Document:

DECLARATION OF TRUST

          DECLARATION OF TRUST, dated as of November 6, 2000, between
Continental Airlines, Inc., a Delaware corporation, as Sponsor, Wilmington Trust
Company, a Delaware banking corporation, as Delaware Trustee, and Lawrence W.
Kellner and Jeffery A. Smisek, as Administrative Trustees (collectively 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
"Continental Airlines Finance Trust II", in which name the Trustees, or the
Sponsor to the extent provided herein, may conduct the business of the Trust,
make and execute contracts, and sue and be sued.

          2. The Sponsor hereby assigns, transfers, conveys and sets over to the
Trust the sum of $10. The Trustees hereby acknowledge receipt of such amount
from the Sponsor, which amount shall constitute the initial trust estate. The
Trustees hereby declare that they will hold the trust estate for the Sponsor. It
is the intention of the parties hereto that the Trust created hereby constitute
a business trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C.
ss.ss. 3801 et seq. (the "Business Trust Act"), and that this document
constitute the governing instrument of the Trust. The Trustees are hereby
authorized and directed to execute and file a certificate of trust in the office
of the Secretary of State of the State of Delaware in the form attached hereto.
The Trust is hereby established by the Sponsor and the Trustees for the purposes
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 debt securities of the Sponsor, (ii)
issuing and selling common securities ("Common Securities" and, together with
the Preferred Securities, "Trust 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 debt securities of the Sponsor and
(iii) engaging in such other activities as are necessary, convenient or
incidental thereto.

          3. Concurrent with the first issuance of any Trust Securities by the
Trust, the Sponsor and the Trustees intend to enter into an amended and restated
Declaration of Trust, satisfactory to each such party and having substantially
the terms described in the offering circular (as referred to below), to provide
for the contemplated operation of the Trust created hereby and the issuance of
the Preferred Securities and the Common Securities referred to therein. Prior to
the execution and delivery of such amended and restated Declaration of Trust,
the Trustees shall not have any duty or obligation hereunder or with respect to
the trust estate, except as otherwise required by applicable law or as may be
necessary to obtain, prior to such execution and delivery, any licenses,
consents or approvals required by applicable law or otherwise.

          4. The Sponsor and the Trustees hereby authorize and direct the
Sponsor, as the sponsor of the Trust, as applicable, (i) to prepare and
distribute one or more offering circulars on behalf of the Trust, including any
necessary or desirable amendments thereto (including any exhibits contained
therein or forming a part thereof), relating to the Preferred Securities of the
Trust and, as applicable, certain other securities; (ii) to prepare and file
with the Private Offering, Resales and Trading through Automatic Linkages
(PORTAL) Market ("PORTAL") and execute on behalf of the Trust a listing
application and all other applications, statements, certificates, agreements and
other instruments as shall be necessary or desirable to cause the Preferred
Securities to be listed and continue to be listed on PORTAL; (iii) to prepare
and file and execute, in each case 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; (iv) to negotiate the terms of, and execute on
behalf of the Trust, such underwriting or purchase agreements with one or more
underwriters, purchasers, dealers or agents relating to the Preferred Securities
as the Sponsor, on behalf of the Trust, may deem necessary or desirable; and (v)
to execute on behalf of the Trust any and all documents, papers and instruments
as may be desirable in connection with any of the foregoing. It is hereby
acknowledged and agreed that in connection with any execution, filing or
document referred to in clauses (i)-(iii) above, (A) any Administrative Trustee
(or his attorneys-in-fact and agents or the Sponsor as permitted herein) is
authorized on behalf of the Trust to file and execute such document on behalf of
the Trust and (B) the Delaware Trustee shall not be required to join in any such
filing or execute on behalf of the Trust any such document unless required by
the rules and regulations of PORTAL or state securities or blue sky laws, and in
such case only to the extent so required.

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

          6. The number of Trustees initially shall be three (3) 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 the number of Trustees shall in no
event be less than three (3); and provided, further, 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 that has its principal place of business in the State of Delaware and
meets any other requirements imposed by applicable law. Subject to the
foregoing, the Sponsor is entitled to appoint or remove without cause any
Trustee at any time. Any Trustee may resign upon thirty days prior notice to the
Sponsor; provided, however, that the Delaware Trustee may resign immediately
upon notice to the Sponsor if the Delaware Trustee is required to join in any
filing or execute on behalf of the Trust any document pursuant to the provisions
of paragraph 4 hereof and, upon giving such notice, the Delaware Trustee shall
not be required to join in any such filing or execute on behalf of the Trust any
such document; provided, further, however, that no resignation of 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.

          7. To the fullest extent permitted by applicable law, the Sponsor
agrees to indemnify (i) the Delaware Trustee, (ii) any affiliate of the Delaware
Trustee, and (iii) any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Delaware
Trustee (each of the persons or entities in (i) through (iii) being referred to
as an "Indemnified Person") for, and to hold each 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 of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The obligation
to indemnify as set forth in this paragraph 7 shall survive the termination of
this Declaration. The Delaware Trustee shall not have any of the powers or
duties of the trustees set forth herein, except as required under the Business
Trust Act. The Delaware Trustee shall be a trustee hereunder for the sole and
limited purpose of fulfilling the requirements of Section 3807(a) of the
Business Trust Act.

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

          9. This Declaration shall be governed by the laws of the State of
Delaware, without regard to conflict of laws principles.

<PAGE>

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

                                   CONTINENTAL AIRLINES, INC.,
                                   as Sponsor

                                   By: /s/ Gregory Brenneman
                                      -----------------------------------------
                                      Name:  Gregory Brenneman
                                      Title: President

                                  WILMINGTON TRUST COMPANY,
                                  as Delaware Trustee

                                  By: /s/ W. Chris Sponenberg
                                     ------------------------------------------
                                     Name:  W. Chris Sponenberg
                                     Title: Assistant Vice President

                                      /s/ Lawrence W. Kellner
                                     ------------------------------------------
                                     Lawrence W. Kellner, as Trustee

                                      /s/ Jeffery A. Smisek
                                     ------------------------------------------
                                     Jeffery A. Smisek, as TrusteeEXECUTION COPY

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

                              AMENDED AND RESTATED

                              DECLARATION OF TRUST

                                       of

                      CONTINENTAL AIRLINES FINANCE TRUST II

                          Dated as of November 10, 2000

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

<PAGE>

                                TABLE OF CONTENTS

ARTICLE I  INTERPRETATION AND DEFINITIONS......................................1

   Section 1.01    Definitions.................................................1

ARTICLE II  TRUST INDENTURE ACT................................................9

   Section 2.01    Trust Indenture Act; Application............................9
   Section 2.02    Lists of Holders of Securities..............................9
   Section 2.03    Reports by the Property Trustee.............................9
   Section 2.04    Periodic Reports to Property Trustee.......................10
   Section 2.05    Evidence of Compliance with Conditions Precedent...........10
   Section 2.06    Events of Default; Waiver..................................10
   Section 2.07    Event of Default; Certain Notices..........................12

ARTICLE III  ORGANIZATION.....................................................12

   Section 3.01    Name.......................................................12
   Section 3.02    Office.....................................................12
   Section 3.03    Purpose....................................................13
   Section 3.04    Authority..................................................13
   Section 3.05    Title to Property of the Trust.............................13
   Section 3.06    Powers and Duties of the Administrative Trustees...........14
   Section 3.07    Prohibition of Actions by the Trust and the Trustees.......16
   Section 3.08    Powers and Duties of the Property Trustee..................17
   Section 3.09    Certain Duties and Responsibilities of the Property
                   Trustee....................................................19
   Section 3.10    Certain Rights of Property Trustee.........................20
   Section 3.11    Delaware Trustee...........................................22
   Section 3.12    Execution of Documents.....................................23
   Section 3.13    Not Responsible for Recitals or Issuance of Securities.....23
   Section 3.14    Duration of Trust..........................................23
   Section 3.15    Mergers....................................................23

ARTICLE IV  SPONSOR...........................................................25

   Section 4.01    Sponsor's Purchase of Common Securities....................25
   Section 4.02    Responsibilities of the Sponsor............................25
   Section 4.03    Guarantee of Payment of Trust Obligations..................25

ARTICLE V  TRUSTEES...........................................................26

   Section 5.01    Number of Trustees.........................................26
   Section 5.02    Delaware Trustee...........................................26
   Section 5.03    Property Trustee; Eligibility..............................27
   Section 5.04    Qualifications of Administrative Trustees and Delaware
                   Trustee Generally..........................................27
   Section 5.05    Initial Trustees...........................................27
   Section 5.06    Appointment, Removal and Resignation of Trustees...........28
   Section 5.07    Vacancies among Trustees...................................30
   Section 5.08    Effect of Vacancies........................................31
   Section 5.09    Meetings...................................................31
   Section 5.10    Delegation of Power........................................31
   Section 5.11    Merger, Conversion, Consolidation or Succession to
                   Business...................................................32

ARTICLE VI  DISTRIBUTIONS.....................................................32

   Section 6.01    Distributions..............................................32

ARTICLE VII  ISSUANCE OF SECURITIES...........................................32

   Section 7.01    General Provisions Regarding Securities....................32
   Section 7.02    Execution and Authentication...............................33
   Section 7.03    Form and Dating............................................34
   Section 7.04    Registrar, Paying Agent and Conversion Agent...............36
   Section 7.05    Paying Agent to Hold Money in Trust........................36
   Section 7.06    Replacement Securities.....................................36
   Section 7.07    Outstanding Preferred Securities...........................37
   Section 7.08    Preferred Securities in Treasury...........................37
   Section 7.09    Temporary Securities.......................................37
   Section 7.10    Cancellation...............................................38

ARTICLE VIII  DISSOLUTION AND TERMINATION OF TRUST............................38

   Section 8.01    Termination of Trust.......................................38

ARTICLE IX  TRANSFER AND EXCHANGE.............................................39

   Section 9.01    General....................................................39
   Section 9.02    Transfer Procedures and Restrictions.......................40
   Section 9.03    Deemed Security Holders....................................47
   Section 9.04    [Reserved].................................................47
   Section 9.05    Notices to Clearing Agency.................................47
   Section 9.06    Appointment of Successor Clearing Agency...................47

ARTICLE X  LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES
           OR OTHERS..........................................................47

   Section 10.01   Liability..................................................47
   Section 10.02   Exculpation................................................48
   Section 10.03   Fiduciary Duty.............................................48
   Section 10.04   Indemnification............................................49
   Section 10.05   Outside Businesses.........................................50

ARTICLE XI  ACCOUNTING........................................................50

   Section 11.01   Fiscal Year................................................50
   Section 11.02   Certain Accounting Matters.................................50
   Section 11.03   Banking....................................................51
   Section 11.04   Withholding................................................51

ARTICLE XII  AMENDMENTS AND MEETINGS..........................................51

   Section 12.01   Amendments.................................................51
   Section 12.02   Meetings of the Holders of Securities; Action by
                   Written Consent............................................52

ARTICLE XIII  REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE........53

   Section 13.01   Representations and Warranties of Property Trustee.........53
   Section 13.02   Representations and Warranties of Delaware Trustee.........54

ARTICLE XIV  REGISTRATION RIGHTS..............................................55

   Section 14.01   Registration Rights........................................55

ARTICLE XV  MISCELLANEOUS.....................................................55

   Section 15.01   Notices....................................................55
   Section 15.02   Governing Law..............................................56
   Section 15.03   Intention of the Parties...................................57
   Section 15.04   Headings...................................................57
   Section 15.05   Successors and Assigns.....................................57
   Section 15.06   Partial Enforceability.....................................57
   Section 15.07   Counterparts...............................................58

ANNEX I      Terms of 6% Convertible Preferred Securities and 6%
             Convertible Common Securities...................................I-1

Exhibit A-1  Form of Preferred Security....................................A-1-1
Exhibit A-2  Form of Common Security.......................................A-2-1

<PAGE>

                             CROSS-REFERENCE TABLE*

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

310 (a)  .....................................................           5.03(a)
310 (c)  .....................................................      Inapplicable
311 (c)  .....................................................      Inapplicable
312 (a)  .....................................................           2.02(a)
312 (b)  .....................................................           2.02(b)
313      .....................................................              2.03
314 (a)  .....................................................              2.04
314 (b)  .....................................................      Inapplicable
314 (c)  .....................................................              2.05
314 (d)  .....................................................      Inapplicable
314 (f)  .....................................................      Inapplicable
315 (a)  .....................................................  3.09(a), 3.09(b)
315 (c)  .....................................................           3.09(a)
315 (d)  .....................................................           3.09(b)
316 (a)  .....................................................           Annex I
316 (c)  .....................................................           3.06(e)

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

<PAGE>
                    AMENDED AND RESTATED DECLARATION OF TRUST
                                       OF
                      CONTINENTAL AIRLINES FINANCE TRUST II

                                November 10, 2000

         AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of November 10, 2000, by the undersigned trustees (together with
all other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Continental
Airlines, Inc., a Delaware corporation, as trust sponsor (the "Sponsor"), and by
the holders, from time to time, of undivided beneficial interests in the assets
of the Trust (as defined below) issued pursuant to this Declaration;

         WHEREAS, certain of the Trustees and the Sponsor established
Continental Airlines Finance Trust II (the "Trust") under the Business Trust Act
(as hereinafter defined) pursuant to a Declaration of Trust dated as of November
6, 2000 (the "Original Declaration"), and a Certificate of Trust filed with the
Secretary of State of the State of Delaware on November 6, 2000, for the sole
purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer (as herein after defined);
and

         WHEREAS, as of the date hereof, no interests in the Trust have been
issued;

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

         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

                         INTERPRETATION AND DEFINITIONS

SECTION 1.01    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
Declaration, and any capitalized term not defined in this Declaration shall have
the meaning assigned thereto in the Indenture;

                  (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) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;

                  (f) 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

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

         "Administrative Action" has the meaning set forth in the definition of
"Tax Event".

         "Administrative Trustee" means any Trustee other than the Property
Trustee and the Delaware Trustee.

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

         "Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.

         "Appointment Event" means an event defined in the terms of the
Preferred Securities, as set forth in Annex I, which entitles the Holders of a
Majority in liquidation amount of the Preferred Securities to appoint a Special
Trustee.

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

         "Beneficiaries" has the meaning set forth in Section 4.03(a).

         "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 Depositary as described in Section 7.03.

         "Business Day" means any day other than a Saturday or a Sunday, a day
on which banking institutions in New York, New York or Wilmington, Delaware are
authorized or required by law or executive order to remain closed, or a day on
which the corporate trust office of the Property Trustee or the Debenture
Trustee is closed for business.

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

         "Certificate" means a certificate in global or definitive form
representing a Common Security or a Preferred Security.

         "Closing Date" means November 10, 2000.

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

         "Commission" means the Securities and Exchange Commission as from time
to time constituted, created, or, if at any time after execution of this
instrument such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties at such time.

         "Common Securities" has the meaning specified in Section 7.01(a).

         "Common Securities Guarantee" means the guarantee agreement to be dated
as of November 10, 2000 of the Sponsor in respect of the Common Securities.

         "Conversion Agent" has the meaning set forth in Section 7.04.

         "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 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.

         "Debenture Issuer" means the Sponsor in its capacity as issuer of the
Debentures.

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

         "Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Property Trustee, in the
form attached to the Indenture as Exhibit A.

         "Delaware Trustee" has the meaning set forth in Section 5.02.

         "Deferral Period" has the meaning set forth in the Indenture.

         "Definitive Preferred Securities" means any Preferred Securities in
definitive form issued by the Trust.

         "Depositary" means The Depository Trust Company, the initial clearing
agency, until a successor shall be appointed pursuant to Section 9.06, and
thereafter means such successor Depositary.

         "Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.01.

