Document:

<PAGE>
                                                                    EXHIBIT 4.13

                              DECLARATION OF TRUST

       This DECLARATION OF TRUST, dated as of May 23, 2002 (this "Declaration of
Trust") between Forest City Enterprises, Inc., an Ohio corporation (the
"Sponsor"), and The Bank of New York (Delaware), a Delaware banking corporation
with its principal office in the State of Delaware, as Delaware trustee (the
"Delaware Trustee"), and Charles A. Ratner, an individual, as trustee (the
"Administrative Trustee", and, together with the Delaware Trustee, the
"Trustees"). The Sponsor and the Trustees hereby agree as follows:

       1. The trust created hereby (the "Trust") shall be known as "Forest City
Enterprises Capital Trust II" in which name the Trustees, or the Sponsor to the
extent provided herein, may engage in the transactions contemplated hereby, make
and execute contracts, and sue and be sued. The Trust is hereby established by
the Sponsor and the Trustees for the purpose of (i) issuing preferred securities
("Preferred Securities") representing undivided beneficial interests in the
assets of the Trust in exchange for cash and investing the proceeds thereof in
debentures of the Sponsor, (ii) issuing common securities representing undivided
beneficial interests in the assets of the Trust to the Sponsor in exchange for
cash and investing the proceeds thereof in additional debentures of the Sponsor
and (iii) engaging in such other activities as are necessary, convenient or
incidental thereto.

       2. The Sponsor hereby assigns, transfers, conveys and sets over to the
Trustees the sum of $100. The Administrative Trustee hereby acknowledges receipt
of such amount in trust from the Sponsor, which amount shall constitute the
initial trust estate. The Administrative 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 constitutes a business trust under
Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section 3801 et seq.
(the "Business Trust Act"), and that this document constitutes the governing
instrument of the Trust. The Trustees are hereby authorized and directed to
execute and file a certificate of trust with the Secretary of State of the State
of Delaware in accordance with the provisions of the Business Trust Act.

       3. The Sponsor and the Trustees will enter into an Amended and Restated
Declaration of Trust, satisfactory to each such party and substantially in the
form included as an exhibit to the 1933 Act Registration Statement (as defined
below), to provide for the contemplated operation of the Trust created hereby
and the issuance of the Preferred Securities referred to therein. Prior to the
execution and delivery of such Amended and Restated Declaration of Trust, (i)
the Delaware 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 Administrative Trustee and the Sponsor shall take 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 Trustees may take all actions deemed proper as are necessary to
effect the transactions contemplated herein.

       4. The Sponsor hereby agrees to (i) reimburse the Trustees for all
reasonable expenses (including reasonable fees and expenses of counsel and other
experts), (ii) indemnify, defend and hold harmless the Trustees and any of the
officers, directors, employees and agent of the Trustees (collectively,
including the Trustees in their individual capacities, the "Indemnified
Persons") from and against any and all losses, damages, liabilities, claims,
actions, suits, costs,

<PAGE>

expenses, disbursements (including the reasonable fees and expenses of counsel),
taxes and penalties of any kind and nature 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 any Indemnified
Person for Expenses to the extent such Expenses result from the willful
misconduct, bad faith or negligence of such Indemnified Person, and (iii)
advance to such Indemnified Person Expenses (including reasonable legal fees)
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
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified therefor under this Section
4.

       5. The Sponsor, as the sponsor of the Trust, is hereby authorized, in its
discretion (i) to file with the Securities and Exchange Commission (the
"Commission") and execute, in each case on behalf of the Trust, (a) a
registration statement on Form S-3 (the "1933 Act Registration Statement"),
including any pre-effective or post-effective amendments thereto (including the
prospectus, prospectus supplements and the exhibits contained therein), and any
registration statement filed pursuant to Rule 462 under the Securities Act of
1933, as amended (the "1933 Act"), relating to the registration under the 1933
Act of the Preferred Securities of the Trust and certain other securities and
(b) a Registration Statement on Form 8-A (the "1934 Act Registration
Statement"), including any pre-effective and post-effective amendments thereto,
relating to the registration of the Preferred Securities of the Trust under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended; (ii)
to file with the New York Stock Exchange or any other national stock exchange or
The Nasdaq National Market (each, an "Exchange") and execute on behalf of the
Trust one or more listing applications and all other applications, statements,
certificates, agreements and other instruments as shall be necessary or
desirable to cause the Preferred Securities to be listed on any of the
Exchanges; (iii) to file and execute on behalf of the Trust such applications,
reports, surety bonds, irrevocable consents, appointments of attorney for
service of process and other papers and documents as shall be necessary or
desirable to register the Preferred Securities under the securities or blue sky
laws of such jurisdictions as the Sponsor on behalf of the Trust, may deem
necessary or desirable; and (iv) to execute, deliver and perform on behalf of
the Trust that certain Underwriting Agreement relating to the Preferred
Securities, among the Trust, the Sponsor and the several Underwriters named
therein, substantially in the form included as an exhibit to the 1933 Act
Registration Statement. In the event that any filing referred to in clauses (i),
(ii) and (iii) above is required by the rules and regulations of the Commission,
an Exchange or state securities or blue sky laws, to be executed on behalf of
the Trust by any of the Trustees, each of the Trustees, in its capacity as a
trustee of the Trust, 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. In
connection with the filings referred to above, the Sponsor hereby constitutes
and appoints Charles A. Ratner, Thomas G. Smith and William M. Warren, and each
of them, as its true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for the Sponsor or in the Sponsor's name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the 1933 Act Registration Statement (and any
registration statement filed pursuant to Rule 462 promulgated pursuant to the
1933 Act) and the 1934 Act Registration Statement and to file the

                                       2
<PAGE>

same, with all exhibits thereto, and other documents in connection therewith,
with the Commission, any Exchange and administrators of state securities or blue
sky laws, granting unto said attorney-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as the
Sponsor might or could do in person, thereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their respective substitute
or substitutes, shall do or cause to be done by virtue hereof.

       6. The Delaware Trustee shall 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 Delaware 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 Delaware 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 Delaware Trustee is a party or is otherwise contrary to law. If
at any time the Delaware Trustee determines that it requires or desires guidance
regarding the application of any provision of this Declaration or any other
document, then the Delaware 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 by the Delaware Trustee in reliance thereon. If
the Delaware Trustee does not receive such instructions it may refrain from
taking any action with respect to the matters described in such notice to the
Sponsor.

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

       8. The number of Trustees initially shall be two (2) and thereafter the
number of Trustees 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; provided, however, that to the extent required by the
Business Trust Act, one Trustee 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 Delaware law. Subject to the foregoing, the
Sponsor is entitled to appoint or remove without cause any Trustee at any time.
A Trustee may resign upon thirty (30) days' prior notice to the Sponsor.

       9. This Declaration of Trust shall be governed by, and construed in
accordance with, the internal laws of the State of Delaware.

       10. The Trust may terminate without issuing any Preferred Securities at
the election of the Sponsor.

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         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.

                              FOREST CITY ENTERPRISES, INC.,
                                    as Sponsor

                              By:  /s/ Charles A. Ratner
                                   --------------------------------------------
                                   Name: Charles A. Ratner
                                   Title: President and Chief Executive Officer

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

                              By:  /s/ William T. Lewis
                                   --------------------------------------------
                                   Name: William T. Lewis
                                   Title: Senior Vice President

                                   /s/ Charles A. Ratner
                               ------------------------------------------------
                               Charles A. Ratner, as Administrative Trustee

                                       4<PAGE>
                                                                    EXHIBIT 4.14

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

                    AMENDED AND RESTATED DECLARATION OF TRUST

                  FOREST CITY ENTERPRISES CAPITAL TRUST [I/II]

                          DATED AS OF __________, 200__

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

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                             CROSS-REFERENCE TABLE*

Section of Trust Indenture                                  Section of
Act of 1939, as amended                                     Declaration
-----------------------                                     -----------

310(a)......................................................5.3(a)
310(b)......................................................5.3(c); 5.3(d)
311(a)......................................................2.2(b)
311(b)......................................................2.2(b)
312(a)......................................................2.2(a)
312(b)......................................................2.2(b)
313.........................................................2.3
314(a)......................................................2.4; 3.6(i)
314(c)......................................................2.5
315(a)......................................................3.9
315(b)......................................................2.7(a)
315(c)......................................................3.9(a)
315(d)......................................................3.9(b)
316(a)......................................................2.6
316(c)......................................................3.6(e)
317(a)......................................................3.8(e); 3.8(h)
317(b)......................................................3.8(j); 7.3
318.........................................................2.1

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

<PAGE>

                                    ARTICLE I
                    ARTICLE I INTERPRETATION AND DEFINITIONS

Section 1.1      Definitions...................................................1

                                   ARTICLE II
                               TRUST INDENTURE ACT

Section 2.1      Trust Indenture Act: Application..............................6

Section 2.2      Lists of Holders of Securities................................7

Section 2.3      Reports by the Institutional Trustee..........................7

Section 2.4      Periodic Reports to Institutional Trustee.....................7

Section 2.5      Evidence of Compliance With Conditions Precedent..............8

Section 2.6      Events of Default: Waiver.....................................8

Section 2.7      Event of Default: Notice......................................9

                                   ARTICLE III
                                  ORGANIZATION

Section 3.1      Name.........................................................10

Section 3.2      Office.......................................................10

Section 3.3      Declaration..................................................10

Section 3.4      Authority....................................................11

Section 3.5      Title to Property of the Trust...............................11

Section 3.6      Powers and Duties of the Regular Trustees....................11

Section 3.7      Prohibition of Actions by the Trust and the Trustees.........14

Section 3.8      Powers and Duties of the Institutional Trustee...............14

Section 3.9      Certain Duties and Responsibilities of the Institutional
                 Trustee......................................................16

Section 3.10     Certain Rights of Institutional Trustee......................18

Section 3.11     Delaware Trustee.............................................20

Section 3.12     Execution of Documents.......................................20

Section 3.13     Not Responsible for Recitals or Issuance of Securities.......20

Section 3.14     Duration of Trust............................................20

Section 3.15     Mergers......................................................20

                                   ARTICLE IV
                                     SPONSOR

Section 4.1      Sponsor's Purchase of Common Securities......................22

                                      -i-

<PAGE>

                                TABLE OF CONTENTS
                                  (continued)
                                                                            PAGE

Section 4.2      Responsibilities of the Sponsor..............................22

Section 4.3      Guarantee of Payment of Trust Obligations....................23

                                    ARTICLE V
                                    TRUSTEES

Section 5.1      Number of Trustees...........................................24

Section 5.2      Delaware Trustee.............................................24

Section 5.3      Institutional Trustee: Eligibility...........................24

Section 5.4      Qualifications of Regular Trustees and Delaware
                 Trustee Generally............................................25

