<Page>

                              AMENDED AND RESTATED
                                   DECLARATION
                                    OF TRUST
                           HOUSEHOLD CAPITAL TRUST VII
                            DATED AS OF        , 2001

<Page>

                             CROSS-REFERENCE TABLE*

<Table>
<Caption>

Section of
Trust Indenture Act                                                                  Section of
of 1939, as Amended                                                                  Declaration
-------------------                                                                --------------
<S>                                                                                 <C>
310(a).........................................................................        5.3(a)
310(b).........................................................................        5.3(c)
310(c).........................................................................     Inapplicable
311(a).........................................................................        2.2(b)
311(b).........................................................................        2.2(b)
311(c).........................................................................     Inapplicable
312(a).........................................................................        2.2(a)
312(b).........................................................................        2.2(b)
313............................................................................          2.3
314(a).........................................................................          2.4
314(b).........................................................................     Inapplicable
314(c).........................................................................          2.5
314(d).........................................................................     Inapplicable
314(f).........................................................................     Inapplicable
315(a).........................................................................        3.9(b)
315(b).........................................................................          2.8
315(c).........................................................................        3.9(a)
315(d).........................................................................        3.9(a)
316(a).........................................................................    Exhibit At 2.6
316(c).........................................................................        3.6(e)
</Table>

*    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>

                                TABLE OF CONTENTS


<Table>

<S>                                                                                                               <C>
DECLARATION OF TRUST...........................................................................................     1

                                    ARTICLE I
                         INTERPRETATION AND DEFINITIONS

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

                                   ARTICLE II
                               TRUST INDENTURE ACT

      SECTION 2.1 Trust Indenture Act; Application.............................................................     6
      SECTION 2.2 Lists of Holders of Securities...............................................................     6
      SECTION 2.3 Reports by the Property Trustee..............................................................     7
      SECTION 2.4 Periodic Reports to Property Trustee.........................................................     7
      SECTION 2.5 Evidence of Compliance with Conditions Precedent.............................................     7
      SECTION 2.6 Events of Default; Waiver....................................................................     7
      SECTION 2.7 Event of Default; Notice.....................................................................     8

                                   ARTICLE III
                                  ORGANIZATION

      SECTION 3.1 Name ........................................................................................     8
      SECTION 3.2 Office  .....................................................................................     9
      SECTION 3.3 Purpose .....................................................................................     9
      SECTION 3.4 Authority....................................................................................     9
      SECTION 3.5 Title to Property of the Trust...............................................................     9
      SECTION 3.6 Powers and Duties of the Regular Trustees....................................................     9
      SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.........................................    11
      SECTION 3.8 Powers and Duties of the Property Trustee....................................................    12
      SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee..................................    13
      SECTION 3.10 Certain Rights of Property Trustee..........................................................    14
      SECTION 3.11 Delaware Trustee............................................................................    16
      SECTION 3.12 Execution of Documents......................................................................    16
      SECTION 3.13 Not Responsible for Recitals or Issuance of Securities . ...................................    16
      SECTION 3.14 Duration of Trust...........................................................................    16
      SECTION 3.15 Mergers.....................................................................................    16

                                   ARTICLE IV
                                     SPONSOR

      SECTION 4.1 Sponsor's Purchase of Common Securities......................................................    17
      SECTION 4.2 Responsibilities of the Sponsor..............................................................    18


<Page>

                                    ARTICLE V
                                    TRUSTEES

      SECTION 5.1 Number of Trustees...........................................................................    18
      SECTION 5.2 Delaware Trustee.............................................................................    19
      SECTION 5.3 Property Trustee; Eligibility................................................................    19
      SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally............................    19
      SECTION 5.5 Initial Trustees.............................................................................    19
      SECTION 5.6 Appointment, Removal and Resignation of Trustees.............................................    20
      SECTION 5.7 Vacancies Among Trustees.....................................................................    21
      SECTION 5.8 Effect of Vacancies..........................................................................    22
      SECTION 5.9 Meetings.....................................................................................    22
      SECTION 5.10 Delegation of Power.........................................................................    22

                                   ARTICLE VI
                                  DISTRIBUTIONS

      SECTION 6.1 Distributions................................................................................    22

                                   ARTICLE VII
                             ISSUANCE OF SECURITIES

      SECTION 7.1 General Provisions Regarding Securities......................................................    22

                                  ARTICLE VIII
                              TERMINATION OF TRUST

      SECTION 8.1 Termination of Trust.........................................................................    23

                                   ARTICLE IX
                              TRANSFER OF INTERESTS

      SECTION 9.1 Transfer of Securities.......................................................................    24
      SECTION 9.2 Transfer of Certificates.....................................................................    24
      SECTION 9.3 Deemed Security Holders......................................................................    25
      SECTION 9.4 Book Entry Interests.........................................................................    25
      SECTION 9.5 Notices to Clearing Agency...................................................................    25
      SECTION 9.6 Appointment of Successor Clearing Agency.....................................................    25
      SECTION 9.7 Definitive Preferred Security Certificates...................................................    26
      SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates............................................    26

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

      SECTION 10.1 Liability...................................................................................    27
      SECTION 10.2 Exculpation.................................................................................    27
      SECTION 10.3 Fiduciary Duty..............................................................................    27
      SECTION 10.4 Indemnification.............................................................................    28
      SECTION 10.5 Outside Businesses..........................................................................    29

<Page>

                                   ARTICLE XI
                                   ACCOUNTING

      SECTION 11.1 Fiscal Year.................................................................................    29
      SECTION 11.2 Certain Accounting Matters..................................................................    29
      SECTION 11.3 Banking.....................................................................................    30
      SECTION 11.4 Withholding.................................................................................    30

                                   ARTICLE XII
                             AMENDMENTS AND MEETINGS

      SECTION 12.1 Amendments..................................................................................    30
      SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent............................    31

                                  ARTICLE XIII
                       REPRESENTATIONS OF PROPERTY TRUSTEE

      SECTION 13.1 Representations and Warranties of Property Trustee..........................................    32

                                   ARTICLE XIV
                                  MISCELLANEOUS

      SECTION 14.1 Notices.....................................................................................    33
      SECTION 14.2 Governing Law...............................................................................    34
      SECTION 14.3 Intention of the Parties....................................................................    34
      SECTION 14.4 Headings....................................................................................    34
      SECTION 14.5 Successors and Assigns......................................................................    34
      SECTION 14.6 Partial Enforceability......................................................................    34
      SECTION 14.7 Counterparts................................................................................    34
</Table>
<Page>

                              AMENDED AND RESTATED
                             DECLARATION OF TRUST OF
                           HOUSEHOLD CAPITAL TRUST VII
                                            , 2001


AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and effective
as of       , 2001 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"),
Household International, Inc., a Delaware corporation, as trust sponsor (the
"Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration;

WHEREAS, the Trustees and the Sponsor established a trust (the "Trust") under
the Delaware Business Trust Act pursuant to a Declaration of Trust, dated as of
October 1, 2001 (the "Original Declaration") and a Certificate of Trust filed
with the Secretary of State of Delaware on October 1, 2001, for the sole purpose
of issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Junior Subordinated Debt Securities of the Sponsor;

NOW, THEREFORE, it being the intention of the parties hereto to continue the
Trust as a statutory business trust under the Business Trust Act and that this
Declaration constitutes 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 1.1 DEFINITIONS.

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

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

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

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

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

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

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

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

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


                                       1

<Page>

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

"Business Day" means any day other than a day on which banking institutions in
New York, New York, Chicago, Illinois, or the State of Delaware are authorized
or required by law to close.

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

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

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

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

"Closing Date" means            , 2001.

"Code" means the Internal Revenue Code of 1986, as amended.

"Commission" has the meaning specified in Section 3.6.

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

"Common Security Certificate" means a definitive certificate in fully registered
form representing a Common Security substantially in the form of Annex II to
Exhibit A.

"Coupon Rate" has the meaning set forth in Section 2(a) of Exhibit A hereto.

"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.

"Debt Issuer" means Household International, Inc., a Delaware corporation.

"Debt Trustee" means Bank One, National Association, a national banking
association, as trustee under the Indenture until a successor is appointed
thereunder and thereafter means such successor trustee.

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

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

"Direction" by a Person means a written direction signed (a) if the Person is a
natural person, by that Person; or (b) in any other case, in the name of such
Person by one or more Authorized Officers of that Person.

"Dissolution Tax Opinion" has the meaning set forth in Section 4(c) of Exhibit A
hereto.

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


                                       2

<Page>

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

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

"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
Notes.

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

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

"Indemnified Person" means any Trustee, any Affiliate of any Trustee, or any
officers, directors, shareholders, members, partners, employees, representatives
or agents of any Trustee, or any employee or agent of the Trust or its
Affiliates.