         "Event of Default" means:

                           (i) a Debenture Event of Default; or

                           (ii) default by the Trust in the payment of any
         Distribution when it becomes due and payable, and continuation of such
         default for a period of 30 days (subject to the deferral of any due
         date in the case of a Deferral Period); or

                           (iii) default by the Trust in the payment of any
         Redemption Price of any Security when it becomes due and payable; or

                           (iv) default in the performance, or breach, in any
         material respect, of any covenant or warranty of the Trustees in the
         Declaration (other than a covenant or warranty, a default in the
         performance of which or the breach of which is addressed in clause (ii)
         or (iii) above), and continuation of such default or breach for a
         period of 60 days after there has been given, by registered or
         certified mail, to the defaulting Trustee or Trustees by the holders of
         at least 25% in aggregate liquidation amount of the outstanding
         Preferred Securities, a written notice specifying such default or
         breach and requiring it to be remedied and stating that such notice is
         a "Notice of Default" under the Declaration; or

                           (v) the failure of the Sponsor to appoint a successor
         Property Trustee in the manner required by Section 5.06(c).

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

         "Global Preferred Securities" means Rule 144A Global Preferred
Securities and/or Unrestricted Global Preferred Securities, as the context
requires.

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

         "Indenture" means the Indenture dated as of November 10, 2000, between
the Debenture Issuer and the Debenture Trustee, as it may be amended from time
to time.

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

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

         "Legal Action" has the meaning set forth in Section 3.06(g).

         "Like Amount" means (i) with respect to a redemption of Preferred
Securities, Preferred Securities having an aggregate liquidation amount equal to
that portion of the principal amount of Debentures to be contemporaneously
redeemed in accordance with the Indenture, allocated to the Common Securities
and to the Preferred Securities based upon the relative liquidation amounts of
such classes and the proceeds of which will be used to pay the applicable
Redemption Price of the Preferred Securities and (ii) with respect to a
distribution of Debentures to holders of Preferred Securities in connection with
a dissolution or liquidation of the Trust, Debentures having a principal amount
equal to the aggregate liquidation amount of the Securities of the Holder to
whom such Debentures are distributed.

         "List of Holders" has the meaning set forth in Section 2.02(a).

         "Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities and 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 more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise of all outstanding Securities of the relevant class).

         "Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.

         "Obligations" means any costs, expenses or liabilities of the Trust,
other than obligations of the Trust to pay to Holders of any Securities or other
similar interests in the Trust the amounts due such Holders pursuant to the
terms of the Securities or such other similar interests, as the case may be.

         "Offering Circular" means the confidential offering circular, dated as
of November 6, 2000, relating to the issuance by the Trust of Preferred
Securities.

         "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:

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

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

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

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

         "Optional Closing Date" has the meaning assigned to such term in the
Purchase Agreement.

         "Participants" has the meaning set forth in Section 7.03(b).

         "Paying Agent" has the meaning specified in Section 7.04.

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

         "Preferred Securities" has the meaning specified in Section 7.01(a).

         "Preferred Securities Guarantee" means the guarantee agreement to be
dated as of November 10, 2000, of the Sponsor in respect of the Preferred
Securities.

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

         "Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.03.

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

         "Purchase Agreement" has the meaning set forth in Section 7.03.

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

         "Redemption Price" has the meaning set forth in Annex I.

         "Registrar" has the meaning set forth in Section 7.04.

         "Registration Rights Agreement" means the Registration Rights
Agreement, dated November 10, 2000, among the Sponsor, the Trust, and the
Purchasers named in the Purchase Agreement.

         "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 Property Trustee, any
vice-president, any assistant vice-president, the treasurer, any assistant
treasurer, any trust officer or assistant trust officer or any other officer in
the Corporate Trust Department of the Property Trustee customarily performing
functions similar to those performed by any of the above designated officers 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.

         "Restricted Preferred Securities" shall include the Rule 144A Global
Preferred Securities.

         "Restricted Securities Legend" has the meaning specified in Section
9.02(j).

         "Rule 144A Global Preferred Security" has the meaning specified in
Section 7.03(a).

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

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

         "Securities Custodian" means the custodian with respect to the Rule
144A Global Preferred Security and any other Preferred Security in global form.

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

         "Special Trustee" means a trustee appointed by the Holders of a
Majority in liquidation amount of the Preferred Securities in accordance with
Section 5.06(a)(ii)(B).

         "Sponsor" means Continental Airlines, Inc., a Delaware corporation, or
any successor entity in a merger, consolidation or amalgamation, in its capacity
as sponsor of the Trust.

         "Successor Delaware Trustee" has the meaning set forth in Section 5.06.

         "Successor Property Trustee" has the meaning set forth in Section 5.06.

         "Super Majority" has the meaning set forth in Section 2.06(a)(ii).

         "Tax Event" means the Property Trustee shall have received an opinion
of nationally-recognized independent tax counsel to the Sponsor (reasonably
acceptable to the Trustees) experienced in such matters (a "Dissolution Tax
Opinion") to the effect that, as a result of (i) any amendment to or change
(including any announced prospective change (which shall not include a proposed
change), provided that a Tax Event shall not occur more than 90 days before the
effective date of any such prospective change) in the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (ii) any judicial decision or official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (iii) any amendment to
or change in the administrative position or interpretation of any Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental agency or
regulatory body, irrespective of the manner in which such amendment or change is
made known, which amendment or change is effective or such Administrative Action
or decision is announced, in each case, on or after the date of original
issuance of the Debentures or the issue date of the Preferred Securities issued
by the Trust, there is more than an insubstantial risk that (a) if the
Debentures are held by the Property Trustee, (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 interest accrued or received on the Debentures or subject to
more than a de minimis amount of other taxes, duties or other governmental
charges as determined by such counsel, or (II) any portion of interest payable
by the Sponsor to the Trust on the Debentures is not, or within 90 days of the
date of such opinion will not be, deductible by the Sponsor in whole or in part
for United States Federal income tax purposes or (b) with respect to Debentures
which are no longer held by the Property Trustee, any portion of interest
payable by the Sponsor on the Debentures is not, or within 90 days of the date
of such opinion will not be, deductible by the Sponsor in whole or in part for
United States Federal income tax purposes.

         "10% in liquidation amount of the Securities" means, except as provided
in the terms of the Preferred Securities or by the Trust Indenture Act, Holders
of outstanding Securities voting together as a single class or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, representing 10% of
the aggregate liquidation amount (including the stated amount that would be paid
on redemption, liquidation or otherwise) 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).

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

         "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.

         "Unrestricted Global Preferred Security" has the meaning set forth in
Section 9.02(b).

                                   ARTICLE II

                               TRUST INDENTURE ACT

SECTION 2.01    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, which are
incorporated by reference in and made part of this Declaration and shall, to the
extent applicable, be governed by such provisions.

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

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

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

SECTION 2.02    Lists of Holders of Securities.

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

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

SECTION 2.03    Reports by the Property Trustee.

         Within 60 days after May 15 of each year, commencing May 15, 2001, the
Property Trustee shall provide to the Holders of the Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Property Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.

SECTION 2.04    Periodic Reports to Property Trustee.

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

SECTION 2.05    Evidence of Compliance with Conditions Precedent.

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

SECTION 2.06    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 Event of
Default:

                           (i) is caused by a Debenture Event of Default that is
         not waivable under the Indenture, the Event of Default under the
         Declaration shall also not be waivable;

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

                           (iii) is the result of a default by the Trust in the
         payment of any Distribution when it becomes due and payable, which
         default has continued for 30 days (subject to the deferral of any due
         date in the case of a Default Period), the Event of Default shall not
         be waivable; or

                           (iv) is the result of a default by the Trust in the
         payment of any Redemption Price of any Preferred Security when it
         becomes due and payable, the Event of Default shall not be waivable.

         The foregoing provisions of this Section 2.06(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.

         Upon such waiver, any such default shall cease to exist, and any Event
of Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or an Event of Default
with respect to the Preferred Securities or impair any right consequent thereon.
Any waiver by the Holders of the Preferred Securities of an Event of Default
with respect to the Preferred Securities shall also be deemed to constitute a
waiver by the Holders of the Common Securities of any such Event of Default with
respect to the Common Securities for all purposes of this Declaration without
any further act, vote, or consent of the Holders of the Common Securities.

                  (b) The Holders of a Majority in liquidation amount of the
Common Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the Event of Default is
caused by a Debenture Event of Default that:

                           (i) is not waivable under the Indenture, except where
         the Holders of the Common Securities are deemed to have waived such
         Event of Default under the Declaration as provided below in this
         Section 2.06(b), the Event of Default under the Declaration shall also
         not be waivable; or

                           (ii) requires the consent or vote of a Super Majority
         to be waived, except where the Holders of the Common Securities are
         deemed to have waived such Event of Default under the Declaration as
         provided below in this Section 2.06(b), the Event of Default under the
         Declaration may only be waived by the vote of the Holders of at least
         the proportion in liquidation amount of the Common Securities that the
         relevant Super Majority represents of the aggregate principal amount of
         the Debentures outstanding;

provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until the effects of all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.06(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of
the Trust Indenture Act and such Section 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.06(b), upon such waiver, any such default shall
cease to exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
or Event of Default with respect to the Common Securities or impair any right
consequent thereon.

                  (c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Preferred Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.06(c) shall be in lieu
of Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B)
of the Trust Indenture Act is hereby expressly excluded from this Declaration
and the Securities, as permitted by the Trust Indenture Act.

SECTION 2.07    Event of Default; Certain Notices.

                  (a) The Property Trustee shall, within ten business days after
the occurrence of an Event of Default actually known to the Property Trustee,
(i) transmit by mail, first-class postage prepaid, to the Holders of the
Securities, and (ii) transmit by any means provided for in this Declaration to
the Administrative Trustees and the Sponsor, notices of all defaults actually
known to the Property Trustee, unless such defaults have been cured before the
giving of such notice (the term "defaults" for the purposes of this Section
2.07(a) being hereby defined to be an Event of Default, not including any
periods of grace and irrespective of the giving of any notice); 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 Property Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Property Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Securities.

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

                      (i)  a default under Sections 5.01(1) and 5.01(2) of the
                           Indenture; or

                      (ii) any default as to which the Property Trustee shall
                           have received written notice.

                  (c) The Property Trustee shall, within five business days
after receipt by it of any notice pursuant to Section 3.13 of the Indenture,
transmit by mail, first-class postage prepaid, to the Holders of the Securities,
a copy of such notice.

                                   ARTICLE III

                                  ORGANIZATION

SECTION 3.01    Name.

         The Trust is named "Continental Airlines Finance Trust II," as such
name may be modified from time to time by the Administrative 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
Administrative Trustees.

SECTION 3.02    Office.

         The address of the principal office of the Trust is c/o Continental
Airlines, Inc., 1600 Smith Street, Houston, Texas 77002, Attention: Chief
Financial Officer. On ten Business Days' written notice to the Holders of
Securities, the Administrative Trustees may designate another principal office.

SECTION 3.03    Purpose.

         The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debentures,
(b) distributing payments received on the Debentures to the Holders of the
Securities and (c) except as otherwise limited herein, to engage in only those
other activities necessary or incidental thereto. The Trust shall not borrow
money, issue debt 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.

SECTION 3.04    Authority.

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

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

                  (c) An Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purposes of signing any documents which the
Administrative Trustees have power and authority to cause the Trust to execute
pursuant to Section 3.06.

SECTION 3.05    Title to Property of the Trust.

         Except as provided in Section 3.08 with respect to the Debentures and
the Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders shall
not have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial interest in the assets of the Trust.

SECTION 3.06    Powers and Duties of the Administrative Trustees.

         The Administrative Trustees shall have, together (except in the case of
paragraphs (a), (b) and (c) of this Section 3.06) with any Special Trustee
holding office pursuant to Section 5.06, if any, 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
interests in the Trust other than the Securities, and the issuance of Securities
shall be limited to simultaneous issuances of both Preferred Securities and
Common Securities on the Closing Date and any Optional 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 the Offering
         Circular and a preliminary offering circular, in each case prepared by
         the Sponsor, in relation to the offering and sale of Preferred
         Securities to qualified institutional buyers in reliance on Rule 144A
         under the Securities Act and to execute and file with the Commission,
         at such time as determined by the Sponsor, a registration statement
         filed on Form S-3 prepared by the Sponsor, including any amendments
         thereto, in relation to the Preferred Securities;

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

                           (iii) execute and file an application, prepared by
         the Sponsor, to the Private Offerings, Resale and Trading through
         Automated Linkages ("PORTAL") Market and, at such time, if any, as
         determined by the Sponsor, to the New York Stock Exchange or any other
         national stock exchange or the Nasdaq National Market for listing or
         quotation of the Preferred Securities;

                           (iv) to execute and deliver letters, documents, or
         instruments with The Depository Trust Company relating the Preferred
         Securities;

                           (v) execute and file with the Commission, at such
         time as determined by the Sponsor, a registration statement on Form
         8-A, including any amendments thereto, prepared by the Sponsor relating
         to the registration of the Preferred Securities under Section 12 of the
         Exchange Act; and

                           (vi) execute and enter into the Purchase Agreement,
         Registration Rights Agreement and other related agreements providing
         for the sale of the Preferred Securities and to provide any
         certificates or other documents in connection with such agreements;

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

                  (d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Tax Event; provided that the
Administrative Trustees (and Special Trustee, if any) shall consult with the
Sponsor and the Property Trustee before taking or refraining from taking any
Ministerial Action in relation to a Tax Event;

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

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

                  (g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.08(e), the Property Trustee
has the exclusive power to bring such Legal Action;

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

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

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

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

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

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

                  (n) to 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;

                  (o) 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;

                  (p) to take any action, not inconsistent with this Declaration
or with applicable law, that the Administrative Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of the
Trust as set out in this Section 3.06, including, but not limited to:

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

                           (ii) causing the Trust to 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 materially adversely affect the interests of
Holders; and

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

         The Administrative Trustees must exercise the powers set forth in this
Section 3.06 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.03, and the Administrative Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.03.

         Subject to this Section 3.06, the Administrative Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.08.

         Any expenses incurred by the Administrative Trustee (or the Special
Trustee, if any) pursuant to this Section 3.06 shall be reimbursed by the
Debenture Issuer.

SECTION 3.07    Prohibition of Actions by the Trust and the Trustees.

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

                           (i) invest any proceeds received by the Trust from
         holding the Debentures, but shall 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; or

                           (vii) other than as provided in the Declaration or
         Annex I hereto, (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 Section
         5.13 of the Indenture, (C) exercise any right to rescind or annul any
         declaration that the principal of all the Debentures shall be due and
         payable, or (D) consent to any amendment, modification or termination
         of the Indenture or the Debentures where such consent shall be required
         unless, in the case of each action described in clause (A), (B), (C) or
         (D), the Trust shall have received an opinion of counsel to the effect
         that such modification will not cause more than an insubstantial risk
         that for United States federal income tax purposes the Trust will not
         be classified as a grantor trust.

SECTION 3.08    Powers and Duties of the Property Trustee.

                  (a) The legal title to the Debentures shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the Property
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Section 5.06. Such
vesting and cessation of title shall be effective whether or not conveyancing
documents with regard to the Debentures have been executed and delivered.

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

                  (c) The Property Trustee shall:

                           (i) establish and maintain a segregated non-interest
         bearing trust account (the "Property Trustee Account") in the name of
         and under the exclusive control of the Property Trustee on behalf of
         the Holders of the Securities and, upon the receipt of payments of
         funds made in respect of the Debentures held by the Property Trustee,
         deposit such funds into the Property Trustee Account and make payments
         to the Holders of the Preferred Securities and Holders of the Common
         Securities from the Property Trustee Account in accordance with Section
         6.01. Funds in the Property Trustee Account shall be held uninvested
         until disbursed in accordance with this Declaration;

                           (ii) engage in such ministerial activities as so
         directed and as shall be necessary or appropriate 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 Administrative Trustees in accordance with the terms of the
         Securities, engage in such ministerial activities as so directed as
         shall be necessary or appropriate to effect the distribution of the
         Debentures to Holders of Securities upon the occurrence of certain
         special events (as may be defined in the terms of the Securities)
         arising from a change in law or a change in legal interpretation or
         other specified circumstances pursuant to the terms of the Securities.