Section 5.5      Initial Trustees: Additional Powers of Regular Trustees......25

Section 5.6      Appointment, Removal and Resignation of Trustees.............26

Section 5.7      Vacancies Among Trustees.....................................27

Section 5.8      Effect of Vacancies..........................................28

Section 5.9      Meetings.....................................................28

Section 5.10     Delegation of Power..........................................28

Section 5.11     Merger, Conversion, Consolidation or Succession
                 to Business..................................................29

                                   ARTICLE VI
                                  DISTRIBUTIONS

Section 6.1      Distributions................................................29

                                   ARTICLE VII
                             ISSUANCE OF SECURITIES

Section 7.1      General Provisions Regarding Securities......................29

Section 7.2      Registrar and Paying Agent...................................30

Section 7.3      Paying Agent to Hold Money in Trust..........................31

                                  ARTICLE VIII
                              DISSOLUTION OF TRUST

Section 8.1      Dissolution of Trust.........................................31

                                   ARTICLE IX
                              TRANSFER OF INTERESTS

Section 9.1      Transfer of Securities.......................................32

Section 9.2      Transfer of Certificates.....................................32

                                      -ii-

<PAGE>

                                TABLE OF CONTENTS
                                  (continued)
                                                                            PAGE

Section 9.3      Deemed Security Holders......................................33

Section 9.4      Book Entry Interests.........................................33

Section 9.5      Notices to Clearing Agency...................................34

Section 9.6      Appointment of Successor Clearing Agency.....................34

Section 9.7      Definitive Preferred Security Certificates...................34

Section 9.8      Mutilated, Destroyed, Lost or Stolen Certificates............35

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

Section 10.1     Liability....................................................35

Section 10.2     Exculpation..................................................36

Section 10.3     Fiduciary Duty...............................................36

Section 10.4     Indemnification..............................................37

Section 10.5     Outside Businesses...........................................40

                                   ARTICLE XI
                                   ACCOUNTING

Section 11.1     Fiscal Year..................................................40

Section 11.2     Certain Accounting Matters...................................40

Section 11.3     Banking......................................................41

Section 11.4     Withholding..................................................41

                                   ARTICLE XII
                             AMENDMENTS AND MEETINGS

Section 12.1     Amendments...................................................41

Section 12.2     Meetings of the Holders of Securities: Action by
                 Written Consent..............................................43

                                  ARTICLE XIII
                    REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
                              AND DELAWARE TRUSTEE

Section 13.1     Representations and Warranties of Institutional Trustee......44

                                     -iii-
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)
                                                                            PAGE

Section 13.2     Representations and Warranties of Delaware Trustee...........45

                                   ARTICLE XIV
                                  MISCELLANEOUS

Section 14.1     Notices......................................................46

Section 14.2     Governing Law................................................47

Section 14.3     Intention of the Parties.....................................47

Section 14.4     Headings.....................................................47

Section 14.5     Successors and Assigns.......................................47

Section 14.6     Partial Enforceability.......................................47

Section 14.7     Counterparts.................................................47

                                      -iv-
<PAGE>

                  AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of [________, 200__], by the Trustees (as defined
herein), the Sponsor (as defined herein) and by the holders, from time to time,
of undivided beneficial interests in the assets of the Trust to be issued
pursuant to this Declaration;

                  WHEREAS, certain of the Trustees and the Sponsor established
Forest City Enterprises Capital Trust [I/II] (the "Trust"), a trust under the
Business Trust Act (as defined herein), pursuant to a Declaration of Trust dated
as of May 23, 2002 (the "Original Declaration"), and a Certificate of Trust
filed with the Secretary of State of the State of Delaware on May 23, 2002, for
the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Debentures (as defined herein) of the Debenture
Issuer (as defined herein);

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

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

                                   ARTICLE I
                    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 have the respective meanings assigned to them in this Section
1.1;

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

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

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

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

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

<PAGE>

         "Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act, or any successor provision thereto and as may be
amended from time to time.

         "Authorized Officer" of a Person means any vice president, senior vice
president, president, chief executive officer, treasurer, controller or other
individual executing a document or otherwise acting by virtue of authority
vested in such individual by such Person in an instrument expressly designating
such individual as an Authorized Officer and referencing this Declaration.

         "Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.

         "Business Day" means any day other than a day on which banking
institutions in the City of New York, New York are authorized or required by any
applicable law or executive order to close.

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

         "Certificate" means a Common Security Certificate or a Preferred
Security Certificate.

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

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

         "Closing Date" means the Closing Date as defined in the Underwriting
Agreement, which date is also the date of execution and delivery of this
Declaration.

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

         "Commission" means the Securities and Exchange Commission.

         "Common Security" has the meaning specified in Section 7.1.

         "Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.

         "Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees,

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<PAGE>

representatives or agents of any Regular Trustee; or (d) any officer, employee
or agent of the Trust or its Affiliates.

         "Corporate Trust Office" means the office of the Institutional Trustee
at which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Declaration is located at 101 Barclay Street, New York, New
York, 10286, Attention: Corporate Trust Trustee 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 the Sponsor, in its capacity as issuer of the
Debentures under the Indenture.

         "Debenture Trustee" means National City Bank as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.

         "Debentures" means the [ ]% [Junior/Senior] Subordinated Debentures due
[ ], to be issued by the Debenture Issuer pursuant to the Indenture to be held
by the Institutional Trustee.

         "Definitive Preferred Security Certificates" has the meaning set forth
in Section 9.4.

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

         "Distribution" has the meaning set forth in Section 6.1.

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

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

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

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

         "Forest City" means Forest City Enterprises, Inc., an Ohio corporation.

         "Global Certificate" has the meaning set forth in Section 9.4.

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

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

                                       3
<PAGE>

         "Indenture" means the [Junior/Senior] Subordinated Debt Indenture dated
as of [__________, 200__], between the Debenture Issuer and the Debenture
Trustee, as amended or supplemented from time to time, pursuant to which the
Debentures are to be issued.

         "Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.

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

         "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, or any successor legislation.

         "Investment Company Event" has the meaning set forth in Annex I hereto.

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

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

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

         "Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:

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

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

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

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

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

                                       4
<PAGE>

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

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

         "Preferred Securities Guarantee" means the guarantee agreement dated as
of [__________, 200__], between the Sponsor and the trustee named therein
relating to the Preferred Securities.

         "Preferred Security" has the meaning specified in Section 7.1.

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

         "Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.

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

         "Regular Trustee" has the meaning specified in Section 5.1.

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

         "Rule 3a-5" means Rule 3a-5 under the Investment Company Act.

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

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

         "Special Event" has the meaning set forth in Annex I hereto.

         "Sponsor" means Forest City Enterprises, Inc., or any successor entity
in a merger, consolidation or amalgamation, in its capacity as sponsor of the
Trust.

                                       5
<PAGE>

         "Successor Delaware Trustee" has the meaning set forth in Section 5.6.

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

         "Successor Institutional Trustee" has the meaning set forth in Section
5.6.

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

         "Tax Event" has the meaning set forth in Annex I hereto.

         "10% in liquidation amount of the Securities" means, except as provided
in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of an aggregate liquidation amount representing 10% or more of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued 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, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).

         "Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office 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.

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

         "Underwriting Agreement" means the Underwriting Agreement for the
offering and sale of Preferred Securities substantially in the form appearing as
exhibit 1.4 to the registration statement on Form S-3 of Forest City and the
Trust relating to the Preferred Securities and the related Preferred Securities
Guarantee.

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

                                       6
<PAGE>

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

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

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

Section 2.2 Lists of Holders of Securities.

         (a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Institutional Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Institutional
Trustee may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request therefor, a
List of Holders as of a date no more than 14 days before such List of Holders is
given to the Institutional Trustee; provided, that neither the Sponsor nor the
Regular Trustees on behalf of the Trust shall be obligated to provide such List
of Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Institutional Trustee by the Sponsor and the
Regular Trustees on behalf of the Trust. The Institutional Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
as Paying Agent (if acting in such capacity) provided that the Institutional
trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders. Unless supplemented, amended or restated pursuant to this
Section 2.2(a), the Institutional Trustee shall be entitled to rely exclusively
on the last List of Holders provided to it by the Sponsor or any Regular
Trustee.

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

Section 2.3   Reports by the Institutional Trustee.

         The Institutional Trustee shall provide to the Holders of the
Preferred Securities such reports as are required by Section 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by such Section
313. The Institutional Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.

Section 2.4 Periodic Reports to Institutional Trustee.

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

                                       7
<PAGE>

Section 2.5 Evidence of Compliance With Conditions Precedent.

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

Section 2.6 Events of Default: Waiver.

         (a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences; provided that, if the underlying Event of
Default under the Indenture is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable. The foregoing
provisions of this Section 2.6(a) shall be in lieu of Section 316(a)(1)(B) of
the Trust Indenture Act and such Section 316(a)(l)(B) of the Trust Indenture Act
is hereby expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act. Upon such waiver, any such default shall
cease to exist, and any Event of Default with respect to the Preferred
Securities arising therefrom shall be deemed to have been cured, for every
purpose of this Declaration, but no such waiver shall extend to any subsequent
or other default or an Event of Default with respect to the Preferred Securities
or impair any right consequent thereon. Any waiver by the Holders of the
Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.

                                       8
<PAGE>

                  (b) The Holders of a Majority in liquidation of the Common
         Securities may, by vote, on behalf of the Holders of all the Common
         Securities, waive any post Event of Default with respect to the Common
         Securities and its consequences; provided that if the underlying Event
         of Default under the Indenture 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 in this
         Section 2.6(b),  the Event of Default under the Declaration shall also
         not be waivable; 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 its consequences
         until all Events of Default with respect to the Preferred Securities
         have been cured, waived or otherwise eliminated, and until such Events
         of Default with respect to the Preferred Securities have been cured,
         waived or otherwise eliminated, the Institutional Trustee will be
         deemed to be acting solely on behalf of the Holders of the Preferred
         Securities and only the Holders of the Preferred Securities will have
         the right to direct the Institutional Trustee in accordance with the
         terms of the Securities. The foregoing provisions of this Section
         2.6(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(l)(B) of
         the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust
         Indenture Act is hereby expressly excluded from this Declaration and
         the Securities, as permitted by the Trust Indenture Act. Subject to the
         foregoing provisions of this Section 2.6(b), upon the waiver of an
         Event of Default by the Holders of a Majority in liquidation amount of
         the Common Securities, any such default shall cease to exist and any
         Event of Default with respect to the Common Securities arising
         therefrom shall be deemed to have been cured for every purpose of this
         Declaration, but no such waiver shall extend to any subsequent or other
         default or Event of Default with respect to the Common Securities or
         impair any right consequent thereon.

         (c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee, at the direction of the Holders of the Preferred
Securities in accordance with this Section 2.6, 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 Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act and such Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act.

Section 2.7 Event of Default: Notice.