"Indenture" means the Indenture dated as of May 15, 1995 among the Debt Issuer,
and BankOne, National Association, as trustee and the indenture supplemental
thereto pursuant to which the Notes are to be issued.

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

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

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

"Majority in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities, Holder(s) of Securities voting together
as a single class or, as the context may require, Holder(s) of Preferred
Securities or Common Securities each, voting separately as a class, who vote
Securities of a relevant class, and the aggregate liquidation amount (including
the stated amount that would be paid on redemption, liquidation or maturity,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of the Securities voted by such Holders represents
more than 50% of the above stated liquidation amount of all Securities of such
class.

"Ministerial Action" has the meaning set forth in the terms of the Securities as
set forth in Exhibit A.

"No Recognition Opinion" has the meaning set forth in Section 4(c) of Exhibit A
hereto.

"Notes" means the series of junior subordinated debt securities to be issued by
the Debt Issuer under the Indenture to the Property Trustee, a specimen
certificate for such series of Notes being Exhibit B.

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

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

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


                                       3

<Page>

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

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

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

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

"Preferred Securities Guarantee" means the guarantee agreement of the Sponsor in
respect of the Preferred Securities.

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

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

"Preferred Security Certificate" means a certificate representing a Preferred
Security substantially in the form of Annex I to Exhibit A.

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

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

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

"Redemption Tax Opinion" has the meaning set forth in Section 4(c) of Exhibit A
hereto.

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

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

"Responsible Officer" means, with respect to the Property Trustee, the chairman
of the board of directors, the president, any vice-president, any assistant
vice-president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, any trust officer or assistant trust officer or any other
officer 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.

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

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

"Securities Act" means the Securities Act of 1933, as amended.


                                       4

<Page>

"66-2/3% in liquidation amount of the Securities" means, except as provided in
the terms of the Preferred Securities, Holder(s) of Securities voting together
as a single class or, as the context may require, Holder(s) of Preferred
Securities or Common Securities, each voting separately as a class, who vote
Securities of a relevant class, and the aggregate liquidation amount (including
the stated amount that would be paid on redemption, liquidation or maturity,
plus accrued and unpaid Distributions, to the date upon which the voting
percentages are determined) of the Securities voted by such Holders represents
66-2/3% of the above-stated liquidation amount of all Securities of such class.

"Special Event" has the meaning set forth in the terms of the Securities.

"Special Regular Trustee" means a Regular Trustee appointed by the Holders of a
Majority in liquidation amount of the Preferred Securities in accordance with
Section 5.6(a)(ii)(B).

"Sponsor" means Household International, Inc., a Delaware corporation or any
successor entity in a merger, in its capacity as sponsor of the Trust.

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

"Successor Property Trustee" means a successor Trustee possessing the
qualifications to act as Property Trustee under Section 5.3(a).

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

"Super Majority" means where consent under the Indenture would require the
consent of greater than a majority of the holders in principal amount of Notes
affected thereby.

"Tax Event" has the meaning set forth in Section 4(c) of Exhibit A hereto.

"10% in liquidation amount of the Securities" means, except as provided in the
terms of the Preferred Securities, Holder(s) of Securities voting together as a
single class or, as the context may require, Holder(s) of Preferred Securities
or Common Securities, each voting separately as a class, who vote Securities of
a relevant class, and the liquidation amount (including the stated amount that
would be paid on redemption, liquidation or maturity, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
the Securities voted by such Holders represents 10% of the above stated
liquidation amount of all Securities of such class.

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

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

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

"Underwriting Agreement" means the Underwriting Agreement for the offering and
sale of Preferred Securities in the form of Exhibit C.


                                       5

<Page>

                                   ARTICLE II

                               TRUST INDENTURE ACT

SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.

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

     (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 Section 310 to 317,
          inclusive, of the Trust Indenture Act, such imposed duties shall
          control; and

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

SECTION 2.2 LISTS OF HOLDERS OF SECURITIES.

     (a)  Each of the Sponsor, the Debt Issuer and the Regular 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 none of the Sponsor, the Debt
          Issuer or the Regular Trustees on behalf of the Trust shall be
          obligated to provide such List of Holders at any time the List of
          Holders does not differ from the most recent List of Holders given to
          the Property Trustee by the Sponsor, the Debt Issuer and the Regular
          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; and (b) the Property
          Trustee shall comply with its obligations under Sections 311(a),
          311(b) and Section 312(b) of the Trust Indenture Act.

SECTION 2.3 REPORTS BY THE PROPERTY TRUSTEE.

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

SECTION 2.4 PERIODIC REPORTS TO PROPERTY TRUSTEE.

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

SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.

Each of the Sponsor, the Debt Issuer and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration which relate to
any of the matters


                                       6

<Page>


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 2.6 EVENTS OF DEFAULT; WAIVER.

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

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

          (ii) which requires the consent or vote of all or a Super Majority of
               the holders of the Notes to be waived under the Indenture, the
               Event of Default under the Declaration may only be waived by the
               vote of all of the Holders of the Preferred Securities or such
               proportion thereof in liquidation amount as represents the
               relevant Super Majority of the aggregate principal amount of
               Notes outstanding.

          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 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.

     (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 arises out of an Event of Default under the Indenture:

          (i)  which 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, the
               Event of Default under the Declaration is not waivable; or

          (ii) which requires the consent or vote of all or a Super Majority of
               the holders of the Notes to be waived under the Indenture, the
               Event of Default under the Declaration may only be waived by the
               vote of all of the Holders of the Preferred Securities or such
               proportion thereof in liquidation amount as represents the
               relevant Super Majority of the aggregate principal amount of the
               Notes outstanding,

          provided that, 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 until all Events of Default with
          respect to the Preferred Securities have been cured, waived or
          otherwise eliminated and until such Events of Default have been so
          cured, waived or otherwise eliminated, the Property Trustee will be
          deemed to be acting solely on behalf of the Holders of the Preferred
          Securities and only the Holders of the Preferred Securities will have
          the right to direct the Property Trustee in accordance with the terms
          of the Securities. Subject to the foregoing proviso, 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.


                                       7

<Page>

     (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.

SECTION 2.7 EVENT OF DEFAULT; NOTICE

     (a)  The Property Trustee shall, within 90 days after the occurrence of an
          Event of Default, transmit by mail, first class postage prepaid, to
          the Holders of the Securities, notices of all defaults with respect to
          the Securities 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 2.7(a) being hereby defined to be an
          Event of Default as defined in the Indenture, not including any
          periods of grace provided for therein and irrespective of the giving
          of any notice provided therein); provided, that, except for a default
          in the payment of principal of (or premium, if any) or interest on any
          of the Notes or in the payment of any sinking fund installment
          established for the Notes, 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 determine
          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 6.01(a)(1) and 6.01(a)(2) of the
               Indenture; or

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

                                   ARTICLE III

                                  ORGANIZATION

SECTION 3.1 NAME.

The Trust created hereby shall be known as "Household Capital Trust VII", as
such name may be modified from time to time by the Regular Trustees following
written notice to the Holders of Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Regular Trustees.

SECTION 3.2 OFFICE.

The address of the principal office of the Trust is c/o Household International,
Inc., 2700 Sanders Road, Prospect Heights, Illinois 60070. On ten Business Days
written notice to the Holders of Securities, the Regular Trustees may designate
another principal office.



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SECTION 3.3 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 Notes, and (b)
except as otherwise limited herein, to enter into such agreements and 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 to be classified for United States
federal income tax purposes as other than a grantor trust.

SECTION 3.4 AUTHORITY.

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

SECTION 3.5 TITLE TO PROPERTY OF THE TRUST.

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

SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES.

The Regular Trustees shall have the exclusive power and authority and duty 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, there
          shall be no interests in the Trust other than the Securities and the
          issuance of Securities shall be limited to a one time, simultaneous
          issuance of both Preferred Securities and Common Securities on the
          Closing Date;

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

          (i)   execute and file with the Securities and Exchange Commission
                (the "Commission") the registration statement on Form S-3
                prepared by the Sponsor in relation to the Preferred Securities,
                including any amendments thereto prepared by the Sponsor;

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

          (iii) execute and file an application prepared by the Sponsor to the
                New York Stock Exchange or any other national stock exchange or
                the NASDAQ National Market for listing upon notice of issuance
                of any Preferred Securities;


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

          (v)   execute and enter into the Underwriting Agreement providing for
                the sale of the Preferred Securities;

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

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

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

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

     (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 3.8(e), the Property
          Trustee has the exclusive power to bring such Legal Action;

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

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

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

     (k)  incur expenses which 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 Debt Issuer of its election to defer payments
          of interest on the Notes 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 which 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 Securities or to enable the Trust to effect the
          purposes for which the Trust was created;


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<Page>


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

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

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

          (iii) cooperating with the Debt Issuer to ensure that the Notes will
                be treated as indebtedness of the Debt Issuer for United States
                federal income tax purposes, provided that such action does not
                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 Regular Trustees, on
          behalf of the Trust.

