Document:

EXHIBIT 4.4

                                TRUST AGREEMENT

                                    between

                      Morgan Stanley ABS Capital I Inc.,
                                 as Depositor,

                                      and

                       [______________________________]
                               as Owner Trustee

                         Dated as of ___________, 200_

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                                         Table of Contents
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                                             ARTICLE I
                                            DEFINITIONS

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Section 1.01.     Capitalized Terms.............................................................1
Section 1.02.     Other Definitional Provisions.................................................3

                                             ARTICLE II
                                            ORGANIZATION

Section 2.01.     Name..........................................................................4
Section 2.02.     Office........................................................................4
Section 2.03.     Purposes and Powers...........................................................4
Section 2.04.     Appointment of Owner Trustee..................................................5
Section 2.05.     Initial Capital Contribution of Owner Trust Estate............................5
Section 2.06.     Declaration of Trust..........................................................5
Section 2.07.     Liability of the Owners.......................................................6
Section 2.08.     Title to Trust Property.......................................................6
Section 2.09.     Situs of Trust................................................................6
Section 2.10.     Representations and Warranties of the Depositor...............................6
Section 2.11.     Federal Income Tax Allocations................................................7

                                            ARTICLE III
                            TRUST CERTIFICATES AND TRANSFER OF INTERESTS

Section 3.01.     Initial Ownership.............................................................8
Section 3.02.     The Trust Certificates........................................................8
Section 3.03.     Authentication of Trust Certificates..........................................9
Section 3.04.     Registration of Transfer and Exchange of Trust Certificates...................9
Section 3.05.     Mutilated, Destroyed, Lost or Stolen Trust Certificates......................10
Section 3.06.     Persons Deemed Owners........................................................10
Section 3.07.     Access to List of Certificateholders' Names and Addresses....................10
Section 3.08.     Maintenance of Office or Agency..............................................10
Section 3.09.     Appointment of Paying Agent..................................................11
Section 3.10.     Ownership by Depositor of Trust Certificates.................................11
Section 3.11.     Book-Entry Trust Certificates................................................11
Section 3.12.     Notices to Clearing Agency...................................................12
Section 3.13.     Definitive Trust Certificates................................................12

                                             ARTICLE IV
                                      ACTIONS BY OWNER TRUSTEE

Section 4.01.     Prior Notice to Owners with Respect to Certain Matters.......................13
Section 4.02.     Action by Owners with Respect to Certain Matters.............................14
Section 4.03.     Action by Owners with Respect to Bankruptcy..................................14

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Section 4.04.     Restrictions on Owners' Power................................................14
Section 4.05.     Majority Control.............................................................14

                                             ARTICLE V
                             APPLICATION OF TRUST FUNDS; CERTAIN DUTIES

 Section 5.01.     Establishment of Trust Account...............................................14
 Section 5.02.     Application of Trust Funds...................................................15
 Section 5.03.     Method of Payment............................................................15
 Section 5.04.     No Segregation of Moneys; No Interest........................................15
 Section 5.05.     Accounting and Reports to the Noteholders, Owners, the Internal
                   Revenue Service and Others...................................................15
 Section 5.06.     Signature on Returns; Tax Matters Partner....................................16

                                             ARTICLE VI
                               AUTHORITY AND DUTIES OF OWNER TRUSTEE

 Section 6.01.     General Authority............................................................16
 Section 6.02.     General Duties...............................................................16
 Section 6.03.     Action upon Instruction......................................................16
 Section 6.04.     No Duties Except as Specified in this Agreement or in Instructions...........17
 Section 6.05.     No Action Except Under Specified Documents or Instructions...................18
 Section 6.06.     Restrictions.................................................................18

                                            ARTICLE VII
                                    CONCERNING THE OWNER TRUSTEE

Section 7.01.     Acceptance of Trusts and Duties..............................................18
Section 7.02.     Furnishing of Documents......................................................19
Section 7.03.     Representations and Warranties...............................................19
Section 7.04.     Reliance; Advice of Counsel..................................................20
Section 7.05.     Not Acting in Individual Capacity............................................20
Section 7.06.     Owner Trustee Not Liable for Trust Certificates or Mortgage Loans............20
Section 7.07.     Owner Trustee May Own Trust Certificates and Notes...........................21

                                            ARTICLE VIII
                                   COMPENSATION OF OWNER TRUSTEE

Section 8.01.     Owner Trustee's Fees and Expenses............................................21
Section 8.02.     Indemnification..............................................................21
Section 8.03.     Payments to the Owner Trustee................................................21

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                                             ARTICLE IX
                                   TERMINATION OF TRUST AGREEMENT

Section 9.01.     Termination of Trust Agreement...............................................22

                                             ARTICLE X
                       SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

Section 10.01.    Eligibility Requirements for Owner Trustee...................................23
Section 10.02.    Resignation or Removal of Owner Trustee......................................23
Section 10.03.    Successor Owner Trustee......................................................24
Section 10.04.    Merger or Consolidation of Owner Trustee.....................................24
Section 10.05.    Appointment of Co-Trustee or Separate Trustee................................24

                                             ARTICLE XI
                                           MISCELLANEOUS

Section 11.01.    Supplements and Amendments...................................................26
Section 11.02.    No Legal Title to Owner Trust Estate in Owners...............................27
Section 11.03.    Limitations on Rights of Others..............................................27
Section 11.04.    Notices......................................................................27
Section 11.05.    Severability.................................................................27
Section 11.06.    Separate Counterparts........................................................27
Section 11.07.    Successors and Assigns.......................................................27
Section 11.08.    No Petition..................................................................28
Section 11.09.    No Recourse..................................................................28
Section 11.10.    Headings.....................................................................28
Section 11.11.    Governing Law................................................................28
Section 11.12.    .............................................................................28

                                              EXHIBITS

EXHIBIT A                Form of Trust Certificate
EXHIBIT B                Form of Certificate of Trust
EXHIBIT C                Form of Certificate Depository Agreement
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          TRUST AGREEMENT (the "Trust Agreement") dated as of ________, 200_,
between Morgan Stanley ABS Capital I Inc., a Delaware corporation, as
depositor (the "Depositor"), and [____________], a [__________________], as
owner trustee (the "Owner Trustee").

                                   ARTICLE I

                                  DEFINITIONS

          Section 1.01 Capitalized Terms. For all purposes of this Agreement,
the following terms shall have the meanings set forth below:

          Agreement: This Trust Agreement, as the same may be amended and
supplemented from time to time.

          Assignment: The assignment of right, title and interest of the
Depositor in the Mortgage Loans to the Trust.

          Basic Documents: The Master Servicing Agreement, the Indenture, and
the other documents and certificates delivered in connection therewith.

          Benefit Plan: The meaning assigned to such term in Section 11.13.

          Book-Entry Trust Certificate: A beneficial interest in the Trust
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 3.10.

          Business Trust Statute: Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code ss. 3801 et seq., as the same may be amended from time to time.

          Certificate: Any of the Book-Entry Trust Certificates or Definitive
Trust Certificates.

          "Certificate Distribution Account": The meaning assigned to such
term in Section 5.01.

          Certificate of Trust: The Certificate of Trust in the form of
Exhibit B filed for the Trust pursuant to Section 3810(a) of the Business
Trust Statute.

          Certificate Owner: With respect to a Book-Entry Trust Certificate, a
Person who is the beneficial owner of such Book-Entry Trust Certificate, 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).

          Certificate Register and Certificate Registrar: The register
mentioned in and the registrar appointed pursuant to Section 3.04.

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          Certificateholder or Holder: A Person in whose name a Trust
Certificate is registered.

          Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.

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

          Code: The Internal Revenue Code of 1986, as amended, and Treasury
Regulations promulgated thereunder.

          Corporate Trust Office: With respect to the Owner Trustee, the
principal corporate trust office of the Owner Trustee located at
[____________________________], or at such other address as the Owner Trustee
may designate by notice to the Owners, the Depositor and the Company, or the
principal corporate trust office of any successor Owner Trustee at the address
designated by such successor Owner Trustee by notice to the Owners, the
Depositor and the Company.

          Definitive Trust Certificates: The meaning set forth in Section
3.10.

          Depositor: Morgan Stanley ABS Capital I Inc. in its capacity as
depositor hereunder.

          Eligible Distribution Account: An account that is (i) maintained
with a depository institution whose debt obligations at the time of any
deposit therein have the highest short-term debt rating by the Rating
Agencies, (ii) one or more accounts with a depository institution which
accounts are fully insured by either the Savings Association Insurance Fund or
the Bank Insurance Fund of the Federal Deposit Insurance Corporation
established by such fund, (iii) a segregated trust account maintained with the
Owner Trustee or an affiliate of the Owner Trustee in its fiduciary capacity
or (iv) otherwise acceptable to each Rating Agency as evidenced by a letter
from each Rating Agency to the Owner Trustee, without reduction or withdrawal
of their then currently ratings of the Certificates.

          ERISA: The meaning assigned thereto in Section 11.13.

          Exchange Act: The Securities Exchange Act of 1934, as amended.

          Expenses: The meaning assigned to such term in Section 8.02.

          Indemnified Parties: The meaning assigned to such term in Section
8.02.

          Indenture: The Indenture dated as of ________, 200_ between the
Trust and [_____________________________], as Indenture Trustee.

          Initial Certificate Balance: $__________.

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          Master Servicing Agreement: The Master Servicing Agreement dated as
of ________1, 200_, among the Trust, as issuer and
[_________________________], as master servicer, as the same may be amended or
supplemented from time to time.

          Mortgage Loans: A pool of [adjustable rate] home equity revolving
credit line loans made or to be made in the future under certain home equity
revolving credit line loan agreements.

          Owner: Each Holder of a Trust Certificate.

          Owner Trust Estate: All right, title and interest of the Trust in
and to the property and rights assigned to the Trust pursuant to the
Assignment, all funds on deposit from time to time in the Trust Accounts and
the Certificate Distribution Account and all other property of the Trust from
time to time, including any rights of the Owner Trustee and the Trust pursuant
to the Master Servicing Agreement.

          Owner Trustee: [____________________], a [_________] banking
corporation, not in its individual capacity but solely as owner trustee under
this Agreement, and any successor Owner Trustee hereunder.

          Paying Agent: Any paying agent or co-paying agent appointed pursuant
to Section 3.09 and shall initially be [_____________].

          Rating Agency: Any nationally recognized statistical rating
organization asked to rate the Certificates.

          Record Date: With respect to any Distribution Date, the close of
business on the day prior to such Distribution Date occurs or, if Definitive
Trust Certificates are issued pursuant to Section 3.13, the last day of the
month preceding such Distribution Date.

          Secretary of State: The Secretary of State of the State of Delaware.

          Treasury Regulations: Regulations, including proposed or temporary
Regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.

          Trust: The trust established by this Agreement.

          Trust Account: Any account set up by the Owner Trustee pursuant to
the provisions of Section 5.01.

          Trust Certificate: A certificate evidencing the beneficial interest
of an Owner in the Trust, substantially in the form attached hereto as Exhibit
A.

          Section 1.02. Other Definitional Provisions. (a) Capitalized terms
used and not otherwise defined herein have the meanings assigned to them in
the Master Servicing Agreement or, if not defined therein, in the Indenture.

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          (b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.

          (c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate
or other document to the extent not defined, shall have the respective
meanings given to them under generally accepted accounting principles. To the
extent that the definitions of accounting terms in this Agreement or in any
such certificate or other document are inconsistent with the meanings of such
terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document shall
control.

          (d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation".

          (e) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.

          (f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.

                                  ARTICLE II

                                 ORGANIZATION

          Section 2.01. Name. The Trust created hereby shall be known as
"[_____________] Home Equity Loan Trust 19 - ," in which name the Owner
Trustee may conduct the business of the Trust, make and execute contracts and
other instruments on behalf of the Trust and sue and be sued.

          Section 2.02. Office. The office of the Trust shall be in care of
the Owner Trustee at the Corporate Trust Office or at such other address in
Delaware as the Owner Trustee may designate by written notice to the Owners,
the Depositor and the Company.