         (a) The Institutional Trustee shall, within 90 days after the
Institutional Trustee has knowledge of the occurrence of an Event of Default,
transmit by mail, first class postage prepaid, to the Holders of the Securities
(i) notices of all defaults with respect to the Securities actually known to a
Responsible Officer of the Institutional Trustee, unless such Event of Default
has been cured before the giving of such notice and (ii) any notice of default
received from the Indenture Trustee with respect to the Debentures, which notice
from the Institutional Trustee to the Holders shall state that an Event of
Default under the Indenture also constitutes an Event of Default with respect to
the Securities; provided that, except for a default in the payment of principal
of (or premium, if any) or interest on any of the Debentures or in the payment
of any sinking fund installment established for the Debentures, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.

                                       9
<PAGE>

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

                  (i) a default under Sections 501(1) and 501(2) of the
         Indenture; or

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

                                  ARTICLE III
                                  ORGANIZATION

Section 3.1 Name.

         The Trust is named "Forest City Enterprises Capital Trust [I/II]", as
such name may be modified from time to time by the Regular Trustees following
written notice to the Holders of Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Regular Trustees.

Section 3.2 Office.

         The address of the principal office of the Trust is c/o Forest City
Enterprises, Inc., 50 Public Square, Terminal Tower, Suite 1100, Cleveland, Ohio
44113-2203. On ten Business Days' written notice to the Institutional Trustee,
the Delaware Trustee and the Holders of Securities, the Regular Trustees may
designate another principal office.

Section 3.3 Declaration.

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

         (b) The Trust will be classified as a grantor trust for United States
federal income tax purposes under Subpart E of Subchapter J of the Code,
pursuant to which the Holders of the Preferred Securities and the Common
Securities will be the owners of the Trust for United States federal income tax
purposes, and such Holders will include directly in their gross income the
income, gain, deduction or loss of the Trust as if the Trust did not exist. By
the acceptance of this Trust, neither the Trustees, the Sponsor nor the owners
of the Preferred Securities or Common Securities will take any position for
United States federal income tax purposes which is contrary to the
classification of the Trust as a grantor trust.

                                       10
<PAGE>

Section 3.4       Authority.

         Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional 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 Institutional Trustee Account or as otherwise expressly 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 Regular Trustees.

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

         (a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and no more than
one series of Common Securities, and, provided further, that there shall be no
beneficial interests in the Trust other than the Securities, and the issuance of
Securities shall be limited to a simultaneous issuance of both Preferred
Securities and Common Securities on the Closing Date;

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

                  (i) assist in the preparation of a prospectus in preliminary
         and final form prepared by the Sponsor in relation to the offering and
         sale of Preferred Securities and to assist in the preparation of and
         filing with the Commission on behalf of the Trust a registration
         statement on Form S-3 or on another appropriate form (including, if
         appropriate, a registration statement under Rule 462(b) of the
         Securities Act), including any pre-effective or post-effective
         amendments thereto, relating to the registration under the Securities
         Act of the Preferred Securities;

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

                                       11
<PAGE>

                  (iii) assist in the filing of an application, prepared by the
         Sponsor, to the New York Stock Exchange, Inc., any other national stock
         exchange or the Nasdaq National Market for listing upon notice of
         issuance of any Preferred Securities;

                  (iv) assist in the filing with the Commission on behalf of the
         Trust a registration statement on Form 8-A, prepared by the Sponsor,
         including any pre-effective or post-effective amendments thereto,
         relating to the registration of the Preferred Securities under Section
         12(b) of the Exchange Act;

                  (v) assist in the preparation of the Underwriting Agreement
         providing for the sale and distribution of the Preferred Securities;
         and

                  (vi) execute and deliver letters, documents, or instruments
         with the Clearing Agency relating to the Preferred Securities;

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

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

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

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

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

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

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

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

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

                                       12
<PAGE>

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

         (m) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular 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 as such under the Investment Company
         Act;

                  (ii) causing the Trust 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, provided that such action
         does not adversely affect the interests of Holders;

         (n) to the extent provided in this Declaration, terminating, dissolving
and liquidating the Trust and preparing, executing and filing the certificate of
cancellation with the Secretary of State of the State of Delaware;

         (o) 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 Regular Trustees, on behalf of the
Trust; and

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

         The Regular Trustees 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 Regular 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 Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
3.8.

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

                                       13
<PAGE>

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

         (a) The Trust shall not, and the Trustees (including the Institutional
Trustee) shall not, engage in any activity other than as required or authorized
by this Declaration. In particular, the Trust shall not and no Trustee
(including the Institutional Trustee) shall cause the Trust to:

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

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

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

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

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

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

                  (vii) other than as provided in this Declaration or Annex I,
         (A) direct the time, method and place of 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;

                  (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 counsel 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; or

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

Section 3.8       Powers and Duties of the Institutional Trustee.

         (a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Institutional
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Institutional 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.

                                       14
<PAGE>

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

         (c) The Institutional Trustee shall:

                  (i) establish and maintain a segregated non-interest bearing
         trust account (the "Institutional Trustee Account") in the name of and
         under the exclusive control of the Institutional Trustee on behalf of
         the Holders of the Securities and, upon the receipt of payments of
         funds made in respect of the Debentures held by the Institutional
         Trustee, deposit such funds into the Institutional Trustee Account and
         make payments to the Holders of the Preferred Securities and Holders of
         the Common Securities from the Institutional Trustee Account in
         accordance with Section 6.1. Funds in the Institutional Trustee Account
         shall be held uninvested until disbursed in accordance with this
         Declaration. The Institutional Trustee Account shall be an account that
         is maintained with a banking institution the rating on whose long-term
         unsecured indebtedness assigned 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 Preferred Securities by a nationally recognized
         statistical rating organization, unless the Preferred Securities are
         not rated, in which case the banking institution's long-term unsecured
         indebtedness shall be rated at least investment grade by such an
         organization;

                  (ii) engage in such ministerial activities as shall be
         specified in written instructions from the Regular Trustees or the
         Sponsor to effect the redemption of the Preferred Securities and the
         Common Securities to the extent the Debentures are redeemed or mature;
         and

                  (iii) upon written notice of distribution issued by the
         Regular Trustees in accordance with the terms of the Securities, engage
         in such ministerial activities as shall be specified in written
         instructions from the Regular Trustees or the Sponsor to effect the
         distribution of the Debentures to Holders of Securities upon the
         occurrence of certain Special Events or other specified circumstances
         pursuant to the terms of the Securities.

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

         (e) Subject to Section 2.6, the Institutional Trustee shall take any
Legal Action which arises out of or in connection with an Event of Default of
which a Responsible Officer of the Institutional Trustee has actual knowledge or
the Institutional Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.

         (f) The Institutional Trustee shall not resign as a Trustee unless
either:

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

                                       15
<PAGE>

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

         (g) The Institutional 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 of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities, this Declaration, the Business Trust Act and the Trust
Indenture Act.

         (h) The Institutional Trustee may authorize one or more Persons (each,
a "Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Institutional Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any time
by the Institutional Trustee.

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

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

         The Institutional 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 the Institutional 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 Institutional Trustee.

         (a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional 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 of the Institutional Trustee has actual knowledge, the
Institutional 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 the exercise
of such rights and powers, 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
Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:

                  (i) prior to the occurrence of an Event of Default and after
         the curing or waiving of all such Events of Default that may have
         occurred:

                                       16
<PAGE>

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

                           (B) in the absence of bad faith on the part of the
                  Institutional Trustee, the Institutional 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 Institutional
                  Trustee and substantially conforming to the requirements of
                  this Declaration; but in the case of any such certificates or
                  opinions that by any provision hereof are specifically
                  required to be furnished to the Institutional Trustee, the
                  Institutional Trustee shall be under a duty to examine the
                  same to determine whether or not they substantially conform to
                  the requirements of this Declaration;

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

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

                  (iv) no provision of this Declaration shall require the
         Institutional Trustee to expend or risk its own funds or otherwise
         incur personal financial liability in the performance of any of its
         duties or in the exercise of any of its rights or powers, if it shall
         have reasonable grounds for believing that the repayment of such funds
         or liability is not reasonably assured to it under the terms of this
         Declaration or indemnity reasonably satisfactory to the Institutional
         Trustee against such risk or liability is not reasonably assured to it;

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

                  (vi) the Institutional 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;

                                       17
<PAGE>

                  (vii) the Institutional 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 Institutional Trustee
         need not be segregated from other funds held by it except in relation
         to the Institutional Trustee Account maintained by the Institutional
         Trustee pursuant to Section 3.8(c)(i) to the extent required by law;
         and

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

Section 3.10 Certain Rights of Institutional Trustee.

         (a) Subject to the provisions of Section 3.9:

                  (i) the Institutional 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 Regular
         Trustees contemplated by this Declaration shall be sufficiently
         evidenced by an Officers' Certificate;

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

                  (iv) the Institutional 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 Institutional Trustee may consult with counsel or
         other experts and the advice or opinion of such counsel and experts
         with respect to legal matters or advice within the scope of such
         experts' area of expertise shall be full and complete authorization and
         protection in respect of any action taken, suffered or omitted by it
         hereunder in good faith and in accordance with such advice or opinion,
         such counsel may be counsel to the Sponsor or any of its Affiliates,
         and may include any of its employees. The Institutional 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 Institutional 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 Institutional Trustee security and indemnity,
         reasonably satisfactory to the Institutional Trustee, against the
         costs, expenses

                                       18

<PAGE>

         (including attorneys' fees and expenses and the expenses of the
         Institutional Trustee's agents, nominees or custodians) and liabilities
         that might be incurred by it in complying with such request or
         direction, including such reasonable advances as may be requested by
         the Institutional Trustee provided, that, nothing contained in this
         Section 3.10(a)(vi) shall be taken to relieve the Institutional
         Trustee, upon the occurrence of an Event of Default, of its obligation
         to exercise the rights and powers vested in it by this Declaration;

                  (vii) the Institutional 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 Institutional Trustee,
         in its discretion, may make such further inquiry or investigation into
         such facts or matters as it may see fit;

                  (viii) the Institutional 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
         Institutional Trustee shall not be responsible for any misconduct or
         negligence on the part of any agent or attorney appointed with due care
         by it hereunder;

                  (ix) any action taken by the Institutional Trustee or its
         agents hereunder shall bind the Trust and the Holders of the
         Securities, and the signature of the Institutional 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 Institutional 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 Institutional
         Trustee's or its agent's taking such action;

                  (x) whenever in the administration of this Declaration the
         Institutional Trustee shall deem it desirable to receive instructions
         with respect to enforcing any remedy or right or taking any other
         action hereunder, the Institutional Trustee (i) may request
         instructions from the Holders of the Securities 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
         Institutional 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 or accordance with such instructions; and

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

         (b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Institutional 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 Institutional 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

                                       19

<PAGE>

permissive power or authority available to the Institutional 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 Regular Trustees or the Institutional Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Business Trust Act. In performing such limited role, the Delaware Trustee
shall have all of the rights and protections afforded to the Institutional
Trustee under Section 3.9(b)(i) (except that (i) the Delaware Trustee's standard
of care shall be gross negligence, and (ii) such rights and protections shall
pertain to the Delaware Trustee without regard to the occurrence of any Event of
Default) and Section 3.10 of this Declaration.

