5
<PAGE>

                         [FORM OF REVERSE OF SECURITY]

          Distributions on each Capital Security will be payable at a fixed rate
per annum of ___% (the "Coupon Rate") of the liquidation amount of $1000 per
Capital Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
semi-annual period will bear interest thereon compounded semi-annually at the
Coupon Rate (to the extent permitted by applicable law). Pursuant to the
Registration Rights Agreement and the Liquidated Damages Agreement, in certain
limited circumstances the Debenture Issuer will be required to pay Liquidated
Damages (as defined in the Registration Rights Agreement and the Liquidated
Damages Agreement) with respect to the Debentures. The term "Distributions," as
used herein, includes such cash distributions and any and all such interest and
Liquidated Damages, if any, payable unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Property Trustee and to the extent the Property Trustee has funds
legally available therefor.

          Distributions on the Capital Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from October 28, 1999 and will be payable
semi-annually in arrears, on May 1/st/  and November 1/st/  of each year,
commencing May 1, 2000, except as otherwise described below. Distributions will
be computed on the basis of a 360-day year of twelve 30-day months. As long as
no Event of Default has occurred and is continuing under the Indenture, the
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period at any time and from time to time on
the Debentures for a period not exceeding 10 consecutive semi-annual calendar
periods, including the first such semi-annual period during such extension
period (each an "Extension Period"), provided that no Extension Period shall end
                                     -------- ----
on a date other than an Interest Payment Date for the Debentures or extend
beyond the Maturity Date of the Debentures. As a consequence of such deferral,
Distributions (other than Liquidated Damages, if any) will also be deferred.
Notwithstanding such deferral, semi-annual Distributions will continue to
accumulate with interest thereon (to the extent permitted by applicable law, but
not at a rate exceeding the rate of interest then accruing on the Debentures) at
the Coupon Rate compounded semi-annually during any such Extension Period. Prior
to the termination of any Extension Period, the Debenture Issuer may further
defer payments of interest by further extending such Extension Period; provided
                                                                       --------
that such Extension Period, together with all such previous and further
----
extensions within such Extension Period, may not (i) exceed 10 consecutive semi-
annual periods, including the first semi-annual period during such Extension
Period, (ii) end on a date other than an Interest Payment Date for the
Debentures or (iii) extend beyond the Maturity Date of the Debentures. Payments
of accumulated Distributions will be payable to Holders as they appear on the
books and records of the Trust on the record date immediately preceding the end
of the Extension Period. Upon the termination of any Extension Period and the
payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.

          Subject to receipt by the Sponsor of any and all required regulatory
approvals and to certain other conditions set forth in the Declaration and the
Indenture, the Property Trustee may, at the direction of the Sponsor, at any
time dissolve the Trust and after satisfaction of liabilities to creditors of
the Trust as provided by applicable law, cause the Debentures to be distributed
to the Holders of the Securities in liquidation of the Trust or, simultaneously
with any redemption of the Debentures, cause a Like Amount of the Securities to
be redeemed by the Trust.

          The Capital Securities shall be redeemable as provided in the
Declaration.

                                      A1-6
<PAGE>

               -------------------------------------------------
                                   ASSIGNMENT
               -------------------------------------------------

FOR VALUE RECEIVED, the undersigned hereby assigns and transfers this Capital
Security Certificate to:

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

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

------------------------------------------------------------------------------
           (Assignee's social security or tax identification number)

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

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

------------------------------------------------------------------------------
                       (Address and zip code of assignee)

and irrevocably appoints

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

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

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

Date:
     ---------------
Signature:
          --------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)

Signature Guarantee:
                     ---------------------------------------------------------

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

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

                                      A1-7
<PAGE>

[Include the following if the Capital Security bears a Restricted Securities
Legend]

In connection with any transfer of any of the Capital Securities evidenced by
this Certificate, the undersigned confirms that such Capital Securities are
being:

CHECK ONE BOX BELOW

     (1)  [ ]  exchanged for the undersigned's own account without transfer; or

     (2)  [ ]  transferred pursuant to and in compliance with Rule 144A under
               the Securities Act of 1933, as amended; or

     (3)  [ ]  transferred to an institutional "accredited investor" within
               the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
               under the Securities Act of 1933 that is acquiring the Capital
               Securities for its own account, or for the account of such an
               institutional "accredited investor," for investment purposes and
               not with a view to, or for offer or sale in connection with, any
               distribution in violation of the Securities Act of 1933, as
               amended; or

     (4)  [ ]  transferred pursuant to another available exemption from the
               registration requirements of the Securities Act of 1933, as
               amended; or

     (5)  [ ]  transferred pursuant to an effective registration statement.

Unless one of the boxes is checked, the Registrar will refuse to register any of
the Capital Securities evidenced by this Certificate in the name of any Person
other than the Holder hereof; provided, however, that if box (3) or (4) is
                              --------  -------
checked, the Registrar may require, prior to registering any such transfer of
the Capital Securities, such legal opinions, certifications and other
information as the Trust has reasonably requested to confirm that such transfer
is being made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act of 1933, as amended, such as
the exemption provided by Rule 144 under such Act; provided, further, that (i)
                                                   --------  -------
if box (2) is checked, by acceptance of this Certificate, the transferee shall
be deemed to have certified that it is a "qualified institutional buyer" (as
defined in Rule 144A) ("QIB") acquiring the Capital Securities for its own
account or for the account of another QIB over which it exercises sole
investment discretion and that it is aware that the Holder is relying upon the
exemption from registration afforded by Rule 144A in respect of the Holder's
transfer of Capital Securities to it or (ii) if box (3) is checked, the
transferee must also provide to the Registrar a Transferee Letter of
Representation in the form attached to the Offering Memorandum of the Trust
dated October ___, 1999; provided, further, that after the date that a
                         --------  -------
registration statement has been filed and so long as such Registration Statement
continues to be effective, only then may the Registrar permit transfers for
which box (5) has been checked.