          Section 2.03. Purposes and Powers. (a) The purpose of the Trust is
to engage in the following activities:

          (i) to issue the Notes pursuant to the Indenture and the Trust
     Certificates pursuant to this Agreement and to sell the Notes and the
     Trust Certificates;

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          (ii) with the proceeds of the sale of the Notes and the Trust
     Certificates, to purchase the Mortgage Loans, and to pay the
     organizational, start-up and transactional expenses of the Trust and to
     pay the balance to the Depositor pursuant to the Master Servicing
     Agreement;

          (iii) to assign, grant, transfer, pledge, mortgage and convey the
     Trust Estate pursuant to the Indenture and to hold, manage and distribute
     to the Owners pursuant to the terms of the Master Servicing Agreement any
     portion of the Trust Estate released from the Lien of, and remitted to
     the Trust pursuant to, the Indenture;

          (iv) to enter into and perform its obligations under the Basic
     Documents to which it is to be a party;

          (v) to engage in those activities, including entering into
     agreements, that are necessary, suitable or convenient to accomplish the
     foregoing or are incidental thereto or connected therewith; and

          (vi) subject to compliance with the Basic Documents, to engage in
     such other activities as may be required in connection with conservation
     of the Owner Trust Estate and the making of distributions to the Owners
     and the Noteholders.

The Trust is hereby authorized to engage in the foregoing activities. The
Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this
Agreement or the Basic Documents.

          Section 2.04. Appointment of Owner Trustee. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.

          Section 2.05. Initial Capital Contribution of Owner Trust Estate.
The Depositor hereby sells, assigns, transfers, conveys and sets over to the
Owner Trustee, as of the date hereof, the sum of $[_____________]. The Owner
Trustee hereby acknowledges receipt in trust from the Depositor, as of the
date hereof, of the foregoing contribution, which shall constitute the initial
Owner Trust Estate and shall be deposited in the Certificate Distribution
Account. The Depositor shall pay organizational expenses of the Trust as they
may arise or shall, upon the request of the Owner Trustee, promptly reimburse
the Owner Trustee for any such expenses paid by the Owner Trustee.

          Section 2.06. Declaration of Trust. The Owner Trustee hereby
declares that it will hold the Owner Trust Estate in trust upon and subject to
the conditions set forth herein for the use and benefit of the Owners, subject
to the obligations of the Trust under the Basic Documents. It is the intention
of the parties hereto that the Trust constitute a business trust under the
Business Trust Statute and that this Agreement constitute the governing
instrument of such business trust. It is the intention of the parties hereto
that, solely for income and franchise tax purposes, the Trust shall be treated
as a partnership, with the assets of the partnership being the Mortgage Loans
and other assets held by the Trust, the partners of the partnership being the
Certificateholders, and the Notes being debt of the partnership. The parties
agree that, unless

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otherwise required by appropriate tax authorities, the Trust will file or
cause to be filed annual or other necessary returns, reports and other forms
consistent with the characterization of the Trust as a partnership for such
tax purposes. Effective as of the date hereof, the Owner Trustee shall have
all rights, powers and duties set forth herein and in the Business Trust
Statute with respect to accomplishing the purposes of the Trust.

          Section 2.07. Liability of the Owners. (a) The Depositor shall be
liable directly to and will indemnify any injured party for all losses,
claims, damages, liabilities and expenses of the Trust (including Expenses, to
the extent not paid out of the Owner Trust Estate) to the extent that the
Depositor would be liable if the Trust were a partnership under the Delaware
Revised Uniform Limited Partnership Act in which the Depositor were a general
partner; provided, however, that the Depositor shall not be liable for any
losses incurred by a Certificateholder in the capacity of an investor in the
Trust Certificates, or a Noteholder in the capacity of an investor in the
Notes. In addition, any third party creditors of the Trust (other than in
connection with the obligations described in the preceding sentence for which
the Depositor shall not be liable) shall be deemed third party beneficiaries
of this paragraph and paragraph (c) below. The obligations of the Depositor
under this paragraph shall be evidenced by the Trust Certificates described in
Section 3.10, which for purposes of the Business Trust Statute shall be deemed
to be a separate class of Trust Certificates from all other Trust Certificates
issued by the Trust; provided that the rights and obligations evidenced by all
Trust Certificates, regardless of class shall, except as provided in this
Section , be identical.

          (b) No Owner, other than to the extent set forth in paragraph (a),
shall have any personal liability for any liability or obligation of the
Trust.

          Section 2.08. Title to Trust Property. Legal title to all the Owner
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.

          Section 2.09. Situs of Trust. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of Delaware
or the State of ________. The Trust shall not have any employees in any state
other than Delaware; provided, however, that nothing herein shall restrict or
prohibit the Owner Trustee from having employees within or without the State
of Delaware. Payments will be received by the Trust only in Delaware or
________, and payments will be made by the Trust only from Delaware or
________. The only office of the Trust will be at the Corporate Trust Office
in Delaware.

          Section 2.10. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Owner Trustee that:

          (a) The Depositor is duly organized and validly existing as a
     corporation in good standing under the laws of the State of Delaware,
     with power and authority to own its properties and to conduct its
     business as such properties are currently owned and such business is
     presently conducted.

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          (b) The Depositor is duly qualified to do business as a foreign
     corporation in good standing and has obtained all necessary licenses and
     approvals in all jurisdictions in which the ownership or lease of its
     property or the conduct of its business shall require such
     qualifications.

          (c) The Depositor has the power and authority to execute and deliver
     this Agreement and to carry out its terms; the Depositor has full power
     and authority to sell and assign the property to be sold and assigned to
     and deposited with the Trust and the Depositor has duly authorized such
     sale and assignment and deposit to the Trust by all necessary corporate
     action; and the execution, delivery and performance of this Agreement
     have been duly authorized by the Depositor by all necessary corporate
     action.

          (d) The consummation of the transactions contemplated by this
     Agreement and the fulfillment of the terms hereof do not conflict with,
     result in any breach of any of the terms and provisions of, or constitute
     (with or without notice or lapse of time) a default under, the
     certificate of incorporation or bylaws of the Depositor, or any
     indenture, agreement or other instrument to which the Depositor is a
     party or by which it is bound; nor result in the creation or imposition
     of any Lien upon any of its properties pursuant to the terms of any such
     indenture, agreement or other instrument (other than pursuant to the
     Basic Documents); nor violate any law or, to the best of the Depositor's
     knowledge, any order, rule or regulation applicable to the Depositor of
     any court or of any federal or state regulatory body, administrative
     agency or other governmental instrumentality having jurisdiction over the
     Depositor or its properties.

          (e) To the Depositor's best knowledge, there are no proceedings or
     investigations pending or threatened before any court, regulatory body,
     administrative agency or other governmental instrumentality having
     jurisdiction over the Depositor or its properties: (A) asserting the
     invalidity of this Agreement, (B) seeking to prevent the consummation of
     any of the transactions contemplated by this Agreement or (C) seeking any
     determination or ruling that might materially and adversely affect the
     performance by the Depositor of its obligations under, or the validity or
     enforceability of, this Agreement.

          (f) The representations and warranties of the Depositor in Sections
     [___________] of the [________________________] are true and correct.

          Section 2.11. Federal Income Tax Allocations. Net income of the
Trust for any month as determined for federal income tax purposes (and each
item of income, gain, loss and deduction entering into the computation
thereof) shall be allocated:

          (a) among the Certificate Owners as of the first Record Date
following the end of such month, in proportion to their ownership of principal
amount of Trust Certificates on such date, net income in an amount up to the
sum of (i) the Certificateholders' Monthly Interest Distributable Amount for
such month, (ii) interest on the excess, if any, of the Certificateholders'
Interest Distributable Amount for the preceding Distribution Date over the
amount in respect of interest that is actually deposited in the Certificate
Distribution Account on such preceding Distribution Date, to the extent
permitted by law, at the Pass-Through Rate from such preceding Distribution
Date through the current Distribution Date, (iii) the portion of the market
discount

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on the Mortgage Loans accrued during such month that is allocable to the
excess, if any, of the initial aggregate principal amount of the Trust
Certificates over their initial aggregate issue price, (iv) any amount
expected to be distributed to the Certificateholders pursuant to the Master
Servicing Agreement (to the extent not previously allocated pursuant to this
clause), (v) any Certificateholders' Prepayment Premium distributable to the
Certificateholders with respect to such month and (vi) any other amounts of
income payable to the Certificateholders for such month; such sum to be
reduced by any amortization by the Trust of premium on Mortgage Loans that
corresponds to any excess of the issue price of Certificates over their
principal amount; and

          (b) to the Depositor, to the extent of any remaining net income. If
the net income of the Trust for any month is insufficient for the allocations
described in clause (a) above, subsequent net income shall first be allocated
to make up such shortfall before being allocated as provided in the preceding
sentence. Net losses of the Trust, if any, for any month as determined for
federal income tax purposes (and each item of income, gain, loss and deduction
entering into the computation thereof) shall be allocated to the Depositor to
the extent the Depositor is reasonably expected to bear the economic burden of
such net losses, and any remaining net losses shall be allocated among the
Certificate Owners as of the first Record Date following the end of such month
in proportion to their ownership of principal amount of Trust Certificates on
such Record Date. The Depositor is authorized to modify the allocations in
this paragraph if necessary or appropriate, in its sole discretion, for the
allocations to fairly reflect the economic income, gain or loss to the
Depositor or to the Certificate Owners, or as otherwise required by the Code.

                                 ARTICLE III

                 TRUST CERTIFICATES AND TRANSFER OF INTERESTS

          Section 3.01. Initial Ownership. Upon the formation of the Trust by
the contribution by the Depositor pursuant to Section 2.05 and until the
issuance of the Trust Certificates, the Depositor shall be the sole
beneficiary of the Trust.

          Section 3.02. The Trust Certificates. The Trust Certificates shall
be issued in minimum denominations of $[_______] and in integral multiples of
$1,000 in excess thereof; provided, however, that the Trust Certificates
issued to the Depositor pursuant to Section 3.10 may be issued in such
denomination as required to include any residual amount. The Trust
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of an authorized officer of the Owner Trustee. Trust Certificates
bearing the manual or facsimile signatures of individuals who were, at the
time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be validly issued and entitled to the benefit of
this Agreement, notwithstanding that such individuals or any of them shall
have ceased to be so authorized prior to the authentication and delivery of
such Trust Certificates or did not hold such offices at the date of
authentication and delivery of such Trust Certificates.

          A transferee of a Trust Certificate shall become a Certificateholder
and shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder upon such transferee's acceptance of a Trust
Certificate duly registered in such transferee's name pursuant to Section
3.04.

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          Each Trust Certificate issued in accordance with this Trust
Agreement shall be deemed fully paid and non-assessable

          Section 3.03. Authentication of Trust Certificates. Concurrently
with the initial sale of the Mortgage Loans to the Trust pursuant to the
Master Servicing Agreement, the Owner Trustee shall cause the Trust
Certificates in an aggregate principal amount equal to the Initial Certificate
Balance to be executed on behalf of the Trust, authenticated and delivered to
or upon the written order of the Depositor, signed by its chairman of the
board, its president, any vice president, secretary or any assistant
treasurer, without further corporate action by the Depositor, in authorized
denominations. No Trust Certificate shall entitle its Holder to any benefit
under this Agreement or be valid for any purpose unless there shall appear on
such Trust Certificate a certificate of authentication substantially in the
form set forth in Exhibit A, executed by the Owner Trustee or [____________],
as the Owner Trustee's authenticating agent, by manual signature; such
authentication shall constitute conclusive evidence that such Trust
Certificate shall have been duly authenticated and delivered hereunder. All
Trust Certificates shall be dated the date of their authentication.

          Section 3.04. Registration of Transfer and Exchange of Trust
Certificates. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.08, a Certificate Register
in which, subject to such reasonable regulations as it may prescribe, the
Owner Trustee shall provide for the registration of Trust Certificates and of
transfers and exchanges of Trust Certificates as herein provided.
[___________] shall be the initial Certificate Registrar.

          Upon surrender for registration of transfer of any Trust Certificate
at the office or agency maintained pursuant to Section 3.08, the Owner Trustee
shall execute, authenticate and deliver (or shall cause [_______________] as
its authenticating agent to authenticate and deliver), in the name of the
designated transferee or transferees, one or more new Trust Certificates in
authorized denominations of a like aggregate amount dated the date of
authentication by the Owner Trustee or any authenticating agent. At the option
of a Holder, Trust Certificates may be exchanged for other Trust Certificates
of authorized denominations of a like aggregate amount upon surrender of the
Trust Certificates to be exchanged at the office or agency maintained pursuant
to Section 3.08.

          Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Trust Certificate surrendered for registration of transfer or exchange
shall be cancelled and subsequently disposed of by the Owner Trustee in
accordance with its customary practice.

          No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Trust Certificates.

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          The preceding provisions of this Section notwithstanding, the Owner
Trustee shall not make, and the Certificate Registrar shall not register
transfers or exchanges of, Trust Certificates for a period of 15 days
preceding the due date for any payment with respect to the Trust Certificates.