Section 3.12      Execution of Documents.

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

Section 3.13      Not Responsible for Recitals or Issuance of Securities.

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

Section 3.14      Duration of Trust.

         The Trust, unless dissolved pursuant to the provisions of Article VIII
hereof, shall dissolve on May 23, 2052.

Section 3.15      Mergers.

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

         (b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, and subject to the terms of Section 3.15(c), consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any State; provided that:

                                       20
<PAGE>

                  (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 Preferred
                  Securities (the "Successor Securities") so long as the
                  Successor Securities rank the same as the Preferred Securities
                  rank with respect to Distributions and payments upon
                  liquidation, redemption and otherwise;

                  (ii) the Debenture Issuer expressly acknowledges a trustee of
         the Successor Entity that possesses the same powers and duties as the
         Institutional Trustee as the Holder of the Debentures;

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

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

                  (v) such merger, consolidation, amalgamation or replacement
         does not adversely affect the rights, preferences and privileges of the
         Holders of the Securities (including any Successor Securities) in any
         material respect (other than with respect to any dilution of such
         Holders' interests in the Successor Entity as a result of such merger,
         consolidation, amalgamation or replacement);

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

                  (vii) prior to such merger, consolidation, amalgamation or
         replacement, the Trust has received an opinion of a nationally
         recognized independent counsel to the Trust experienced in such matters
         to the effect that:

                           (A) such merger, consolidation, amalgamation or
                  replacement does not adversely affect the rights, preferences
                  and privileges of the Holders of the Securities (including any
                  Successor Securities) in any material respect (other than with
                  respect to any dilution of the Holders' interest in the
                  Successor Entity);

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

                                       21
<PAGE>

                           (C) following such merger, consolidation,
                  amalgamation or replacement, 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 guarantees the
                           obligations of such Successor Entity under the
                           Successor Securities at least to the extent provided
                           by the Preferred Securities Guarantee, and

                                    (ix) the Sponsor, or, subject to Section
                           9.1(c), a Related Party, continues to hold the Common
                           Securities so long as any Preferred Securities or
                           Successor Securities remain outstanding.

         (c) Notwithstanding Section 3.15(b), the Trust shall not, without the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it, if
in the opinion of a nationally recognized independent tax counsel experienced in
such matters, such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.

                                   ARTICLE IV
                                     SPONSOR

Section 4.1       Sponsor's Purchase of Common Securities.

         On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust in an amount equal to 3% or more of the capital
of the Trust, at the same time as the Preferred Securities are sold.

Section 4.2       Responsibilities of the Sponsor.

         In connection with the issue and sale of the Preferred Securities, the
Sponsor is hereby appointed an agent of the Trust pursuant to Section 3806(b)(7)
of the Business Trust Act and in such capacity shall have the exclusive right
and responsibility to engage in the following activities:

         (a) to prepare a prospectus relating to the offering of Preferred
Securities by the Trust and to prepare for filing by the Trust with the
Commission, and execute on behalf of the Trust, a registration statement on Form
S-3 or on another appropriate form (including, if appropriate, a registration
statement under Rule 462(b) of the Securities Act) and any pre-effective or
post-effective amendments thereto, relating to the registration under the
Securities Act of the Preferred Securities;

         (b) to determine the States in which to take appropriate action to
qualify or register for sale of all or part of the Preferred Securities and to
do any and all such acts, other than actions which must be taken by the Trust,
and advise the Trust of actions it must take, and prepare for execution and
filing any documents to be executed and filed by the Trust, as the

                                       22
<PAGE>

Sponsor deems necessary or advisable in order to comply with the applicable laws
of any such States;

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

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

         (e) to negotiate the terms of, and execute on behalf of the Trust, the
Underwriting Agreement providing for the sale of the Preferred Securities; and

         (f) to execute and deliver letters, documents or instruments on behalf
of the Trust with any Clearing Agency.

         The Sponsor must exercise the powers set forth in this Section 4.2 in a
manner that is consistent with the purposes and functions of the Trust set out
in Section 3.3, and the Sponsor 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 4.2, the Sponsor shall have none of the powers
or the authority of the Institutional Trustee set forth in Section 3.8.

Section 4.3       Guarantee of Payment of Trust Obligations.

         (a) Subject to the terms and conditions of this Section 4.3, the Holder
of Common Securities hereby irrevocably and unconditionally guarantees to each
Person to whom the Trust is now or hereafter becomes indebted or liable (the
"Beneficiaries") the full payment, when and as due, of any and all costs,
expenses or liabilities of the Trust (other than obligations of the Trust to
make payments to holders of a Trust Security pursuant to the terms thereof)
("Obligations") to such Beneficiaries.

         (b) The agreement of the Holder of Common Securities in Section 4.3(a)
is intended to be for the benefit of, and to be enforceable by, all such
Beneficiaries, whether or not such Beneficiaries have received notice hereof.

         (c) The agreement of the Holder of Common Securities set forth in
Section 4.3(a) shall terminate and be of no further force and effect upon the
later of (a) the date on which full payment has been made of all amounts payable
to all Holders of all the Preferred Securities (whether upon redemption,
liquidation, exchange or otherwise) and (b) the date on which there are no
Beneficiaries remaining; provided, however, that such agreement shall continue
to be effective or shall be reinstated, as the case may be, if at any time any
Holder of Preferred Securities or any Beneficiary must restore payment of any
sums paid under the Preferred Securities, under any Obligation, under the
Preferred Securities Guarantee or under this

                                       21
<PAGE>

Declaration for any reason whatsoever. Such agreement is continuing,
irrevocable, unconditional and absolute.

                                   ARTICLE V
                                    TRUSTEES

Section 5.1       Number of Trustees.

         The number of Trustees initially shall be [four (4)], 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 (i) if required by the
Business Trust Act, there shall be at least one Delaware Trustee; (ii) there
shall be at least one Trustee who is an employee or officer of, or is affiliated
with the Sponsor (a "Regular Trustee"); and (iii) for so long as this
Declaration is required to qualify as an indenture under the Trust Indenture
Act, there shall be one Institutional Trustee, who may also serve as Delaware
Trustee if it meets the applicable requirements.

Section 5.2       Delaware Trustee.

         If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be: (a) a natural person who is a resident of the State of
Delaware; or (b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the requirements
of applicable law, provided that, if the Institutional Trustee has its principal
place of business in the State of Delaware and otherwise meets the requirements
of applicable law, then the Institutional Trustee shall also be the Delaware
Trustee and Section 3.11 shall have no application.

Section 5.3       Institutional Trustee: Eligibility.

         (a) There shall at all times be one Trustee that shall act as
Institutional Trustee which shall:

                  (i) not be an Affiliate of the Sponsor;

                  (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 institutional trustee under the Trust
         Indenture Act, authorized under such laws to exercise corporate trust
         powers, having a combined capital and surplus of at least 50 million
         U.S. dollars ($50,000,000), and subject to supervision or examination
         by Federal, State, territorial or District of Columbia authority. If
         such corporation publishes reports of condition at least annually,
         pursuant to law or to the requirements of the supervising or examining
         authority

                                       24
<PAGE>

         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; and

                  (iii) if the Trust is excluded from the definition of an
         Investment Company solely by means of Rule 3a-7 and to the extent Rule
         3a-7 requires a trustee having certain qualifications to hold title to
         the "eligible assets" of the Trust, the Institutional Trustee shall
         possess those qualifications.

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

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

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

         (e) The initial Institutional Trustee shall be as set forth in Section
5.5 hereof.

Section 5.4   Qualifications of Regular Trustees and Delaware Trustee Generally.

         Each Regular Trustee and the Delaware Trustee (unless the Institutional
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 have the power and
authority to act as a trustee hereunder and shall be represented in such
capacity by one or more Authorized Officers.

Section 5.5       Initial Trustees: Additional Powers of Regular Trustees.

         (a) The initial Regular Trustees shall be:

                           Charles A. Ratner and
                           Thomas G. Smith
                           in each case c/o Forest City Enterprises, Inc.
                           50 Public Square
                           Terminal Tower, Suite 1100
                           Cleveland, Ohio 44113-2203

                                       25
<PAGE>

                           The initial Delaware Trustee shall be:

                           The Bank of New York (Delaware)
                           White Clay Center, Route 273
                           Newark, Delaware 19711
                           Attention: Corporate Trust Trustee Administration

                           The initial Institutional Trustee shall be:

                           The Bank of New York
                           101 Barclay Street
                           New York, New York 10286
                           Attention: Corporate Trust Trustee Administration

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

Section 5.6       Appointment, Removal and Resignation of Trustees.

         (a) Subject to Section 5.6(b), 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) 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
         or acting by unanimous written consent; and

                  (iii) if an Event of Default shall have occurred and be
         continuing after the issuance of any Preferred Securities, the
         Institutional Trustee and the Delaware Trustee may only be removed and
         appointed by the vote of Holders of a Majority in liquidation amount of
         the Preferred Securities voting as a class.

         (b) (i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee possessing
the qualifications to act as Institutional Trustee under Section 5.3 (a
"Successor Institutional Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Institutional
Trustee and delivered to the Regular Trustees and the Sponsor; and

                  (ii) the Trustee that acts as Delaware Trustee shall not be
         removed in accordance with 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 Regular Trustees and
         the Sponsor.

                                       26
<PAGE>

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

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

                           (A) until a Successor Institutional Trustee has been
                  appointed and has accepted such appointment by instrument
                  executed by such Successor Institutional Trustee and delivered
                  to the Trust, the Sponsor and the resigning Institutional
                  Trustee; or

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

                  (ii) no such resignation of the Trustee that acts as the
         Delaware Trustee shall be effective until a Successor Delaware Trustee
         has been appointed and has accepted such appointment by instrument
         executed by such Successor Delaware Trustee and delivered to the Trust,
         the Sponsor and the resigning Delaware Trustee whereupon the resigning
         Trustee shall be released and discharged of the trusts and other duties
         imposed on such Trustee in connection herewith.

         (d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Institutional
Trustee as the case may be if the Institutional Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.6.

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

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

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 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive

                                       27
<PAGE>

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

Section 5.9       Meetings.

         If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees 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 a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.

Section 5.10      Delegation of Power.

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

         (b) the Regular 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 Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.

                                       28

<PAGE>

Section 5.11      Merger, Conversion, Consolidation or Succession to Business.

         Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.

                                   ARTICLE VI
                                  DISTRIBUTIONS

Section 6.1       Distributions.

         Holders shall receive Distributions (as defined herein) in accordance
with the applicable terms of the relevant Holder's Securities. Distributions
shall be made on the Preferred Securities and the Common Securities in
accordance with the preferences set forth in their respective terms. If and to
the extent that the Debenture Issuer makes a payment of interest (including
Additional Interest (as defined in the Indenture)), premium or principal, or
both, on the Debentures held by the Institutional Trustee (the amount of any
such payment being a "Payment Amount"), the Institutional Trustee shall and is
directed to make a distribution (a "Distribution") of the Payment Amount to
Holders.