                                         Signature
                                         --------------------------------

                                      A1-8
<PAGE>

                                  EXHIBIT A-2

                      FORM OF COMMON SECURITY CERTIFICATE

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

          THE HOLDER OF THIS COMMON SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS COMMON SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH ASTORIA FINANCIAL
CORPORATION (THE "CORPORATION") OR ANY "AFFILIATE" OF THE CORPORATION WAS THE
OWNER OF THIS COMMON SECURITY (OR ANY PREDECESSOR OF THIS COMMON SECURITY) ONLY
(A) TO THE CORPORATION, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS  THIS COMMON
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7)
OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS COMMON SECURITY FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF ASTORIA CAPITAL TRUST I (THE
"TRUST") AND THE CORPORATION PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i)
PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.  SUCH
HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS COMMON
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

                                      A2-1
<PAGE>

                    Certificate Evidencing Common Securities

                                       of

                            Astoria Capital Trust I

                            [___]% Common Securities
                (liquidation amount $1,000 per Common Security)

          Astoria Capital Trust I, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that Astoria
Financial Corporation (the "Holder") is the registered owner of [_____] common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the [____]% Common Securities (liquidation amount
$1,000 per Common Security) (the "Common Securities").  Subject to the terms of
the Declaration (as defined below), the Common Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this Certificate duly endorsed and in proper form for
transfer. The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities represented hereby are
issued and shall in all respects be subject to the provisions of the Amended and
Restated Declaration of the Trust dated as of October ___, 1999, as the same may
be amended from time to time (the "Declaration"), including the designation of
the terms of the Common Securities as set forth in Annex I to the Declaration.
Capitalized terms used but not defined herein shall have the meaning given them
in the Declaration. The Sponsor will provide a copy of the Declaration, the
Common Securities Guarantee and the Indenture (including any supplemental
indenture) to a Holder without charge upon written request to the Trust at its
principal place of business.

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

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

          IN WITNESS WHEREOF, the Trust has executed this certificate this
__________ day of _____________ 1999.

                              ASTORIA CAPITAL TRUST I

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

                                      A2-2
<PAGE>

                         [FORM OF REVERSE OF SECURITY]

     Distributions on each Common Security will be payable at a rate of [_____]%
per annum (the "Coupon Rate") of the liquidation amount of $1000 per Common
Security, such rate being the rate of interest payable on the Debentures to be
held by the Property Trustee. Distributions in arrears for more than one semi-
annual period will bear interest thereon compounded semi-annually at the Coupon
Rate (to the extent permitted by applicable law). Pursuant to the Registration
Rights Agreement, in certain limited circumstances the Debenture Issuer will be
required to pay Liquidated Damages (as defined in the Registration Rights
Agreement) with respect to the Debentures. The term "Distributions", as used
herein, includes such cash distributions and any and all such interest and
Liquidated Damages, if any, payable unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Property Trustee and to the extent the Property Trustee has funds
legally available therefor.

     Distributions on the Common Securities will be cumulative, will accrue from
the most recent date to which Distributions have been paid or, if no
Distributions have been paid, from October ___, 1999 and will be payable semi-
annually in arrears, on May 1 and November 1 of each year, commencing May 1,
2000, except as otherwise described below. Distributions will be computed on the
basis of a 360-day year of twelve 30-day months. As long as no Event of Default
has occurred and is continuing under the Indenture, the Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 10 consecutive calendar semi-annual periods, including
the first such semi-annual period during such extension period (each an
"Extension Period"), provided that no Extension Period shall end on a date other
                     -------- ----
than an Interest Payment Date for the Debentures or extend beyond the Maturity
Date of the Debentures. As a consequence of such deferral, Distributions will
also be deferred. Notwithstanding such deferral, semi-annual Distributions will
continue to accumulate with interest thereon (to the extent permitted by
applicable law, but not at a rate exceeding the rate of interest then accruing
on the Debentures) at the Coupon Rate compounded semi-annually during any such
Extension Period. Prior to the termination of any Extension Period, the
Debenture Issuer may further defer payments of interest by further extending
such Extension Period; provided that such Extension Period, together with all
                       -------- ----
such previous and further extensions within such Extension Period, may not (i)
exceed 10 consecutive semi-annual periods, including the first semi-annual
period during such Extension Period, (ii) end on a date other than an Interest
Payment Date for the Debentures or (iii) extend beyond the Maturity Date of the
Debentures. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the record date immediately
preceding the end of the Extension Period. Upon the termination of any Extension
Period and the payment of all amounts then due, the Debenture Issuer may
commence a new Extension Period, subject to the above requirements.

     Subject to the receipt by the Sponsor of any and all required regulatory
approvals and to certain other conditions set forth in the Declaration and the
Indenture, the Property Trustee may, at the direction of the Sponsor, at any
time dissolve the Trust and cause the Debentures to be distributed to the
Holders of the Securities in liquidation of the Trust or, simultaneously with
any redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.

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

     Under certain circumstances, the rights of the holders of the Common
Securities shall be subordinate to the rights of the holders of the Capital
Securities, as provided in the Declaration.

                                      A2-3

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