          Section 3.05. Mutilated, Destroyed, Lost or Stolen Trust
Certificates. If (a) any mutilated Trust Certificate shall be surrendered to
the Certificate Registrar, or if the Certificate Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Certificate and (b) there shall be delivered to the Certificate Registrar and
the Owner Trustee such security or indemnity as may be required by them to
save each of them harmless, then in the absence of notice that such Trust
Certificate has been acquired by a bona fide purchaser, the Owner Trustee on
behalf of the Trust shall execute and the Owner Trustee or [_______________],
as the Owner Trustee's authenticating agent, shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Trust Certificate, a new Trust Certificate of like tenor and denomination. In
connection with the issuance of any new Trust Certificate under this Section ,
the Owner Trustee or the Certificate Registrar 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 Trust Certificate issued
pursuant to this Section shall constitute conclusive evidence of ownership in
the Trust, as if originally issued, whether or not the lost, stolen or
destroyed Trust Certificate shall be found at any time.

          Section 3.06. Persons Deemed Owners. Prior to due presentation of a
Trust Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar or any Paying Agent may treat the Person in whose name
any Trust Certificate is registered in the Certificate Register as the owner
of such Trust Certificate for the purpose of receiving distributions pursuant
to Section 5.02 and for all other purposes whatsoever, and none of the Owner
Trustee, the Certificate Registrar or any Paying Agent shall be bound by any
notice to the contrary.

          Section 3.07. Access to List of Certificateholders' Names and
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Master Servicer and the Depositor, within 15 days after receipt by the Owner
Trustee of a written request therefor from the Master Servicer or the
Depositor, a list, in such form as the Master Servicer or the Depositor may
reasonably require, of the names and addresses of the Certificateholders as of
the most recent Record Date. If three or more Certificateholders or one or
more Holders of Trust Certificates evidencing not less than 25% of the
Certificate Balance apply in writing to the Owner Trustee, and such
application states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Trust Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Owner Trustee
shall, within five Business Days after the receipt of such application, afford
such applicants access during normal business hours to the current list of
Certificateholders. Each Holder, by receiving and holding a Trust Certificate,
shall be deemed to have agreed not to hold any of the Depositor, the
Depositor, the Certificate Registrar or the Owner Trustee accountable by
reason of the disclosure of its name and address, regardless of the source
from which such information was derived.

          Section 3.08. Maintenance of Office or Agency. The Owner Trustee
shall maintain in the Borough of Manhattan, The City of New York, an office or
offices or agency or

                                      10
<PAGE>

agencies where Trust Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Owner
Trustee in respect of the Trust Certificates and the Basic Documents may be
served. The Owner Trustee initially designates
[_______________________________] as its office for such purposes. The Owner
Trustee shall give prompt written notice to the Certificateholders of any
change in the location of the Certificate Register or any such office or
agency.

          Section 3.09. Appointment of Paying Agent. The Paying Agent shall
make distributions to Certificateholders from the Certificate Distribution
Account pursuant to Section 5.02 and shall report the amounts of such
distributions to the Owner Trustee. Any Paying Agent shall have the revocable
power to withdraw funds from the Certificate Distribution Account for the
purpose of making the distributions referred to above. The Owner Trustee may
revoke such power and remove the Paying Agent if the Owner Trustee determines
in its sole discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect. The Paying Agent
initially shall be [___________], and any co-paying agent chosen by
[___________] and acceptable to the Owner Trustee. [____________] shall be
permitted to resign as Paying Agent upon 30 days' written notice to the Owner
Trustee. In the event that [___________] shall no longer be the Paying Agent,
the Owner Trustee shall appoint a successor to act as Paying Agent (which
shall be a bank or trust company). The Owner Trustee shall cause such
successor Paying Agent or any additional Paying Agent appointed by the Owner
Trustee to execute and deliver to the Owner Trustee an instrument in which
such successor Paying Agent or additional Paying Agent shall agree with the
Owner Trustee that, as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums shall be paid to such Certificateholders. The Paying
Agent shall return all unclaimed funds to the Owner Trustee and upon removal
of a Paying Agent such Paying Agent shall also return all funds in its
possession to the Owner Trustee. The provisions of Sections 7.01, 7.03, 7.04
and 8.01 shall apply to the Owner Trustee also in its role as Paying Agent,
for so long as the Owner Trustee shall act as Paying Agent and, to the extent
applicable, to any other paying agent appointed hereunder. Any reference in
this Agreement to the Paying Agent shall include any co-paying agent unless
the context requires otherwise.

          Section 3.10. Ownership by Depositor of Trust Certificates. The
Depositor shall on the Closing Date purchase Trust Certificates representing
at least __% of the Initial Certificate Balance and shall thereafter retain
beneficial and record ownership of Trust Certificates representing at least
__% of the Certificate Balance. Any attempted transfer of any Trust
Certificate that would reduce such interest of the Depositor below __% of the
Certificate Balance shall, to the extent permitted by applicable law, be void.
The Owner Trustee shall cause any Trust Certificate issued to the Depositor to
contain a legend stating "THIS CERTIFICATE IS NON TRANSFERABLE TO THE EXTENT
PERMITTED BY APPLICABLE LAW".

          Section 3.11. Book-Entry Trust Certificates. The Trust Certificates,
upon original issuance, will be issued in the form of a typewritten Trust
Certificate or Trust Certificates representing Book-Entry Trust Certificates,
to be delivered to The Depository Trust Depositor, the initial Clearing
Agency, by, or on behalf of, the Trust; provided, however, that one Definitive
Trust Certificate may be issued to the Depositor pursuant to Section 3.11.
Such Trust Certificate or Trust Certificates shall initially be registered on
the Certificate Register in

                                      11
<PAGE>

the name of Cede & Co., the nominee of the initial Clearing Agency, and no
Certificate Owner will receive a definitive Trust Certificate representing
such Certificate Owner's interest in such Trust Certificate, except as
provided in Section 3.13. Unless and until definitive, fully registered Trust
Certificates (the "Definitive Trust Certificates") have been issued to
Certificate Owners pursuant to Section 3.13:

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

          (b) The Certificate Registrar and the Owner Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this Agreement
(including the payment of principal of and interest on the Trust Certificates
and the giving of instructions or directions hereunder) as the sole Holder of
the Trust Certificates and shall have no obligation to the Certificate Owners;

          (c) To the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control;

          (d) The rights of Certificate Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency and/or the
Clearing Agency Participants. Pursuant to the Certificate Depository
Agreement, unless and until Definitive Trust Certificates are issued pursuant
to Section 3.13, the initial Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit payments of
principal of and interest on the Trust Certificates to such Clearing Agency
Participants; and

          (e) Whenever this Agreement requires or permits actions to be taken
based upon instructions or directions of Holders of Trust Certificates
evidencing a specified percentage of the Certificate Balance, the Clearing
Agency shall be deemed to represent such percentage only to the extent that it
has received instructions to such effect from Certificate Owners and/or
Clearing Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Trust Certificates and
has delivered such instructions to the Owner Trustee.

          Section 3.12. Notices to Clearing Agency. Whenever a notice or other
communication to the Certificateholders is required under this Agreement,
unless and until Definitive Trust Certificates shall have been issued to
Certificate Owners pursuant to Section 3.13, the Owner Trustee shall give all
such notices and communications specified herein to be given to
Certificateholders to the Clearing Agency, and shall have no obligations to
the Certificate Owners.

          Section 3.13. Definitive Trust Certificates. If (i) the
Administrator advises the Owner Trustee in writing that the Clearing Agency is
no longer willing or able to properly discharge its responsibilities with
respect to the Trust Certificates and the Administrator is unable to locate a
qualified successor, (ii) the Administrator at its option advises the Owner
Trustee in writing that it elects to terminate the book-entry system through
the Clearing Agency or (iii) after the occurrence of an Event of Default or a
Master Servicer Default, Certificate Owners representing beneficial interests
aggregating at least a majority of the Certificate Balance advise the Clearing
Agency in writing that the continuation of a book-entry system through the

                                      12
<PAGE>

Clearing Agency is no longer in the best interest of the Certificate Owners,
then the Clearing Agency shall notify all Certificate Owners and the Owner
Trustee of the occurrence of any such event and of the availability of the
Definitive Trust Certificates to Certificate Owners requesting the same. Upon
surrender to the Owner Trustee of the typewritten Trust Certificate or Trust
Certificates representing the Book-Entry Trust Certificates by the Clearing
Agency, accompanied by registration instructions, the Owner Trustee shall
execute and authenticate the Definitive Trust Certificates in accordance with
the instructions of the Clearing Agency. Neither the Certificate Registrar nor
the Owner Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on, such instructions. Upon the issuance of Definitive Trust Certificates, the
Owner Trustee shall recognize the Holders of the Definitive Trust Certificates
as Certificateholders. The Definitive Trust Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Owner Trustee, as evidenced by its execution
thereof.

                                  ARTICLE IV

                           ACTIONS BY OWNER TRUSTEE

          Section 4.01. Prior Notice to Owners with Respect to Certain
Matters. With respect to the following matters, the Owner Trustee shall not
take action unless at least 30 days before the taking of such action, the
Owner Trustee shall have notified the Certificateholders in writing of the
proposed action and the Owners shall not have notified the Owner Trustee in
writing prior to the 30th day after such notice is given that such Owners have
withheld consent or provided alternative direction:

          (a) the initiation of any claim or lawsuit by the Trust (except
claims or lawsuits brought in connection with the collection of the Mortgage
Loans) and the compromise of any action, claim or lawsuit brought by or
against the Trust (except with respect to the aforementioned claims or
lawsuits for collection of the Mortgage Loans;

          (b) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed under the
Business Trust Statute);

          (c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;

          (d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Owners;

          (e) the amendment, change or modification of the Master Servicing
Agreement, except to cure any ambiguity or to amend or supplement any
provision in a manner or add any provision that would not materially adversely
affect the interests of the Owners; or

          (f) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or pursuant to this Agreement of
a successor Certificate Registrar, or the consent to the assignment by the
Note Registrar, Paying Agent or Indenture

                                      13
<PAGE>

Trustee or Certificate Registrar of its obligations under the Indenture or
this Agreement, as applicable.

          Section 4.02. Action by Owners with Respect to Certain Matters. The
Owner Trustee shall not have the power, except upon the direction of the
Owners, to (a) remove the Master Servicer under the Master Servicing Agreement
pursuant to Section [ ] thereof or (b) except as expressly provided in the
Basic Documents, sell the Mortgage Loans after the termination of the
Indenture. The Owner Trustee shall take the actions referred to in the
preceding sentence only upon written instructions signed by the Owners.

          Section 4.03. Action by Owners with Respect to Bankruptcy. The Owner
Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior approval of all
Owners and the delivery to the Owner Trustee by each such Owner of a
certificate certifying that such Owner reasonably believes that the Trust is
insolvent.

          Section 4.04. Restrictions on Owners' Power. The Owners shall not
direct the Owner Trustee to take or to refrain from taking any action if such
action or inaction would be contrary to any obligation of the Trust or the
Owner Trustee under this Agreement or any of the Basic Documents or would be
contrary to Section 2.03, nor shall the Owner Trustee be obligated to follow
any such direction, if given.

          Section 4.05. Majority Control. Except as expressly provided herein,
any action that may be taken by the Owners under this Agreement may be taken
by the Holders of Trust Certificates evidencing not less than a majority of
the Certificate Balance. Except as expressly provided herein, any written
notice of the Owners delivered pursuant to this Agreement shall be effective
if signed by Holders of Trust Certificates evidencing not less than a majority
of the Certificate Balance at the time of the delivery of such notice.

                                  ARTICLE V

                  APPLICATION OF TRUST FUNDS; CERTAIN DUTIES

          Section 5.01. Establishment of Trust Account. The Owner Trustee, for
the benefit of the Certificateholders, shall establish and maintain in the
name of the Trust an Eligible Deposit Account (the "Certificate Distribution
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders.

          The Owner Trustee shall possess all right, title and interest in all
funds on deposit from time to time in the Certificate Distribution Account and
in all proceeds thereof. Except as otherwise expressly provided herein, the
Certificate Distribution Account shall be under the sole dominion and control
of the Owner Trustee for the benefit of the Certificateholders. If, at any
time, the Certificate Distribution Account ceases to be an Eligible Deposit
Account, the Owner Trustee (or the Depositor on behalf of the Owner Trustee,
if the Certificate Distribution Account is not then held by the Owner Trustee
or an affiliate thereof) shall within 10 Business Days (or such longer period,
not to exceed 30 calendar days, as to which each Rating Agency may

                                      14
<PAGE>

consent) establish a new Certificate Distribution Account as an Eligible
Deposit Account and shall transfer any cash and/or any investments to such new
Certificate Distribution Account.