                                  ARTICLE VII
                             ISSUANCE OF SECURITIES

Section 7.1       General Provisions Regarding Securities.

         (a) The Trust shall issue one class of preferred securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Preferred Securities") and one
class of common securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the "Common
Securities"). The Trust shall issue no securities or other interests in the
assets of the Trust other than the Preferred Securities and the Common
Securities.

         (b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee. Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular

                                       29
<PAGE>

Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.

         (c) The Preferred Security Certificates shall not be valid until
authenticated by the manual signature of an authorized officer of the
Institutional Trustee, the signature of whom shall be conclusive evidence that
the Preferred Security Certificates have been authenticated under this
Declaration. Upon a written order of the Trust signed by one Regular Trustee,
the Institutional Trustee shall authenticate the Preferred Security Certificates
for original issue. The Institutional Trustee may appoint an authenticating
agent acceptable to the Trust to authenticate the Preferred Security
Certificates. An authenticating agent may authenticate the Preferred Security
Certificates whenever the Institutional Trustee may do so. Each reference to
authentication by the Institutional Trustee includes authentication by such
agent. An authenticating agent has the same rights as the Institutional Trustee
to deal with the Sponsor or an Affiliate thereof.

         (d) 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.

         (e) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable; subject to Section 10.1 with respect to the Common Securities.

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

Section 7.2       Registrar and Paying Agent.

         The Trust shall maintain in New York, New York (i) an office or agency
where Preferred Securities may be presented for registration of transfer or for
exchange ("Registrar"), and (ii) an office or agency where Preferred Securities
may be presented for payment. The Registrar shall keep a register of the
Preferred Securities and of their transfer and exchange. The Trust may appoint
the Registrar and the Paying Agent and may appoint one or more co-registrars and
one or more additional paying agents in such other locations as it shall
determine. The term "Paying Agent" includes any additional paying agent. The
Trust may change any Paying Agent, Registrar or co-registrar without prior
notice to any Holder. The Trust shall notify the Institutional 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 or Paying Agent, the
Institutional Trustee shall act as such. The Trust or any of its Affiliates may
act as Paying Agent or Registrar. The Trust shall act as Paying Agent, Registrar
and co-registrar for the Common Securities.

         The Trust initially appoints the Institutional Trustee as Registrar and
Paying Agent for the Preferred Securities.

                                       30
<PAGE>

Section 7.3       Paying Agent to Hold Money in Trust.

         The Trust shall require each Paying Agent other than the Institutional
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Institutional Trustee all money held by the Paying
Agent for the payment of principal or Distributions on Securities, and will
notify the Institutional Trustee if there are insufficient funds. While any such
insufficiency continues, the Institutional Trustee may require a Paying Agent to
pay all money held by it to the Institutional Trustee. The Trust at any time may
require a Paying Agent to pay all money held by it to the Institutional Trustee
and to account for any money disbursed by it. Upon payment to the Institutional
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.

                                  ARTICLE VIII
                              DISSOLUTION OF TRUST

Section 8.1       Dissolution of Trust.

         (a) The Trust shall dissolve:

                  (i) upon the bankruptcy of any Holder of the Common Securities
         or the Sponsor;

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

                  (iii) upon the entry of a decree of judicial dissolution of
         any Holder of the Common Securities, the Sponsor or the Trust;

                  (iv) 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;

                  (v) at the election of the Sponsor (which is wholly within its
         sole discretion); provided that the Trust shall have been dissolved in
         accordance with the terms of the Securities and all of the Debentures
         endorsed thereon shall have been distributed to the Holders of
         Securities in exchange for all of the Securities; or

                  (vi) before the issuance of any Securities, with the consent
         of all of the Regular Trustees and the Sponsor.

         (b) As soon as is practicable after the occurrence of an event referred
to in Section 8.1(a) or upon the expiration of the term of the Trust set forth
in Section 3.14 and the winding up of the affairs of the Trust in accordance
with Section 3808 of the Business Trust Act, the

                                       31
<PAGE>

Trustees shall file a certificate of cancellation with the Secretary of State of
the State of Delaware, and thereupon this Declaration and the Trust shall
terminate.

         (c) The provisions of Section 3.9(b) and Article X shall survive the
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
the terms of the Securities. 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, Preferred Securities shall be freely
transferable.

         (c) Subject to this Article IX, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of a nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:

                  (i) the Trust would not continue to be classified for United
         States federal income tax purposes as a grantor trust; or

                  (ii) the Trust would be an Investment Company or the
         transferee would become an Investment Company.

Section 9.2       Transfer of Certificates.

         The Registrar shall provide for the registration of Certificates
representing Preferred Securities and of transfers of such Certificates, 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 government charges
that may be imposed in relation to it. Upon surrender for registration of
transfer of any Certificate representing Preferred Securities, the Registrar
shall cause one or more new Certificates to be issued in the name of the
designated transferee or transferees. Every such Certificate 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 such Certificate
surrendered for registration of transfer shall be canceled by the Registrar.

         The Regular Trustees shall provide for the registration of Certificates
representing Common Securities and of transfers of such Certificates, which will
be effected without charge but only upon payment (with such indemnity as the
Regular Trustees may require) in respect of any tax or other government charges
that may be imposed in relation to it. Upon surrender for registration of
transfer of any such Certificate, the Regular Trustees shall cause one or more
new

                                       32
<PAGE>

Certificates to be issued in the name of the designated transferee or
transferees. Every Certificate representing a Common Security surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each such
Certificate surrendered for registration of transfer shall be canceled by the
Regular Trustees.

         A transferee of a Certificate shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Certificate. By acceptance of a Certificate, each transferee
shall be deemed to have agreed to be bound by this Declaration.

Section 9.3       Deemed Security Holders.

         The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate 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 Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.

Section 9.4       Book Entry Interests.

         Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Securities Certificates, on original issuance, will be issued in
the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, or its custodian, by, or on behalf of, the Trust. Such Global
Certificates shall initially be registered on the books and records of the Trust
in the name of Cede & Co., the nominee of DTC, and no Preferred Security
Beneficial Owner will receive a definitive Preferred Security Certificate
representing such Preferred Security Beneficial Owner's interests in such Global
Certificates, except as provided in Section 9.7. Unless and until definitive,
fully registered Preferred Security Certificates (the "Definitive Preferred
Security Certificates") have been issued to the Preferred Security Beneficial
Owners pursuant to Section 9.7:

         (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 Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and shall have no obligation to the Preferred
Security Beneficial Owners;

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

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

                                       33
<PAGE>

Certificates to such Clearing Agency Participants. DTC will make book entry
transfers among the Clearing Agency Participants.

Section 9.5       Notices to Clearing Agency.

         Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Trustees shall give all such
notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.

Section 9.6       Appointment of Successor Clearing Agency.

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

Section 9.7       Definitive Preferred Security Certificates.

         If:

         (a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.6; or

         (b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with respect to the
Preferred Securities, then:

                  (i) Definitive Preferred Security Certificates shall be
         prepared by the Regular Trustees on behalf of the Trust with respect to
         such Preferred Securities; and

                  (ii) upon surrender of the Global Certificates by the Clearing
         Agency, accompanied by registration instructions, the Regular Trustees
         shall cause Definitive Certificates to be executed, and the
         Institutional Trustee shall cause such Definitive Securities to be
         authenticated and delivered, to Preferred Security Beneficial Owners in
         accordance with the instructions of the Clearing Agency. Neither the
         Trustees nor the Trust shall be liable for any delay in delivery of
         such instructions and each of them may conclusively rely on, and shall
         be protected in relying on, said instructions of the Clearing Agency.
         The Definitive Preferred Security Certificates shall be printed,
         lithographed or engraved or may be produced in any other manner as is
         reasonably acceptable to the Regular Trustees, as evidenced by their
         execution thereof, and may have such letters, numbers or other marks of
         identification or designation and such legends or endorsements as the
         Regular Trustees may deem appropriate, or as may be required to comply
         with any law or with any rule or regulation made pursuant thereto or
         with any rule or regulation of any stock exchange on which Preferred
         Securities may be listed, or to conform to usage.

                                       34
<PAGE>

Section 9.8       Mutilated, Destroyed, Lost or Stolen Certificates.

         If:

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

         (b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of the Trustees harmless then,
in the absence of notice that such Certificate shall have been acquired by a
Protected Purchaser (as such term is used in section 8-405(a)(1) of the UCC as
in effect in the State of Delaware (1994 Rev)), any Regular Trustee on behalf of
the Trust shall execute, and, in the case of any Preferred Security, cause the
Institutional Trustee to authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like denomination. In connection with the issuance of any new Certificate under
this Section 9.8, the Regular Trustees may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Certificate issued pursuant to this Section
shall constitute conclusive evidence of an ownership interest in the relevant
Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.

                                   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 Preferred
Securities Guarantee 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 of the
         Securities which shall be made solely from assets of the Trust; and

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

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

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

                                       35
<PAGE>

Section 10.2      Exculpation.

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

                                       36
<PAGE>

         agreement contemplated herein or of any duty or obligation of the
         Indemnified Person at law or in equity or otherwise.

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

                  (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 Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys fees), 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 Debenture Issuer shall indemnify, to the full extent
         permitted by law, any Company Indemnified Person who was or is a party
         or is threatened to be made a party to any threatened, pending or
         completed action or suit by or in the right of the Trust to procure a
         judgment in its favor by reason of the fact that he is or was a Company
         Indemnified Person against expenses (including attorneys' fees)
         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.

                                       37
<PAGE>

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

                  (iv) Any indemnification under paragraphs (i) and (ii) of this
         Section 10.4(a) (unless ordered by a court) shall be made by the
         Debenture Issuer only as authorized in the specific case upon a
         determination that indemnification of the Company Indemnified Person is
         proper in the circumstances because he has met the applicable standard
         of conduct set forth in paragraphs (i) and (ii). Such determination
         shall be made (1) by the Regular Trustees by a majority vote of a
         quorum consisting of such Regular 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 Regular 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) 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 Debenture Issuer
         in advance of the final disposition of such action, suit or proceeding
         upon receipt of an undertaking by or on behalf of such Company
         Indemnified Person to repay such amount if it shall ultimately be
         determined that he is not entitled to be indemnified by the Debenture
         Issuer as authorized in this Section 10.4(a). Notwithstanding the
         foregoing, no advance shall be made by the Debenture Issuer if a
         determination is reasonably and promptly made (i) by the Regular
         Trustees by a majority vote of a quorum of disinterested Regular
         Trustees, (ii) if such a quorum is not obtainable, or, even if
         obtainable, if a quorum of disinterested Regular Trustees so directs,
         by independent legal counsel in a written opinion or (iii) the Common
         Security Holder of the Trust, that, based upon the facts known to the
         Regular 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 such person did not believe to be in or
         not 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 conduct was unlawful. In no event
         shall any advance be made in instances where the Regular Trustees,
         independent legal counsel or Common Security Holder reasonably
         determine that such person deliberately breached his duty to the Trust
         or its Common or Preferred Security Holders.