The Regular Trustees must exercise the powers set forth in this Section 3.6 in a
manner which is consistent with the purposes and functions of the Trust set out
in Section 3.3 and the Regular Trustees shall not take any action which is
inconsistent with the purposes and functions of the Trust set forth in Section
3.3. Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Property Trustee set forth in Section 3.8.

SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.

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

          (i)   invest any proceeds received by the Trust from holding the Notes
                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 Notes;

          (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) (A) direct the time, method and place of exercising any trust or
                power conferred upon the Debt Trustee with respect to the Notes,
                (B) waive any past default that is waivable under Section 7.13
                of the Indenture, (C) exercise any right to rescind or annul any
                declaration that the principal of all the Notes shall be due and
                payable or (D) consent to any amendment, modification or
                termination of the Indenture or the Notes, where such consent
                shall be required, unless the Trust shall have received an
                opinion of counsel to the effect that such modification will not
                cause more than an insubstantial risk


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<Page>


                that for United States federal income tax purposes the Trust
                will be characterized as other than a grantor trust.

SECTION 3.8 POWERS AND DUTIES OF THE PROPERTY TRUSTEE.

     (a)  The legal title to the Notes 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 Notes shall vest automatically in each Person
          who may hereafter be appointed as Property Trustee as set forth in
          Section 5.6. Such vesting and cessation of title shall be effective
          whether or not conveyancing documents have been executed and
          delivered.

     (b)  The Property Trustee shall not transfer its right, title and interest
          in the Notes to the Regular 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 bank
                account (the "Property Account") in the name of and under the
                exclusive control of the Property Trustee on behalf of the
                Holders of the Securities and, upon the receipt of payments of
                funds made in respect of the Notes held by the Property Trustee,
                deposit such funds into the Property Account and make payments
                to the Holders of the Preferred Securities and the Common
                Securities from the Property Account in accordance with Section
                6.1. Funds in the Property Account shall be held uninvested
                until disbursed in accordance with this Declaration. The
                Property Account shall be an account which is maintained with a
                banking institution the rating on whose long term unsecured
                indebtedness is at least equal to the rating assigned to the
                Preferred Securities by a "nationally recognized statistical
                rating organization", as that term is defined for purposes of
                Rule 436(g)(2) under the Securities Act;

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

          (iii) upon notice of distribution issued by the Regular Trustees in
                accordance with the terms of the Preferred Securities and the
                Common Securities, engage in such ministerial activities as
                shall be necessary or appropriate to effect the distribution of
                the Notes 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;

     (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 accepted
                that appointment in accordance with Section 5.6;


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     (g)  the Property Trustee shall have the legal power to exercise all of the
          rights, powers and privileges of a holder of Notes 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 Notes subject to the rights of the Holders
          pursuant to the terms of such Securities;

     (h)  the Property Trustee may authorize one or more Persons (each, a
          "Paying Agent") to pay Distributions, redemption payments or
          liquidation payments on behalf of the Trust with respect to either or
          both of the Preferred Securities and the Common 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; and

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

The Property Trustee must exercise the powers set forth in this Section 3.8 in a
manner which is consistent with the purposes and functions of the Trust set
forth in Section 3.3 and the Property Trustee shall not take any action which is
inconsistent with the purposes and functions of the Trust set out in Section
3.3.

SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY TRUSTEE

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

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

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

               (A)  the duties and obligations of the Property Trustee shall be
                    determined solely by the express provisions of this
                    Declaration and in the terms of the Securities, and the
                    Property Trustee shall not be liable except for the
                    performance of such duties and obligations as are
                    specifically set forth in this Declaration, and 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;


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          (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 at the time
                outstanding 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; and

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

SECTION 3.10 CERTAIN RIGHTS OF PROPERTY TRUSTEE.

     (a)  Subject to the provisions of Section 3.9:

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

          (ii)  any direction or act of the Sponsor or the Regular Trustees
                contemplated by this Declaration shall be sufficiently evidenced
                by a Direction or 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 and, if the Trust is excluded from the definition of an
                Investment Company solely by means of Rule 3a-5, subject to the
                requirements of Rule 3a-5, request and rely upon an Officers'
                Certificate which, upon receipt of such request, shall be
                promptly delivered by the Sponsor or the Regular Trustees;

          (iv)  the Property Trustee shall have no duty to see to any recording,
                filing or registration of any instrument (or any rerecording,
                refiling or registration thereof);

          (v)   the Property Trustee may consult with counsel and the written
                advice or opinion of such counsel with respect to legal matters
                shall be full and complete authorization and protection in
                respect of any action taken, suffered or omitted by it hereunder
                in good faith and in 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 adequate security and
                indemnity which would satisfy a reasonable person in the
                position of the Property Trustee, against the costs, expenses
                (including attorneys' fees and expenses)


                                       14

<Page>

                 and liabilities that might be incurred by it in complying with
                 such request or direction, including such reasonable advances
                 as may be requested by the Property Trustee provided, that,
                 nothing contained in this Section 3.10 (a) (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, bond,
                 debenture, note, other evidence of indebtedness or other paper
                 or document, but the Property Trustee, in its discretion, may
                 make such further inquiry or investigation into such facts or
                 matters as it may see fit;

          (viii) the Property Trustee may execute any of the trusts or powers
                 hereunder or perform any duties hereunder either directly or by
                 or through agents 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, (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; and

          (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 except upon the Direction of the Sponsor or the
                 Regular Trustees as the case may be.

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

SECTION 3.11 DELAWARE TRUSTEE

     Notwithstanding any other provision of this Declaration other than Section
5.2, the Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities of the
Regular Trustees and the Property Trustee described in this Declaration. Except
as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for the
sole and limited purpose of fulfilling the requirements of Section 3807 of the
Business Trust Act.

SECTION 3.12 EXECUTION OF DOCUMENTS

Unless otherwise determined by the Regular Trustees and except as otherwise
required by the Business Trust Act, a majority of, or if there are only two,
both of the Regular Trustees are authorized to execute on behalf of the Trust
any documents which the


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Regular Trustees have the power and authority to execute pursuant to Section
3.6, provided that any listing application prepared by the Sponsor referred to
in Section 3.6(b)(iii) may be executed by any Regular Trustee.

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 terminated pursuant to the provisions of Article VIII hereof,
shall have existence until         , 20 .

SECTION 3.15 MERGERS.

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

     (b)  The Trust may, with the consent of a majority of the Regular 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; provided, that:

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

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

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

          (ii)  the Debt Issuer expressly acknowledges a trustee of the
                Successor Entity which possess the same powers and duties as the
                Property Trustee as the Holder of the Notes;

          (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 other
                organization on which the Preferred Securities are then listed;

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

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

          (vi)  such successor entity has a purpose identical to that of the
                Trust;


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<Page>

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

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

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

          (viii) the Sponsor guarantees the obligations of such Successor Entity
                 under the Successor Securities at least to the extent provided
                 by the Preferred Securities Guarantee; and

     (c)  notwithstanding Section 3.15(b), the Trust shall not 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 for United
          States federal income tax purposes to be classified as other than a
          grantor trust, except with the consent of Holders of 100% in
          liquidation amount of the Securities.

                                   ARTICLE IV

                                     SPONSOR

SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES.

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

SECTION 4.2 Responsibilities of the Sponsor.

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

     (a)  to prepare for filing by the Trust with the Commission a registration
          statement on Form S-3 in relation to the Preferred Securities,
          including any amendments thereto;

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

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


                                       17

<Page>

     (d)  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(b) of the Exchange Act, including any
          amendments thereto; and

     (e)  to negotiate the terms of the Underwriting Agreement providing for the
          sale of the Preferred Securities.

                                    ARTICLE V

                                    TRUSTEES

SECTION 5.1 NUMBER OF TRUSTEES.

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

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

     (b)  after the issuance of any Securities:

          (i)  and except as provided in Section 5.1 (b)(ii) and 5.6 (a) (ii)
               (B) with respect to the Special Regular Trustee, the number of
               Trustees may be increased or decreased by vote of the Holders of
               a Majority in liquidation amount of the Common Securities voting
               as a class at a meeting of the Holders of the Common Securities;
               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 Regular Trustee in accordance with
               Section 5.6,

provided that in any case, the number of Trustees shall be at least three (3) so
long as the Trustee that acts as the Property Trustee also acts as the Delaware
Trustee pursuant to Section 5.2. In the event the Property Trustee is not also
acting as the Delaware Trustee, the number of Trustees shall be at least five
(5).

SECTION 5.2 DELAWARE TRUSTEE.