          Section 5.02. Application of Trust Funds. (a) On each Distribution
Date, the Owner Trustee will distribute to Certificateholders, on a pro rata
basis, amounts deposited in the Certificate Distribution Account.

          (b) On each Distribution Date, the Owner Trustee shall send to each
Certificateholder the statement or statements provided to the Owner Trustee by
the Master Servicer pursuant to Section [____] of the Master Servicing
Agreement with respect to such Distribution Date.

          (c) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to an Owner, such tax shall reduce the
amount otherwise distributable to the Owner in accordance with this Section .
The Owner Trustee is hereby authorized and directed to retain from amounts
otherwise distributable to the Owners sufficient funds for the payment of any
tax that is legally owed by the Trust (but such authorization shall not
prevent the Owner Trustee from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed
with respect to an Owner shall be treated as cash distributed to such Owner at
the time it is withheld by the Trust and remitted to the appropriate taxing
authority. If there is a possibility that withholding tax is payable with
respect to a distribution (such as a distribution to a non-U.S. Owner), the
Owner Trustee may in its sole discretion withhold such amounts in accordance
with this paragraph (c).

          Section 5.03. Method of Payment. Subject to Section 9.01(c),
distributions required to be made to Certificateholders on any Distribution
Date shall be made to each Certificateholder of record on the preceding Record
Date either by wire transfer, in immediately available funds, to the account
of such Holder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions at least five Business Days prior
to such Distribution Date and such Holder's Trust Certificates in the
aggregate evidence a denomination of not less than $[____________], or, if
not, by check mailed to such Certificateholder at the address of such holder
appearing in the Certificate Register.

          Section 5.04. No Segregation of Moneys; No Interest. Subject to
Sections 5.01 and 5.02, moneys received by the Owner Trustee hereunder need
not be segregated in any manner except to the extent required by law or the
Master Servicing Agreement and may be deposited under such general conditions
as may be prescribed by law, and the Owner Trustee shall not be liable for any
interest thereon.

          Section 5.05. Accounting and Reports to the Noteholders, Owners, the
Internal Revenue Service and Others. The Owner Trustee shall (a) maintain (or
cause to be maintained) the books of the Trust on a calendar year basis and
the accrual method of accounting, (b) deliver to each Owner, as may be
required by the Code and applicable Treasury Regulations, such information as
may be required (including Schedule K-1) to enable each Owner to prepare its
federal and state income tax returns, (c) file such tax returns relating to
the Trust (including a

                                      15
<PAGE>

partnership information return, IRS Form 1065) and make such elections as from
time to time may be required or appropriate under any applicable state or
federal statute or any rule or regulation thereunder so as to maintain the
Trust's characterization as a partnership for federal income tax purposes, (d)
cause such tax returns to be signed in the manner required by law and (e)
collect or cause to be collected any withholding tax as described in and in
accordance with Section 5.02(c) with respect to income or distributions to
Owners. The Owner Trustee shall elect under Section 1278 of the Code to
include in income currently any market discount that accrues with respect to
the Mortgage Loans. The Owner Trustee shall not make the election provided
under Section 754 of the Code.

          Section 5.06. Signature on Returns; Tax Matters Partner. (a) The
Owner Trustee shall sign on behalf of the Trust the tax returns of the Trust,
unless applicable law requires an Owner to sign such documents, in which case
such documents shall be signed by the Depositor.

          (b) The Depositor shall be designated the "tax matters partner" of
the Trust pursuant to Section 6231(a)(7)(A) of the Code and applicable
Treasury Regulations.

                                  ARTICLE VI

                     AUTHORITY AND DUTIES OF OWNER TRUSTEE

          Section 6.01. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is to
be a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is to be a party and
any amendment or other agreement or instrument, in each case, in such form as
the Depositor shall approve, as evidenced conclusively by the Owner Trustee's
execution thereof. In addition to the foregoing, the Owner Trustee is
authorized, but shall not be obligated, to take all actions required of the
Trust pursuant to the Basic Documents. The Owner Trustee is further authorized
from time to time to take such action as the Administrator recommends with
respect to the Basic Documents.

          Section 6.02. General Duties. It shall be the duty of the Owner
Trustee to discharge (or cause to be discharged) all of its responsibilities
pursuant to the terms of this Agreement and the Basic Documents to which the
Trust is a party and to administer the Trust in the interest of the Owners,
subject to the Basic Documents and in accordance with the provisions of this
Agreement.

          Section 6.03. Action upon Instruction. (a) Subject to Article IV and
in accordance with the terms of the ----------------------- Basic Documents,
the Owners may by written instruction direct the Owner Trustee in the
management of the Trust. Such direction may be exercised at any time by
written instruction of the Owners pursuant to Article IV.

          (b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is likely to result in liability on the part of the Owner Trustee or is
contrary to the terms hereof or of any Basic Document or is otherwise contrary
to law.

                                      16
<PAGE>

          (c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or under any Basic Document, the Owner Trustee shall promptly give
notice (in such form as shall be appropriate under the circumstances) to the
Owners requesting instruction as to the course of action to be adopted, and to
the extent the Owner Trustee acts in good faith in accordance with any written
instruction of the Owners received, the Owner Trustee shall not be liable on
account of such action to any Person. If the Owner Trustee shall not have
received appropriate instruction within 10 days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Agreement or the
Basic Documents, as it shall deem to be in the best interests of the Owners,
and shall have no liability to any Person for such action or inaction.

          (d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or any
such provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee may give
notice (in such form as shall be appropriate under the circumstances) to the
Owners requesting instruction and, to the extent that the Owner Trustee acts
or refrains from acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable on account of such action or
inaction to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Agreement or the
Basic Documents, as it shall deem to be in the best interests of the Owners,
and shall have no liability to any Person for such action or inaction.

          Section 6.04. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of,
or otherwise deal with the Owner Trust Estate, or to otherwise take or refrain
from taking any action under, or in connection with, any document contemplated
hereby to which the Owner Trustee is a party, except as expressly provided by
the terms of this Agreement or in any document or written instruction received
by the Owner Trustee pursuant to Section 6.03; and no implied duties or
obligations shall be read into this Agreement or any Basic Document against
the Owner Trustee. The Owner Trustee shall have no responsibility for filing
any financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to prepare or file any Securities and Exchange
Commission filing for the Trust or to record this Agreement or any Basic
Document. The Owner Trustee nevertheless agrees that it will, at its own cost
and expense, promptly take all action as may be necessary to discharge any
liens on any part of the Owner Trust Estate that result from actions by, or
claims against, the Owner Trustee that are not related to the ownership or the
administration of the Owner Trust Estate.

                                      17
<PAGE>

          Section 6.05. No Action Except Under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose
of or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the
Owner Trustee pursuant to this Agreement, (ii) in accordance with the Basic
Documents and (iii) in accordance with any document or instruction delivered
to the Owner Trustee pursuant to Section 6.03.

          Section 6.06. Restrictions. The Owner Trustee shall not take any
action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.03 or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation for federal income tax
purposes. The Owners shall not direct the Owner Trustee to take action that
would violate the provisions of this Section .

                                 ARTICLE VII

                         CONCERNING THE OWNER TRUSTEE

          Section 7.01. Acceptance of Trusts and Duties. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement. The
Owner Trustee also agrees to disburse all moneys actually received by it
constituting part of the Owner Trust Estate upon the terms of the Basic
Documents and this Agreement. The Owner Trustee shall not be answerable or
accountable hereunder or under any Basic Document under any circumstances,
except (i) for its own willful [malfeasance, bad faith or gross] negligence or
(ii) in the case of the inaccuracy of any representation or warranty contained
in Section 7.03 expressly made by the Owner Trustee. In particular, but not by
way of limitation (and subject to the exceptions set forth in the preceding
sentence):

          (a) The Owner Trustee shall not be liable for any error of judgment
made by a Trust Officer of the Owner Trustee;

          (b) The Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of the
Administrator or any Owner;

          (c) No provision of this Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers
hereunder or under any Basic Document if the Owner Trustee shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or provided
to it;

          (d) Under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes;

          (e) The Owner Trustee shall not be responsible for or in respect of
the validity or sufficiency of this Agreement or for the due execution hereof
by the Depositor or for the form, character, genuineness, sufficiency, value
or validity of any of the Owner Trust Estate, or for or

                                      18
<PAGE>

in respect of the validity or sufficiency of the Basic Documents, other than
the certificate of authentication on the Trust Certificates, and the Owner
Trustee shall in no event assume or incur any liability, duty, or obligation
to any Noteholder or to any Owner, other than as expressly provided for herein
or expressly agreed to in the Basic Documents;

          (f) The Owner Trustee shall not be liable for the default or
misconduct of the Administrator, [the Seller or] Depositor, the Indenture
Trustee or the Master Servicer under any of the Basic Documents or otherwise
and the Owner Trustee shall have no obligation or liability to perform the
obligations of the Trust under this Agreement or the Basic Documents that are
required to be performed by the Indenture Trustee under the Indenture or the
Master Servicer [or the Seller] or Depositor under the Master Servicing
Agreement; and

          (g) The Owner Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Basic Document, at the request, order or
direction of any of the Owners, unless such Owners have offered to the Owner
Trustee security or indemnity satisfactory to it against the costs, expenses
and liabilities that may be incurred by the Owner Trustee therein or thereby.
The right of the Owner Trustee to perform any discretionary act enumerated in
this Agreement or in any Basic Document shall not be construed as a duty, and
the Owner Trustee shall not be answerable for other than its [willful
malfeasance, bad faith or gross negligence] in the performance of any such
act.

          Section 7.02. Furnishing of Documents. The Owner Trustee shall
furnish to the Owners promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.

          Section 7.03. Representations and Warranties. The Owner Trustee
hereby represents and warrants to the Depositor, for the benefit of the
Owners, that:

          (a) It is a banking corporation duly organized and validly existing
in good standing under the laws of the State of Delaware. It has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement.

          (b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf.

          (c) Neither the execution nor the delivery by it of this Agreement,
nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will contravene
any federal or Delaware law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order binding
on it, or constitute any default under its charter documents or bylaws or any
indenture, mortgage, contract, agreement or instrument to which it is a party
or by which any of its properties may be bound.

                                      19
<PAGE>

          Section 7.04. Reliance; Advice of Counsel. (a) The Owner Trustee
shall incur no liability to anyone in acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion,
bond, or other document or paper believed by it to be genuine and believed by
it to be signed by the proper party or parties. The Owner Trustee may accept a
certified copy of a resolution of the board of directors or other governing
body of any corporate party as conclusive evidence that such resolution has
been duly adopted by such body and that the same is in full force and effect.
As to any fact or matter the method of determination of which is not
specifically prescribed herein, the Owner Trustee may for all purposes hereof
rely on a certificate, signed by the president or any vice president or by the
treasurer or other authorized officers of the relevant party, as to such fact
or matter and such certificate shall constitute full protection to the Owner
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.

          (b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents
or attorneys pursuant to agreements entered into with any of them, and the
Owner Trustee shall not be liable for the conduct or misconduct of such agents
or attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants
and other skilled Persons to be selected with reasonable care and employed by
it. The Owner Trustee shall not be liable for anything done, suffered or
omitted in good faith by it in accordance with the written opinion or advice
of any such counsel, accountants or other such Persons and not contrary to
this Agreement or any Basic Document.

          Section 7.05. Not Acting in Individual Capacity. Except as provided
in this Article VII, in accepting the trusts hereby created
[_____________________] acts solely as Owner Trustee hereunder and not in its
individual capacity, and all Persons having any claim against the Owner
Trustee by reason of the transactions contemplated by this Agreement or any
Basic Document shall look only to the Owner Trust Estate for payment or
satisfaction thereof.

          Section 7.06. Owner Trustee Not Liable for Trust Certificates or
Mortgage Loans. The recitals contained herein and in the Certificates (other
than the signature and countersignature of the Owner Trustee on the Trust
Certificates) shall be taken as the statements of the Depositor, and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner
Trustee makes no representations as to the validity or sufficiency of this
Agreement, of any Basic Document or of the Trust Certificates (other than the
signature and countersignature of the Owner Trustee on the Trust Certificates)
or the Notes, or of any Mortgage Loan or related documents. The Owner Trustee
shall at no time have any responsibility or liability for or with respect to
the legality, validity and enforceability of any Mortgage Loan, or for or with
respect to the sufficiency of the Owner Trust Estate or its ability to
generate the payments to be distributed to Certificateholders under this
Agreement or the Noteholders under the Indenture, including, without
limitation: the existence, condition and ownership of any property securing a
Mortgage Loan; the existence and enforceability of any insurance thereon; the
validity of the assignment of any Mortgage Loan to the Trust or of any
intervening assignment; the performance or enforcement of any Mortgage Loan;
the compliance by the Depositor, or the Master Servicer with any warranty or
representation made under any Basic Document or in any related document or the
accuracy of any such warranty or representation, or any action of the
Administrator, the

                                      20
<PAGE>

Indenture Trustee or the Master Servicer or any subservicer taken in the name
of the Owner Trustee.