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

                  (e) The Property Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default or the Property
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act; provided, however, that if a Debenture Event of Default has occurred and is
continuing and such event is attributable to the failure of the Sponsor 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 institute a legal proceeding directly
for enforcement of payment to such Holder 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 (a "Direct Action") on or after the
respective due date specified in the Securities. In connection with such Direct
Action, the Debenture Issuer shall be subrogated to the rights of such Holder of
Preferred Securities with respect to payments on the Preferred Securities to the
extent of any payment made by the Sponsor to such Holder of Preferred Securities
in such Direct Action. In addition, if the Property Trustee fails to enforce its
rights under the Debentures (other than rights arising from an Event of Default
described in the immediately preceding sentence) after any Holder of Preferred
Securities shall have made a written request to the Property Trustee to enforce
such rights, such Holder of Preferred Securities may, to the fullest extent
permitted by law, institute a Direct Action to enforce such rights. Except as
provided in the preceding sentences, the Holders of Preferred Securities will
not be able to exercise directly any other remedy available to the holders of
the Debentures.

                  (f) The Property Trustee shall 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

                           (ii) a Successor Property Trustee has been appointed
         and has accepted that appointment in accordance with Section 5.06.

                  (g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Debentures
under the Indenture and, if an Event of Default occurs and is continuing, the
Property 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.

                  (h) The Property Trustee will act as Paying Agent and
Registrar in Wilmington, Delaware to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to all securities and
any such Paying Agent shall comply with Section 317(b) of the Trust Indenture
Act. Any Paying Agent may be removed by the Property Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any time
by the Property Trustee.

                  (i) Subject to this Section 3.08, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 3.06.

                  (j) The Property Trustee must exercise the powers set forth in
this Section 3.08 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.03, and the Property Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.03.

SECTION 3.09    Certain Duties and Responsibilities of the Property Trustee.

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

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

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

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

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

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

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

                           (iv) no provision of this Declaration shall require
         the Property Trustee to expend or risk its own funds or otherwise incur
         personal financial liability in the performance of any of its duties or
         in the exercise of any of its rights or powers;

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

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

                           (vii) the Property Trustee shall not be liable for
         any interest on any money received by it except as it may otherwise
         agree with the Sponsor. Money held by the Property Trustee need not be
         segregated from other funds held by it except in relation to the
         Property Trustee Account maintained by the Property Trustee pursuant to
         Section 3.08(c)(i) and except to the extent otherwise required by law;
         and

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

SECTION 3.10    Certain Rights of Property Trustee.

                  (a) Subject to the provisions of Section 3.09:

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

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

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

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

                           (v) the Property Trustee may consult with counsel of
         its choice or other experts and the advice or opinion of such counsel
         and experts with respect to legal matters or advice within the scope of
         such experts' area of expertise shall be full and complete
         authorization and protection in respect of any action taken, suffered
         or omitted by it hereunder in good faith and in accordance with such
         advice or opinion. Such counsel may be counsel to the Sponsor or any of
         its Affiliates, and may include any of its employees. The Property
         Trustee shall have the right at any time to seek instructions
         concerning the administration of this Declaration from any court of
         competent jurisdiction;

                           (vi) the Property Trustee shall be under no
         obligation to exercise any of the rights or powers vested in it by this
         Declaration at the request or direction of any Holder, unless such
         Holder shall have provided to the Property Trustee security
         satisfactory to the Property Trustee, against the costs, expenses
         (including its reasonable attorneys' fees and expenses) and liabilities
         that might be incurred by it in complying with such request or
         direction, including such reasonable advances as may be requested in
         writing by the Property Trustee, provided, that, nothing contained in
         this Section 3.10(a)(vi) shall be taken to relieve the Property
         Trustee, upon the occurrence of an Event of Default, of its obligation
         to exercise the rights and powers vested in it by this Declaration;

                           (vii) the Property Trustee shall not be bound to make
         any investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         direction, consent, order, security, bond, debenture, note, other
         evidence of indebtedness or other paper or document, but the Property
         Trustee, in its discretion, may make such further inquiry or
         investigation into such facts or matters as it may see fit;

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

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

                           (x) whenever in the administration of this
         Declaration the Property Trustee shall deem it desirable to receive
         instructions with respect to enforcing any remedy or right or taking
         any other action hereunder the Property Trustee (i) may request
         instructions from the Holders 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 Property
         Trustee under the terms of the Securities in respect of such remedy,
         right or action, (ii) may refrain from enforcing such remedy or right
         or taking such other action until such instructions are received, and
         (iii) shall be protected in acting in accordance with such
         instructions;

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

                           (xii) the Property Trustee shall not be liable for
         any action taken, suffered, or omitted to be taken by it in good faith
         and reasonably believed by it to be authorized or within the discretion
         or rights or powers conferred upon it by this Declaration.

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

SECTION 3.11    Delaware Trustee.

         Notwithstanding any other provision of this Declaration other than
Section 5.02, 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 Administrative Trustees or the Property Trustee described in this
Declaration. Except as set forth in Section 5.02, 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.

SECTION 3.12    Execution of Documents.

         Except as otherwise required by the Business Trust Act, any
Administrative Trustee is authorized to execute on behalf of the Trust any
documents that the Administrative Trustees have the power and authority to
execute pursuant to Section 3.06; provided that, the registration statement
referred to in Section 3.06(b)(i), including any amendments thereto, shall be
signed by a majority of the Administrative Trustees.

SECTION 3.13    Not Responsible for Recitals or Issuance of Securities.

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

SECTION 3.14    Duration of Trust.

         The Trust, unless dissolved pursuant to the provisions of Article VIII
hereof, shall exist until November 15, 2050.

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 Person, except as described in Section
3.15(b) and (c) of this Declaration and Section 3 and 4 of the terms of the
Securities as set forth in Annex I attached hereto.

                  (b) The Trust may, with the consent of a majority of the
Administrative Trustees and without the consent of the Holders of the
Securities, the Delaware Trustee or the Property Trustee, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any State or the District of Columbia; provided that:

                           (i) if the Trust is not the surviving entity, the
         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") as long as
                  the Successor Securities rank, with respect to participation
                  in the profits and distributions and payments upon
                  liquidation, redemption and otherwise at least as high as the
                  Preferred Securities rank with respect to participation in the
                  profits and dividends and payments upon liquidation redemption
                  and otherwise;

                           (ii) the Debenture Issuer appoints a Trustee of such
         Successor Entity possessing the same powers and duties of the Property
         Trustee as the Holder of the Debentures;

                           (iii) 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 powers, preferences and other
         special rights of the Holders of the Preferred Securities (including
         any Successor Securities) in any material respect;

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

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

                                    (A) the Successor Entity will be treated as
                  a grantor trust for United States federal income tax purposes;

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

                                    (C) such merger, consolidation, amalgamation
                  or replacement will not adversely affect the limited liability
                  of the Holders of the Securities (including any Successor
                  Securities); and

                           (viii) the Sponsor provides a guarantee to the
         Holders of the Successor Securities with respect to the Successor
         Entity having substantially the same terms as the Preferred Securities
         Guarantee; and

                           (ix) such merger, consolidation, amalgamation or
         replacement is not a taxable event for holders of the Preferred
         Securities.

                  (c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if 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 4.01    Sponsor's Purchase of Common Securities.

         On the Closing Date and any Optional Closing Date the Sponsor will
purchase an amount of Common Securities issued by the Trust such that the
aggregate liquidation amount of such Common Securities purchased by the Sponsor
shall at such date equal at least 3% of the total capital of the Trust.

SECTION 4.02    Responsibilities of the Sponsor.

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

                  (a) to prepare the Offering Circular and to prepare for filing
by the Trust with the Commission the Shelf Registration Statement, including any
amendments thereto;

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

                  (c) if deemed necessary or advisable by the Sponsor, to
prepare for filing by the Trust an application to PORTAL and to the New York
Stock Exchange or any other national stock exchange or the Nasdaq National
Market for listing or quotation of the Preferred Securities;

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

                  (e) to negotiate the terms of the Purchase Agreement,
Registration Rights Agreement and other related agreements providing for the
sale of the Preferred Securities.

SECTION 4.03    Guarantee of Payment of Trust Obligations.

                  (a) Subject to the terms and conditions of this Section 4.03,
the Sponsor 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 Obligations
to such Beneficiaries.

                  (b) The agreement of the Sponsor in Section 4.03(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 Sponsor set forth in Section 4.03(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 Agreement for any reason whatsoever. Such agreement is
continuing, irrevocable, unconditional and absolute.

                                    ARTICLE V

                                    TRUSTEES

SECTION 5.01    Number of Trustees.

         Subject to Section 5.02, the number of Trustees shall initially 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:

                           (i) the number of Trustees may be increased or
         decreased, except as provided in Sections 5.01(b)(ii) and
         5.06(a)(ii)(B) with respect to the Special Trustee, by vote of the
         Holders of a Majority in liquidation amount of the Common Securities
         voting as a class at a meeting of the Holders of the Common Securities;
         and

                           (ii) the number of Trustees shall be increased
         automatically by one (1) if an Appointment Event has occurred and is
         continuing and the Holders of a Majority in liquidation amount of the
         Preferred Securities appoint a Special Trustee in accordance with
         Section 5.06(a)(ii).

SECTION 5.02    Delaware Trustee.

         If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall either be (i) a natural person who is at least 21 years of age
and a resident of the State of Delaware, or (ii) an entity which has its
principal place of business in the State of Delaware, and otherwise meets the
requirements of applicable law, provided that, if the Property Trustee has its
principal place of business in the State of Delaware and otherwise meets the
requirements of applicable law, then the Property Trustee shall also be the
Delaware Trustee and Section 3.11 shall have no application.

SECTION 5.03    Property Trustee; Eligibility.

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

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

                           (ii) be a corporation organized and doing business
         under the laws of the United States of America or any State or
         Territory thereof or of the District of Columbia, or a corporation or
         Person permitted by the Commission to act as an 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 referred to above, then for the purposes of this
         Section 5.03(a)(ii), the combined capital and surplus of such
         corporation shall be deemed to be its combined capital and surplus as
         set forth in its most recent report of condition so published.

                  (b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.03(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.06(e).

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

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

SECTION 5.04    Qualifications of Administrative Trustees and Delaware Trustee
                Generally.

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

SECTION 5.05    Initial Trustees.

         The initial Administrative Trustees shall be:

                           Lawrence W. Kellner
                           c/o Continental Airlines, Inc.
                           1600 Smith Street, HQSEO
                           Houston, Texas  77002
                           Facsimile No.: (713) 324-2687

                           Gerald Laderman
                           c/o Continental Airlines, Inc.
                           1600 Smith Street, HQSEO
                           Houston, Texas  77002
                           Facsimile No.: (713) 324-2687

The initial Delaware Trustee shall be:

                           Wilmington Trust Company
                           Rodney Square North
                           1100 North Market Street
                           Wilmington, Delaware  19890-0001
                           Attention:  Corporate Trust Administration

The initial Property Trustee shall be:

                           Wilmington Trust Company
                           Rodney Square North
                           1100 North Market Street
                           Wilmington, Delaware  19890-0001
                           Attention:  Corporate Trust Administration

SECTION 5.06    Appointment, Removal and Resignation of Trustees.

                  (a) Except as provided otherwise in Section 5.06(b) and
5.06(d), Trustees may be appointed or removed without cause at any time:

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

                           (ii) after the issuance of any Securities:

                                    (A) other than in respect to a Special
                  Trustee, 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 by written consent,
                  unless a Debenture Event of Default shall have occurred and be
                  continuing, in which event the Property Trustee and the
                  Delaware Trustee may only be removed by the Holders of a
                  Majority in liquidation amount of the Preferred Securities,
                  voting as a class at a meeting of the Holders of the Preferred
                  Securities or by written consent; and

                                    (B) if an Appointment Event has occurred and
                  is continuing, one (1) additional trustee (the "Special
                  Trustee"), who shall have the same rights, powers and
                  privileges as an Administrative Trustee, may be appointed by
                  vote of the Holders of a Majority in liquidation amount of the
                  Preferred Securities, voting as a class at a meeting of the
                  Holders of the Preferred Securities, and such Special Trustee
                  may only be removed (otherwise than by the operation of
                  Section 5.06(e)), by vote of the Holders of a Majority in
                  liquidation amount of the Preferred Securities voting as a
                  class at a meeting of the Holders of the Preferred Securities.

                  (b) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.06(a) until a successor Property Trustee
meeting the requirements of Section 5.03 (a "Successor Property Trustee") has
been appointed and has accepted such appointment by written instrument executed
by such Successor Property Trustee and delivered to the Administrative Trustees
and the Sponsor.

                  (c) The Holders of a Majority in liquidation amount of the
Common Securities shall remove the Property Trustee by written instrument upon:

                           (i) the entry or a decree or order by a court having
         jurisdiction in the premises adjudging the Property Trustee as bankrupt
         or insolvent, or approving as properly filed a petition seeking
         reorganization, arrangement, adjustment or composition of or in respect
         of the Property Trustee under any applicable federal or state
         bankruptcy, insolvency, reorganization or other similar law, or
         appointing a receiver, liquidator, assignee, trustee, sequestrator (or
         other similar official) of the Property Trustee or of any substantial
         part of its property or ordering the winding up or liquidation of its
         affairs, and the continuance of any such decree or order unstayed and
         in effect for a period of 60 consecutive days; or

                           (ii) the institution by the Property Trustee of
         proceedings to be adjudicated a bankrupt or insolvent, or the consent
         by it to the institution of bankruptcy or insolvency proceedings
         against it, or the filing by it of a petition or answer or consent
         seeking reorganization or relief under any applicable federal or state
         bankruptcy, insolvency, reorganization or other similar law, or the
         consent by it to the filing of any such petition or to the appointment
         of a receiver, liquidator, assignee, trustee, sequestrator (or other
         similar official) of the Property Trustee or of any substantial part of
         its property, or the making by it of an assignment for the benefit of
         creditors, or the admission by it in writing of its inability to pay
         its debts generally as they become due and its willingness to be
         adjudicated a bankrupt, or the taking of corporate action by the
         Property Trustee in furtherance of any such action.

The Sponsor shall appoint a Successor Property Trustee within 60 days of such an
event.

                  (d) The Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.06(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 5.02 and 5.04 (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 Trustees and the Sponsor.

                  (e) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation,
provided that a Special Trustee shall only hold office while an Appointment
Event is continuing and shall cease to hold office immediately after the
Appointment Event pursuant to which the Special Trustee was appointed and all
other Appointment Events cease to be continuing. Any Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:

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

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

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

                           (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; and

                           (iii) no such resignation of a Special Trustee shall
         be effective until the 60th day following delivery of the instrument of
         resignation of the Special Trustee to the Sponsor and the Trust or such
         later date specified in such instrument during which period the Holders
         of the Preferred Securities shall have the right to appoint a successor
         Special Trustee as provided in this Section 5.06.

                  (f) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Property Trustee or Successor Delaware
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.06.

                  (g) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.06 within 60 days after delivery to the Sponsor and the Trust of an
instrument of resignation or removal, at the cost of the Sponsor the resigning
Property Trustee or Delaware Trustee, resigning or being removed as applicable,
may petition any court of competent jurisdiction for appointment of a Successor
Property Trustee or Successor Delaware Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper and prescribe, appoint a
Successor Property Trustee or Successor Delaware Trustee, as the case may be.

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

SECTION 5.07    Vacancies among Trustees.

         If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.01, or if the number of Trustees
is increased pursuant to Section 5.01, a vacancy shall occur. A resolution
certifying the existence of such vacancy by a majority of the Administrative
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section
5.06.

SECTION 5.08    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.

         Whenever a vacancy in the number of Administrative Trustees shall
occur, until such vacancy is filled by the appointment of a Administrative
Trustee in accordance with Section 5.06, the Administrative Trustees in office,
regardless of their number, shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Declaration.

SECTION 5.09    Meetings.

         Meetings of the Administrative Trustees shall be held from time to time
upon the call of any Administrative Trustee. Regular meetings of the
Administrative Trustees may be held at a time and place fixed by resolution of
the Administrative Trustees. Notice of any meetings of the Administrative
Trustees shall be hand delivered or otherwise delivered in writing (including by
facsimile or overnight courier) not less than 24 hours before such 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
Administrative Trustee at a meeting shall constitute a waiver of notice of such
meeting except where a Administrative Trustee attends a meeting for the express
purpose of objecting to the transaction of any activity on the ground that the
meeting has not been lawfully called or convened. Unless provided otherwise in
this Declaration, any action of the Administrative Trustees may be taken at a
meeting by vote of a majority of the Administrative Trustees present (whether in
person or by telephone) and eligible to vote with respect to such matter,
provided that a Quorum is present, or without a meeting and without prior notice
by the written consent of a majority of the Administrative Trustees.