                  (vi) The indemnification and advancement of expenses provided
         by, or granted pursuant to, the other paragraphs of this Section
         10.4(a) shall not be deemed exclusive of any other rights to which
         those seeking indemnification and advancement of expenses may be
         entitled under any agreement, vote of stockholders or disinterested
         directors of the Debenture Issuer or Preferred Security Holders of the
         Trust or otherwise, both as to action in his official capacity and as
         to action in another capacity while holding such

                                       38
<PAGE>

         office. All rights to indemnification under this Section 10.4(a) shall
         be deemed to be provided by a contract between the Debenture Issuer and
         each Company Indemnified Person who serves in such capacity at any time
         while this Section 10.4(a) is in effect. Any repeal or modification of
         this Section 10.4(a) shall not affect any rights or obligations then
         existing.

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

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

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

         (b) The Sponsor agrees to indemnify (i) the Institutional Trustee, (ii)
the Delaware Trustee, (iii) any Affiliate of the Institutional Trustee and the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Institutional Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 10.4(b)
shall survive the resignation or removal of the Institutional Trustee or the
Delaware Trustee, the satisfaction and discharge of this Declaration and the
termination of the Trust.

         (c) The Sponsor agrees to pay the Institutional Trustee and the
Delaware Trustee, from time to time, such compensation for all services rendered
by the Institutional Trustee and the Delaware Trustee hereunder as may be
mutually agreed upon in writing by the Sponsor and the Institutional Trustee or
the Delaware Trustee, as the case may be, and except as otherwise expressly
provided herein, to reimburse the Institutional Trustee and the Delaware Trustee
upon its or their request for all reasonable expenses (including counsel fees
and expenses), disbursements and advances incurred or made by the Institutional
Trustee or the Delaware

                                       39
<PAGE>

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
Institutional 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 of Securities shall have no rights by virtue of this
Declaration in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. No Covered
Person, the Sponsor, the Delaware Trustee, or the Institutional 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 Institutional 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 Institutional 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 Regular
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 of the
United States, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes.

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

         (c) The Regular Trustees shall cause to be duly prepared and delivered
to each of the Holders of Securities, any annual United States federal income
tax information statement, required by the Code, containing such information
with regard to the Securities held by each

                                       40
<PAGE>

Holder as is required by the Code and the Treasury Regulations. Notwithstanding
any right under the Code to deliver any such statement at a later date, the
Regular Trustees shall endeavor to deliver all such statements within 30 days
after the end of each Fiscal Year of the Trust.

         (d) The Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority, an annual United States federal income tax
return, on 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 Regular Trustees on behalf of the Trust with any state or local taxing
authority.

Section 11.3      Banking.

         The Trust shall 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 Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.

Section 11.4      Withholding.

         The Regular Trustees shall, and shall cause the Trust to, 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 Regular Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Holder, the amount withheld shall
be deemed to be a distribution in the amount of the withholding to the Holder.
In the event of any claimed over withholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.

                                  ARTICLE XII
                             AMENDMENTS AND MEETINGS

Section 12.1      Amendments.

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

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

                                       41
<PAGE>

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

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

                  (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;

                           (B) reduce or otherwise adversely affect the powers
                  of the Institutional 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 of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;

         (d) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities;

         (e) Article IV shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Common Securities;

                                       42
<PAGE>

         (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;

         (g) this Declaration may not be amended without the consent of each
affected Holder of Securities to:

                  (i) change the amount or timing of any Distribution on the
         Securities or otherwise adversely affect the amount of any Distribution
         required to be made in respect of the Securities as of a specified
         date;

                  (ii) change any provisions relating to the redemption of the
         Securities; or

                  (iii) restrict the right of a Holder of Securities to
         institute a legal proceeding for the enforcement of any Distribution on
         or after the date established for such Distribution; and

         (h) subject to Section 12.1(c), this Declaration may be amended without
the consent of the Holders of the Securities to:

                  (i) cure any ambiguity;

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

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

                  (iv) modify, eliminate or add to any provision in this
         Declaration to the extent necessary to ensure that:

                            (A) the Trust will not be taxable as a corporation
                  or classified for purposes of United States federal income
                  taxation as a grantor trust;

                            (B) the Debentures held by the Institutional
                  Trustee are treated for purposes of United States federal
                  income taxation as indebtedness of the Debenture Issuer; or

                            (C) cause the Trust not to be deemed to be an
                  Investment Company required to be registered under the
                  Investment Company Act; and

                  (v) to modify, eliminate and add to any provision of the
         Declaration to such extent as may be reasonably necessary to effectuate
         any of the foregoing or to otherwise comply with applicable law;

provided, however, that, in each case, the amendment would not have a material
adverse effect on the right, preference or privileges of the Holders of
Securities.

Section 12.2 Meetings of the Holders of Securities: Action by Written Consent.

         (a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the Preferred Securities
are listed or admitted for trading. The Regular Trustees shall call a meeting of
the Holders of such class if directed to do so by the Holders of Securities
representing at least 25% in liquidation amount of such class of Securities.
Such direction shall be given by delivering to the Regular Trustees one or more
calls in a writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of Securities calling a meeting shall specify in
writing the Security Certificates held by the Holders of Securities 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 of
Securities:

                  (i) notice of any such meeting shall be given to all the
         Holders of Securities having a right to vote thereat at least 7 days
         but not more than 60 days before the date of such meeting. Whenever a
         vote, consent or approval of the Holders of Securities is permitted or
         required under this Declaration or the rules of any stock exchange on
         which the Preferred Securities are listed or admitted for trading, such
         vote, consent or approval may be given at a meeting of the Holders of
         Securities. Any action that may be taken at a

                                       43
<PAGE>

         meeting of the Holders of Securities may be taken without a meeting if
         a consent in writing setting forth the action so taken is signed by the
         Holders of Securities owning not less than the minimum amount of
         Securities in liquidation amount that would be necessary to authorize
         or take such action at a meeting at which all Holders of Securities
         having a right to vote thereon were present and voting. Prompt notice
         of the taking of action without a meeting shall be given to the Holders
         of Securities entitled to vote who have not consented in writing. The
         Regular 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 Regular
         Trustees;

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

                  (iii) each meeting of the Holders of the Securities shall be
         conducted by the Regular Trustees or by such other Person that the
         Regular Trustees may designate; 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 or market on which the Preferred Securities are
         then listed or traded, otherwise provides, the Regular Trustees, in
         their sole discretion, shall establish all other provisions relating to
         meetings of Holders of Securities, including notice of the time, place
         or purpose of any meeting at which any matter is to be voted on by any
         Holders of Securities, waiver of any such notice, action by consent
         without a meeting, the establishment of a record date, quorum
         requirements, voting in person or by proxy or any other matter with
         respect to the exercise of any such right to vote.

                                  ARTICLE XIII
                    REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
                              AND DELAWARE TRUSTEE

Section 13.1      Representations and Warranties of Institutional Trustee.

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

         (a) the Institutional Trustee is a New York banking corporation with
trust powers, duly organized, validly existing and in good standing under the
laws of the State of New York,

                                       44
<PAGE>

with trust power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, the Declaration;

         (b) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Institutional Trustee. The Declaration has been duly
executed and delivered by the Institutional Trustee, and it constitutes a legal,
valid and binding obligation of the Institutional 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 the Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
Articles of Incorporation or by-laws of the Institutional Trustee; and

         (d) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority governing the banking or trust
powers of the Institutional Trustee is required for the execution, delivery or
performance by the Institutional Trustee, of the 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 with trust
powers, duly organized, validly existing and in good standing under the laws of
the State of Delaware, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, the
Declaration.

         (b) The Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and the Declaration. The Declaration under
Delaware law constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other similar
laws affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).

         (c) No consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority governing the banking or trust
powers of the Institutional Trustee is required for the execution, delivery or
performance by the Delaware Trustee of the Declaration.

         (d) The Delaware Trustee has its principal place of business in the
State of Delaware.

                                       45
<PAGE>

                                  ARTICLE XIV
                                  MISCELLANEOUS

Section 14.1      Notices.

         All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:

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

                           Forest City Enterprises Capital Trust [I/II]
                           50 Public Square
                           Terminal Tower, Suite 1100
                           Cleveland, Ohio 44113-2203
                           Attention: Charles A. Ratner
                           With a copy to: Treasurer

         (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 of the Securities):

                           The Bank of New York (Delaware)
                           White Clay Center, Route 273
                           Newark, Delaware 19711
                           Attention: Corporate Trust Trustee Administration

         (c) if given to the Institutional Trustee, at its Corporate Trust
Office (or such other address as the Institutional Trustee may give notice of to
the Holders of the Securities):

                           The Bank of New York
                           101 Barclay Street
                           New York, New York 10286
                           Attention: Corporate Trust Trustee Administration

         (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 of to the Trust):

                           Forest City Enterprises Capital Trust [I/II]
                           50 Public Square
                           Terminal Tower, Suite 1100
                           Cleveland, Ohio 44113-2203
                           Attention: Charles A. Ratner
                           With a copy to: Treasurer

                                       46
<PAGE>

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

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

Section 14.2      Governing Law.

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

Section 14.3      Intention of the Parties.

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

Section 14.4      Headings.

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

Section 14.5      Successors and Assigns.

         Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.

Section 14.6      Partial Enforceability.

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

Section 14.7      Counterparts.

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

                                       47
<PAGE>

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

                             ---------------------------------------------------
                             Charles A. Ratner, as Regular Trustee

                             ---------------------------------------------------
                             Thomas G. Smith, as Regular Trustee

                             THE BANK OF NEW YORK (DELAWARE)
                             As Delaware Trustee

                             By:________________________________________________
                                 Name:    ______________________________________
                                 Title:   ______________________________________

                             THE BANK OF NEW YORK, as Institutional Trustee

                             By:________________________________________________
                                 Name:    ______________________________________
                                 Title:   ______________________________________

                             FOREST CITY ENTERPRISES, INC., as Sponsor and
                             Debenture Issuer

                             By:________________________________________________
                                 Name:    ______________________________________
                                 Title:   ______________________________________

                                       48
<PAGE>

                                     ANNEX I
                                    TERMS OF
                         [ ]% TRUST PREFERRED SECURITIES
                          [ ]% TRUST COMMON SECURITIES

         Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of [_________, 200__] (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities 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 Prospectus referred to below):

1.       Designation and Number.

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

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

2.       Distributions.

(a) Distributions payable on each Security will be fixed at a rate per annum of
[ ]% (the "Coupon Rate") of the stated liquidation amount of [$ ] per Security,
such rate being the rate of interest payable on the Debentures to be held by the
Institutional Trustee. Distributions in arrears beyond the first date such
Distributions are payable (or would be payable if not for any Extension Period
(as defined below) or default by the Debenture Issuer on the Debentures) will
bear interest thereon at the Coupon Rate compounded quarterly (to the extent
permitted by applicable law) from the relevant payment date for such
Distribution. The term "Distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year consisting of twelve 30-day

                                       1
<PAGE>

months. Distributions payable for any period shorter than a full quarterly
Distribution period for which Distributions are computed will be computed on the
basis of a 30-day month and, for periods of less than one month, the actual
number of days elapsed during such month.