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

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

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

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

SECTION 5.3 PROPERTY TRUSTEE; ELIGIBILITY.

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


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          (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 5.3 (a) (ii), the
               combined capital and surplus of such corporation shall be deemed
               to be its combined capital and surplus asset forth in its most
               recent report of condition so published.

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

     (c)  If the Property Trustee has or shall acquire any "conflicting
          interest" within the meaning of Section 310(b) of the Trust Indenture
          Act, the Property Trustee and the 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 5.4 QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE TRUSTEE GENERALLY.

Each Regular 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 which shall act through one or more Authorized
Officers.

SECTION 5.5 INITIAL TRUSTEES.

The initial Regular Trustees shall be:

Steven L. McDonald
2700 Sanders Road
Prospect Heights, Illinois 60070,

Dennis J. Mickey
2700 Sanders Road
Prospect Heights, Illinois 60070

and

Benjamin B. Moss, Jr.
2700 Sanders Road
Prospect Heights, Illinois 60070

The initial Delaware Trustee
The Bank of New York (Delaware)
White Clay Center Route 273
Newark, Delaware 19711


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The initial Property Trustee shall be:
BNY Midwest Trust Company
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attn: Corporate Trust Department

SECTION 5.6 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.

     (a)  Subject to Section 5.6(b) Trustees may be appointed or removed without
          cause at any time:

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

          (ii) after the issuance of any Securities;

               (A)  other than in respect to a Special Regular 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

               (B)  if an Appointment Event has occurred and is continuing, one
                    (1) additional Regular Trustee (the "Special Regular
                    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 Regular Trustee may
                    only be removed (otherwise than by the operation of Section
                    5.6(c)), 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)  (i) The Trustee that acts as Property Trustee shall not be removed in
          accordance with Section 5.6(a) until Successor Property Trustee has
          been appointed and has accepted such appointment by written instrument
          executed by such Successor Property Trustee and delivered to the
          Regular Trustees and the Sponsor; and

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

     (c)  A Trustee appointed to office shall hold office until his successor
          shall have been appointed or until his death, removal or resignation,
          provided that a Special Regular 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
          Regular 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 until either:

               (A)  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


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<Page>


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

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

          (iii) no such resignation of a Special Regular Trustee shall be
                effective until the 60th day following delivery of the
                instrument of resignation of the Special Regular 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 5.6.

     (d)  If no Successor Property Trustee or Successor Delaware Trustee shall
          have been appointed and accepted appointment as provided in this
          Section 5.6 within 60 days after delivery to the Sponsor and the Trust
          of an instrument of resignation, the resigning Property Trustee or
          Delaware Trustee may petition any court of competent jurisdiction for
          appointment of a Successor Property Trustee or Successor Delaware
          Trustee. Such court may thereupon after 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.

SECTION 5.7 VACANCIES AMONG TRUSTEES.

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

SECTION 5.8 EFFECT OF VACANCIES.

     The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee, or
any one of them, shall not operate to annul the Trust. Whenever a vacancy in the
number of Regular Trustees shall occur, until such vacancy is filled by the
appointment of a Regular Trustee in accordance with Section 5.6, the Regular
Trustees in office, regardless of their number, shall have all the powers
granted to the Regular Trustees and shall discharge all the duties imposed upon
the Regular Trustees by this Declaration.

SECTION 5.9 MEETINGS.

     Meetings of the Regular Trustees shall be held from time to time upon the
call of any Regular Trustee. Regular meetings of the Regular Trustees may be
held at a time and place fixed by resolution of the Regular Trustees. Notice of
any in-person meetings of the Regular Trustees shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 48 hours before such meeting. Notice of any
telephonic meetings of the Regular Trustees or any committee thereof shall be
hand delivered or otherwise delivered in writing (including by facsimile, with a
hard copy by overnight courier) not less than 24 hours before a meeting. Notices
shall contain a brief statement of the time, place and anticipated purposes of
the meeting. The presence (whether in person or by telephone) of a Regular
Trustee at a meeting shall constitute a waiver of notice of such meeting except
where a Regular Trustee attends a meeting for the express purpose of objecting
to the transaction of any activity on the ground that the meeting has not been
lawfully called or convened. Unless provided otherwise in this Declaration, any
action of the Regular Trustees may be taken at a meeting by vote of a majority
of the Regular Trustees present (whether in person or by telephone) and eligible
vote with respect to such matter, provided that a quorum is present, or without
a meeting by the unanimous written consent of the Regular Trustees.


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<Page>

SECTION 5.10 DELEGATION OF POWER.

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

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

                                   ARTICLE VI

                                  DISTRIBUTIONS

SECTION 6.1 DISTRIBUTIONS.

Holders shall receive Distributions 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 Debt Issuer makes
a payment of interest (including Compounded Interest (as defined in the
Indenture)), premium and principal on the Notes held by the Property Trustee
(the amount of any such payment being a "Payment Amount"), the Property Trustee
shall and is directed, to the extent funds are available for that purpose, to
make a Distribution of the Payment Amount to Holders.

                                   ARTICLE VII

                             ISSUANCE OF SECURITIES

SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES.

     (a)  The Regular Trustees shall, on behalf of the Trust, issue one class of
          preferred securities representing undivided beneficial interests in
          the assets of the Trust having such terms as are set forth in Exhibit
          A and incorporated herein by reference (the "Preferred Securities"),
          and one class of common securities representing undivided beneficial
          interests in the assets of the Trust having such terms as are set
          forth in Exhibit A and incorporated herein by reference (the "Common
          Securities"). The Trust shall have no securities or other interests in
          the assets of the Trust other than the Preferred Securities and the
          Common Securities.

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


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<Page>


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

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

     (d)  Upon issuance of the Securities as provided in this Declaration, the
          Securities so issued shall be deemed to be validly issued, fully paid
          and nonassessable.

     (e)  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.

                                  ARTICLE VIII

                              TERMINATION OF TRUST

SECTION 8.1 TERMINATION OF TRUST.

     (a)  The Trust shall dissolve;

          (i)   upon the bankruptcy of the Holder of the Common Securities, the
                Sponsor or the Debt Issuer;

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

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

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

          (v)   upon the occurrence and continuation of a Special Event pursuant
                to which the Trust shall have been dissolved in accordance with
                the terms of the Securities and all of the Notes endorsed
                thereon shall have been distributed to the Holders of Securities
                in exchange for all of the Securities; or

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

     (b)  As soon as is practicable after the occurrence of an event referred to
          in Section 8.1 (a), the Trustees shall, after paying or making
          reasonable provision for payment of the liabilities of the Trust, file
          a certificate of cancellation with the Secretary of State of the State
          of Delaware and the Trust shall terminate.

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


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<Page>

                                   ARTICLE IX

                              TRANSFER OF INTERESTS

SECTION 9.1 TRANSFER OF SECURITIES.

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

     (b)  Subject to this Article IX, Preferred Securities shall be freely
          transferable.

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

          (i)  the Trust would be classified for United States federal income
               tax purposes as an association taxable as a corporation or a
               partnership and each Holder of Securities would not be treated as
               owning an undivided beneficial interest in the Notes; and

          (ii) the Trust would be an Investment Company, or would be controlled
               by an Investment Company.

SECTION 9.2 TRANSFER OF CERTIFICATES.

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

SECTION 9.3 DEEMED SECURITY HOLDERS.

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

SECTION 9.4 BOOK ENTRY INTERESTS.

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


                                       24

<Page>


such Global Certificates, except as provided in Section 9.7. Unless and until
definitive, fully registered Preferred Security Certificates (the "Definitive
Preferred Security Certificates") have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7:

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

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

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

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

SECTION 9.5 NOTICES TO CLEARING AGENCY.

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

SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.

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

SECTION 9.7 DEFINITIVE PREFERRED SECURITY CERTIFICATES.

     If:

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

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

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

     (d)  upon surrender of the Global Certificates by the Clearing Agency,
          accompanied by registration instructions, the Regular Trustees shall
          cause Definitive Certificates to be delivered to Preferred Security
          Beneficial Owners in accordance with the instructions of the Clearing
          Agency. Neither the Trustees nor the Trust shall be liable for any
          delay in delivery of such instructions and each of them may
          conclusively rely on and shall be protected in


                                       25

<Page>


          relying on, such instructions. The Definitive Preferred Security
          Certificates shall be printed, lithographed or engraved or may be
          produced in any other manner as is reasonably acceptable to the
          Regular Trustees, as evidenced by their execution thereof, and may
          have such letters, numbers or other marks of identification or
          designation and such legends or endorsements as the Regular Trustees
          may deem appropriate, or as may be required to comply with any law or
          with any rule or regulation made pursuant thereto or with any rule or
          regulation of any stock exchange on which Preferred Securities may be
          listed, or to conform to usage.