         In the event there is only one Administrative Trustee, any and all
action of such Administrative Trustee shall be evidenced by a written consent of
such Administrative Trustee. In the event a Special Trustee is holding office
pursuant to Section 5.06, such Special Trustee shall have the same rights as an
Administrative Trustee with respect to participation in a meeting of the
Administrative Trustees.

SECTION 5.10    Delegation of Power.

                  (a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.06, including any registration statement or amendment
thereto filed with the Commission, or making any other governmental filing; and

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

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

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

                                   ARTICLE VI

                                  DISTRIBUTIONS

SECTION 6.01    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
Compounded Interest (as defined in the Indenture) and Additional Sums (as
defined in the Indenture)) premium and principal on the Debentures held by the
Property Trustee (the amount of any such payment being a "Payment Amount"), the
Property Trustee shall and is directed, to the extent funds are available for
that purpose, to make a distribution (a "Distribution") of the Payment Amount to
Holders.

                                   ARTICLE VII

                             ISSUANCE OF SECURITIES

SECTION 7.01    General Provisions Regarding Securities.

                  (a) The Administrative Trustees shall on behalf of the Trust
issue one class of convertible preferred securities, designated as 6%
Convertible Preferred Securities, Term Income Deferrable Equity Securities
(TIDES)SM, representing undivided beneficial interests in the assets of the
Trust (the "Preferred Securities"), having such terms as are set forth in Annex
I and one class of convertible common securities, liquidation amount $50,
representing undivided beneficial interests in the assets of the Trust (the
"Common Securities"), having such terms as are set forth in Annex I. The Trust
shall have no securities or other interests in the assets of the Trust other
than the Preferred Securities and the Common Securities. The Trust shall issue
no Securities in bearer form.

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

                  (c) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable, subject to Section 10.01 with respect to the
Common Securities.

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

                  (e) Every Person, by virtue of having become a Holder or a
Preferred Securities Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have covenanted to treat the Debentures as
indebtedness and the Securities as evidence of an indirect beneficial ownership
interest in the Debentures.

SECTION 7.02    Execution and Authentication.

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

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

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

         Upon a written order of the Trust signed by one Administrative Trustee,
the Property Trustee shall authenticate the Preferred Securities for original
issue by executing the Property Trustee's certificate of authentication
contained in the form of Preferred Securities attached hereto as Exhibit A-1.
The aggregate number of Preferred Securities outstanding at any time shall not
exceed the number set forth in the terms in Annex I hereto except as provided in
Section 7.06.

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

SECTION 7.03    Form and Dating.

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

         The Preferred Securities are being offered and sold by the Trust
pursuant to a Purchase Agreement relating to the Preferred Securities, dated
November 6, 2000, among the Trust, the Sponsor and the Purchasers named therein
(the "Purchase Agreement").

                  (a) Global Securities. Preferred Securities offered and sold
to Qualified Institutional Buyers ("QIBs") in reliance on Rule 144A under the
Securities Act ("Rule 144A") as provided in the Purchase Agreement, shall be
issued in the form of one or more permanent global Securities in definitive,
fully registered form without distribution coupons with the appropriate global
legends, ERISA legend and Restricted Securities Legend set forth in Exhibit A-1
hereto (each, a "Rule 144A Global Preferred Security"), which shall be deposited
on behalf of the purchasers of the Preferred Securities represented thereby with
the Property Trustee, at its Wilmington, Delaware office, as custodian for the
Depositary, and registered in the name of the Depositary or a nominee of the
Depositary, duly executed by an Administrative Trustee on behalf of the Trust
and authenticated by the Property Trustee as provided herein. The number of
Preferred Securities represented by the Rule 144A Global Preferred Security may
from time to time be increased or decreased by adjustments made on the records
of the Property Trustee and the Depositary or its nominee as hereinafter
provided.

                  (b) Book-Entry Provisions. This Section 7.03(b) shall apply
only to the Rule 144A Global Preferred Securities and such other Preferred
Securities in global form as may be authorized by the Trust to be deposited with
or on behalf of the Depositary.

         An Administrative Trustee on behalf of the Trust shall execute and the
Property Trustee shall, in accordance with this Section 7.03, authenticate and
deliver initially one or more Rule 144A Global Preferred Securities that (a)
shall be registered in the name of Cede & Co. or other nominee of such
Depositary and (b) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's written instructions or held by the Trustee as
custodian for the Depositary.

         Members of, or participants in, the Depositary ("Participants") shall
have no rights under this Declaration with respect to any Rule 144A Global
Preferred Security held on their behalf by the Depositary or by the Property
Trustee as the custodian of the Depositary or under such Rule 144A Global
Preferred Security, and the Depositary may be treated by the Trust, the Property
Trustee and any agent of the Trust or the Property Trustee as the absolute owner
of such Rule 144A Global Preferred Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Trust, the
Property Trustee or any agent of the Trust or the Property Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Participants, the
operation of customary practices of such Depositary governing the exercise of
the rights of a holder of a beneficial interest in any Rule 144A Global
Preferred Security.

                  (c) Certificated Securities. Except as provided in Section
7.03(d), owners of beneficial interests in the Rule 144A Global Preferred
Security will not be entitled to receive physical delivery of certificated
Preferred Securities.

                  (d) A Global Preferred Security deposited with the Depositary
or with the Property Trustee as custodian for the Depositary pursuant to this
Section 7.03 shall be transferred to the beneficial owners thereof in the form
of certificated Preferred Securities only if such transfer complies with Section
9.02 and (i) the Depositary notifies the Company that it is unwilling or unable
to continue as Depositary for such Global Preferred Security or if at any time
such Depositary ceases to be a "clearing agency" registered under the Exchange
Act, at a time when the Depositary is required to be so registered to act as
such depositary, (ii) the Sponsor on behalf of the Trust in its sole discretion
determines that such Global Preferred Security shall be so exchangeable, or
(iii) an Event of Default has occurred and is continuing.

                  (e) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of certificated Preferred Securities
pursuant to this Section 7.03 shall be surrendered by the Depositary to the
Property Trustee located in Wilmington, Delaware, to be so transferred, in whole
or from time to time in part, without charge, and the Property Trustee shall
authenticate and deliver, upon such transfer of each portion of such Global
Preferred Security, an equal aggregate liquidation amount of Preferred
Securities of authorized denominations in the form of certificated Preferred
Securities. Any portion of a Global Preferred Security transferred pursuant to
this Section shall be registered in such names as the Depositary shall direct.
Any Preferred Security in the form of certificated Preferred Securities
delivered in exchange for an interest in the Rule 144A Global Preferred Security
shall, except as otherwise provided by Section 9.01, bear the Restricted
Securities Legend set forth in Exhibit A hereto.

                  (f) Subject to the provisions of Section 7.03(e), the
registered holder of a Global Preferred Security may grant proxies and otherwise
authorize any person, including Participants and persons that may hold interests
through Participants, to take any action which a holder is entitled to take
under this Declaration or the Securities.

                  (g) In the event of the occurrence of any of the events
specified in Section 7.03(d), the Trust will promptly make available to the
Property Trustee a reasonable supply of certificated Securities in definitive,
fully registered form without distribution coupons.

SECTION 7.04    Registrar, Paying Agent and Conversion Agent.

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

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

SECTION 7.05    Paying Agent to Hold Money in Trust.

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

SECTION 7.06    Replacement Securities.

         If the Holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Preferred Securities to the
Property Trustee, an Administrative Trustee on behalf of the Trust shall issue
and, with respect to the Preferred Securities, the Property Trustee shall
authenticate a replacement Security if the Property Trustee's and the Trust's
requirements, as the case may be, are met. If required by the Property Trustee
or the Trust, an indemnity bond must be sufficient in the judgment of both to
protect the Trustees, the Sponsor or any authenticating agent from any loss
which any of them may suffer if a Security is replaced. The Sponsor may charge
for its expenses in replacing a Security.

         In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be purchased by the
Sponsor pursuant to Article III hereof, the Sponsor in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.

SECTION 7.07    Outstanding Preferred Securities.

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

         If a Preferred Security is replaced, paid or purchased pursuant to
Section 7.06 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased Preferred
Security is held by a protected purchaser.

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

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

SECTION 7.08    Preferred Securities in Treasury.

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

SECTION 7.09    Temporary Securities.

         Until definitive Securities are ready for delivery, an Administrative
Trustee may prepare and, in the case of the Preferred Securities, the Property
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
an Administrative Trustee considers appropriate for temporary Securities.
Without unreasonable delay, an Administrative Trustee shall prepare and deliver
to the Property Trustee Preferred Securities in certificated form (other than in
the case of Preferred Securities in global form) and thereupon any or all
temporary Preferred Securities (other than any such Preferred Securities in
global form) may be surrendered in exchange therefor, at the office of the
Registrar, and the Property Trustee shall authenticate and deliver an equal
aggregate liquidation amount of definitive Preferred Securities in certificated
form in exchange for temporary Preferred Securities (other than any such
Preferred Securities in global form).

SECTION 7.10    Cancellation.

         The Trust at any time may deliver Preferred Securities to the Property
Trustee for cancellation. The Registrar, Paying Agent and Conversion Agent shall
forward to the Property Trustee any Preferred Securities surrendered to them for
registration of transfer, redemption, conversion, exchange or payment. The
Property Trustee shall promptly cancel all Preferred Securities, surrendered for
registration of transfer, redemption, conversion, exchange, payment, replacement
or cancellation and shall return such canceled Preferred Securities to the
Administrative Trustees. The Trust may not issue new Preferred Securities to
replace Preferred Securities that it has paid or that have been delivered to the
Property Trustee for cancellation or that any holder has converted.

                                  ARTICLE VIII

                      DISSOLUTION AND TERMINATION OF TRUST

SECTION 8.01    Termination of Trust.

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

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

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

                           (iii) the written direction of the Sponsor, as the
         Holder of the outstanding Common Securities, to the Property Trustee to
         dissolve the Trust and distribute a Like Amount of Debentures to
         Holders of the Securities in accordance with the terms of the
         Securities;

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

                           (vi) upon the distribution of the Class B Common
         Stock (as defined in the Indenture) of the Sponsor to Holders of all
         outstanding Securities upon conversion of all such Securities;

                           (vii) the expiration of the term of the Trust as set
         forth in Section 3.14 hereof; or

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

                  (b) As soon as is practicable after the occurrence of an event
referred to in Section 8.01(a) and after satisfaction of liabilities of
creditors of the Trust as provided by applicable law, any one of the Trustees
(each of whom is hereby authorized to take such action) shall file a certificate
of cancellation with the Secretary of State of the State of Delaware terminating
the Trust and, upon such filing, the respective obligations and responsibilities
of the Trustees and the Trust created and continued hereby, shall terminate.

                  (c) The provisions of Sections 3.09, 4.03, 10.01(b), 10.04,
the last sentence of Section 3.06 and Article X shall survive the termination of
the Trust.

                                   ARTICLE IX

                              TRANSFER AND EXCHANGE

SECTION 9.01    General.

                  (a) Where Preferred Securities are presented to the Registrar
or a co-registrar with a request to register a transfer or to exchange them for
an equal number of Preferred Securities represented by different certificates,
the Registrar shall register the transfer or make the exchange if its
requirements for such transactions are met. To permit registrations of transfers
and exchanges, the Administrative Trustee in accordance with this Declaration
shall execute and deliver and the Property Trustee shall authenticate Preferred
Securities at the Registrar's request.

                  (b) 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. To the fullest extent permitted by law, any
transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.

         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 or
as otherwise permitted by Article VIII of the Indenture; provided that, any such
transfer is subject to the condition precedent that the transferor obtain the
written opinion of 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 be classified for United
         States federal income tax purposes as a grantor trust; and

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

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

                  (d) The Trust shall not be required (i) to issue, register the
transfer of, or exchange, Preferred Securities during a period beginning at the
opening of business 15 days before the day of any selection of Preferred
Securities for redemption set forth in the terms of the Securities as set forth
in Annex I hereto and ending at the close of business on the day of selection,
or (ii) to register the transfer or exchange of any Preferred Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Preferred Security being redeemed in part.

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

Section 9.02          Transfer Procedures and Restrictions.

                  (a) General. Subject to Sections 9.02(b) and 9.02(j)(ii), if
Preferred Securities are issued upon the transfer, exchange or replacement of
Preferred Securities bearing the Restricted Securities Legend set forth in
Exhibit A-1 hereto, or if a request is made to remove such Restricted Securities
Legend on Preferred Securities, the Preferred Securities so issued shall bear
the Restricted Securities Legend, or the Restricted Securities Legend shall not
be removed, as the case may be, unless there is delivered to the Trust and the
Property Trustee such satisfactory evidence, which may include an opinion of
counsel, as may be reasonably required by the Company, that (i) neither the
legend nor the restrictions on transfer set forth therein are required to ensure
that transfers thereof comply with the provisions of Rule 144A or Rule 144 under
the Securities Act or (ii) that such Securities are not "restricted" within the
meaning of Rule 144 under the Securities Act. Upon provision of such
satisfactory evidence, the Property Trustee, at the written direction of an
Administrative Trustee on behalf of the Trust, shall authenticate and deliver
Preferred Securities that do not bear the Restricted Securities Legend.

                  (b) Transfers After Effectiveness of Shelf Registration
Statement. After the effectiveness of a Shelf Registration Statement for any
Preferred Securities, all requirements pertaining to Restricted Securities
Legends on any Preferred Security included within such Shelf Registration
Statement will cease to apply, and beneficial interests in a Preferred Security
in global form without Restricted Securities Legends will be available to
transferees of such Preferred Securities, upon directions to transfer such
Holder's beneficial interest in the Rule 144A Global Preferred Security. After
the effectiveness of the Shelf Registration Statement, the Administrative
Trustees shall execute and deliver and the Property Trustee shall authenticate a
Preferred Security in global form without the Restricted Securities Legend (the
"Unrestricted Global Preferred Security") to deposit with the Depositary to
evidence transfers of beneficial interests from the Rule 144A Global Preferred
Security.

                  (c) [Reserved]

                  (d) Transfer and Exchange of Definitive Preferred Securities.
When Definitive Preferred Securities are presented to the Registrar or
co-Registrar

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

                           (y) to exchange such Definitive Preferred Securities
         for an equal number of Definitive Preferred Securities of another
         denomination,

the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Preferred Securities surrendered for
transfer or exchange:

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

                           (ii) in the case of Definitive Preferred Securities
         that are Restricted Preferred Securities, and are being transferred or
         exchanged (x) pursuant to an effective registration statement under the
         Securities Act or (y) pursuant to, and in compliance with, clause (A)
         or (B) below:

                                    (A) if such Restricted Preferred Securities
                  are being delivered to the Registrar by a Holder for
                  registration in the name of such Holder, without transfer,
                  such Holder shall deliver a certification to that effect (in
                  the form set forth on the reverse of the Preferred Security);
                  or

                                    (B) if such Restricted Preferred Securities
                  are being transferred pursuant to an exemption from
                  registration in accordance with Rule 144A or Rule 144 under
                  the Securities Act such Holder shall deliver: (i) a
                  certification to that effect (in the form set forth on the
                  reverse of the Preferred Security) and (ii) if the Trust or
                  Registrar so requests, evidence reasonably satisfactory to
                  them as to the compliance with the restrictions set forth in
                  the Restricted Securities Legend.

         Definitive Preferred Securities that are transferred to QIBs in
accordance with Rule 144A under the Securities Act must take delivery of their
interests in the Preferred Securities in the form of a beneficial interest in
the Rule 144A Global Preferred Security in accordance with Section 9.02(e).