          Section 7.07. Owner Trustee May Own Trust Certificates and Notes.
The Owner Trustee in its individual or any other capacity may become the owner
or pledgee of Trust Certificates or Notes and may deal with the Depositor, the
Administrator, the Indenture Trustee and the Master Servicer in banking
transactions with the same rights as it would have if it were not Owner
Trustee.

                                 ARTICLE VIII

                         COMPENSATION OF OWNER TRUSTEE

          Section 8.01. Owner Trustee's Fees and Expenses. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have
been separately agreed upon before the date hereof between the Depositor and
the Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed by
the Depositor for its other reasonable expenses hereunder, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder.

          Section 8.02. Indemnification. The Depositor shall be liable as
primary obligor for, and shall indemnify the Owner Trustee and its successors,
assigns, agents and servants (collectively, the "Indemnified Parties") from
and against, any and all liabilities, obligations, losses, damages, taxes,
claims, actions and suits, and any and all reasonable costs, expenses and
disbursements (including reasonable legal fees and expenses) of any kind and
nature whatsoever (collectively, "Expenses") which may at any time be imposed
on, incurred by, or asserted against the Owner Trustee or any Indemnified
Party in any way relating to or arising out of this Agreement, the Basic
Documents, the Owner Trust Estate, the administration of the Owner Trust
Estate or the action or inaction of the Owner Trustee hereunder, except only
that the Depositor shall not be liable for or required to indemnify an
Indemnified Party from and against Expenses arising or resulting from any of
the matters described in the third sentence of Section 7.01. The indemnities
contained in this Section shall survive the resignation or termination of the
Owner Trustee or the termination of this Agreement. In any event of any claim,
action or proceeding for which indemnity will be sought pursuant to this
Section, the Owner Trustee's choice of legal counsel shall be subject to the
approval of the Depositor, which approval shall not be unreasonably withheld.

          Section 8.03. Payments to the Owner Trustee. Any amounts paid to the
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part
of the Owner Trust Estate immediately after such payment.

                                      21
<PAGE>

                                  ARTICLE IX

                        TERMINATION OF TRUST AGREEMENT

          Section 9.01. Termination of Trust Agreement. (a) This Agreement
(other than Article VIII) and the Trust shall terminate and be of no further
force or effect upon the final distribution by the Owner Trustee of all moneys
or other property or proceeds of the Owner Trust Estate in accordance with the
terms of the Indenture, the Master Servicing Agreement and Article V. The
bankruptcy, liquidation, dissolution, death or incapacity of any Owner shall
not (x) operate to terminate this Agreement or the Trust or (y) entitle such
Owner's legal representatives or heirs to claim an accounting or to take any
action or proceeding in any court for a partition or winding up of all or any
part of the Trust or Owner Trust Estate or (z) otherwise affect the rights,
obligations and liabilities of the parties hereto.

          (b) Except as provided in Section 9.01(a), neither the Depositor nor
any Owner shall be entitled to revoke or terminate the Trust.

          (c) Notice of any termination of the Trust, specifying the
Distribution Date upon which Certificateholders shall surrender their Trust
Certificates to the Paying Agent for payment of the final distribution and
cancellation, shall be given by the Owner Trustee by letter to
Certificateholders mailed within five Business Days of receipt of notice of
such termination from the Master Servicer stating (i) the Distribution Date
upon or with respect to which final payment of the Trust Certificates shall be
made upon presentation and surrender of the Trust Certificates at the office
of the Paying Agent therein designated, (ii) the amount of any such final
payment and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Trust Certificates at the office of the
Paying Agent therein specified. The Owner Trustee shall give such notice to
the Certificate Registrar (if other than the Owner Trustee) and the Paying
Agent at the time such notice is given to Certificateholders. Upon
presentation and surrender of the Trust Certificates, the Paying Agent shall
cause to be distributed to Certificateholders amounts distributable on such
Distribution Date pursuant to Section 5.02.

          In the event that all of the Certificateholders shall not surrender
their Trust Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Owner Trustee shall give
a second written notice to the remaining Certificateholders to surrender their
Trust Certificates for cancellation and receive the final distribution with
respect thereto. If within one year after the second notice all the Trust
Certificates shall not have been surrendered for cancellation, the Owner
Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Trust Certificates, and the cost thereof shall be paid out
of the funds and other assets that shall remain subject to this Agreement. Any
funds remaining in the Trust after exhaustion of such remedies shall be
distributed by the Owner Trustee to the Depositor.

          (d) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be cancelled by filing a
certificate of cancellation with the

                                      22
<PAGE>

Secretary of State in accordance with the provisions of Section 3810 of the
Business Trust Statute.

                                  ARTICLE X

            SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

          Section 10.01. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation satisfying the provisions of
Section 3807(a) of the Business Trust Statute; authorized to exercise
corporate trust powers; having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authorities; and having (or having a parent that has) a rating of at least
[____] by [__________]. If such corporation shall publish reports of condition
at least annually pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section , the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Owner Trustee shall cease to
be eligible in accordance with the provisions of this Section , the Owner
Trustee shall resign immediately in the manner and with the effect specified
in Section 10.02.

          Section 10.02. Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Administrator. Upon receiving
such notice of resignation, the Administrator shall promptly appoint a
successor Owner Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to
the successor Owner Trustee. If no successor Owner Trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Owner Trustee may petition any court
of competent jurisdiction for the appointment of a successor Owner Trustee.

          If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.01 and shall fail to resign after
written request therefor by the Administrator, or if at any time the Owner
Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Administrator may remove the Owner
Trustee. If the Administrator shall remove the Owner Trustee under the
authority of the immediately preceding sentence, the Administrator shall
promptly appoint a successor Owner Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the outgoing
Owner Trustee so removed and one copy to the successor Owner Trustee, and
shall pay all fees owed to the outgoing Owner Trustee.

          Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 10.03 and payment of all fees and expenses
owed to the outgoing Owner Trustee. The Administrator shall

                                      23
<PAGE>

provide notice of such resignation or removal of the Owner Trustee to each of
the Rating Agencies.

          Section 10.03. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to
the Administrator and to its predecessor Owner Trustee an instrument accepting
such appointment under this Agreement, and thereupon the resignation or
removal of the predecessor Owner Trustee shall become effective, and such
successor Owner Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor under this Agreement, with like effect as if originally named as
Owner Trustee. The predecessor Owner Trustee shall upon payment of its fees
and expenses deliver to the successor Owner Trustee all documents and
statements and monies held by it under this Agreement; and the Administrator
and the predecessor Owner Trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for fully and certainly
vesting and confirming in the successor Owner Trustee all such rights, powers,
duties and obligations.

          No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner
Trustee shall be eligible pursuant to Section 10.01.

          Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section , the Administrator shall mail notice thereof to all
Certificateholders, the Indenture Trustee, the Noteholders and the Rating
Agencies. If the Administrator shall fail to mail such notice within 10 days
after acceptance of such appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Administrator.

          Section 10.04. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, without the execution or filing of any instrument or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, that such corporation shall be eligible pursuant to
Section 10.01 and, provided, further, that the Owner Trustee shall mail notice
of such merger or consolidation to the Rating Agencies.

          Section 10.05. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Owner Trust Estate may at the time be located, the Administrator
and the Owner Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Administrator and Owner Trustee to act as co-trustee, jointly with the Owner
Trustee, or as separate trustee or separate trustees, of all or any part of
the Owner Trust Estate, and to vest in such Person, in such capacity, such
title to the Trust or any part thereof and, subject to the other provisions of
this Section , such powers, duties, obligations, rights and trusts as the
Administrator and the Owner Trustee may consider necessary or desirable. If
the Administrator

                                      24
<PAGE>

shall not have joined in such appointment within 15 days after the receipt by
it of a request so to do, the Owner Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee under this Agreement shall
be required to meet the terms of eligibility as a successor Owner Trustee
pursuant to Section 10.01 and no notice of the appointment of any co-trustee
or separate trustee shall be required pursuant to Section 10.03.

          Each separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:

          (a) All rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed by
the Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Owner Trust
Estate or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Owner Trustee;

          (b) No trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement; and

          (c) The Administrator and the Owner Trustee acting jointly may at
any time accept the resignation of or remove any separate trustee or
co-trustee.

          Any notice, request or other writing given to the Owner Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Owner Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Owner Trustee. Each such instrument shall be filed with the
Owner Trustee and a copy thereof given to the Administrator.

          Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor co-trustee or separate trustee.

                                      25
<PAGE>

                                  ARTICLE XI

                                 MISCELLANEOUS

          Section 11.01. Supplements and Amendments. This Agreement may be
amended by the Depositor and the Owner Trustee, with prior written notice to
the Rating Agencies, without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this Agreement
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel satisfactory to the Owner Trustee,
adversely affect in any material respect the interests of any Noteholder or
Certificateholder.

          This Agreement may also be amended from time to time by the
Depositor and the Owner Trustee, with prior written notice to the Rating
Agencies, with the consent of the Holders (as defined in the Indenture) of
Notes evidencing not less than a majority of the Principal Balance of the
Notes and the consent of the Holders of Certificates evidencing not less than
a majority of the Certificate Balance, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Noteholders
or the Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Mortgage Loans or distributions that
shall be required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the Principal
Balance of the Notes and the Certificate Balance required to consent to any
such amendment, without the consent of the holders of all the outstanding
Notes and Certificates.

          Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and each
of the Rating Agencies.

          It shall not be necessary for the consent of Certificateholders,
Noteholders or the Indenture Trustee pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents (and any other consents of Certificateholders provided
for in this Agreement or in any other Basic Document) and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to such reasonable requirements as the Owner Trustee may prescribe.

          Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.

          Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Owner

                                      26
<PAGE>

Trustee may, but shall not be obligated to, enter into any such amendment that
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.

          Section 11.02. No Legal Title to Owner Trust Estate in Owners. The
Owners shall not have legal title to any part of the Owner Trust Estate. The
Owners shall be entitled to receive distributions with respect to their
undivided ownership interest therein only in accordance with Articles V and
IX. No transfer, by operation of law or otherwise, of any right, title or
interest of the Owners to and in their ownership interest in the Owner Trust
Estate shall operate to terminate this Agreement or the trusts hereunder or
entitle any transferee to an accounting or to the transfer to it of legal
title to any part of the Owner Trust Estate.

          Section 11.03. Limitations on Rights of Others. Except for Section
2.07, the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Depositor, the Owners, the Administrator and, to the extent
expressly provided herein, the Indenture Trustee and the Noteholders, and
nothing in this Agreement (other than Section 2.07), whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Owner Trust Estate or under or in respect of
this Agreement or any covenants, conditions or provisions contained herein.

          Section 11.04. Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt by the intended recipient or three Business Days
after mailing if mailed by certified mail, postage prepaid (except that notice
to the Owner Trustee shall be deemed given only upon actual receipt by the
Owner Trustee), if to the Owner Trustee, addressed to the Corporate Trust
Office; if to the Depositor, addressed to Morgan Stanley ABS Capital I Inc.,
1585 Broadway, New York, New York 10036, Attention: [_______________]; or, as
to each party, at such other address as shall be designated by such party in a
written notice to each other party.

          (b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder
receives such notice.

          Section 11.05. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.

          Section 11.06. Separate Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.

          Section 11.07. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of
the Depositor, the Owner Trustee and its successors and each Owner and its
successors and permitted assigns, all as herein

                                      27
<PAGE>

provided. Any request, notice, direction, consent, waiver or other instrument
or action by an Owner shall bind the successors and assigns of such Owner.

          Section 11.08. No Petition. The Owner Trustee, by entering into this
Agreement, each Certificateholder, by accepting a Trust Certificate, and the
Indenture Trustee and each Noteholder, by accepting the benefits of this
Agreement, hereby covenant and agree that they will not at any time institute
against the Trust, or join in any institution against the Trust of, any
bankruptcy proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Trust
Certificates, the Notes, this Agreement or any of the Basic Documents.

          Section 11.09. No Recourse. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Certificateholder's Trust
Certificates represent beneficial interests in the Trust only and do not
represent interests in or obligations of the Depositor, the Master Servicer,
the Depositor, the Administrator, the Owner Trustee, the Indenture Trustee or
any Affiliate thereof and no recourse may be had against such parties or their
assets, except as may be expressly set forth or contemplated in this
Agreement, the Trust Certificates or the Basic Documents.