SECTION 9.8      MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.

     If:

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

     (b)  there shall be delivered to the Regular Trustees such security or
          indemnity as may be required by them to keep each of them harmless,

     then in the absence of notice that such Certificate shall have been
     acquired by a bona fide purchaser, any two Regular Trustees on behalf of
     the Trust shall execute and deliver, in exchange for or in lieu of any such
     mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
     denomination. In connection with the issuance of any new Certificate under
     this Section 9.8, the Regular Trustees may require the payment of a sum
     sufficient to cover any tax or other governmental charge that may be
     imposed in connection therewith. Any duplicate Certificate issued pursuant
     to this Section shall constitute conclusive evidence of an ownership
     interest in the relevant Securities, as if originally is sued, whether or
     not the lost, stolen or destroyed Certificate shall be found at any time.


                                       26

<Page>


                                    ARTICLE X

                           LIMITATION OF LIABILITY OF
                    HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

SECTION 10.1 LIABILITY.

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

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

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

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

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

SECTION 10.2 EXCULPATION.

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

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

SECTION 10.3 FIDUCIARY DUTY.

     (a)  To the extent that, at law or in equity, an Indemnified Person has
          duties (including fiduciary duties) and liabilities relating thereto
          to the Trust or to any other Covered Person, an Indemnified Person
          acting under this Declaration, subject to any duties or obligations
          imposed on the Property Trustee under the Trust Indenture Act and Rule
          3a-5, 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 duties imposed on the


                                       27

<Page>

          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 here in:

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

          (ii) whenever this Declaration or any other agreement contemplated
               herein or therein provide 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 10.4 INDEMNIFICATION.

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

     (b)  To the fullest extent permitted by applicable law, expenses (including
          legal fees) incurred by an Indemnified Person in defending any claim,
          demand, action, suit or proceeding shall, from time to time, be
          advanced by the Sponsor prior to the final disposition of such claim,
          demand, action, suit or proceeding upon receipt by the Sponsor of an
          undertaking by or on behalf of the Indemnified Person to repay such
          amount if it shall be determined that the Indemnified Person is not
          entitled to be indemnified as authorized in Section 10.4(a).


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<Page>


SECTION 10.5 OUTSIDE BUSINESSES.

Any Covered Person, the Sponsor, the Debt Issuer, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business ventures
of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Debt
Issuer, 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 Debt Issuer, 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 depository for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.

                                   ARTICLE XI

                                   ACCOUNTING

SECTION 11.1 FISCAL YEAR.

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

SECTION 11.2 CERTAIN ACCOUNTING MATTERS.

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

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

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

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


                                       29

<Page>

SECTION 11.3 BANKING.

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

SECTION 11.4 WITHHOLDING.

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

                                   ARTICLE XII

                             AMENDMENTS AND MEETINGS

SECTION 12.1 AMENDMENTS.

     (a)  Except as otherwise provided in this Declaration or by any applicable
          terms of the Securities, this Declaration may be amended by, and only
          by, a written instrument approved and executed by the Regular Trustees
          (or, if there are more than two Regular Trustees a majority of the
          Regular Trustees); provided, however, that:

          (i)   no amendment shall be made, and any such purported amendment
                shall be void and ineffective, to the extent the result thereof
                would be to:

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

                (B) reduce or otherwise adversely affect the rights, powers,
                    obligations or liabilities of the Property Trustee or the
                    Delaware Trustee without the written consent of the affected
                    trustee; or

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

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

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


                                       30
<Page>

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

          (v)   the rights of the holders of the Common Securities under Article
                V to increase or decrease the number of, and appoint and remove
                Trustees shall not be amended without the consent of the Holders
                of a Majority in liquidation amount of the Common Securities.

     (b)  Notwithstanding Section 12.1(a)(ii), this Declaration may be amended
          without the consent of the Holders of the Securities to:

          (i)   cure any ambiguity;

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

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

          (iv)  to conform to any change in Rule 3a-5 or written change in
                interpretation or application of Rule 3a-5 by any legislative
                body, court, government agency or regulatory authority which
                amendment does not have a material adverse effect on the right,
                preferences or privileges of the Holders.

 SECTION 12.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN CONSENT.

     (a)  Meetings of the Holders of any class of Securities may be called at
          any time by the Regular Trustees (or as provided in the terms of the
          Securities) to consider and act on any matter on which Holders of such
          class of Securities are entitled to act under the terms of this
          Declaration, the terms of the Securities or the rules of any stock
          exchange on which the Preferred Securities are listed or admitted for
          trading. The Regular Trustees shall call a meeting of such class of
          Holders, if directed to do so by the Holders of at least 10% in
          liquidation amount of such class of Securities. Such direction shall
          be given by delivering to the Regular Trustees one or more calls in a
          writing stating that the signing Holders of Securities wish to call a
          meeting and indicating the general or specific purpose for which the
          meeting is to be called. Any Holders of Securities calling a meeting
          shall specify in writing the Security Certificates held by the Holders
          of Securities exercising the right to call a meeting and only those
          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 if a consent in writing setting forth the
               action so taken is signed by the Holders of Securities owning not
               less than the minimum amount of Securities in liquidation amount
               that would be necessary to authorize or take such action at a
               meeting at which all Holders of Securities having a right to vote
               thereon were present and voting. Prompt notice of the taking of
               action without a meeting shall be given to the Holders of
               Securities entitled to vote who have not consented in writing.
               The Regular Trustees may specify that any written


                                       31

<Page>

                ballot submitted to the Security Holder for the purpose of
                taking any action without a meeting shall be returned to the
                Trust within the time specified by the Regular Trustees;

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

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

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

                                  ARTICLE XIII

                       REPRESENTATIONS OF PROPERTY TRUSTEE

SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE.

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

     (a)  The Property Trustee is a New York banking corporation with trust
          powers, duly organized, validly existing and in good standing under
          the laws of the State of New York, with trust power and authority to
          execute and deliver, and to carry out and perform its obligations
          under the terms of, the Declaration.

     (b)  The execution, delivery and performance by the 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 it constitutes a
          legal, valid and binding obligation of the Property Trustee,
          enforceable against it in accordance with its terms, subject to
          applicable bankruptcy, reorganization, moratorium, insolvency, and
          other similar laws affecting creditors' rights generally and to
          general principles of equity and the discretion of the court
          (regardless of whether the enforcement of such remedies is considered
          in a proceeding in equity or at law).

     (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 state or federal banking authority is required for the
          execution, delivery or performance by the Property Trustee, of the
          Declaration.


                                       32

<Page>

     (e)  The Property Trustee, pursuant to the Declaration, shall hold legal
          title and a valid ownership interest in the Notes under the law of its
          place of incorporation and Delaware law.

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

                                   ARTICLE XIV

                                  MISCELLANEOUS

SECTION 14.1 NOTICES.

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

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

                 Household Capital Trust VII
                 2700 Sanders Road
                 Prospect Heights, Illinois 60070
                 Attention: Treasurer

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

<Table>
          <S>                                                <C>
          BNY Midwest Trust Company                          The Bank of New York (Delaware)
          2 North LaSalle Street, Suite 1020                 White Clay Center Route 273
          Chicago, Illinois 60602                            Newark, Delaware 197111
          Attention: Corporate Trust Administration
</Table>

     (c)  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):

          Household International, Inc.
          2700 Sanders Road
          Prospect Heights, Illinois 60070

          Attention: Treasurer

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

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


                                       33

<Page>

SECTION 14.2 GOVERNING LAW.

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

SECTION 14.3 INTENTION OF THE PARTIES.

It is the intention of the parties hereto that the Trust not be characterized
for United States federal income tax purposes as an association taxable as a
corporation or a partnership but rather, the Trust be characterized as a grantor
trust or otherwise in a manner that each Holder of Securities be treated as
owning an undivided beneficial interest in the Notes. The provisions of this
Declaration shall be interpreted to further this intention of the parties.

SECTION 14.4 HEADINGS.

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

SECTION 14.5 SUCCESSORS AND ASSIGNS

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

SECTION 14.6 PARTIAL ENFORCEABILITY.

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

SECTION 14.7 COUNTERPARTS.