                  (e) Restrictions on Transfer of a Definitive Preferred
Security for a Beneficial Interest in a Global Preferred Security. A Definitive
Preferred Security may not be exchanged for a beneficial interest in a Global
Preferred Security except upon satisfaction of the requirements set forth below.
Upon receipt by the Property Trustee of a Definitive Preferred Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Property Trustee, together with (i) written instructions
directing the Property Trustee to make, or to direct the Depositary to make, an
adjustment on its books and records with respect to such Global Preferred
Security to reflect an increase in the number of the Preferred Securities
represented by the Global Preferred Security, and (ii) if such Definitive
Preferred Security is a Restricted Preferred Security, certification, in the
form provided on the reverse of the Preferred Security, to the effect that such
Definitive Preferred Security is being transferred to a QIB in accordance with
Rule 144A under the Securities Act, then the Property Trustee shall cancel such
Definitive Preferred Security and cause, or direct the Depositary to cause, the
aggregate number of Preferred Securities represented by the Global Preferred
Security to be increased accordingly. If no Global Preferred Securities are then
outstanding, the Administrative Trustee shall execute and deliver and the
Property Trustee shall authenticate, upon written order of any Administrative
Trustee, an appropriate number of Preferred Securities in global form.

                  (f) Transfer and Exchange of Global Preferred Securities. The
transfer and exchange of Global Preferred Securities or beneficial interests
therein shall be effected through the Depositary, in accordance with this
Declaration (including applicable restrictions on transfer set forth herein, if
any) and the procedures of the Depositary therefor.

                  (g) Transfer of a Beneficial Interest in a Global Preferred
Security for a Definitive Preferred Security.

                           (i) The transfer of a beneficial interest in a Rule
         144A Global Preferred Security in exchange for a Definitive Preferred
         Security will require the delivery by the transferee of a transfer
         certificate in the form set forth in Exhibit A-1.

                           (ii) Definitive Preferred Securities issued in
         exchange for a beneficial interest in a Global Preferred Security
         pursuant to this Section 9.02(g) shall be registered in such names and
         in such authorized denominations as the Depositary, pursuant to
         instructions from its Participants or indirect participants or
         otherwise, shall instruct the Property Trustee. The Property Trustee
         shall deliver such Preferred Securities to the Persons in whose names
         such Preferred Securities are so registered in accordance with the
         instructions of the Depositary.

                  (h) Restrictions on Transfer and Exchange of Global Preferred
Securities. Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in Section 7.03), a Global Preferred Security may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary or another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary.

                  (i) [Reserved].

                  (j) Legend.

                           (i) Except as permitted by the following paragraph
         (ii), each Preferred Security certificate evidencing the Global
         Preferred Securities and the Definitive Preferred Securities (and all
         Preferred Securities issued in exchange therefor or substitution
         thereof) shall bear a legend (the "Restricted Securities Legend") in
         substantially the following form:

                  "THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY
                  ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
                  UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
                  "SECURITIES ACT"), AND THIS SECURITY AND ANY
                  CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES ISSUED
                  UPON EXCHANGE FOR THIS SECURITY AND ANY CLASS B
                  COMMON STOCK ISSUABLE UPON CONVERSION THEREOF MAY
                  NOT BE OFFERED, SOLD, PLEDGED, ENCUMBERED OR
                  OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
                  REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
                  EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED
                  THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
                  THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
                  THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

                  THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
                  AGREES FOR THE BENEFIT OF THE TRUST AND CONTINENTAL
                  AIRLINES, INC. THAT (A) THIS SECURITY AND ANY
                  CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES ISSUABLE
                  UPON EXCHANGE THEREFOR AND ANY CLASS B COMMON STOCK
                  ISSUABLE UPON CONVERSION THEREOF MAY BE OFFERED,
                  RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i)
                  TO THE COMPANY, (ii) INSIDE THE UNITED STATES TO A
                  PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
                  "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
                  144A UNDER THE SECURITIES ACT) IN A TRANSACTION
                  MEETING THE REQUIREMENTS OF RULE 144A, (iii)
                  PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
                  SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
                  AVAILABLE), (iv) PURSUANT TO ANY OTHER AVAILABLE
                  EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
                  OR (v) PURSUANT TO AN EFFECTIVE REGISTRATION
                  STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES
                  (i) THROUGH (v) IN ACCORDANCE WITH ANY APPLICABLE
                  SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
                  ANY OTHER APPLICABLE JURISDICTION, AND (B) THE
                  HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
                  TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF
                  THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

                  BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
                  INTEREST HEREIN, THE HOLDER REPRESENTS THAT IT (1)
                  IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
                  MEANING OF RULE 144A UNDER THE SECURITIES ACT, IS
                  AWARE THAT THE SALE TO IT IS BEING MADE IN RELIANCE
                  ON RULE 144A AND IS ACQUIRING THE SECURITIES FOR ITS
                  OWN ACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE
                  QUALIFIED INSTITUTIONAL BUYERS AND THAT IT EXERCISES
                  SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH
                  ACCOUNT OR (2) ACQUIRED SUCH SECURITY IN A
                  TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER
                  THE SECURITIES ACT."

                           (ii) Upon any sale or transfer of a Restricted
         Preferred Security (including any Restricted Preferred Security
         represented by a Global Preferred Security) pursuant to Rule 144 under
         the Securities Act or an effective registration statement under the
         Securities Act the Registrar shall permit the holder thereof to
         exchange such Restricted Preferred Security for an interest in the
         Unrestricted Global Preferred Security.

                            (iii) Each Preferred Security certificate evidencing
         the Global Preferred Securities and the Definitive Preferred Securities
         (and all Preferred Securities issued in exchange therefor or
         substitution thereof) shall bear a legend in substantially the
         following form, unless otherwise determined by the Sponsor in
         accordance with applicable law:

                  "BY ITS PURCHASE HEREOF OR ANY INTEREST THEREIN, THE
                  PURCHASER THEREOF WILL BE DEEMED TO HAVE REPRESENTED
                  EITHER THAT (A) IT IS NOT A PLAN OR OTHER ENTITY
                  WHOSE UNDERLYING ASSETS ARE SUBJECT TO ERISA AND/OR
                  SECTION 4975 OF THE CODE, OR A GOVERNMENTAL OR
                  CHURCH PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE
                  OR LOCAL LAW THAT IS SUBSTANTIALLY SIMILAR TO THE
                  PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975
                  OF THE CODE OR (B) ITS PURCHASE AND HOLDING OF A
                  TIDES WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
                  TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION
                  4975 OF THE CODE (OR, IN THE CASE OF A GOVERNMENTAL
                  OR CHURCH PLAN, A VIOLATION OF ANY SUBSTANTIALLY
                  SIMILAR FEDERAL, STATE OR LOCAL LAW). FURTHER, THE
                  FIDUCIARIES OF ANY PLAN OR PLAN ASSETS ENTITY WHICH
                  MAY PURCHASE OR HOLD THESE SECURITIES WILL BE DEEMED
                  AS A RESULT OF SUCH ACQUISITION OR HOLDING TO HAVE
                  (A) DIRECTED THE TRUST TO INVEST IN THE DEBENTURES,
                  (B) AUTHORIZED AND DIRECTED ANY OF THE ACTIONS TAKEN
                  OR WHICH MAY BE TAKEN WITH RESPECT TO THE TRUST, THE
                  CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES AND THESE
                  SECURITIES BY ANY OF THE TRUSTEES, THE DEBENTURE
                  TRUSTEE, THE GUARANTEE TRUSTEE OR US AS CONTEMPLATED
                  BY THE INDENTURE, THE DEBENTURES OR THE GUARANTEE
                  AND (C) TO HAVE APPOINTED THE TRUSTEES."

                           (iv) Preferred Securities issued in the form of one
         or more permanent Global Preferred Securities shall bear a legend in
         substantially the following form, unless otherwise determined by the
         Sponsor in accordance with applicable law:

         [Include if Preferred Security is in global form and The Depository
         Trust Company is the Depositary--]

                  "THIS CERTIFICATE IS A PREFERRED GLOBAL SECURITY
                  WITHIN THE MEANING OF THE DECLARATION HEREINAFTER
                  REFERRED TO AND IS REGISTERED IN THE NAME OF THE
                  DEPOSITORY TRUST COMPANY (THE "DEPOSITARY" OR "DTC")
                  OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS
                  EXCHANGEABLE FOR 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 CERTIFICATE
                  (OTHER THAN A TRANSFER OF THIS CERTIFICATE 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 CERTIFICATE IS PRESENTED BY AN
                  AUTHORIZED REPRESENTATIVE OF DTC (55 WATER STREET,
                  NEW YORK, NEW YORK), TO THE TRUST OR ITS AGENT FOR
                  REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
                  ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
                  CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
                  AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
                  MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
                  REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC)
                  ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
                  OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
                  INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
                  HAS AN INTEREST HEREIN."

         [Include if Preferred Security is in global form--]

                  "TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED
                  TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES
                  OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
                  NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
                  SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
                  ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
                  DECLARATION REFERRED TO BELOW."

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

                  (l) [Reserved]

                  (m) No Obligation of the Property Trustee.

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

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

SECTION 9.03    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, the Trustees,
the Registrar or a co-registrar shall have actual or other notice thereof.

SECTION 9.04    [Reserved].

SECTION 9.05    Notices to Clearing Agency.

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

SECTION 9.06    Appointment of Successor Clearing Agency.

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

                                    ARTICLE X

           LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES
                                    OR OTHERS

SECTION 10.01   Liability.

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

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

                           (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.

SECTION 10.02   Exculpation.

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

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

SECTION 10.03   Fiduciary Duty.

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

                  (b) Unless otherwise expressly provided herein:

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

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

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

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

                           (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 10.04   Indemnification.

                  (a) To the fullest extent permitted by applicable law, the
Debenture Issuer shall indemnify and hold harmless each Indemnified Person from
and against any loss, damage, liability, tax, penalty, expense or claim of any
kind or nature whatsoever incurred by such Indemnified Person by reason of the
creation, operation or termination of the Trust or any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably believed to be within the scope
of authority conferred on such Indemnified Person by this Declaration, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.

                  (b) To the fullest extent permitted by applicable law,
expenses (including reasonable legal fees and expenses) incurred by an
Indemnified Person in defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by the Debenture Issuer prior to the final
disposition of such claim, demand, action, suit or proceeding upon receipt by
the Debenture Issuer 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 as authorized in Section 10.4(a). The
indemnification shall survive the termination of this Declaration or the
resignation or removal of the Property Trustee or the Delaware Trustee, as the
case may be.

SECTION 10.05   Outside Businesses.

         Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee (subject to Section 5.03(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. None of the Sponsor, any
Covered Person, the Delaware Trustee, or the Property Trustee shall be obligated
to present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee
and the Property Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Property Trustee may engage or be interested in any financial or
other transaction with the Sponsor or any Affiliate of the Sponsor, or may act
as depositary for, trustee or agent for, or act on any committee or body of
holders of, securities or other obligations of the Sponsor or its Affiliates.

                                   ARTICLE XI

                                   ACCOUNTING

SECTION 11.01   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 11.02   Certain Accounting Matters.

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

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

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

SECTION 11.03   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 Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the Trust shall be deposited
in the Property Trustee Account. The sole signatories for such accounts shall be
designated by the Administrative Trustees; provided, however, that the Property
Trustee shall designate the signatories for the Property Trustee Account.

SECTION 11.04   Withholding.

         The Administrative Trustees on behalf of the Trust shall comply with
all withholding requirements under United States federal, state and local law.
The Administrative Trustees on behalf of 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 Administrative
Trustees on behalf of the Trust to assist it in determining the extent of, and
in fulfilling, its withholding obligations. The Administrative Trustees shall
file required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Holder, the amount withheld shall
be deemed to be a distribution in the amount of the withholding to the Holder.
In the event of any claimed overwithholding, 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 (at the
written direction of one of the Administrative Trustees of the Trust) may reduce
subsequent Distributions by the amount of such withholding.

                                   ARTICLE XII

                             AMENDMENTS AND MEETINGS

SECTION 12.01   Amendments.

                  (a) This Declaration may be amended from time to time by the
Sponsor, the Property Trustee and the Administrative Trustees, without the
consent of the Holders of the Securities, (i) to cure any ambiguity, correct or
supplement any provision in the Declaration that may be inconsistent with any
other provision, or to make any other provisions with respect to ministerial
matters or questions arising under the Declaration, which shall not be
inconsistent with the other provisions of the Declaration, or (ii) to modify,
eliminate or add to any provisions of the Declaration to such extent as shall be
necessary to ensure that the Trust will not be taxable as a corporation or will
be classified for United States federal income tax purposes as a grantor trust
at all times that any Securities are outstanding or to ensure that the Trust
will not be required to register as an "investment company" under the Investment
Company Act; provided, however, that in the case of clause (i), such action
shall not adversely affect in any material respect the interests of any Holder
of Securities, and any such amendments of the Declaration shall become effective
when notice thereof is given to the Holders of the Securities.

                  (b) Except as provided in (c) below, this Declaration may be
amended by the Trustees and the Sponsor with (i) the consent of Holders
representing not less than a Majority in liquidation amount of the outstanding
Preferred Securities, and (ii) receipt by the Trustees of an opinion of counsel
to the effect that such amendment or the exercise of any power granted to the
Trustees in accordance with such amendment will not affect the Trust's status as
a grantor trust for United States federal income tax purposes or the Trust's
exemption from status as an "investment company" under the Investment Company
Act.

                  (c) Without the consent of each holder of Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Securities of a specified
date or (ii) restrict the right of a Holder of Securities to institute suit for
the enforcement of any such payment on or after such date.

SECTION 12.02   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 Administrative Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Declaration, the
terms of the Securities or the rules of any stock exchange on which the
Preferred Securities are listed or admitted for trading. The Administrative
Trustees shall call a meeting of the Holders of such class if directed to do so
by the Holders of at least 25% in liquidation amount of such class of
Securities. Such direction shall be given by delivering to the Administrative
Trustees one or more requests 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 Certificates held by the Holders of
Securities exercising the right to call a meeting and only those Securities
represented by the Certificates so 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 and 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 meeting of
         the Holders of Securities may be taken without a meeting and without
         prior notice if a consent in writing setting forth the action so taken
         is signed by the Holders of Securities owning not less than the minimum
         aggregate liquidation amount of Securities 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 Administrative Trustees may specify that any written
         ballot submitted to the Holders for the purpose of taking any action
         without a meeting shall be returned to the Trust within the time
         specified by the Administrative Trustees;

                           (ii) each Holder 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 Administrative Trustees or by such other
         Person that the Administrative Trustees may designate; and

                           (iv) unless the Business Trust Act, this Declaration,
         the terms of the Securities, the Trust Indenture Act or the listing
         rules of any stock exchange on which the Preferred Securities are then
         listed or trading, provide otherwise, the Administrative 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 PROPERTY TRUSTEE AND DELAWARE TRUSTEE

SECTION 13.01   Representations and Warranties of Property Trustee.

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

                  (a) The Property Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, with corporate 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 Property
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Declaration has been duly
executed and delivered by the Property Trustee, and constitutes a legal, valid
and binding obligation of the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law).

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

                  (d) No consent, approval or authorization of, or registration
with or notice to, any Delaware or Federal banking authority is required for the
execution, delivery or performance by the Property Trustee, of the Declaration.

                  (e) The Property Trustee, pursuant to this Declaration, shall
hold legal title to, and an ownership interest on behalf of the Holders of the
Securities, in the Debentures and agrees that, except as expressly provided or
contemplated by this Declaration, it will not create, incur or assume, or suffer
to exist any mortgage, pledge, hypothecation, encumbrance, lien or other charge
or security interest upon the Debentures.

SECTION 13.02   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, at the
Closing Date and at each Optional Closing Date, if any, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Delaware Trustee that:

                  (a) The Delaware Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, with corporate 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 Delaware
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Delaware Trustee. The Declaration has been duly
executed and delivered by the Delaware Trustee, and constitutes a legal, valid
and binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law).

                  (c) The execution, delivery and performance of the Declaration
by the Delaware Trustee does not conflict with or constitute a breach of the
certificate of incorporation or by-laws of the Delaware Trustee.

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

                  (e) The Delaware Trustee is an entity which has its principal
place of business in the State of Delaware.

                                   ARTICLE XIV

                               REGISTRATION RIGHTS

SECTION 14.01   Registration Rights.

         The Holders of the Preferred Securities, the Debentures, the Preferred
Securities Guarantee and the shares of Class B Common Stock of the Sponsor
issuable upon conversion of the Securities are entitled to the benefits of a
Registration Rights Agreement as set forth in the Purchase Agreement and the
Indenture.