          Section 11.10. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.

          Section 11.11. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

          Section 11.12. The Trust Certificates may not be acquired by (a) an
employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to
the provisions of Title I of ERISA, (b) a plan described in Section 4975(e)(1)
of the Code or (c) any entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (each, a `Benefit Plan'). By
accepting and holding this Trust Certificate, the Holder hereof shall be
deemed to have represented and warranted that it is not a Benefit Plan.

                                  * * * * * *

          IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.

                                        Morgan Stanley ABS Capital I Inc.,
                                        as Depositor,

                                        by:  _____________________________
                                        Name:
                                        Title:

                                      28
<PAGE>

                                        [__________________________________],
                                        not in its individual capacity but
                                        solely as Owner Trustee,

                                        by:  ______________________________
                                        Name:
                                        Title:

                                      29
<PAGE>

                                                                     EXHIBIT A

                           FORM OF TRUST CERTIFICATE

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

NUMBER                                                              $_________
R-__________                                               CUSIP NO. _________

               [_____________ ] HOME EQUITY LOAN TRUST 200__-__

     [_____]% HOME EQUITY LOAN ASSET BACKED CERTIFICATES, SERIES 200__-__

evidencing a fractional undivided beneficial ownership interest in the Trust,
as defined below, the property of which includes a pool of [adjustable rate]
home equity revolving credit line loans caused to be sold to the Trust by
[_______________].

(This Trust Certificate does not represent an interest in or obligation of
Morgan Stanley ABS Capital I Inc., or any of its respective affiliates, except
to the extent described below.)

THIS CERTIFIES THAT [________________________] is the registered owner of
[____________________] DOLLARS nonassessable, fully paid, fractional undivided
interest in [___________] HOME EQUITY LOAN TRUST 200__-__ (the "Trust") formed
by Morgan Stanley ABS Capital I Inc., a Delaware corporation (the
"Depositor"), and [_______________], a [__________] (the "Owner Trustee").

                                      A-1
<PAGE>

                 OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Trust Certificates referred to in the within-mentioned
Trust Agreement.

[_______________________],                       [_______________________],
   as Owner Trustee                   or             as Owner Trustee

by: ______________________                       by: [___________________],
    Authorized Signatory                             as Authenticating Agent

                                                 by:  [__________________],
                                                      Authorized Signatory

          The Trust was created pursuant to a Trust Agreement, dated as of
_____, 200__ (the "Trust Agreement"), between the Depositor and
[____________], as owner trustee (the "Owner Trustee"), a summary of certain
of the pertinent provisions of which is set forth below. To the extent not
otherwise defined herein, the capitalized terms used herein have the meanings
assigned to them in the Trust Agreement or the Master Servicing Agreement
dated as of ___________, 200__ (as amended and supplemented from time to time,
the "Master Servicing Agreement"), among the Trust, the Depositor and
[_______________], as servicer (the "Master Servicer"), as applicable.

          This Certificate is one of a duly authorized issue of Home Equity
Loan Asset-Backed Certificates, Series 200__-__ (herein called the "Trust
Certificates"). Also issued under the Indenture dated as of ___________, 200__
between the Trust and [________________], as indenture trustee, are the
[_______] classes of Notes designated as [_______________________
_________________________________________________________________________
___________________________________] (collectively, the "Notes"). This Trust
Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Trust Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound. The property of the Trust consists of a pool of [adjustable
rate] home equity loan revolving credit line loans made or to be made in the
future (the "Mortgage Loans"), under certain home equity revolving credit line
loan agreements and secured first, second and third or deeds of trust or
mortgages on residential properties that are primarily one- to four-family
properties (the "Mortgaged Properties"); the collections in respect of the
Mortgage Loans received after the Cut-off Date; property that secured a
Mortgage Loan which has been acquired by foreclosure or deed in lieu of
foreclosure; [a surety bond] [a letter of credit]; an assignment of the
Depositor's rights under the [________________]; rights under certain hazard
insurance policies covering the Mortgaged Properties; and certain other
property. [The rights of the Holders of the Trust Certificates are
subordinated to the rights of the Holders of the Notes, as set forth in the
Master Servicing Agreement.]

          Under the Trust Agreement, there will be distributed on the
[_______] day of each month or, if such [_______] day is not a Business Day,
the next Business Day (each, a "Distribution Date"), commencing on
___________, 200__, to the Person in whose name this Trust Certificates is
registered at the close of business on the first day of the month or, if

                                      A-2
<PAGE>

Definitive Certificates are issued, the [_______] day of the prior month (the
"Record Date"), such Certificateholder's fractional undivided interest in the
amount to be distributed to Certificateholders on such Distribution Date. No
distributions of principal will be made on any Certificate until all of the
Notes have been paid in full.

          [The Holder of this Trust Certificate acknowledges and agrees that
its rights to receive distributions in respect of this Trust Certificate are
subordinated to the rights of the Noteholders as described in the Master
Servicing Agreement and the Indenture.]

          It is the intent of the Depositor, the Master Servicer and the
Certificateholders that, for purposes of federal income, state and local
income and single business tax and any other income taxes, the Trust will be
treated as a partnership and the Certificateholders (including the Depositor)
will be treated as partners in that partnership. The Depositor and the other
Certificateholders, by acceptance of a Trust Certificate, agree to treat, and
to take no action inconsistent with the treatment of, the Trust Certificates
for such tax purposes as partnership interests in the Trust.

          Each Certificateholder or Certificate Owner, by its acceptance of a
Trust Certificate or, in the case of a Certificate Owner, a beneficial
interest in a Trust Certificate, covenants and agrees that such
Certificateholder or Certificate Owner, as the case may be, will not at any
time institute against the Depositor, or join in any institution against the
Depositor of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal
or state bankruptcy or similar law in connection with any obligations relating
to the Trust Certificates, the Notes, the Trust Agreement or any of the Basic
Documents.

          Distributions on this Trust Certificate will be made as provided in
the Trust Agreement by the Owner Trustee by wire transfer or check mailed to
the Certificateholder of record in the Certificate Register without the
presentation or surrender of this Trust Certificate or the making of any
notation hereon, except that with respect to Trust Certificates registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except
as otherwise provided in the Trust Agreement and notwithstanding the above,
the final distribution on this Trust Certificate will be made after due notice
by the Owner Trustee of the pendency of such distribution and only upon
presentation and surrender of this Trust Certificate at the office or agency
maintained for that purpose by the Owner Trustee in the Borough of Manhattan,
The City of New York.

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

          Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Trust Certificate shall not entitle the Holder hereof to any benefit
under the Trust Agreement or the Master Servicing Agreement or be valid for
any purpose.

                                      A-3
<PAGE>

          THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

          IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and
not in its individual capacity, has caused this Trust Certificate to be duly
executed.

                                   [Owner Trustee]

                                   by:  [__________________], not in its
                                        individual capacity but solely as
                                        Owner Trustee

Dated:                             by:  __________________________________
                                        Authorized Signatory

                                      A-4
<PAGE>

                        [REVERSE OF TRUST CERTIFICATE]

          The Trust Certificates do not represent an obligation of, or an
interest in, the Depositor, the Master Servicer, the Owner Trustee or any
affiliates of any of them and no recourse may be had against such parties or
their assets, except as expressly set forth or contemplated herein or in the
Trust Agreement or the Basic Documents. In addition, this Trust Certificate is
not guaranteed by any governmental agency or instrumentality and is limited in
right of payment to certain collections and recoveries with respect to the
Mortgage Loans (and certain other amounts), all as more specifically set forth
herein and in the Master Servicing Agreement. A copy of each of the Master
Servicing Agreement and the Trust Agreement may be examined by any
Certificateholder upon written request during normal business hours at the
principal office of the Depositor and at such other places, if any, designated
by the Depositor.

          The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under
the Trust Agreement at any time by the Depositor, and the Owner Trustee with
the consent of the Holders of the Trust Certificates and the Notes, each
voting as a class, evidencing not less than a majority of the Certificate
Balance and the outstanding principal balance of the Notes of each such class.
Any such consent by the Holder of this Trust Certificate shall be conclusive
and binding on such Holder and on all future Holders of this Trust Certificate
and of any Trust Certificate issued upon the transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent is made
upon this Trust Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders
of any of the Trust Certificates.

          As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Trust Certificate is
registerable in the Certificate Register upon surrender of this Trust
Certificate for registration of transfer at the offices or agencies of the
Certificate Registrar maintained by the Owner Trustee in the Borough of
Manhattan, The City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Owner Trustee and the Certificate
Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Trust Certificates of
authorized denominations evidencing the same aggregate interest in the Trust
will be issued to the designated transferee. The initial Certificate Registrar
appointed under the Trust Agreement is [_________________], New York, New
York.

          Except as provided in the Trust Agreement, the Trust Certificates
are issuable only as registered Trust Certificates without coupons in
denominations of $[__________] and in integral multiples of $[_______] in
excess thereof. As provided in the Trust Agreement and subject to certain
limitations therein set forth, Trust Certificates are exchangeable for new
Trust Certificates of authorized denominations evidencing the same aggregate
denomination, as requested by the Holder surrendering the same. No service
charge will be made for any such registration of transfer or exchange, but the
Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.

                                      A-5
<PAGE>

          The Owner Trustee, the Certificate Registrar and any agent of the
Owner Trustee or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none
of the Owner Trustee, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.

          The obligations and responsibilities created by the Trust Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Master Servicing Agreement and the disposition of all
property held as part of the Owner Trust Estate. The Master Servicer of the
Mortgage Loans may at its option purchase the Owner Trust Estate at a price
specified in the Master Servicing Agreement, and such purchase of the Mortgage
Loans and other property of the Trust will effect early retirement of the
Trust Certificates; however, such right of purchase is exercisable only as of
the last day of any Collection Period as of which the Pool Balance is less
than or equal to [____]% of the Original Pool Balance.

          The Trust Certificates may not be acquired by (a) an employee
benefit plan (as defined in Section 3(3) of ERISA) that is subject to the
provisions of Title I of ERISA, (b) a plan described in Section 4975(e)(1) of
the Code or (c) any entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (each, a `Benefit Plan'). By
accepting and holding this Trust Certificate, the Holder hereof shall be
deemed to have represented and warranted that it is not a Benefit Plan.

                                      A-6
<PAGE>

                                  ASSIGNMENT

          FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

______________________________________________________________________________
(Please print or type name and address, including postal zip code, of
assignee)

______________________________________________________________________________
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing

______________________________________________________________________________
to transfer said Trust Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.

Dated:

                                        ____________________________________*
                                        Signature Guaranteed:

                                        ________________*/

---------
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Trust Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial
bank or trust company.

                                      A-7
<PAGE>

                                                                     EXHIBIT B

                            CERTIFICATE OF TRUST OF
                  [___________] HOME EQUITY LOAN TRUST 200___

          THIS Certificate of Trust of [___________] HOME EQUITY LOAN TRUST
200__-__ (the "Trust"), dated , 200__, is being duly executed and filed by
[_____________________], a [___________________________], as trustee, to form
a business trust under the Delaware Business Trust Act (12 Del. Code, ss. 3801
et seq.).

          1. Name. The name of the business trust formed hereby is
[COUNTRYWIDE] HOME EQUITY LOAN TRUST 200__-__.

          2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware is [______________], Delaware [____],

Attention: [_______________________________].

          IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.