         (b) Distributions on the Securities will be cumulative, will accrue
from and including [________, 200__], and will be payable quarterly in arrears,
on [__________], [_________], [_________] and [_________] of each year,
commencing on [_________, 200__]. When, as and if available for payment,
Distributions will be made by the Institutional Trustee.

                                       2
<PAGE>

         (c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the relevant record dates. While the Preferred Securities remain in
book-entry only form, the relevant record dates shall be one Business Day prior
to the relevant payment dates which payment dates shall correspond to the
interest payment dates on the Debentures. Subject to any applicable laws and
regulations and the provisions of the Declaration, each such payment in respect
of the Preferred Securities will be made as described under the heading
"Book-Entry Issuance" in the Prospectus, dated [_________, 200__] (the
"Prospectus"), of the Trust included in the Registration Statement on Form S-3
of the Sponsor and the Trust. The relevant record dates for the Common
Securities shall be the same record date as for the Preferred Securities. If the
Preferred Securities shall not continue to remain in book-entry only form, the
relevant record dates for the Preferred Securities shall conform to the rules of
any securities exchange on which the securities are listed and, if none, shall
be selected by the Regular Trustees, which dates shall be at least 14 days but
no more than 60 days before the relevant payment dates, which payment dates
shall correspond to the interest payment dates on the Debentures. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures (other than while an Extension Period shall be
continuing), will cease to be payable to the Person in whose name such
Securities are registered 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 Distribution payable
on such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except that,
if such Business Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such Distribution payment 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 of the Securities.

3.       Liquidation Distribution Upon Dissolution.

         In the event of any voluntary or involuntary liquidation, dissolution
or winding-up of the Trust, the Holders of the Securities on the date of the
liquidation, dissolution or winding-up, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities after satisfaction of liabilities of creditors, distributions in an
amount equal to the aggregate of the stated liquidation amount of [$ ] per
Security plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in connection with
such liquidation, dissolution, or winding-up, Debentures in an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate equal to the Coupon Rate, and bearing accrued and unpaid interest
in an amount equal to the accrued and unpaid Distributions on, such Securities
outstanding at such time, have been distributed on a Pro Rata basis to the
Holders of the Securities in exchange for such Securities.

                                       3
<PAGE>

         If, upon any such liquidation, dissolution, or winding-up the
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Trust on the Securities
shall be paid on a Pro Rata basis, as such term is defined in Section 8 below.

4.       Redemption and Distribution.

         (a) Upon the repayment of the Debentures in whole or in part, whether
at maturity or upon redemption (either at the option of the Debenture Issuer or
pursuant to a Special Event, as described below), the proceeds from such
repayment or payment shall be simultaneously applied to redeem Securities having
an aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed at a redemption price equal to the proceeds
from such repayment or redemption of the Debentures (the "Redemption Price").
Holders shall be given not less than 30 nor more than 60 days notice of such
redemption.

         (b) If fewer than all the outstanding Securities are to be so redeemed,
the Securities will be redeemed Pro Rata and the Preferred Securities to be
redeemed will be as described in Section 4(h)(ii) below.

         (c) The Debenture Issuer shall have the right, at any time, to dissolve
the Trust and, after satisfaction of creditors, cause Debentures held by the
Institutional Trustee, having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
Coupon Rate, and with accrued and unpaid interest equal to accrued and unpaid
Distributions on, the Securities outstanding at such time, to be distributed to
the Holders of the Securities in liquidation of such Holders' interests in the
Trust on a Pro Rata basis.

         (d) The Debenture Issuer shall have the right (subject to the
conditions set forth in the Indenture) to elect to prepay the Debentures, in
whole or in part, at any time on or after [________, 200__] (the "Initial
Optional Redemption Date"), and, simultaneous with such prepayment, to cause a
Like Amount (as defined below) of the Debentures to be redeemed by the Trust at
the Optional Redemption Price on a Pro Rata basis.

         "Like Amount" means, with respect to a redemption of the Securities,
Securities having a stated liquidation amount equal to the principal amount of
Debentures to be paid in accordance with their terms.

         "Optional Redemption Price" means an amount equal to 100% of the stated
liquidation amount of the Securities to be redeemed by the Trust plus
accumulated and unpaid Distributions thereon, if any to the date of such
redemption.

         (e) The Debenture Issuer shall have the right, upon not less than 30
nor more than 60 days notice, to redeem the Debentures, in whole but not in
part, for cash within 90 days following the occurrence of a Tax Event or an
Investment Company Event (each as defined below, and each a "Special Event"),
and, following such redemption, Securities with an aggregate liquidation amount
equal to the aggregate principal amount of the Debentures so redeemed shall be
redeemed by the Trust at the Redemption Price on a Pro Rata basis.

                                       4
<PAGE>

         "Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "Tax Event Opinion") 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) as a result of 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 the
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 accrued or
received on the Debentures, (ii) the Trust is, or, within 90 days of the date of
such opinion, will be subject to more than a de minimis amount of other taxes,
duties or other governmental charges, or (iii) interest payable to the Trust on
the Debentures is not or will not, within 90 days of the date of such opinion,
be deductible, in whole or in part, by the Debenture Issuer for United States
federal income tax purposes.

         "Investment Company Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent counsel experienced
in practice under the Investment Company Act (an "Investment Company Event
Opinion") to the effect that, as a result of (a) an amendment to or a change
(including any announced prospective change) in law or regulation of the United
States or any rules, guidelines or policies of any applicable regulatory
authority for the Debenture Issuer, or (b) as a result of 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 the original
issuance of the Securities (a "Change in 1940 Act Law"), there is a more than an
insubstantial risk that the Trust is or will be considered, within 90 days of
the date of such opinion, an Investment Company which is required to be
registered under the Investment Company Act.

         On and from the date fixed by the Regular Trustees for any distribution
of Debentures and dissolution of the Trust: (i) the Securities will no longer be
deemed to be outstanding, (ii) DTC or its nominee (or any successor Clearing
Agency or its nominee), as the record Holder of the Preferred Securities, will
receive a registered global certificate or certificates representing the
Debentures to be delivered upon such distribution and (iii) any certificates
representing Securities, except for certificates representing Preferred
Securities held by DTC or its nominee (or any successor Clearing Agency or its
nominee), will be deemed to represent beneficial interests in the Debentures
having an aggregate principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the Coupon Rate of, and accrued
and unpaid interest equal to accrued and unpaid Distributions on such Securities
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 accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or before the date of
redemption.

         (g) If the Debentures are distributed to Holders of the Securities,
pursuant to the terms of the Indenture, the Debenture Issuer will use its best
efforts to have the Debentures listed

                                       5
<PAGE>

on the New York Stock Exchange or on such other exchange as the Preferred
Securities were listed immediately prior to the distribution of the Debentures.

              (h)      Redemption or Distribution procedures will 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 of
         Securities 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(h)(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 of Securities. Each
         Redemption/Distribution Notice shall be addressed to the Holders of
         Securities at the address of each such Holder appearing in the books
         and records of the Trust. No defect in the Redemption/ Distribution
         Notice or in the mailing of either thereof with respect to any Holder
         shall affect the validity of the redemption or exchange proceedings
         with respect to any other Holder.

                  (ii) In the event that fewer than all the outstanding
         Securities are to be redeemed, the Securities to be redeemed shall be
         redeemed Pro Rata from each Holder of Preferred Securities, it being
         understood that, in respect of Preferred Securities registered in the
         name of and held of record by DTC 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 each Clearing Agency
         Participant (or Person on whose behalf such nominee holds such
         securities) 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 may only be issued if the
         Debentures are redeemed as set out in this Section 4 (which notice will
         be irrevocable), then (A) while the Preferred Securities are in
         book-entry only form, with respect to the Preferred Securities, by
         12:00 noon, New York City time, on the redemption date, provided, that
         the Debenture Issuer has paid the Institutional Trustee a sufficient
         amount of cash in connection with the related redemption or maturity of
         the Debentures, the Institutional Trustee will deposit irrevocably with
         DTC or its nominee (or successor Clearing Agency or its nominee) funds
         sufficient to pay the applicable Redemption Price with respect to the
         Preferred Securities and will give DTC (or any successor Clearing
         Agency) irrevocable instructions and authority to pay the Redemption
         Price to the Preferred Security Beneficial Owners, and (B) with respect
         to Preferred Securities issued in definitive form and Common
         Securities, provided that the Debenture Issuer has paid the
         Institutional Trustee a sufficient amount of cash in connection with
         the related redemption or maturity of the Debentures, the Institutional
         Trustee will pay the relevant Redemption Price to the Holders of such
         Securities by check mailed to the address of the relevant Holder
         appearing on the books and records of the Trust on the redemption date.
         If a Redemption/Distribution Notice shall have been given and funds
         deposited as

                                       6
<PAGE>

         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 accrue on the Securities so
         called for redemption and all rights of Holders of such Securities so
         called for redemption will cease, except the right of the Holders of
         such Securities to receive the Redemption Price, but without interest
         on such Redemption Price. Neither the Regular Trustees nor the Trust
         shall be required to register or cause to be registered the transfer of
         any Securities that have been so called for redemption. If any date
         fixed for redemption of Securities is not a Business Day, then payment
         of the Redemption Price payable on such date will be made on the next
         succeeding day that is a Business Day (and without any interest or
         other payment in respect of any such delay) except that, if such
         Business Day falls in the next calendar year, such payment will be made
         on the immediately preceding Business Day, in each case with the same
         force and effect as if made on such date fixed for redemption. If
         payment of the Redemption Price in respect of any Securities is
         improperly withheld or refused and not paid either by the Institutional
         Trustee or by the Sponsor as guarantor pursuant to the Preferred
         Securities Guarantee, Distributions on such Securities will continue to
         accrue 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.

                  (iv) Redemption/Distribution Notices shall be sent by the
         Regular Trustees on behalf of the Trust to (A) in respect of the
         Preferred Securities, DTC or its nominee (or any successor Clearing
         Agency or its nominee) if the Global Certificates have been issued or,
         if Definitive Preferred Security Certificates have been issued, to the
         Holder thereof, and (B) in respect of the Common Securities to the
         Holder thereof.