                                   ARTICLE XV

                                  MISCELLANEOUS

SECTION 15.01   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 Administrative
Trustees at the Trust's mailing address set forth below (or such other address
as the Trust may give notice of to the Holders of the Securities):

                      c/o Continental Airlines, Inc.
                      1600 Smith Street, HQSEO
                      Houston, Texas 77002
                      Attention: General Counsel and Chief Financial Officer
                      Facsimile No.:  (713) 324-2687

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

                      Wilmington Trust Company
                      Rodney Square North
                      1100 North Market Street
                      Wilmington, Delaware  19890-0001
                      Attention:  Corporate Trust Administration

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

                      Wilmington Trust Company
                      Rodney Square North
                      1100 North Market Street
                      Wilmington, Delaware  19890-0001
                      Attention:  Corporate Trust 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 to the Trust):

                      c/o Continental Airlines, Inc.
                      1600 Smith Street, HQSEO
                      Houston, Texas 77002
                      Attention: General Counsel and Chief Financial Officer
                      Facsimile No.:  (713) 324-2687

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

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

SECTION 15.02   Governing Law.

         THIS DECLARATION AND THE RIGHTS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS OF THE STATE OF DELAWARE OR ANY OTHER
JURISDICTION THAT WOULD CALL FOR THE APPLICATION OF THE LAW OF ANY JURISDICTION
OTHER THAN THE STATE OF DELAWARE; PROVIDED, HOWEVER, THAT THERE SHALL NOT BE
APPLICABLE TO THE PARTIES HEREUNDER OR THIS DECLARATION ANY PROVISION OF THE
LAWS (STATUTORY OR COMMON) OF THE STATE OF DELAWARE PERTAINING TO TRUSTS THAT
RELATE TO OR REGULATE, IN A MANNER INCONSISTENT WITH THE TERMS HEREOF (A) THE
FILING WITH ANY COURT OR GOVERNMENTAL BODY OR AGENCY OF TRUSTEE ACCOUNTS OR
SCHEDULES OF TRUSTEE FEES AND CHARGES, (B) AFFIRMATIVE REQUIREMENTS TO POST
BONDS FOR TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (C) THE NECESSITY
FOR OBTAINING COURT OR OTHER GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION,
HOLDING OR DISPOSITION OF REAL OR PERSONAL PROPERTY, (D) FEES OR OTHER SUMS
PAYABLE TO TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (E) THE
ALLOCATION OF RECEIPTS AND EXPENDITURES TO INCOME OR PRINCIPAL, (F) RESTRICTIONS
OR LIMITATIONS ON THE PERMISSIBLE NATURE, AMOUNT OR CONCENTRATION OF TRUST
INVESTMENTS OR REQUIREMENTS RELATING TO THE TITLING, STORAGE OR OTHER MANNER OF
HOLDING OR INVESTING TRUST ASSETS OR (G) THE ESTABLISHMENT OF FIDUCIARY OR OTHER
STANDARDS OF RESPONSIBILITY OR LIMITATIONS ON THE ACTS OR POWERS OF TRUSTEES
THAT ARE INCONSISTENT WITH THE LIMITATIONS OR LIABILITIES OR AUTHORITIES AND
POWERS OF THE TRUSTEES HEREUNDER AS SET FORTH OR REFERENCED IN THIS DECLARATION.
SECTION 3540 OF TITLE 12 OF THE DELAWARE CODE SHALL NOT APPLY TO THE TRUST.

SECTION 15.03   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 15.04   Headings.

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

SECTION 15.05   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 15.06   Partial Enforceability.

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

SECTION 15.07   Counterparts.

         This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All 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.

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

                                        /s/ Gerald Laderman
                                       -----------------------------------------
                                       as Administrative Trustee

                                        /s/ Lawrence W. Kellner
                                       -----------------------------------------
                                       as Administrative Trustee

                                       WILMINGTON TRUST COMPANY, as
                                           Delaware Trustee

                                       By:  /s/ W. Chris Sponenberg
                                           -------------------------------------
                                            Name:  W. Chris Sponenberg
                                            Title: Assistant Vice President

                                       WILMINGTON TRUST COMPANY, as
                                          Property Trustee

                                       By:  /s/ W. Chris Sponenberg
                                           -------------------------------------
                                            Name:  W. Chris Sponenberg
                                            Title: Assistant Vice President

                                       CONTINENTAL AIRLINES, INC.,
                                           as Sponsor and Debenture Issuer

                                       By:  /s/ Gerald Laderman
                                           -------------------------------------
                                            Name:  Gerald Laderman
                                            Title: Senior Vice President
                                                   Finance

<PAGE>
                                                                         ANNEX I

                  TERMS OF 6% CONVERTIBLE PREFERRED SECURITIES
               TERM INCOME DEFERRABLE EQUITY SECURITIES (TIDES)SM
                        6% CONVERTIBLE COMMON SECURITIES

         Pursuant to Section 7.01 of the Amended and Restated Declaration of
Trust, dated as of November 10, 2000 (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 the Indenture (as defined in the
Declaration) or, if not defined in the Declaration or Indenture, as defined in
the Offering Circular (as defined in the Declaration):

1.       Designation and Number.

         (a) "Preferred Securities." 5,000,000 Preferred Securities of the Trust
with an aggregate liquidation preference with respect to the assets of the Trust
of Two-Hundred Fifty Million Dollars ($250,000,000), and a liquidation amount
with respect to the assets of the Trust of $50 per Preferred Security, are
hereby designated for the purposes of identification only as "6% Convertible
Preferred Securities, Term Income Deferrable Equity Securities (TIDES) )SM" (the
"Preferred Securities"). The Preferred Security Certificates evidencing the
Preferred Securities shall be substantially in the form attached hereto as
Exhibit A-1, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange or other organization on which the Preferred Securities
are listed.

         (b) "Common Securities." 154,640 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of Seven
Million Seven-Hundred Thirty-Two Thousand Dollars ($7,732,000) and a liquidation
amount with respect to the assets of the Trust of $50 per Common Security, are
hereby designated for the purposes of identification only as "6% Convertible
Common Securities" (the "Common Securities"). The Common Security Certificates
evidencing the Common Securities shall be substantially in the form attached
hereto as Exhibit A-2, 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 6% (the "Coupon Rate") of the stated liquidation amount of $50 per
Security, such rate being the rate of interest payable on the Debentures to be
held by the Property Trustee. Distributions in arrears for more than one quarter
will bear interest thereon compounded quarterly at the Coupon Rate (to the
extent permitted by applicable law), subject to adjustment in the event of a
Registration Default, as described in the Declaration. The term "Distributions"
as used herein includes such quarterly distributions, additional distributions
on quarterly distributions not paid on the applicable Distribution Date, Special
Distributions and Additional Sums, as applicable. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds available
therefor. 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 of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.

         (b) Distributions on the Securities will be cumulative, will accrue
from the date of their original issuance and will be payable quarterly in
arrears, on the following dates, which dates correspond to the interest payment
dates on the Debentures: February 15, May 15, August 15 and November 15 of each
year, commencing on February 15, 2001, except as otherwise described below. The
Sponsor 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 consecutive quarters (each a "Deferral 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 Deferral Period. Prior to three Business
Days before a Regular Record Date fixed for a Payment Resumption Date (as
defined in the Indenture), the Sponsor may further extend such Deferral Period;
provided that such Deferral Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters 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 Regular Record Date for the relevant Payment
Resumption Date. Upon the termination of any Deferral Period and the payment of
all amounts then due, the Sponsor may commence a new Deferral Period, subject to
the above requirements.

         (c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the relevant record dates. The relevant record dates shall be on the
1st day of the month of the relevant payment dates, except as otherwise
described in this Annex I to the Declaration. Subject to any applicable laws and
regulations and the provisions of the Declaration, each such payment in respect
of Preferred Securities being held in book-entry form through The Depository
Trust Company (the "Depositary") will be made as described under the heading
"Description of TIDES--Form, Book-Entry Procedures and Transfer" in the Offering
Circular. The relevant record dates for the Common Securities shall be the same
record dates as for the Preferred Securities. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Sponsor having failed to make a payment under the Debentures, 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, with
respect to any Redemption Date, if such Business Day is in the next succeeding
calendar year, such Redemption Date shall be the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.

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

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

3.       Liquidation Distribution Upon Dissolution.

         In the event of any voluntary or involuntary dissolution of the Trust,
the Trust shall be liquidated by the Trustees as expeditiously as the Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law (including, without
limitation, by paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act), to the Holders of the Securities a Like Amount of Debentures, unless
such distribution would not be practical as determined by the Administrative
Trustees, in which event such Holders will be entitled to receive out of the
assets of the Trust available for distribution to holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law (including,
without limitation, by paying or making reasonable provision to pay all claims
and obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act), an amount equal to, in the case of Holders of Preferred Securities,
the aggregate liquidation amount thereof plus accrued and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such 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
Preferred Securities shall be paid on a Pro Rata (as defined below) basis in
accordance with paragraph 9. The Holder of the Common Securities will be
entitled to receive distributions upon any such liquidation Pro Rata with the
Holders of the Preferred Securities, except as provided in paragraph 10.

4.       Redemption and Distribution.

         (a) Upon the repayment or payment of the Debentures in whole or in
part, whether at maturity or upon redemption or otherwise (other than following
any distribution of the Debentures to the Holders), the proceeds from such
repayment or redemption shall be simultaneously applied to redeem, on a Pro Rata
basis, a Like Amount of Securities, on the redemption date, in an amount per
Security equal to the applicable redemption price, which redemption price will
be equal to (i) the liquidation amount of each of the Securities plus any
accrued and unpaid Distributions thereon (A) in the case of the repayment of the
Debentures at stated maturity, or (B) in the case of a redemption of the
Debentures in certain limited circumstances set forth in the Indenture upon the
occurrence of a Tax Event or (ii) in the case of an Optional Redemption on or
after November 15, 2003, the Optional Redemption Price (as defined in the
Indenture), payable in cash (as applicable, the "Redemption Price"). Holders
will be given not less than 20 nor more than 60 days' notice of such redemption.
Upon the repayment of the Debentures at maturity or upon any acceleration,
earlier redemption or otherwise, the proceeds from such repayment will be
applied to redeem the Securities, in whole, upon not less than 30 nor more than
60 days' notice.

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

         (c) The Sponsor, as the Holder of the outstanding Common Securities,
shall have the right at any time (including, without limitation, upon the
occurrence of a Tax Event or Investment Company Act Event) to dissolve the Trust
and, after satisfaction of the creditors of the Trust, cause a Like Amount of
the Debentures to be distributed to the Holders of the Securities upon
liquidation of the Trust, provided that the Administrative Trustees shall have
received a No Recognition Opinion (as defined below) prior to the dissolution of
the Trust.

         (d) If, at any time, a Tax Event shall occur and be continuing the
Sponsor shall cause the Administrative Trustees to dissolve the Trust and, after
satisfaction of creditors of the Trust (including, without limitation, by paying
or making reasonable provision to pay all claims and obligations of the Trust in
accordance with Section 3808(e) of the Business Trust Act), cause Debentures to
be distributed to the Holders of the Securities in liquidation of the Trust
within 90 days following the occurrence of such Tax Event (the "90 Day Period");
provided, however, that such dissolution and distribution shall be conditioned
on (i) the Trustees' receipt of an opinion of a nationally recognized
independent tax counsel (reasonably acceptable to the Trustees) experienced in
such matters (a "No Recognition Opinion"), which opinion may rely on published
revenue rulings of the Internal Revenue Service, to the effect that the Holders
of the Securities will not recognize any income, gain or loss for United States
federal income tax purposes as a result of such liquidation and distribution of
Debentures, and (ii) the Sponsor being unable to avoid such Tax Event within the
90 day period by taking some ministerial action or pursuing some other
reasonable measure that, in the sole judgment of the Sponsor, will have no
adverse effect on the Trust, the Sponsor or the Holders of the Securities and
will involve no material cost ("Ministerial Action").

         If (i) the Sponsor has received an opinion (a "Redemption Tax Opinion")
of a nationally recognized independent tax counsel (reasonably acceptable to the
Trustees) experienced in such matters that, as a result of a Tax Event, there is
more than an insubstantial risk that the Sponsor would be precluded from
deducting the interest on the Debentures for United States federal income tax
purposes, even after the Debentures were distributed to the Holders of
Securities upon liquidation of the Trust as described in this paragraph 4(d), or
(ii) the Trustees shall have been informed by such tax counsel that it cannot
deliver a No Recognition Opinion, the Sponsor shall have the right, upon not
less than 20 nor more than 60 days' notice, and within 90 days following the
occurrence of such Tax Event, to redeem the Debentures in whole (but not in
part) for cash, for the principal amount plus accrued and unpaid interest
thereon and, following such redemption, all the Securities will be redeemed by
the Trust at the liquidation amount of $50 per Security plus accrued and unpaid
Distributions thereon; provided, however, that, if at the time there is
available to the Sponsor or the Trust the opportunity to eliminate, within the
90 Day Period, the Tax Event by taking some Ministerial Action, the Trust or the
Sponsor will pursue such Ministerial Action in lieu of redemption.

         In lieu of the foregoing options, the Company shall also have the
option of causing the Securities to remain outstanding and pay Additional Sums
on the Debentures.

         "Tax Event" means that the Property Trustee shall have received an
opinion of a nationally recognized independent tax counsel to the Sponsor
(reasonably acceptable to the Trustees) experienced in such matters (a
"Dissolution Tax Opinion") to the effect that, as a result of (i) any amendment
to, or change (including any announced prospective change (which shall not
include a proposed change), provided that a Tax Event shall not occur more than
90 days before the effective date of any such prospective change) in the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority therefor or therein, (ii) any judicial decision
or official administrative pronouncement, ruling, regulatory procedure, notice
or announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (iii) any amendment to
or change in the administrative position or interpretation of any Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental agency or
regulatory body, irrespective of the manner in which such amendment or change is
made known, which amendment or change is effective or such Administrative Action
or decision is announced, in each case, on or after the date of original
issuance of the Debentures or the issue date of the Preferred Securities issued
by the Trust, there is more than an insubstantial risk that (a) if the
Debentures are held by the Property Trustee, (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 interest accrued or received on the Debentures or subject to
more than a de minimis amount of other taxes, duties or other governmental
charges as determined by such counsel, or (II) any portion of interest payable
by the Sponsor to the Trust on the Debentures is not, or within 90 days of the
date of such opinion will not be, deductible by the Sponsor in whole or in part
for United States federal income tax purposes or (b) with respect to Debentures
which are no longer held by the Property Trustee, any portion of interest
payable by the Sponsor on the Debentures is not, or within 90 days of the date
of such opinion will not be, deductible by the Sponsor in whole or in part for
United States federal income tax purposes.

         If an Investment Company Event (as hereinafter defined) shall occur and
be continuing, the Sponsor shall cause the Trustees to dissolve the Trust and,
after satisfaction of liabilities of the creditors of the Trust as provided by
applicable law (including, without limitation, by paying or making reasonable
provision to pay all claims and obligations of the Trust in accordance with
Section 3808(e) of the Business Trust Act), cause the Debentures to be
distributed to the Holders of the Securities in liquidation of the Trust within
90 days following the occurrence of such Investment Company Event.

         "Investment Company Event" means the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), to the effect that the Trust is or will
be considered an Investment Company which is required to be registered under the
Investment Company Act, which Change in 1940 Act Law becomes effective on or
after the date of the Offering Circular.

         After the date fixed for any distribution of Debentures: (i) the
Securities will no longer be deemed to be outstanding, (ii) the Depositary or
its nominee (or any successor Depositary or its nominee), as record Holder of
Preferred Securities represented by global certificates, 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
the Depositary or its nominee (or any successor Depositary or its nominee), will
be deemed to represent Debentures having an aggregate principal amount equal to
the aggregate stated liquidation amount of such Securities, with accrued and
unpaid interest equal to accrued and unpaid Distributions on such Securities
until such certificates are presented to the Sponsor or its agent for transfer
or reissuance.

         (e) The Securities will not be redeemed 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.

         (f) Redemption or Distribution Procedures.