                                        [_____________________],
                                        not in its individual capacity but
                                        solely as owner trustee under a
                                        Trust Agreement dated

                                        __________________, 200__

                                        By:______________________________
                                        Name:
                                        Title:

                                      B-1
<PAGE>

                                   EXHIBIT C

                  [Form of Certificate Depository Agreement]

                                      C-1<PAGE>

                             HEWLETT-PACKARD COMPANY

                                       and

                      COMPUTERSHARE INVESTOR SERVICES, LLC

                                  Rights Agent

                        PREFERRED STOCK RIGHTS AGREEMENT

                           Dated as of August 31, 2001

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                                  PAGE
                                                                                                                  ----

<S>               <C>                                                                                              <C>
SECTION 1.        CERTAIN DEFINITIONS.................................................................................1

SECTION 2.        APPOINTMENT OF RIGHTS AGENT.........................................................................7

SECTION 3.        ISSUANCE OF RIGHTS CERTIFICATES.....................................................................7

SECTION 4.        FORM OF RIGHTS CERTIFICATES.........................................................................8

SECTION 5.        COUNTERSIGNATURE AND REGISTRATION...................................................................9

SECTION 6.        TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES; MUTILATED, DESTROYED, LOST OR
                  STOLEN RIGHTS CERTIFICATES.........................................................................10

SECTION 7.        EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE OF RIGHTS......................................11

SECTION 8.        CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES................................................12

SECTION 9.        RESERVATION AND AVAILABILITY OF PREFERRED SHARES...................................................13

SECTION 10.       RECORD DATE........................................................................................14

SECTION 11.       ADJUSTMENT OF EXERCISE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS.................................14

SECTION 12.       CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES.........................................21

SECTION 13.       CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER...............................21

SECTION 14.       FRACTIONAL RIGHTS AND FRACTIONAL SHARES............................................................25

SECTION 15.       RIGHTS OF ACTION...................................................................................25

SECTION 16.       AGREEMENT OF RIGHTS HOLDERS........................................................................26

SECTION 17.       RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.................................................26

SECTION 18.       CONCERNING THE RIGHTS AGENT........................................................................26

SECTION 19.       MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT..........................................27

SECTION 20.       DUTIES OF RIGHTS AGENT.............................................................................28

SECTION 21.       CHANGE OF RIGHTS AGENT.............................................................................30

                                      -i-

<PAGE>

                                TABLE OF CONTENTS
                                  (continued)
                                                                                                                  PAGE
                                                                                                                  ----
<CAPTION>

<S>               <C>                                                                                              <C>

SECTION 22.       ISSUANCE OF NEW RIGHTS CERTIFICATES................................................................30

SECTION 23.       REDEMPTION.........................................................................................31

SECTION 24.       EXCHANGE...........................................................................................31

SECTION 25.       NOTICE OF CERTAIN EVENTS...........................................................................33

SECTION 26.       NOTICES............................................................................................33

SECTION 27.       SUPPLEMENTS AND AMENDMENTS.........................................................................34

SECTION 28.       SUCCESSORS.........................................................................................35

SECTION 29.       DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC..........................................35

SECTION 30.       BENEFITS OF THIS AGREEMENT.........................................................................35

SECTION 31.       SEVERABILITY.......................................................................................36

SECTION 32.       GOVERNING LAW......................................................................................36

SECTION 33.       COUNTERPARTS.......................................................................................36

SECTION 34.       DESCRIPTIVE HEADINGS...............................................................................36

EXHIBITS

Exhibit A.........Form of Certificate of Designation

Exhibit B.........Form of Rights Certificate

Exhibit C.........Summary of Rights

</TABLE>

                                      -ii-
<PAGE>

                        PREFERRED STOCK RIGHTS AGREEMENT

         This Preferred Stock Rights Agreement is dated as of August 31, 2001,
between Hewlett-Packard Company, a Delaware corporation, and Computershare
Investor Services, LLC.

         On August 31, 2001 (the "RIGHTS DIVIDEND DECLARATION DATE"), the Board
of Directors of the Company authorized and declared a dividend of one Preferred
Share Purchase Right (a "RIGHT") for each Common Share (as hereinafter defined)
of the Company outstanding as of the Close of Business (as hereinafter defined)
on September 17, 2001 (the "RECORD DATE"), each Right representing the right to
purchase one one-thousandth (0.001) of a share of Series A Participating
Preferred Stock (as such number may be adjusted pursuant to the provisions of
this Agreement), having the rights, preferences and privileges set forth in the
form of Certificate of Designations of Rights, Preferences and Privileges of
Series A Participating Preferred Stock attached hereto as EXHIBIT A, upon the
terms and subject to the conditions herein set forth, and further authorized and
directed the issuance of one Right (as such number may be adjusted pursuant to
the provisions of this Agreement) with respect to each Common Share that shall
become outstanding between the Record Date and the earlier of the Distribution
Date and the Expiration Date (as such terms are hereinafter defined), and in
certain circumstances after the Distribution Date.

         NOW, THEREFORE, in consideration of the promises and the mutual
agreements herein set forth, the parties hereby agree as follows:

         Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:

               (a) "ACQUIRING PERSON" shall mean any Person, who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the Common Shares then outstanding, but shall
not include the Company, any Subsidiary of the Company or any employee benefit
plan of the Company or of any Subsidiary of the Company, or any entity holding
Common Shares for or pursuant to the terms of any such plan. Notwithstanding the
foregoing, no Person shall be deemed to be an Acquiring Person as the result of
an acquisition of Common Shares by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Common Shares of the Company then
outstanding; PROVIDED, HOWEVER, that if a Person shall become the Beneficial
Owner of 15% or more of the Common Shares of the Company then outstanding by
reason of share purchases by the Company and shall, after such share purchases
by the Company, become the Beneficial Owner of any additional Common Shares of
the Company (other than pursuant to a dividend or distribution paid or made by
the Company on the outstanding Common Shares in Common Shares or pursuant to a
split or subdivision of the outstanding Common Shares), then such Person shall
be deemed to be an Acquiring Person unless upon becoming the Beneficial Owner of
such additional Common Shares of the Company such Person does not beneficially
own 15% or more of the Common Shares of the Company then outstanding.
Notwithstanding the foregoing, (i) if the Company's Board of Directors
determines in good faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently (including, without limitation, because (A) such
Person was unaware that it beneficially owned a percentage of the Common Shares
that would otherwise cause such Person to be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this paragraph (a), or (B) such Person
was aware of the extent of the Common Shares it beneficially owned but had no
actual knowledge of the consequences of such beneficial ownership under this
Agreement) and without any intention of changing or influencing control of the
Company, and if such Person divested or divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed to be or to have become an
"Acquiring Person" for any purposes of this Agreement; and (ii) if, as of the
date hereof, any Person is the Beneficial Owner of 15% or more of the Common
Shares outstanding, such Person shall not be or become an "Acquiring Person," as
defined pursuant to the foregoing provisions of this paragraph (a), unless and
until such time as such Person shall become the Beneficial Owner of additional
Common Shares (other than pursuant to a dividend or distribution paid or made by
the Company on the outstanding Common Shares in Common Shares or pursuant to a
split or subdivision of the outstanding Common Shares), unless, upon becoming
the Beneficial Owner of such additional Common Shares, such Person is not then
the Beneficial Owner of 15% or more of the Common Shares then outstanding.

               (b) "ADJUSTMENT FRACTION" shall have the meaning set forth in
Section 11(a)(i) hereof.

               (c) "AFFILIATE" AND "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date of this Agreement.

               (d) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "beneficially own" any securities:

                    (i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, for purposes of Section
13(d) of the Exchange Act and Rule 13d-3 thereunder (or any comparable or
successor law or regulation);

                    (ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights), warrants or options, or otherwise;
PROVIDED, HOWEVER, that a Person shall not be deemed pursuant to this Section
1(d)(ii)(A) to be the Beneficial Owner of, or to beneficially own, (1)
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or (2) securities
which a Person or any of such Person's Affiliates or Associates may be deemed to
have the right to acquire pursuant to any merger or other acquisition agreement
between the Company and such Person (or one or more of its Affiliates or
Associates) if such agreement has been approved by the Board of Directors of the
Company prior to there being an Acquiring Person; or (B) the right to vote
pursuant to any

                                      -2-

<PAGE>

agreement, arrangement or understanding; PROVIDED, HOWEVER, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, any security
under this Section 1(d)(ii)(B) if the agreement, arrangement or understanding
to vote such security (1) arises solely from a revocable proxy or consent given
to such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations of
the Exchange Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or

                    (iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which such
Person or any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding, whether or not in writing (other than customary
agreements with and between underwriters and selling group members with respect
to a bona fide public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso to Section
1(d)(ii)(B) hereof) or disposing of any securities of the Company; PROVIDED,
HOWEVER, that in no case shall an officer or director of the Company be deemed
(x) the Beneficial Owner of any securities beneficially owned by another officer
or director of the Company solely by reason of actions undertaken by such
persons in their capacity as officers or directors of the Company or (y) the
Beneficial Owner of securities held of record by the trustee of any employee
benefit plan of the Company or any Subsidiary of the Company for the benefit of
any employee of the Company or any Subsidiary of the Company, other than the
officer or director, by reason of any influence that such officer or director
may have over the voting of the securities held in the plan.

               (e) "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in New York are authorized or
obligated by law or executive order to close.

               (f) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M.,
New York time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 P.M., New York time, on the next succeeding
Business Day.

               (g) "COMMON SHARES" when used with reference to the Company shall
mean the shares of Common Stock of the Company, par value $0.01 per share.
Common Shares when used with reference to any Person other than the Company
shall mean the capital stock (or equity interest) with the greatest voting power
of such other Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-mentioned Person.

               (h) "COMMON STOCK EQUIVALENTS" shall have the meaning set forth
in Section 11(a)(iii) hereof.

               (i) "COMPANY" shall mean Hewlett-Packard Company, a Delaware
corporation, subject to the terms of Section 13(a)(iii)(C) hereof.

               (j) "CURRENT PER SHARE MARKET PRICE" of any security (a
"Security" for purposes of this definition), for all computations other than
those made pursuant to Section 11(a)(iii) hereof, shall mean the average of the
daily closing prices per share of such

                                      -3-

<PAGE>

Security for the thirty (30) consecutive Trading Days immediately prior to such
date, and for purposes of computations made pursuant to Section 11(a)(iii)
hereof, the Current Per Share Market Price of any Security on any date shall be
deemed to be the average of the daily closing prices per share of such Security
for the ten (10) consecutive Trading Days immediately prior to such date;
PROVIDED, HOWEVER, that in the event that the Current Per Share Market Price of
the Security is determined during a period following the announcement by the
issuer of such Security of (i) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such shares or
(ii) any subdivision, combination or reclassification of such Security, and
prior to the expiration of the applicable thirty (30) Trading Day or ten (10)
Trading Day period, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the Current Per Share Market
Price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading or, if the Security is
not listed or admitted to trading on any national securities exchange, the last
sale price or, if such last sale price is not reported, the average of the high
bid and low asked prices in the over-the-counter market, as reported by Nasdaq
or such other system then in use, or, if on any such date the Security is not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Security
selected by the Board of Directors of the Company. If on any such date no market
maker is making a market in the Security, the fair value of such shares on such
date as determined in good faith by the Board of Directors of the Company shall
be used. If the Preferred Shares are not publicly traded, the Current Per Share
Market Price of the Preferred Shares shall be conclusively deemed to be (x) the
Current Per Share Market Price of the Common Shares as determined pursuant to
this Section 1(j), as appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof, multiplied by
(y) 1,000. If the Security is not publicly held or so listed or traded, Current
Per Share Market Price shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for
all purposes.

               (k) "CURRENT VALUE" shall have the meaning set forth in Section
11(a)(iii) hereof.

               (l) "DISTRIBUTION DATE" shall mean the earlier of (i) the Close
of Business on the tenth (10th) day (or such later date as may be determined by
action of the Company's Board of Directors) after the Shares Acquisition Date
(or, if the tenth (10th) day after the Shares Acquisition Date occurs before the
Record Date, the Close of Business on the Record Date) or (ii) the Close of
Business on the tenth (10th) Business Day (or such later date as may be
determined by action of the Company's Board of Directors) after the date that a
tender or exchange offer by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of any Subsidiary of
the Company, or any Person or

                                      -4-

<PAGE>

entity organized, appointed or established by the Company for or pursuant to
the terms of any such plan) is first published or sent or given within the
meaning of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act, if, assuming the successful consummation thereof, such Person
would be an Acquiring Person.

               (m) "EQUIVALENT SHARES" shall mean Preferred Shares and any other
class or series of capital stock of the Company which is entitled to the same
rights, privileges and preferences as the Preferred Shares.

               (n) "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended.

               (o) "EXCHANGE RATIO" shall have the meaning set forth in Section
24(a) hereof.

               (p) "EXERCISE PRICE" shall have the meaning set forth in Section
4(a) hereof.

               (q) "EXPIRATION DATE" shall mean the earliest to occur of: (i)
the Close of Business on the Final Expiration Date, (ii) the Redemption Date, or
(iii) the time at which the Board of Directors orders the exchange of the Rights
as provided in Section 24 hereof.

               (r) "FINAL EXPIRATION DATE" shall mean September 17, 2011.

               (s) "NASDAQ" shall mean The Nasdaq Stock Market, Inc.

               (t) "PERSON" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or otherwise) of such
entity.

               (u) "POST-EVENT TRANSFEREE" shall have the meaning set forth in
Section 7(e) hereof.

               (v) "PREFERRED SHARES" shall mean shares of Series A
Participating Preferred Stock, par value $0.01 per share, of the Company.