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


                                       34

<Page>

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


                                        ---------------------------------------
                                        Steven L. McDonald,
                                        as Trustee


                                        ---------------------------------------
                                        Dennis J. Mickey,
                                        as Trustee


                                        ---------------------------------------
                                        Benjamin B. Moss Jr.,
                                        as Trustee

                                        BNY Midwest Trust Company,
                                        as Trustee and as Property Trustee

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

                                        The Bank of New York (Delaware),
                                        As Trustee and Property Trustee

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

                                        Household International, Inc.,
                                        as Sponsor

                                        By:
                                            -----------------------------------
                                            Name: John W. Blenke
                                            Title: Vice President-Corporate Law


                                       35

<Page>

                                    EXHIBIT A

                                    TERMS OF

                          % TRUST PREFERRED SECURITIES

                            % TRUST COMMON SECURITIES

Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of         , 2001 (as amended from time to time, the "Declaration"),
the designation, rights, privileges, restrictions, preferences and other
terms and provisions of the Preferred Securities and the Common Securities
are set out below (each capitalized term used but not defined herein has the
meaning set forth in the Declaration or, if not defined in such Declaration,
as defined in the Prospectus referred to below):

1. DESIGNATION AND NUMBER.

     (a)  PREFERRED SECURITIES. Preferred Securities of the Trust with an
          aggregate liquidation amount with respect to the assets of the Trust
          of $     and a liquidation amount with respect to the assets of the
          Trust of $25 per Preferred Security, are hereby designated for the
          purposes of identification only as "     % Trust Preferred Securities"
          (the "Preferred Securities"). The Preferred Security Certificates
          evidencing the Preferred Securities shall be substantially in the form
          attached hereto as Annex I, with such changes and additions thereto or
          deletions therefrom as may be required by ordinary usage, custom or
          practice or to conform to the rules of any stock exchange on which the
          Preferred Securities are listed.

     (b)  COMMON SECURITIES. Common Securities of the Trust with an aggregate
          liquidation amount with respect to the assets of the Trust of $
          and a liquidation amount with respect to the assets of the Trust of
          $25 per Common Security, are hereby designated for the purposes of
          identification only as "     % Trust Common Securities" (the "Common
          Securities"). The Common Security Certificates evidencing the Common
          Securities shall be substantially in the form attached hereto as Annex
          II, with such changes and additions thereto or deletions therefrom as
          may be required by ordinary usage, custom or practice.

2. DISTRIBUTIONS.

     (a)  Distributions payable on each Security will be fixed at a rate per
          annum of    % (the "Coupon Rate") of the stated liquidation amount
          of $25 per Security, such rate being the rate of interest payable on
          the Notes 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 cash
          distributions and any such interest payable unless otherwise stated.
          A Distribution is payable only to the extent that payments are made in
          respect of the Notes held by the Property Trustee. The amount of
          Distributions payable for any period will be computed (i) for any full
          90-day quarterly Distribution period, on the basis of a 360-day year
          of twelve 30-day months and (ii) for any period shorter than a full
          90-day quarterly Distribution period for which Distributions are
          computed, on the basis of a 30-day month, and for periods of less than
          a month, the actual number of days elapsed per 30-day month.

     (b)  Distributions on the Securities will be cumulative, will accrue
          from             , 2001 and will be payable quarterly in arrears,
          on                        ,                  , and       of each year
          commencing on            , 2001 , except as otherwise described below.
          The Debt Issuer has the right under the Indenture to defer payments of
          interest by extending the interest payment period from time to time on
          the Notes for a period not exceeding 20 consecutive quarters (each, an
          "Extension Period") and, as a consequence of such extension,
          Distributions will also be deferred. No Extension Period will extend
          beyond the maturity date for the Notes. Despite such deferral,
          quarterly Distributions will continue to accrue with interest


                                       1

<Page>

          thereon (to the extent permitted by applicable law) at the Coupon Rate
          during any such Extension Period. Prior to the termination of any such
          Extension Period, the Debt Issuer may further extend such Extension
          Period; provided that such Extension Period together with all such
          previous and further extensions thereof may not exceed 20 consecutive
          quarters and provided further that no Extension Period may extend
          beyond the maturity date for the Notes. Payments of accrued
          Distributions will be payable to Holders as they appear on the books
          and records of the Trust on the first record date after the end of the
          Extension Period. Upon the termination of any Extension Period and the
          payment of all amounts then due, the Debt Issuer may commence a new
          Extension Period, subject to the above requirements.

     (c)  Distributions on the Securities will be payable to the Holders there
          of as they appear on the books and records of the Trust on the
          relevant record dates. While the Preferred Securities remain in
          book-entry only form, the relevant record dates shall be one Business
          Day prior to the relevant payment dates which payment dates correspond
          to the interest payment dates on the Notes. Subject to any applicable
          laws and regulations and the provisions of the Declaration, each such
          payment in respect of the Preferred Securities will be made as
          described under the heading "Description of the Preferred Securities
          -- Book-Entry Only Issuance - The Depository Trust Company" in the
          Prospectus dated         , 2001, (the "Prospectus"), included in the
          Registration Statement on Form S-3 of the Sponsor, the Debt Issuer and
          the Trust. The relevant record dates for the Common Securities, and if
          the Preferred Securities shall not continue to remain in book-entry
          only form, the relevant record dates for the Preferred Securities,
          shall conform to the rules of any securities exchange on which the
          securities are listed and, if none, shall be selected by the Regular
          Trustees, which dates shall be at least one Business Day but less than
          60 Business Days before the relevant payment dates which payment dates
          correspond to the interest payment dates on the Notes. Distributions
          payable on any Securities that are not punctually paid on any
          Distribution payment date as a result of the Debt Issuer or the
          Sponsor having failed to make a payment under the Notes, will cease to
          be payable to the Person in whose name such Securities are registered
          on the relevant record date, and such defaulted Distribution will
          instead be payable to the Person in whose name such Securities are
          registered on the special record date or other specified date
          determined in accordance with the Indenture. If any date on which
          Distributions are payable on the Securities is not a Business Day,
          then payment of the Distribution payable on such date will be made on
          the next succeeding day that is a Business Day (and without any
          interest or other payment in respect of any such delay) except that,
          if such Business Day is in the next succeeding calendar year, such
          payment shall be made on the immediately preceding Business Day, in
          each case with the same force and effect as if made on such date.

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

     3.   LIQUIDATION DISTRIBUTION UPON DISSOLUTION.

     In the event of any voluntary or involuntary dissolution, winding-up or
termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities after satisfaction of liabilities to creditors, an amount equal to
the aggregate of the stated liquidation amount of $25 per Security plus accrued
and unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"), unless, in connection with such dissolution,
winding-up or termination, Notes in an aggregate principal amount equal to the
aggregate stated liquidation amount of such Securities, with an interest rate
equal to the Coupon Rate of, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, such Securities, shall
be distributed on a Pro Rata basis to the Holders of the Securities in exchange
for such Securities.

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

                                       2
<Page>

     4.   REDEMPTION AND DISTRIBUTION.

     (a)  Upon the repayment of the Notes in whole or in part, whether at
          maturity or upon redemption, the proceeds from such repayment or
          payment shall be simultaneously applied to redeem Securities having an
          aggregate liquidation amount equal to the aggregate principal amount
          of the Notes so repaid or redeemed at a redemption price of $25 per
          Security plus an amount equal to accrued and unpaid Distributions
          thereon to the date of the redemption, payable in cash (the
          "Redemption Price"). Holders will be given not less than 30 nor more
          than 60 days notice of such redemption.

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

     (c)  If, at any time, a Tax Event or an Investment Company Event (each as
          defined below, and each a "Special Event") shall occur and be
          continuing, the Regular Trustees shall dissolve the Trust and, after
          satisfaction of creditors, cause Notes held by the Property Trustee,
          having an aggregate principal amount equal to the aggregate stated
          liquidation amount of, with an interest rate identical to the Coupon
          Rate of, and accrued and unpaid interest equal to accrued and unpaid
          Distributions on and having the same record date for payment as the
          Securities to be distributed to the Holders of the Securities in
          liquidation of such Holders' interests in the Trust on a Pro Rata
          basis, within 90 days following the occurrence of such Special Event
          (the "90 Day Period"), provided, however, that in the case of the
          occurrence of a Tax Event, as a condition of such dissolution and
          distribution, the Regular Trustees shall have received an opinion of a
          nationally recognized independent tax counsel 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 gain
          or loss for United States federal income tax purposes as a result of
          the dissolution of the Trust and the distribution of Notes and
          provided, further, that, if at the time there is available to the
          Trust the opportunity to eliminate, within the 90 Day Period, the
          Special Event by taking some ministerial action, such as filing a form
          or making an election, or pursuing some other similar reasonable
          measure that has no adverse effect on the Trust, the Debt Issuer, the
          Sponsor or the Holders of the Securities ("Ministerial Action"), the
          Trust will pursue such Ministerial Action in lieu of dissolution. In
          addition, if a Tax Event shall occur and be continuing, the Debt
          Issuer has the right to advance the maturity date of the Notes to the
          minimum extent required in order to permit payments of interest on the
          Notes to be deductible by the Debt Issuer for United States federal
          income tax purposes, but the resulting maturity may not be less than
          15 years from the original issuance of the Notes. The Debt Issuer may
          take such action only if nationally recognized independent tax counsel
          to the Debt Issuer experienced in such matters has delivered an
          opinion, which opinion may rely on published revenue rulings of the
          Internal Revenue Service, to the effect that (i) after advancing the
          maturity of the Notes, interest payments on the Notes will be
          deductible for United States federal income tax purposes and (ii)
          advancing the maturity date of the Notes will not result in a taxable
          event to holders of the Preferred Securities.