                           (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 an Administrative
         Trustee on behalf of the Trust by mail to each Holder of Securities to
         be redeemed or exchanged not fewer than 20 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 paragraph
         4(f)(i), a Redemption/Distribution Notice shall be deemed to be given
         on the day such notice is first mailed by first-class mail, postage
         prepaid, to Holders 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 the Depositary (or any successor
         Depositary) or any nominee, the distribution of the proceeds of such
         redemption will be made to each 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 an
         Administrative Trustee on behalf of the Trust gives a
         Redemption/Distribution Notice, which notice may only be issued if the
         Debentures are redeemed as set out in this paragraph 4 (which notice
         will be irrevocable), then (A) with respect to Preferred Securities
         held in book-entry form, by 12:00 noon, New York City time, on the
         redemption date, to the extent funds are available, with respect to
         Preferred Securities held in global form, the Property Trustee will
         deposit irrevocably with the Depositary (or successor Depositary) funds
         sufficient to pay the amount payable on redemption with respect to such
         Preferred Securities and will give the Depositary irrevocable
         instructions and authority to pay the amount payable on redemption to
         the Holders of such Preferred Securities, and (B) with respect to
         Preferred Securities issued in certificated form and Common Securities,
         to the extent funds are available, the Property Trustee will
         irrevocably deposit with the Paying Agent funds sufficient to pay the
         amount payable on redemption to the Holders of such Securities and will
         give the Paying Agent irrevocable instructions and authority to pay the
         amount payable on redemption to the Holders thereof upon surrender of
         their certificates. If a Redemption/Distribution Notice shall have been
         given and funds deposited as required, then on the date of such
         deposit, all rights of Holders of such Securities so called for
         redemption will cease, except the right of the Holders of such
         Securities to receive the redemption price, but without interest on
         such redemption price, and such Securities will cease to be
         outstanding. Neither the Administrative Trustees nor the Property
         Trustee 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 amount payable on such date will be made on the next
         succeeding day that is a Business Day (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 Trust or by the Sponsor
         as guarantor pursuant to the relevant Securities Guarantee,
         Distributions on such Securities will continue to accrue at the then
         applicable rate, from the original redemption date to the date of
         payment, in which case the actual payment date will be considered the
         date fixed for redemption for purposes of calculating the amount
         payable upon redemption (other than for purposes of calculating any
         premium).

                           (iv) Redemption/Distribution Notices shall be sent by
         the Administrative Trustees on behalf of the Trust to (A) in the case
         of Preferred Securities held in book-entry form, the Depositary and, in
         the case of Securities held in certificated form, the Holders of such
         certificates and (B) in respect of the Common Securities, the Holder
         thereof.

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

5.       Conversion Rights.

         The Holders of Securities shall have the right at any time prior to
5:00 p.m. New York City Time on the Business Day immediately preceding the
earlier of November 15, 2030 and the date fixed for redemption of the
Securities, at their option, to cause the Conversion Agent to convert
Securities, on behalf of the converting Holders, into shares of Class B Common
Stock, par value $.01 per share, of the Sponsor (including any class or classes
of shares resulting from any reclassification or reclassifications thereof, the
"Class B Common Stock") in the manner described herein on and subject to the
following terms and conditions:

         (a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable shares of Class B Common Stock pursuant
to the Holder's direction to the Conversion Agent to exchange such Securities
for a portion of the Debentures theretofore held by the Trust on the basis of
one Security per $50 principal amount of Debentures, and immediately convert
such amount of Debentures into fully paid and nonassessable shares of Class B
Common Stock at an initial conversion price of $60 per share of Class B Common
Stock per $50 principal amount of Debentures (which is equivalent to an initial
conversion ratio of approximately 0.8333 shares of Class B Common Stock per $50
principal amount of Debentures), subject to certain adjustments set forth in the
Indenture.

         (b) In order to convert Securities into Class B Common Stock the Holder
shall submit to the Conversion Agent at the office referred to above an
irrevocable request to convert Securities on behalf of such Holder (the
"Conversion Request"), together, if the Securities are in certificated form,
with such certificates. The Conversion Request shall (i) set forth the number of
Securities to be converted and the name or names, if other than the Holder, in
which the shares of Class B Common Stock should be issued and (ii) direct the
Conversion Agent (a) to exchange such Securities for a portion of the Debentures
held by the Trust (at the price specified in the preceding paragraph) and (b) to
immediately convert such Debentures on behalf of such Holder, into Class B
Common Stock (at the conversion price specified in the preceding paragraph). The
Conversion Agent shall notify the Trust of the Holder's election to exchange
Securities for a portion of the Debentures held by the Trust and the Trust
shall, upon receipt of such notice, deliver to the Conversion Agent the
appropriate principal amount of Debentures for exchange in accordance with this
Section. The Conversion Agent shall thereupon notify the Sponsor of the Holder's
election to convert such Debentures into shares of Class B Common Stock. Holders
of Securities at the close of business on a Distribution record date will be
entitled to receive the Distribution payable on such Securities on the
corresponding Distribution payment date notwithstanding the conversion of such
Securities following such record date but prior to such distribution payment
date. Except as provided above, neither the Trust nor the Sponsor will make, or
be required to make, any payment, allowance or adjustment upon any conversion on
account of any accumulated and unpaid Distributions accrued on the Securities,
whether or not in arrears, (including any Additional Amounts accrued thereon)
surrendered for conversion, or on account of any accumulated and unpaid
dividends on the shares of Class B Common Stock issued upon such conversion,
except to the extent that such shares are held of record on the record date for
any such distributions. Securities shall be deemed to have been converted
immediately prior to the close of business on the day on which a Notice of
Conversion relating to such Securities is received by the Trust in accordance
with the foregoing provision (the "Conversion Date"). The Person or Persons
entitled to receive the Class B Common Stock issuable upon conversion of the
Debentures shall be treated for all purposes as the record holder or holders of
such Class B Common Stock at such time. As promptly as practicable on or after
the Conversion Date, the Sponsor shall issue and deliver at the office of the
Conversion Agent a certificate or certificates for the number of full shares of
Class B Common Stock issuable upon such conversion, together with the cash
payment, if any, in lieu of any fraction of any share to the Person or Persons
entitled to receive the same, unless otherwise directed by the Holder in the
notice of conversion and the Conversion Agent shall distribute such certificate
or certificates to such Person or Persons.

         (c) Each Holder of a Security by his acceptance thereof appoints
Wilmington Trust Company "Conversion Agent" for the purpose of effecting the
conversion of Securities in accordance with this Section. In effecting the
conversion and transactions described in this Section, the Conversion Agent
shall be acting as agent of the Holders of Securities directing it to effect
such conversion transactions. The Conversion Agent is hereby authorized (i) to
exchange Securities from time to time for Debentures held by the Trust in
connection with the conversion of such Securities in accordance with this
Section and (ii) to convert all or a portion of the Debentures into Class B
Common Stock and thereupon to deliver such shares of Class B Common Stock in
accordance with the provisions of this Section and to deliver to the Trust a new
Debenture or Debentures for any resulting unconverted principal amount.

         (d) No fractional shares of Class B Common Stock will be issued as a
result of conversion, but in lieu thereof, such fractional interest will be paid
in cash by the Sponsor to the Trust, which in turn will make such payment to the
Holder or Holders of Securities so converted.

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

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

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

6.       Voting Rights--Preferred Securities.

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

         (b) In addition to the rights of the Holders of the Preferred
Securities with respect to the enforcement of payment of principal and interest
on the Debentures set forth herein, in the Declaration or in the Indenture, if
(i) a Debenture Event of Default occurs and is continuing or (ii) the Company
defaults under the Guarantee (each of (i) and (ii) being an "Appointment
Event"), then the Holders of the Preferred Securities, acting as a single class,
will be entitled by the vote of a Majority in liquidation amount of the
Preferred Securities to appoint a Special Trustee in accordance with Section
5.06(a)(ii)(B) of the Declaration. Any Holder of Preferred Securities (other
than the Sponsor, or any entity directly or indirectly controlling or controlled
by or under direct or indirect common control with the Sponsor) will be entitled
to nominate any Person to be appointed as Special Trustee. Not later than 30
days after such right to appoint a Special Trustee arises, the Trustees will
convene a meeting for the purpose of appointing a Special Trustee. If the
Trustees fail to convene such meeting within such 30-day period, the Holders of
not less than 10% in aggregate liquidation amount of the Preferred Securities
will be entitled to convene such meeting in accordance with Section 12.02 of the
Declaration. The record date for such meeting will be the close of business on
the Business Day that is one Business Day before the day on which notice of the
meeting is sent to the Holders. The provisions of the Declaration relating to
the convening and conduct of the meetings of the Holders will apply with respect
to any such meeting.

         Any Special Trustee so appointed shall cease to be a Special Trustee if
the Appointment Event pursuant to which the Special Trustee was appointed and
all other Appointment Events cease to be continuing. A Special Trustee may be
removed without cause at any time by vote of the Holders of a Majority in
liquidation amount of the Preferred Securities at a meeting of the Holders of
the Preferred Securities or by written consent in accordance with Section
5.06(a)(ii)(B) of the Declaration. The Holders of 10% in liquidation amount of
the Preferred Securities will be entitled to convene such a meeting in
accordance with Section 12.02 of the Declaration. The record date for such
meeting will be the close of business on the Business Day which is one Business
Day before the day on which the notice of meeting is sent to Holders.
Notwithstanding the appointment of a Special Trustee, the Sponsor shall retain
all rights under the Indenture, including the right to defer payments of
interest by extending the interest payment period on the Debentures.

         Subject to the requirements set forth in this paragraph, the Holders of
a majority in liquidation amount of the Preferred Securities, voting separately
as a class may, and the Trustees shall not, without obtaining the prior approval
of the Holders of a Majority in aggregate liquidation amount of all outstanding
Preferred Securities (i) direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee under the Indenture, or
executing any trust or power conferred upon the Property Trustee with respect to
the Debentures, (ii) waive any past default and its consequences that is
waivable under Section 5.13 of the Indenture or otherwise, (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, provided, however, that, where a consent under the Indenture would
require the consent or act of the Holders of greater than a majority of the
Holders in principal amount of Debentures affected thereby (a "Super Majority"),
the Property Trustee may only give such consent or take such action at the
direction of the Holders of at least the proportion in liquidation preference of
the Preferred Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. The Property Trustee
shall not, and none of the other Trustees shall in any event, revoke any action
previously authorized or approved by a vote of the Holders of the Preferred
Securities, except by a subsequent vote of the Holders of the Preferred
Securities. Other than with respect to directing the time, method and place of
conducting any remedy available to the Property Trustee or the Debenture Trustee
as set forth above, the Property Trustee shall not take any action in accordance
with the directions of the Holders of the Preferred Securities under this
paragraph unless the Property Trustee has obtained an opinion of tax counsel 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 a Declaration 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 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. 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 any Direct Action, the Debenture Issuer will be subrogated to
the rights of such Holder of Preferred Securities under the Declaration to the
extent of any payment made by the Debenture Issuer to such Holder of Preferred
Securities in such Direct Action.

         Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
without notice pursuant to written consent. The Administrative Trustees 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 the following
information (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 Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.

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

7.       Voting Rights--Common Securities.

         (a) Except as provided under paragraphs 7(b), (c) and 8, in the
Business Trust Act and 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, subject to the exclusive right of the Holders of the Preferred
Securities to appoint, remove or replace a Special Trustee.

         (c) Subject to Section 2.06 of the Declaration and only after the Event
of Default with respect to the Preferred Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred upon the Property
Trustee under 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) waive any past default and its consequences that is
waivable under Section 5.13 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Debentures shall be
due and payable, provided that, where a consent or action under the Indenture
would require the consent or act of the Holders of greater than a majority in
principal amount of Debentures affected thereby (a "Super Majority"), the
Property Trustee may only give such consent or take such action at the direction
of the Holders of at least the proportion in liquidation amount of the Common
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. Pursuant to this paragraph 7(c),
the Property Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities, except by a
subsequent vote of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of conducting any remedy
available to the Property Trustee or the Debenture Trustee as set forth above,
the Property Trustee shall not take any action in accordance with the directions
of the Holders of the Common Securities under this paragraph unless the Property
Trustee has obtained an opinion of tax counsel 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 Property Trustee fails to
enforce its rights, as holder of the Debentures, under the Indenture, any Holder
of Common Securities may, to the fullest extent permitted by law and after a
period of 30 days has elapsed from such Holder's written request to the Property
Trustee to enforce such rights, institute a legal proceeding directly against
the Sponsor, to enforce the Property Trustee's rights, as holder of the
Debentures, under the Indenture, without first instituting any legal proceeding
against the Property 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 without notice
pursuant to written consent. The Administrative 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 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.

8.       Amendments to Declaration and Indenture.

         (a) In addition to any requirements under Section 12.01 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Administrative Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or 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 8.01
of the Declaration, then the Holders of outstanding Securities 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, that, the
rights of Holders of Preferred Securities under Article V of the Declaration to
appoint, remove or replace a Special Trustee shall not be amended without the
consent of each Holder of Preferred Securities; and provided further that 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 at
least a Majority in liquidation amount of such class of Securities.

         (b) In the event the consent of the Property Trustee as the holder of
the Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the 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 at least
the same proportion in aggregate stated liquidation preference of the
Securities; provided, however, that the Property Trustee shall not take any
action in accordance with the directions of the Holders of the Securities under
this paragraph 8(b) unless the Property Trustee has obtained 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.

9.       Pro Rata.

         A reference in these terms of the Securities to any payment,
Distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
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, on any Distribution Date or redemption date
an Event of Default under the Declaration has occurred and is continuing, in
which case no payment of any Distribution on, or amount payable upon redemption
of, any Common Security, and no other payment on account of the redemption,
liquidation or other acquisition of Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid Distributions on all
outstanding Preferred Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the amount payable upon redemption
of the Preferred Securities, the full amount of such amount in respect of all
outstanding Preferred Securities shall have been made or provided for, and all
funds available to the Property Trustee shall first be applied to the payment in
full in cash of all Distributions on, or the amount payable upon redemption of
Preferred Securities then due and payable.

10.      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 Property 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.

11.      Acceptance of Securities Guarantees and Indenture.

         Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture which
are incorporated by reference herein and which include, among other things,
provisions relating to certain rights of the Holders of the Preferred Securities
all as set forth therein.

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 the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.

<PAGE>
                                                                     EXHIBIT A-1

                           FORM OF PREFERRED SECURITY

                           [FORM OF FACE OF SECURITY]

[Include the following Restricted Securities Legend on all Restricted Preferred
Securities, including Rule 144A Global Preferred Securities, unless otherwise
determined by the Sponsor in accordance with applicable law--

                  THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY
                  ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
                  UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
                  "SECURITIES ACT"), AND THIS SECURITY AND ANY
                  CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES (THE
                  "DEBENTURES") ISSUED UPON EXCHANGE FOR THIS SECURITY
                  AND ANY CLASS B COMMON STOCK ISSUABLE UPON
                  CONVERSION THEREOF MAY NOT BE OFFERED, SOLD,
                  PLEDGED, ENCUMBERED OR OTHERWISE TRANSFERRED OR
                  DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
                  AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
                  THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF
                  THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM
                  THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
                  PROVIDED BY RULE 144A THEREUNDER.