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

5.       Voting Rights - Preferred Securities.

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

         (b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in aggregate liquidation amount of the Preferred
Securities, voting separately as a class, may direct the time, method, and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee, as holder of the Debentures, to (i) direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercise any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past Event of Default
that is waivable under the Indenture, (iii) exercise any right to rescind or
annul a declaration that the principal of all the Debentures shall be due and
payable or (iv) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required.

                                       7
<PAGE>

The Institutional Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. Except with
respect to directing the time, method and place of conducting a proceeding for a
remedy available to the Institutional Trustee, the Institutional Trustee, as
holder of the Debentures, shall not take any of the actions described in clauses
(i), (ii), (iii) or (iv) above unless the Institutional Trustee has obtained, at
the expense of the Holder of Common Securities, an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that as a result of such action, the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes. If the
Institutional Trustee fails to enforce its rights under the Declaration, (other
than by reason of the failure to obtain the opinion set forth in the previous
sentence) any Holder of Preferred Securities may, to the fullest extent
permitted by law, directly institute a legal proceeding against the Debenture
Issuer to enforce the Institutional Trustee's rights under the Debentures
without first instituting a legal proceeding against the Institutional Trustee
or any other Person. If an Event of Default has occurred and is continuing and
such event is attributable to the failure of the Debenture Issuer to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, on the redemption date),
then a Holder of Preferred Securities may also directly institute a proceeding
for enforcement of payment to such Holder (a "Direct Action") of the principal
of or interest on the Debentures having a principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such Holder on or
after the respective due date specified in the Debentures without first (i)
directing the Institutional Trustee to enforce the terms of the Debentures or
(ii) instituting a legal proceeding directly against the Debenture Issuer to
enforce the Institutional Trustee's rights under the Debentures. Except as
provided in the preceding sentence, the Holders of Preferred Securities will not
be able to exercise directly any other remedy available to the Holders of the
Debentures. In connection with such Direct Action, Forest City will be
subrogated to the rights of such Holder of Preferred Securities under the
Declaration to the extent of any payment made by Forest City to such Holder of
Preferred Securities in such Direct Action.

         (c) Any required approval or direction of Holders of Preferred
Securities may be given at a separate meeting of Holders of Preferred Securities
convened for such purpose, at a meeting of all of the Holders of Securities in
the Trust or pursuant to written consent. The Regular Trustees or, at their
election, the Institutional Trustee, will cause a notice of any meeting at which
Holders of Preferred Securities are entitled to vote to be mailed to each Holder
of record of Preferred Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote 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 Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.

                                       8
<PAGE>

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

6.       Voting Rights - Common Securities.

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

         (b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.

         Subject to Section 2.6 of the Declaration and only after the Event of
Default with respect to the Preferred Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in aggregate liquidation
amount of the Common Securities, voting separately as a class, may direct the
time, method, and place of conducting any proceeding for any remedy available to
the Institutional Trustee, or direct the exercise of any trust or power
conferred upon the Institutional Trustee under the Declaration, including (i)
directing the time, method, place of conducting any proceeding for any remedy
available to the Debenture Trustee, or exercising any trust or power conferred
on the Debenture Trustee with respect to the Debentures, (ii) waiving any past
default and its consequences that is waivable under the Indenture, or (iii)
exercising any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable. Pursuant to this Section 6(c), the
Institutional Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of conducting any proceeding for
any remedy available to the Institutional Trustee or the Debenture Trustee as
set forth above, the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Common Securities under
this paragraph unless the Institutional Trustee has obtained , at the expense of
the Holder of Common Securities, an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action. If the
Institutional Trustee fails to enforce its rights under the Declaration, any
Holder of Common Securities may institute a legal proceeding directly against
any Person to enforce the Institutional Trustee's rights under the Declaration
without first instituting a legal proceeding against the Institutional Trustee
or any other Person.

         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 Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote to be mailed to each
Holder of record of Common Securities. Each such notice will include a statement
setting

                                       9
<PAGE>

forth (i) the date of such meeting, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
and (iii) instructions for the delivery of proxies.

         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 and Indenture.

         (a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class, will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.

         (b) In the event the consent of the Institutional Trustee as the holder
of the Debentures is required under the Indenture with respect to any amendment,
modification or termination on the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that the Institutional Trustee shall not take any
action in accordance with the directions of the Holders of the Securities under
this Section 7(b) unless the Institutional Trustee has obtained, at the expense
of the Holder of Common Securities, an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.

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
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of

                                       10
<PAGE>

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

9.       Ranking.

         The Preferred Securities rank pari passu and payment thereon shall be
made Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing under the Indenture in respect of the Debentures held
by the Institutional Trustee, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Preferred Securities.

10.      Listing.

         The Regular Trustees shall use their reasonable best efforts to cause
the Preferred Securities to be listed on the New York Stock Exchange, Inc.

11.      Acceptance of Securities Guarantee and Indenture.

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

12.      No Preemptive Rights.

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

13.      Miscellaneous.

         These terms constitute a part of the Declaration.

         The Sponsor will provide a copy of any one or more of the Declaration,
the Preferred Securities Guarantee and the Indenture to a Holder without charge
on written request to the Sponsor at its principal place of business.

                                       11
<PAGE>

               EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE

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

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

                  Certificate Number __________
                  Number of Preferred Securities ___________

                  CUSIP No. _________

                  Certificate Evidencing Preferred Securities of

                  FOREST CITY ENTERPRISES CAPITAL TRUST [I/II]

                  [ ]% Trust Preferred Securities (Liquidation Amount [$ ] per
                  Preferred Security)

         FOREST CITY ENTERPRISES CAPITAL TRUST [I/II], a statutory business
trust created under the laws of the State of Delaware (the "Trust"), hereby
certifies that Cede & Co. (the "Holder") is the registered owner of
[________________________] preferred securities of the Trust representing
preferred undivided beneficial interests in the assets of the Trust designated
the [ ]% Trust Preferred Securities (the "Preferred Securities"). The Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities are set forth in, and this certificate and the Preferred

                                      A1-1

<PAGE>

Securities represented hereby are issued and shall in all respects be subject
to, the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of [__________, 200__] as the same may be amended from time to time
(the "Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I thereto. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the Preferred Securities Guarantee to the extent
provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Sponsor at its principal place of business.

         The Holder of this certificate, by accepting this certificate, is
deemed to have (i) agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all [Senior Indebtedness/Senior Debt] (as defined in the Indenture) and (ii)
agreed to the terms of the Preferred Securities Guarantee, including that the
Preferred Securities Guarantee is (A) subordinate and junior in right of payment
to all [Senior Indebtedness/Senior Debt] (as defined in the Indenture) of Forest
City, (B) pari passu with the most senior preferred or preference stock now or
hereafter issued by Forest City and with any guarantee now or hereafter issued
by Forest City with respect to preferred or preference stock of Forest City
affiliates and (C) senior to Forest City's common stock.

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

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

         IN WITNESS WHEREOF, the Trust has executed this certificate this [____]
day of [________, 200__].

                                         FOREST CITY ENTERPRISES
                                            CAPITAL TRUST [I/II]

                                         --------------------------------------
                                         By:        Charles A. Ratner
                                         Title:     Regular Trustee

                                      A1-2

<PAGE>

              INSTITUTIONAL TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

                                    By:________________________________________
                                        Authorized Officer

                                      A1-3

<PAGE>

                          [FORM OF REVERSE OF SECURITY]

         Distributions payable on each Preferred Security will be fixed at a
rate per annum of [ ]% (the "Coupon Rate") of the stated liquidation amount of
[$ ] per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears
will bear interest thereon at the Coupon Rate compounded quarterly (to the
extent permitted by applicable law). The term "Distributions" as used herein
includes such cash distributions and any such interest payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the extent
the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year consisting of twelve 30-day
months. Distributions payable for any period of less than a full quarterly
period will be computed on the basis of a 30-day month and, for periods of less
than one month, the actual number of elapsed days per 30-day month.

         Distributions on the Preferred Securities will be cumulative, will
accrue from the date of original issuance and will be payable quarterly in
arrears, on the following dates, which dates correspond to the interest payment
dates on the Debentures: [_________], [_________], [________] and [________] of
each year, commencing on [_______, 200__], except as otherwise described below.
The Debenture Issuer has the right under the Indenture to defer payments of
interest by extending the interest payment period from time to time on the
Debentures for a period not exceeding 20 quarterly periods (each an "Extension
Period") and, as a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to accrue
with interest thereon (to the extent permitted by applicable law) at the Coupon
Rate compounded quarterly during any such Extension Period. Prior to the
termination of any such Extension Period, the Debenture Issuer may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 quarterly
periods or extend beyond the maturity (whether at the stated maturity or by
declaration of acceleration, call for redemption or otherwise) of the Debentures
under the Indenture. Payments of accrued Distributions will be payable to
Holders as they appear on the books and records of the Trust on the first record
date after 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.

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

                                      A1-4
<PAGE>

                                   ASSIGNMENT

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

_______________________________________________________________________________

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

_______________________________________________________________________________

_______________________________________________________________________________

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

_______________________________________________________________________________

_______________________________________________________________________________

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

Date:  _____________________________________

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

                                      A1-5
<PAGE>

                                   EXHIBIT A-2

                       FORM OF COMMON SECURITY CERTIFICATE

          TRANSFER OF THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SET
                   FORTH IN THE DECLARATION REFERRED TO BELOW

         Certificate Number ____________

         Number of Common Securities ____________

         Certificate Evidencing Common Securities of ____________

         FOREST CITY ENTERPRISES CAPITAL TRUST [I/II]

         [ ]% Trust Common Securities (Liquidation Amount [$ ] per Common
Security)

         FOREST CITY ENTERPRISES CAPITAL TRUST [I/II], a statutory business
trust created under the laws of the State of Delaware (the "Trust"), hereby
certifies that Forest City Enterprises, Inc., an Ohio 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 [ ]% Trust Common Securities (the "Common Securities"). 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 and satisfaction of the other
conditions set forth in the Declaration (as defined below), including, without
limitation, Section 9.1 thereof. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of [___________, 200__], 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 thereto. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Sponsor
will provide a copy of the Declaration and the Indenture to a Holder without
charge upon written request to the Sponsor at its principal place of business.

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

         The Holder of this certificate, by accepting this certificate, is
deemed to have agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Indebtedness (as defined in the Indenture) as and to the extent
provided in the Indenture.

                                     A2-1
<PAGE>

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

         IN WITNESS WHEREOF, the Trust has executed this certificate this [____]
day of [___________, 200__].

                                  FOREST CITY ENTERPRISES CAPITAL TRUST [I/II]

                                  ---------------------------------------------
                                  By:     Charles A. Ratner
                                  Title:  Regular Trustee

                                      A2-2
<PAGE>

                                   ASSIGNMENT

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

_______________________________________________________________________________

_______________________________________________________________________________

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

_______________________________________________________________________________

_______________________________________________________________________________

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

_______________________________________________________________________________

_______________________________________________________________________________

______________________________________________________________________ agent to
transfer this Common 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 Common Security Certificate)

                                      A2-3

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