          If, in the case of the occurrence of a Tax Event (i) the Debt Issuer
          has received an opinion (a "Redemption Tax Opinion") of a nationally
          recognized independent tax counsel experienced in such matters that,
          as a result of a Tax Event, there is more than an insubstantial risk
          that the Debt Issuer would be precluded from deducting the interest on
          the Notes for United States federal income tax purposes even if the
          Notes were distributed to the Holders of Securities in liquidation of
          such Holders' interests in the Trust as described in this Section
          4(c), or (ii) the Regular Trustees shall have been informed by such
          tax counsel that a No Recognition Opinion cannot be delivered to the
          Trust, the Debt Issuer shall have the right at any time, upon not less
          than 30 nor more than 60 days notice, to redeem the Notes in whole or
          in part for cash within 90 days following the occurrence of such Tax
          Event, and following such redemption, Securities with an aggregate
          liquidation amount equal to the


                                       3

<Page>

          aggregate principal amount of the Notes so redeemed shall be redeemed
          by the Trust at the Redemption Price on a Pro Rata basis; provided,
          however, that, if at the time there is available to the Trust the
          opportunity to eliminate, within such 90 day period, the Tax Event by
          taking some Ministerial Action, the Trust or the Debt Issuer will
          pursue such Ministerial Action in lieu of redemption.

          "Tax Event" means that the Regular Trustees shall have received an
          opinion of a nationally recognized independent tax counsel experienced
          in such matters (a "Dissolution Tax Opinion") to the effect that on or
          after the date of the Prospectus, as a result of (a) any amendment to,
          or change (including any announced prospective change) in, the laws
          (or any regulations thereunder) of the United States or any political
          subdivision or taxing authority therefore or therein, or (b) any
          amendment to, or change in, an interpretation or application of any
          such laws or regulations by any legislative body, court, governmental
          agency or regulatory authority, which amendment or change is enacted,
          promulgated, issued or announced or which interpretation or
          pronouncement is issued or announced or which action is taken, in each
          case on or after the date of the Prospectus, there is more than an
          insubstantial risk that (i) the Trust is or will be within 90 days of
          the date thereof, subject to United States federal income tax with
          respect to interest accrued or received on the Notes, (ii) the Trust
          is, or will be within 90 days of the date thereof, subject to more
          than a de minimis amount of taxes, duties or other governmental
          charges, or (iii) interest payable by the Debt Issuer to the Trust on
          the Notes is not, or within 90 days of the date thereof will not be,
          deductible, in whole or in part, by the Debt Issuer for United States
          federal income tax purposes.

          "Investment Company Event" means that the Regular Trustees shall have
          received an opinion of a nationally recognized independent counsel
          experienced in practice under the Investment Company Act that, as a
          result of 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"), 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 Prospectus Supplement.

          On and from the date fixed by the Regular Trustees for any
          distribution of Notes and dissolution of the Trust: (i) the Securities
          will no longer be deemed to be outstanding, (ii) The Depository Trust
          Company (the "Depository") or its nominee (or any successor Clearing
          Agency or its nominee), as the record Holder of the Preferred
          Securities, will receive a registered global certificate or
          certificates representing the Notes and the Note Guarantee to be
          delivered upon such distribution and any certificates representing
          Securities, except for certificates representing Preferred Securities
          held by the Depository or its nominee (or any successor Clearing
          Agency or its nominee), will be deemed to represent beneficial
          interests in the Notes having an aggregate principal amount equal to
          the aggregate stated liquidation amount of, with an interest rate
          identical to the Coupon Rate of, and accrued and unpaid interest equal
          co accrued and unpaid Distributions on such Securities until such
          certificates are presented to the Debt Issuer or its agent for
          transfer or reissue.

     (d)  The Trust may not redeem fewer than all the outstanding Securities
          unless all accrued and unpaid Distributions have been paid on all
          Securities for all quarterly Distribution periods terminating on or
          before the date of redemption.

     (e)  If the Notes are distributed to holders of the Securities, pursuant to
          the terms of the Indenture, the Debt Issuer will use its best efforts
          to have the Notes listed on the New York Stock Exchange or on such
          other exchange as the Preferred Securities were listed immediately
          prior to the distribution of the Notes.

     (f)  "Redemption or Distribution Procedures."


                                       4

<Page>

          (i)   Notice of any redemption of, or notice of distribution of Notes
                in exchange for the Securities (a "Redemption/ Distribution
                Notice") will be given by the Trust by mail to each Holder of
                Securities to be redeemed or exchanged not fewer than 30 nor
                more than 60 days before the date fixed for redemption or
                exchange thereof which, in the case of a redemption, will be the
                date fixed for redemption of the Notes. For purposes of the
                calculation of the date of redemption or exchange and the dates
                on which notices are given pursuant to this Section 4(e)(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 Securities, it being understood
                that in respect of Preferred Securities registered in the name
                of and held of record by DTC (or a successor clearing agency) or
                any other Nominee, the distribution of the proceeds of such
                redemption will be made to each Clearing Agency Participant (or
                person on whose behalf such nominee holds such securities) in
                accordance with the procedures applied by such agency or
                nominee.

          (iii) If Securities are to be redeemed and the Trust gives a
                Redemption/Distribution Notice which notice may only be issued
                if the Notes are redeemed as set out in this Section 4 (which
                notice will be irrevocable) then (A) while the Preferred
                Securities are in book entry only form, with respect to the
                Preferred Securities, by 12:00 noon, New York City time, on the
                redemption date, provided that the Debt Issuer has paid the
                Property Trustee a sufficient amount of cash in connection with
                the related redemption or maturity of the Notes, the Property
                Trustee will deposit irrevocably with the Depository (or
                successor Clearing Agency) funds sufficient to pay the
                applicable Redemption Price with respect to the Preferred
                Securities and will give the Depository irrevocable instructions
                and authority to pay the Redemption Price to the Holders of the
                Preferred Securities, and (B) if the Preferred Securities are
                issued in definitive form, with respect to the Preferred
                Securities, and with respect to the Common Securities, provided
                that the Debt Issuer has paid the Property Trustee a sufficient
                amount of cash in connection with the related redemption or
                maturity of the Notes, the Property Trustee will pay the
                relevant Redemption Price to the Holders of such Securities by
                check mailed to the address of the relevant Holder appearing on
                the books and records of the Trust on the redemption date. If a
                Redemption/Distribution Notice shall have been given and funds
                deposited as required, if applicable, then immediately prior to
                the close of business on the date of such deposit, or on the
                redemption date, as applicable, Distributions will cease to
                accrue on the Securities so called for redemption and all rights
                of Holders of such Securities so called for redemption will
                cease, except the right of the Holders of such Securities to
                receive the Redemption Price, but without interest on such
                Redemption Price. Neither the Regular Trustees nor the Trust
                shall be required to register or cause to be registered the
                transfer of any Securities which have been so called for
                redemption. If any date fixed for redemption of Securities is
                not a Business Day, then payment of the Redemption Price payable
                on such date will be made on the next succeeding day that is a
                Business Day (and without any interest or other payment in
                respect of any such delay) except that, if such Business Day
                falls in the next calendar year, such payment will be made on
                the immediately preceding Business Day, in each case with the
                same force and effect as if made on such date fixed for
                redemption. If payment of the Redemption Price in respect of
                Securities is improperly withheld or refused and not paid either
                by the Property Trustee or by the Sponsor as guarantor pursuant
                to the Preferred Securities Guarantee, Distributions on such
                Securities will continue to accrue, from the original redemption
                date to the actual date of payment, in which case


                                       5

<Page>


                the actual payment date will be considered the date fixed for
                redemption for purposes of calculating the Redemption Price.

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

          (v)   Subject to the foregoing and applicable law (including, without
                limitation, United States federal securities laws), provided the
                acquirer is not the Holder of the Common Securities or the
                obligor under the Indenture, 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.   VOTING RIGHTS - PREFERRED SECURITIES.

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

     (b)  If (i) the Trust fails to make Distributions in full on the Preferred
Securities for six consecutive quarterly Distribution periods (other than during
an Extension Period), or (ii) an Event of Default occurs and is continuing (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 Regular
Trustee in accordance with Section 5.6(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 Regular Trustee. For purposes of determining whether the
Trust has failed to make Distributions in full for six consecutive quarterly
Distribution periods, Distributions shall be deemed to remain in arrears,
notwithstanding any payments in respect thereof, until full cumulative
Distributions have been or contemporaneously are paid with respect to all
quarterly Distribution periods terminating on or prior to the date of payment of
such cumulative Distributions.