                  THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
                  AGREES FOR THE BENEFIT OF CONTINENTAL AIRLINES, INC.
                  (THE "COMPANY") AND THE TRUST THAT (A) THIS SECURITY
                  AND ANY DEBENTURES ISSUABLE UPON EXCHANGE THEREOF
                  AND ANY CLASS B COMMON STOCK ISSUABLE UPON
                  CONVERSION THEREOF MAY BE OFFERED, RESOLD, PLEDGED
                  OR OTHERWISE TRANSFERRED, ONLY (i) TO THE COMPANY,
                  (ii) INSIDE THE UNITED STATES TO A PERSON WHOM THE
                  SELLER REASONABLY BELIEVES IS A "QUALIFIED
                  INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
                  THE SECURITIES ACT) IN A TRANSACTION MEETING THE
                  REQUIREMENTS OF RULE 144A, (iii) PURSUANT TO AN
                  EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
                  PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (iv)
                  PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
                  REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR
                  (v) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
                  UNDER THE SECURITIES ACT, IN EACH OF CASES (i)
                  THROUGH (v) IN ACCORDANCE WITH ANY APPLICABLE
                  SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
                  ANY OTHER APPLICABLE JURISDICTION, AND (B) THE
                  HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
                  TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF
                  THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

                  BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
                  INTEREST HEREIN, THE HOLDER REPRESENTS THAT IT (1)
                  IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
                  MEANING OF RULE 144A UNDER THE SECURITIES ACT, IS
                  AWARE THAT THE SALE TO IT IS BEING MADE IN RELIANCE
                  ON RULE 144A AND IS ACQUIRING THE SECURITIES FOR ITS
                  OWN ACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE
                  QUALIFIED INSTITUTIONAL BUYERS AND THAT IT EXERCISES
                  SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH
                  ACCOUNT OR (2) ACQUIRED SUCH SECURITY IN A
                  TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER
                  THE SECURITIES ACT]

                  [Include on Preferred Security, unless otherwise
                  determined by the Sponsor in accordance with
                  applicable law--

                  BY ITS PURCHASE HEREOF OR ANY INTEREST THEREIN, THE
                  PURCHASER THEREOF WILL BE DEEMED TO HAVE REPRESENTED
                  EITHER THAT (A) IT IS NOT A PLAN OR OTHER ENTITY
                  WHOSE UNDERLYING ASSETS ARE SUBJECT TO ERISA AND/OR
                  SECTION 4975 OF THE CODE, OR A GOVERNMENTAL OR
                  CHURCH PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE
                  OR LOCAL LAW THAT IS SUBSTANTIALLY SIMILAR TO THE
                  PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975
                  OF THE CODE OR (B) ITS PURCHASE AND HOLDING OF A
                  TIDES WILL NOT RESULT IN A NON-EXEMPT PROHIBITED
                  TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION
                  4975 OF THE CODE (OR, IN THE CASE OF A GOVERNMENTAL
                  OR CHURCH PLAN, A VIOLATION OF ANY SUBSTANTIALLY
                  SIMILAR FEDERAL, STATE OR LOCAL LAW). FURTHER, THE
                  FIDUCIARIES OF ANY PLAN OR PLAN ASSETS ENTITY WHICH
                  MAY PURCHASE OR HOLD THESE SECURITIES WILL BE DEEMED
                  AS A RESULT OF SUCH ACQUISITION OR HOLDING TO HAVE
                  (A) DIRECTED THE TRUST TO INVEST IN THE DEBENTURES,
                  (B) AUTHORIZED AND DIRECTED ANY OF THE ACTIONS TAKEN
                  OR WHICH MAY BE TAKEN WITH RESPECT TO THE TRUST, THE
                  DEBENTURES AND THESE SECURITIES BY ANY OF THE
                  TRUSTEES, THE DEBENTURE TRUSTEE, THE GUARANTEE
                  TRUSTEE OR US AS CONTEMPLATED BY THE INDENTURE, THE
                  DEBENTURES OR THE GUARANTEE AND (C) TO HAVE
                  APPOINTED THE TRUSTEES.]

                  [Include if Preferred Security is in global form and
                  The Depository Trust Company is the Depositary--

                  THIS SECURITY IS A PREFERRED GLOBAL SECURITY WITHIN
                  THE MEANING OF THE DECLARATION HEREINAFTER REFERRED
                  TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY
                  TRUST COMPANY (THE "DEPOSITARY" OR "DTC") OR A
                  NOMINEE OF THE DEPOSITARY. THIS SECURITY IS
                  EXCHANGEABLE FOR 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 SECURITY (OTHER
                  THAN A TRANSFER OF THIS 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 CERTIFICATE IS PRESENTED BY AN
                  AUTHORIZED REPRESENTATIVE OF DTC (55 WATER STREET,
                  NEW YORK, NEW YORK), TO THE TRUST OR ITS AGENT FOR
                  REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
                  ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF
                  CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
                  AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
                  MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
                  REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC)
                  ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
                  OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
                  INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
                  HAS AN INTEREST HEREIN.]

              [Include if Preferred Security is in global form--

                  TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED
                  TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES
                  OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
                  NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
                  SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
                  ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
                  DECLARATION REFERRED TO BELOW.]

<PAGE>

                             Certificate Number P-1
                  Number of Preferred Securities _____________
                              CUSIP NO. 270-796-207
                             Preferred Securities of
                      Continental Airlines Finance Trust II

                       6% Convertible Preferred Securities
               Term Income Deferrable Equity Securities (TIDES)SM*
           (liquidation amount $50 per Convertible Preferred Security)

Continental Airlines Finance Trust II, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that

------------------------------------
           (the "Holder")

is the registered owner of preferred securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the 6%
Convertible Preferred Securities, Term Income Deferrable Equity Securities
(TIDESSM)* (liquidation amount $50 per Convertible Preferred Security) (the
"Preferred Securities"). Subject to the terms of the Declaration (as defined
below), the Preferred Securities are transferable on the books and records of
the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Preferred Securities represented hereby are issued and shall in all respects
be subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of November 10, 2000, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the
Preferred Securities as set forth in Annex I to the Declaration. Capitalized
terms used 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 Trust at its principal place of
business.

         Reference is hereby made to select provisions of the Preferred
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.

         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.

------------
* The terms Term Income Deferrable Equity Securities (TIDES)" and TIDES" are
registered servicemarks of Credit Suisse First Boston Corporation.

         Unless the Property Trustee's Certificate of Authentication hereon has
been properly executed, these Preferred Securities shall not be entitled to any
benefit under the Declaration or be valid or obligatory for any purpose.

         IN WITNESS WHEREOF, the Trust has executed this certificate this
_____________day of _________________.

                                        Continental Airlines Finance Trust II

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

<PAGE>

                PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

Dated:

                                         Wilmington Trust Company,
                                         as Property Trustee

                                         By:
                                             -----------------------------------
                                             Authorized Signature

<PAGE>
                          [FORM OF REVERSE OF SECURITY]

         Distributions payable on each Preferred Security will be fixed at a
rate per annum of 6% (the "Coupon Rate") of the stated liquidation amount of $50
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). The term "Distributions" as
used herein includes such quarterly distributions, additional distributions on
quarterly distributions not paid on the applicable Distribution Date, Special
Distributions and Additional Sums, as applicable. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds available
therefor. 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 of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.

         Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from the date of their original
issuance and will be payable quarterly in arrears, on February 15, May 15,
August 15 and November 15 of each year, commencing on February 15, 2001, to
Holders of record at the close of business on the 1st day of the month of the
applicable payment date, which payment dates shall correspond to the interest
payment dates (each an "Interest Payment Date") on the Debentures. 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 consecutive quarters (each a "Deferral 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 Deferral Period. Prior to the termination
of any such Deferral Period, the Debenture Issuer may further extend such
Deferral Period; provided that such Deferral Period together with all such
previous and further deferrals thereof may not exceed 20 consecutive quarters 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 on an Interest
Payment Date elected by the Company to Holders as they appear on the books and
records of the Trust on the record date fixed for such Interest Payment Date.
Upon the termination of any Deferral Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Deferral Period, subject to the
above requirements.

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

The Preferred Securities shall be convertible into shares of Class B Common
Stock, through (i) the exchange of Preferred Securities for a portion of the
Debentures and (ii) the immediate conversion of such Debentures into Class B
Common Stock, in the manner and according to the terms set forth in the
Declaration.

<PAGE>

                               CONVERSION REQUEST

To:   Wilmington Trust Company
    as Property Trustee of
    Continental Airlines Finance Trust II

         The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Class B Common Stock of Continental Airlines, Inc. (including
any class or classes of shares resulting from any reclassification or
reclassifications thereof, the "Class B Common Stock") in accordance with the
terms of the Amended and Restated Declaration of Trust (the "Declaration"),
dated as of November 10, 2000, by Lawrence W. Kellner and Gerald Laderman, as
Administrative Trustees, Wilmington Trust Company, as Delaware Trustee,
Wilmington Trust Company, as Property Trustee, Continental Airlines, Inc., as
Sponsor, and by the Holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to the Declaration. Pursuant to the
aforementioned exercise of the option to convert these Preferred Securities, the
undersigned hereby directs the Conversion Agent (as that term is defined in the
Declaration) to (i) exchange such Preferred Securities for a portion of the
Debentures (as that term is defined in the Declaration) held by the Trust (at
the rate of exchange specified in the terms of the Preferred Securities set
forth as Annex I to the Declaration) and (ii) immediately convert such
Debentures on behalf of the undersigned, into Class B Common Stock (at the
conversion rate specified in the terms of the Preferred Securities set forth as
Annex I to the Declaration).

         The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.

         Any holder, upon the exercise of its conversion rights in accordance
with the terms of the Declaration and the Preferred Securities, agrees to be
bound by the terms of the Registration Rights Agreement relating to the Class B
Common Stock issuable upon conversion of the Preferred Securities.

Date:

in whole __________                 in part __________

Number of Preferred Securities to be converted: ___________________

If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of Class B Common Stock are to be
issued, along with the address or addresses of such person or persons:

<PAGE>

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

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

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

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

                                       -----------------------------------------
                                       Signature (for conversion only)

Please Print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other Identifying Number:

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

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

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

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

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

<PAGE>

                                   ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security 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 on the books of the Trust. The agent
may substitute another to act for him or her.

Date:

Signature:
           ---------------------------------

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

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

<PAGE>

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF RESTRICTED
PREFERRED SECURITIES

This certificate relates to _____________ Preferred Securities held in (check
applicable space) ____ book-entry or ____ definitive form by the undersigned.

(A)     The undersigned (check one box below):

[ ]     has requested the Property Trustee by written order to deliver in
        exchange for its beneficial interest in the Rule 144A Global Preferred
        Security held by the Depositary a Preferred Security or Preferred
        Securities in definitive, registered form in such number equal to its
        beneficial interest in such Rule 144A Global Preferred Security (or the
        number thereof indicated above); or

[ ]     has requested the Property Trustee by written order to exchange its
        Preferred Security in definitive registered form for an interest in the
        Rule 144A Global Preferred Security held by the Depositary in such
        number equal to number of Preferred Securities in definitive registered
        form so held; or

[ ]     has requested the Property Trustee by written order to exchange or
        register the transfer of a Preferred Security or Preferred Securities.

(B)     The undersigned confirms that such Securities are being (check one box
        below):

  (1) [ ]  acquired for the undersigned's own account, without transfer (in
           satisfaction of Section 9.02(d)(ii)(A) of the Declaration); or

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

  (3) [ ]  transferred pursuant to Rule 144 of the Securities Act of 1933; or

  (4) [ ]  transferred pursuant to an effective registration statement under the
           Securities Act.

Unless one of the boxes in (B) above is checked, the Property Trustee will
refuse to register any of the Preferred Securities evidenced by this certificate
in the name of any person other than the registered Holder thereof; provided,
however, that if box (3) or (4) is checked, the Property Trustee may require,
prior to registering any such transfer of the Preferred Securities such legal
opinions, certifications and other information as the Trust has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, such as the exemption provided by Rule 144 under such
Act.

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

<PAGE>

                                       Signature Guarantee:*

                                       -----------------------------------------
                                       Signature must be guaranteed Signature

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

              TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing these Preferred
Securities for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Trust as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.

Dated:
       ------------------

NOTICE:  To be executed by an executive officer

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

<PAGE>

                                                                     EXHIBIT A-2

                             FORM OF COMMON SECURITY

                           [FORM OF FACE OF SECURITY]

         [THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN EFFECTIVE
REGISTRATION STATEMENT.]

         [OTHER THAN AS PROVIDED IN THE DECLARATION (AS DEFINED HEREIN), THIS
SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO A
RELATED PARTY (AS DEFINED IN THE DECLARATION) OF CONTINENTAL AIRLINES FINANCE
TRUST II.]

                             Certificate Number C-1
                   Number of Common Securities ______________
                                Common Securities
                                       of
                      Continental Airlines Finance Trust II

                        6% Convertible Common Securities
            (liquidation amount $50 per Convertible Common Security)

         Continental Airlines Finance Trust II, a statutory business trust
created under the laws of the State of Delaware (the "Trust"), hereby certifies
that

--------------------------------------------------------------------------------
(the "Holder") is the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 6% Convertible Common Securities (liquidation amount $50 per
Convertible Common Security) (the "Common Securities"). Subject to the terms of
the Declaration (as defined below), the Common Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for
transfer. The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities represented hereby are
issued and shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of November 10, 2000, as the
same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Common Securities as set forth in Annex I to the
Declaration. Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits of
the Common Securities Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Common Securities Guarantee and the
Indenture to a Holder without charge upon written request to the Sponsor at its
principal place of business.

         Reference is hereby made to select provisions of the Common Securities
set forth on the reverse hereof, which select provisions shall for all purposes
have the same effect as if set forth at this place.

         Upon receipt of this certificate, the Sponsor 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 Common Securities as
evidence of indirect beneficial ownership in the Debentures.

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

                                       -----------------------------------------
                                       Continental Airlines Finance Trust II

                                       By:
                                           -------------------------------------
                                           solely in his capacity as trustee and
                                           not in his individual capacity

<PAGE>
                          [FORM OF REVERSE OF SECURITY]

         Distributions payable on each Common Security will be fixed at a rate
per annum of 6% (the "Coupon Rate") of the stated liquidation amount of $50 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used herein
includes quarterly distributions, additional distributions on quarterly
distributions not paid on the applicable Distribution Date, Special
Distributions and Additional Sums, as applicable. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds available
therefor. 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 of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.

         Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from the date of their original
issuance and will be payable quarterly in arrears, on February 15, May 15,
August 15 and November 15 of each year, commencing on February 15, 2001, to
Holders of record one (1) day prior to such payment dates, which payment dates
shall correspond to the interest payment dates (each, an "Interest Payment
Date") on the Debentures. 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 consecutive quarters
(each a "Deferral 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 Deferral Period.
Prior to the termination of any such Deferral Period, the Debenture Issuer may
further extend such Deferral Period; provided that such Deferral Period together
with all such previous and further deferrals thereof may not exceed 20
consecutive quarters 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 on an Interest Payment Date elected by the Company to Holders as they
appear on the books and records of the Trust on the record date fixed for such
Interest Payment Date. Upon the termination of any Deferral Period and the
payment of all amounts then due, the Debenture Issuer may commence a new
Deferral Period, subject to the above requirements.

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

         The Common Securities shall be convertible into shares of Class B
Common Stock, through (i) the exchange of Common Securities for a portion of the
Debentures and (ii) the immediate conversion of such Debentures into Class B
Common Stock, in the manner and according to the terms set forth in the
Declaration.

<PAGE>

                               CONVERSION REQUEST

To: Wilmington Trust Company,
    as Property Trustee of
    Continental Airlines Finance Trust II

         The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Class B Common Stock of CONTINENTAL AIRLINES, INC. (the "Class
B Common Stock") in accordance with the terms of the Amended and Restated
Declaration of Trust (the "Declaration"), dated as of November 10, 2000, by
Lawrence W. Kellner and Gerald Laderman, as Administrative Trustees, Wilmington
Trust Company, as Delaware Trustee, Wilmington Trust Company, as Property
Trustee, Continental Airlines, Inc., as Sponsor, and by the Holders, from time
to time, of undivided beneficial interests in the Trust to be issued pursuant to
the Declaration. Pursuant to the aforementioned exercise of the option to
convert these Common Securities, the undersigned hereby directs the Conversion
Agent (as that term is defined in the Declaration) to (i) exchange such Common
Securities for a portion of the Debentures (as that term is defined in the
Declaration) held by the Trust (at the rate of exchange specified in the terms
of the Common Securities set forth as Annex I to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned, into Class B
Common Stock (at the conversion rate specified in the terms of the Common
Securities set forth as Annex I to the Declaration).

         The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.

         Any holder, upon the exercise of its conversion rights in accordance
with the terms of the Declaration and the Common Securities, agrees to be bound
by the terms of the Registration Rights Agreement relating to the Class B Common
Stock issuable upon conversion of the Common Securities.

Date:

in whole _________                  in part _________

Number of Common Securities to be converted: _____________________

If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of Class B Common Stock are to be
issued, along with the address or addresses of such person or persons

<PAGE>

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

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

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

--------------------------------------------------------------------------------
                         Signature (for conversion only)

Please Print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other Identifying Number

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

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

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

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

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

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

<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)

<PAGE>

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

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00020-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00020-of-00352.parquet"}]]