     Not later than 30 days after such right to appoint a Special Regular
Trustee arises, the Regular Trustees will convene a meeting for the purpose of
appointing a Special Regular Trustee. If the Regular Trustees fail to convene
such meeting within such 30-day period, the Holders of 10% in liquidation amount
of the Preferred Securities will be entitled to convene such meeting in
accordance with Section 12.2 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 notice of the meeting is sent to 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.

     A Special Regular 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 in accordance with
Section 5.6(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 12.2 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 Regular
Trustee, the Debt Issuer shall retain all rights under the Indenture, including
the right to extend the interest payment period on the Notes.

     Subject to the requirements of the second to last sentence of this
paragraph, the Holders of a Majority in liquidation amount of the Preferred
Securities, voting separately as a class may direct the time, method, and place
of conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property


                                       6

<Page>

Trustee under the Declaration, including (i) directing the time, method, place
of conducting any proceeding for any remedy available to the Note Trustee, or
executing any trust or power conferred on the Note Trustee with respect to the
Notes, (ii) waive any past default and its consequences that is waivable under
Section 7.13 of the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Notes shall be due and payable, or
(iv) consent to any amendment, modification or termination of the Indenture or
the Notes, where such consent shall be required, provided, however, that where a
Super Majority of the holders of the Notes is required, the Property Trustee may
only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of the Preferred Securities which the relevant
Super Majority represents of the aggregate principal amount of the Notes. The
Property Trustee shall not revoke any action previously authorized or approved
by a vote of the Holders of the Preferred Securities. Other than with respect to
directing the time, method and place of conducting any remedy available to the
Property Trustee or the Note 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 for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust. If the Property Trustee fails to enforce its rights under the
Declaration, any Holder of Preferred Securities may, to the extent permissible
by applicable law, 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 any Person to enforce the Property Trustee's
rights under the Declaration, without first instituting a legal proceeding
against the Property Trustee or any other Person.

     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
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.

     No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Notes 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 by any entity directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Sponsor shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not outstanding.

     6.   VOTING RIGHTS - COMMON SECURITIES.

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

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

     (c)  Subject to Section 2.6 of this Declaration and only after the Event of
          Default with respect to the Preferred Securities have 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


                                       7

<Page>

          remedy available to the Note Trustee, or executing any trust or power
          conferred on the Note Trustee with respect to the Notes, (ii) waive
          any past default and its consequences that is waivable under Section
          7.13 of the Indenture, (iii) exercise any right to rescind or annul a
          declaration that the principal of all the Notes shall be due and
          payable, or (iv) consent to any amendment, modification or termination
          of the Indenture or the Notes, where such consent shall be required,
          provided, however, that where a consent under the Indenture would
          require the consent of greater than a majority of the Holders in
          principal amount of Notes affected thereby (a "Super Majority"), the
          Property Trustee may only give such consent 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 Notes outstanding. The Property
          Trustee shall not revoke any action previously authorized or approved
          by a vote of the Holders of the Preferred Securities. Other than with
          respect to directing the time, method and place of conducting any
          remedy available to the Property Trustee or the Note 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 for the purposes of United
          States federal income tax the Trust will not be classified as other
          than a grantor trust. If the Property Trustee fails to enforce its
          rights under the Declaration, any Holder of Common Securities may,
          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 any Person to enforce the Property
          Trustee's rights under the Declaration, without first instituting a
          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 pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.

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

     7. AMENDMENTS TO DECLARATION AND INDENTURE.

     (a)  If any proposed amendment to the Declaration provides for, or the
          Regular Trustees otherwise propose to effect, (i) any action that
          would adversely affect the powers, preferences or special rights of
          the Securities, whether by way of amendment to the Declaration or
          otherwise, or (ii) the dissolution, winding-up or termination of the
          Trust, other than as described in Section 8.1 of the Declaration, then
          the Holders of outstanding Securities as a class, will be entitled to
          vote on such amendment or proposal (but not on any other amendment or
          proposal) and such amendment or proposal shall not be effective except
          with the approval of the Holders of at least 66-2/3% in liquidation
          amount of the Securities, voting together as a single class provided,
          however, that the rights Holders of Preferred Securities under Article
          V of the Declaration to appoint, remove or replace a Special Regular
          Trustee shall not amended without the consent of each Holder of
          Preferred Securities, provided, however, if any amendment or proposal
          referred to in clause (i) above would adversely affect only the
          Preferred Securities or the Common Securities, 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 66 2/3% in liquidation amount of such class of securities.

     (b)  In the event the consent of the Property Trustee as the holder of the
          Notes is required under the Indenture with respect to any amendment,
          modification or


                                       8

<Page>


          termination of the Indenture or the Notes, 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
          a Majority in liquidation amount of the Securities voting together as
          a single class; provided, however, that where a consent under the
          Indenture would require the consent of the holders of greater than a
          majority in aggregate principal amount of the Notes (a "Super
          Majority"), the Property Trustee may only give such consent at the
          direction of the Holders of at least the proportion in liquidation
          amount of the Securities which the relevant Super Majority represents
          of the aggregate principal amount of the Notes outstanding provided,
          further, that the Property Trustee shall not take any action in
          accordance with the directions of the Holders of the Securities under
          this Section 7(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.

     8. PRO RATA.

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

     9. RANKING.

     The Preferred Securities rank pari pasu 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 Notes 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.

     10. LISTING.

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


                                       9

<Page>


     11. ACCEPTANCE OF PREFERRED SECURITIES GUARANTEE AND INDENTURE.

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

     12. NO PREEMPTIVE RIGHTS.

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

     13. MISCELLANEOUS.

     These terms constitute a part of the Declaration.

     The Regular Trustees will provide a copy of the Declaration, the Preferred
Securities Guarantee and the Indenture to a Holder without charge on written
request to the Trust at its principal place of business.


                                       10
<Page>

                                     ANNEX I

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

     Unless this Preferred Security is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York) to the Trust or its
agent for registration of transfer, exchange or payment, and any Preferred
Security issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]

Certificate Number                                Number of Preferred Securities

     CUSIP NO.

                   CERTIFICATE EVIDENCING PREFERRED SECURITIES

                                       OF

                          HOUSEHOLD PREFERRED TRUST VII

                              PREFERRED SECURITIES.

                 (LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)

     Household Capital Trust VII, a business trust formed 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     % Trust Preferred Securities (liquidation amount $25 per
Preferred Security) (the "Preferred Securities"). The Preferred Securities
are transferable on the books and records of the Trust, in person or by a
duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities 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         , 2001, 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 Exhibit A 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 Trust 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.

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


                                      A-1

<Page>

     By acceptance, the Holder agrees to treat the Notes as indebtedness and the
Preferred Securities as evidence of indirect beneficial ownership in the Notes.

                 IN WITNESS WHEREOF, the Trust has executed this

                  certificate this ______ day of         , 2001.

                                       [ ]
                                        as Trustee


                                       ----------------------------------------
                                       [ ]
                                       as Trustee


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


                                      A-2

<Page>

                                   ASSIGNMENT

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


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

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

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

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

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


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

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

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

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

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

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


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

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

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

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

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

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


Date:
      -----------------------------------------------

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


                                      A-3

<Page>

                                    ANNEX II

CERTIFICATE NUMBER                                   NUMBER OF COMMON SECURITIES

                    CERTIFICATE EVIDENCING COMMON SECURITIES
                                       OF
                           HOUSEHOLD CAPITAL TRUST VII

                                COMMON SECURITIES
                  (LIQUIDATION AMOUNT $25 PER COMMON SECURITY)

Household Capital Trust VII, a business trust formed 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     % Trust Common Securities (liquidation amount $25 per
Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. 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         , 2001, 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 Exhibit A to the Declaration. Capitalized terms
used herein but not defined shall have the meaning given them in the
Declaration. The Trust will provide a copy of the Declaration and the
Indenture to a Holder without charge upon written request to the Trust at its
principal place of business.

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

By acceptance, the Holder agrees to treat the Notes as indebtedness and the
Common Securities as evidence of indirect beneficial ownership in the Notes.

         IN WITNESS WHEREOF, the Trust has executed this certificate this day of
        , 2001.

                                       [ ]
                                       as Trustee


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                                       [ ]
                                       as Trustee


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                                      A-4

<Page>

                                   ASSIGNMENT

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


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


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(Insert address and zip code of assignee) and irrevocably appoint)


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


                                      A-5

<Page>

                                    EXHIBIT B

                                SPECIMEN OF NOTE
<Page>

                                    EXHIBIT C

                             UNDERWRITING AGREEMENT