               (w) "PRE-EVENT TRANSFEREE" shall have the meaning set forth in
Section 7(e) hereof.

               (x) "PRINCIPAL PARTY" shall have the meaning set forth in Section
13(b) hereof.

               (y) "RECORD DATE" shall have the meaning set forth in the
recitals at the beginning of this Agreement.

               (z) "REDEMPTION DATE" shall have the meaning set forth in Section
23(a) hereof.

               (aa) "REDEMPTION PRICE" shall have the meaning set forth in
Section 23(a) hereof.

                                      -5-

<PAGE>

               (bb) "RIGHTS AGENT" shall mean (i) Computershare Investor
Services, LLC, (ii) its successor or replacement as provided in Sections 19 and
21 hereof or (iii) any additional Person appointed pursuant to Section 2 hereof.

               (cc) "RIGHTS CERTIFICATE" shall mean a certificate substantially
in the form attached hereto as EXHIBIT B.

               (dd) "RIGHTS DIVIDEND DECLARATION DATE" shall have the meaning
set forth in the recitals at the beginning of this Agreement.

               (ee) "SECTION 11(A)(II) TRIGGER DATE" shall have the meaning set
forth in Section 11(a)(iii) hereof.

               (ff) "SECTION 13 EVENT" shall mean any event described in clause
(i), (ii) or (iii) of Section 13(a) hereof.

               (gg) "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.

               (hh) "SHARES ACQUISITION DATE" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such; PROVIDED THAT, if such Person is determined not to have become an
Acquiring Person pursuant to Section 1(a) hereof, then no Shares Acquisition
Date shall be deemed to have occurred.

               (ii) "SPREAD" shall have the meaning set forth in Section
11(a)(iii) hereof.

               (jj) "SUBSIDIARY" of any Person shall mean any corporation or
other entity of which an amount of voting securities sufficient to elect a
majority of the directors or Persons having similar authority of such
corporation or other entity is beneficially owned, directly or indirectly, by
such Person, or any corporation or other entity otherwise controlled by such
Person.

               (kk) "SUBSTITUTION PERIOD" shall have the meaning set forth in
Section 11(a)(iii) hereof.

               (ll) "SUMMARY OF RIGHTS" shall mean a summary of this Agreement
substantially in the form attached hereto as EXHIBIT C.

               (mm) "TOTAL EXERCISE PRICE" shall have the meaning set forth in
Section 4(a) hereof.

               (nn) "TRADING DAY" shall mean a day on which the principal
national securities exchange on which a referenced security is listed or
admitted to trading is open for the transaction of business or, if a referenced
security is not listed or admitted to trading on any national securities
exchange, a Business Day.

                                      -6-

<PAGE>

               (oo) A "TRIGGERING EVENT" shall be deemed to have occurred upon
any Person becoming an Acquiring Person.

         Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable, upon ten (10) days' prior written notice to the Rights Agent. The
Rights Agent shall have no duty to supervise, and shall in no event be liable
for, the acts or omissions of any co-Rights Agent.

         Section 3. ISSUANCE OF RIGHTS CERTIFICATES.

               (a) Until the Distribution Date, (i) the Rights will be evidenced
(subject to the provisions of Sections 3(b) and 3(c) hereof) by the certificates
for Common Shares registered in the names of the holders thereof (which
certificates shall also be deemed to be Rights Certificates) and not by separate
Rights Certificates, and (ii) the right to receive Rights Certificates will be
transferable only in connection with the transfer of Common Shares. Until the
earlier of the Distribution Date or the Expiration Date, the surrender for
transfer of certificates for Common Shares shall also constitute the surrender
for transfer of the Rights associated with the Common Shares represented
thereby. As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and the Company will
send or cause to be sent (and the Rights Agent will, if requested, send) by
first-class, postage-prepaid mail, to each record holder of Common Shares as of
the Close of Business on the Distribution Date, at the address of such holder
shown on the records of the Company, a Rights Certificate evidencing one Right
for each Common Share so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per Common Share has been made
pursuant to Section 11 hereof, then at the time of distribution of the Rights
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights (in accordance with Section 14(a)
hereof). As of the Distribution Date, the Rights will be evidenced solely by
such Rights Certificates and may be transferred by the transfer of the Rights
Certificates as permitted hereby, separately and apart from any transfer of
Common Shares, and the holders of such Rights Certificates as listed in the
records of the Company or any transfer agent or registrar for the Rights shall
be the record holders thereof.

               (b) On the Record Date or as soon as practicable thereafter, the
Company will send a copy of the Summary of Rights by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the Close of
Business on the Record Date, at the address of such holder shown on the records
of the Company's transfer agent and registrar. With respect to certificates for
Common Shares outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates registered in the names of the
holders thereof together with the Summary of Rights.

                                      -7-

<PAGE>

               (c) Unless the Board of Directors by resolution adopted at or
before the time of the issuance of any Common Shares after the Record Date but
prior to the earlier of the Distribution Date or the Expiration Date (or, in
certain circumstances provided in Section 22 hereof, after the Distribution
Date) specifies to the contrary, Rights shall be issued in respect of all Common
Shares that are so issued, and Certificates representing such Common Shares
shall also be deemed to be certificates for Rights, and shall bear the following
legend:

         THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO
         CERTAIN RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN
         HEWLETT-PACKARD COMPANY AND COMPUTERSHARE INVESTOR SERVICES, LLC, AS
         THE RIGHTS AGENT, DATED AS OF AUGUST 31, 2001, (THE "RIGHTS
         AGREEMENT"), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY
         REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE
         OFFICES OF HEWLETT-PACKARD COMPANY. UNDER CERTAIN CIRCUMSTANCES, AS SET
         FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED BY
         SEPARATE CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS
         CERTIFICATE. HEWLETT-PACKARD COMPANY WILL MAIL TO THE HOLDER OF THIS
         CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE AFTER RECEIPT
         OF A WRITTEN REQUEST THEREFOR ADDRESSED TO THE CORPORATE SECRETARY AT
         HEWLETT-PACKARD COMPANY'S PRINCIPAL EXECUTIVE OFFICES. UNDER CERTAIN
         CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR
         HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY
         AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
         AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY
         ANY SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.

With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date or the Expiration Date, the Rights associated
with the Common Shares represented by such certificates shall be evidenced by
such certificates alone, and the surrender for transfer of any such certificate
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby.

               (d) In the event that the Company purchases or acquires any
Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated with
the Common Shares which are no longer outstanding.

         Section 4. FORM OF RIGHTS CERTIFICATES.

               (a) The Rights Certificates (and the forms of election to
purchase Common Shares and of assignment to be printed on the reverse thereof)
shall be substantially in the form of EXHIBIT B hereto and may have such marks
of identification or designation and such legends,

                                      -8-

<PAGE>

summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange or a
national market system, on which the Rights may from time to time be listed or
included, or to conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever distributed, shall be dated
as of the Record Date (or in the case of Rights issued with respect to Common
Shares issued by the Company after the Record Date, as of the date of issuance
of such Common Shares) and on their face shall entitle the holders thereof to
purchase such number of one-thousandths (0.001) of a Preferred Share as shall be
set forth therein at the price set forth therein (such exercise price per one
one-thousandth (0.001) of a Preferred Share being hereinafter referred to as the
"EXERCISE PRICE" and the aggregate Exercise Price of all Preferred Shares
issuable upon exercise of one Right being hereinafter referred to as the "TOTAL
EXERCISE PRICE"), but the number and type of securities purchasable upon the
exercise of each Right and the Exercise Price shall be subject to adjustment as
provided herein.

               (b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii) a Post-Event
Transferee, (iii) a Pre-Event Transferee, or (iv) any subsequent transferee
receiving transferred Rights from a Post-Event Transferee or a Pre-Event
Transferee, either directly or through one or more intermediate transferees, and
any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:

         THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
         BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR
         AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
         DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
         AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
         CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.

         Section 5. COUNTERSIGNATURE AND REGISTRATION.

               (a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its Chief
Financial Officer, its President or any Vice President, either manually or by
facsimile signature, and by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal (if any) or a facsimile thereof. The Rights
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless countersigned. In case any officer of the
Company who shall have signed any of the Rights Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who signed such Rights
Certificates on behalf of the Company

                                      -9-

<PAGE>

had not ceased to be such officer of the Company; and any Rights Certificate may
be signed on behalf of the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of the Company
to sign such Rights Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.

               (b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its office designated for such purposes, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.

         Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
                    CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS
                    CERTIFICATES.

               (a) Subject to the provisions of Sections 7(e), 14 and 24 hereof,
at any time after the Close of Business on the Distribution Date, and at or
prior to the Close of Business on the Expiration Date, any Rights Certificate or
Rights Certificates may be transferred, split up, combined or exchanged for
another Rights Certificate or Rights Certificates, entitling the registered
holder to purchase a like number of one-thousandths (0.001) of a Preferred Share
(or, following a Triggering Event, other securities, cash or other assets, as
the case may be) as the Rights Certificate or Rights Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or Rights
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Sections 7(e), 14 and 24 hereof,
countersign and deliver to the person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment from the registered holder of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Rights Certificates.

               (b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company will make and deliver a new
Rights Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Rights Certificate so lost, stolen, destroyed
or mutilated.

                                      -10-

<PAGE>

         Section 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE
                    OF RIGHTS.

               (a) Subject to Sections 7(e), 23(b) and 24(b) hereof, the
registered holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date and prior to the Close of Business on the Expiration
Date by surrender of the Rights Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at the
office of the Rights Agent designated for such purpose, together with payment of
the Exercise Price for each one-thousandth (0.001) of a Preferred Share (or,
following a Triggering Event, other securities, cash or other assets as the case
may be) as to which the Rights are exercised.

               (b) The Exercise Price for each one-thousandth (0.001) of a
Preferred Share issuable pursuant to the exercise of a Right shall initially be
One Hundred and Eighty Dollars and no cents ($180.00), shall be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof and shall
be payable in lawful money of the United States of America in accordance with
paragraph (c) below.

               (c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Exercise Price for the number of one-thousandths (0.001) of a
Preferred Share (or, following a Triggering Event, other securities, cash or
other assets as the case may be) to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Rights
Certificate in accordance with Section 9(e) hereof, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares (or make available, if the Rights Agent
is the transfer agent for the Preferred Shares) a certificate or certificates
for the number of one-thousandths (0.001) of a Preferred Share (or, following a
Triggering Event, other securities, cash or other assets as the case may be) to
be purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests or (B) if the Company shall have elected to
deposit the total number of one-thousandths (0.001) of a Preferred Share (or,
following a Triggering Event, other securities, cash or other assets as the case
may be) issuable upon exercise of the Rights hereunder with a depository agent,
requisition from the depository agent depository receipts representing such
number of one-thousandths (0.001) of a Preferred Share (or, following a
Triggering Event, other securities, cash or other assets as the case may be) as
are to be purchased (in which case certificates for the Preferred Shares (or,
following a Triggering Event, other securities, cash or other assets as the case
may be) represented by such receipts shall be deposited by the transfer agent
with the depository agent) and the Company hereby directs the depository agent
to comply with such request, (ii) when appropriate, requisition from the Company
the amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such certificates or
depository receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, and (iv) when appropriate, after receipt
thereof, deliver such cash to or upon the order of the registered holder of such
Rights Certificate. The payment of the Exercise Price (as such amount may be
reduced (including to zero) pursuant to Section 11(a)(iii) hereof) and an amount
equal to any applicable transfer tax required to be paid by the holder of such
Rights Certificate in accordance with Section 9(e) hereof, may be made in cash
or by certified bank check, cashier's check or bank draft payable to the order
of the Company. In the event that the Company is obligated to issue securities
of the Company other than Preferred Shares, pay cash and/or distribute other
property pursuant to Section 11(a) hereof,

                                      -11

<PAGE>

the Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when appropriate.

               (d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Rights Certificate or to
his or her duly authorized assigns, subject to the provisions of Section 14
hereof.

               (e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Triggering Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such (a "POST-EVENT TRANSFEREE"), (iii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Company's Board of Directors has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e) (a "PRE-EVENT TRANSFEREE") or (iv) any subsequent
transferee receiving transferred Rights from a Post-Event Transferee or a
Pre-Event Transferee, either directly or through one or more intermediate
transferees, shall become null and void without any further action and no holder
of such Rights shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The Company shall
use all reasonable efforts to ensure that the provisions of this Section 7(e)
and Section 4(b) hereof are complied with, but shall have no liability to any
holder of Rights Certificates or to any other Person as a result of its failure
to make any determinations with respect to an Acquiring Person or any of such
Acquiring Person's Affiliates, Associates or transferees hereunder.

               (f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall, in
addition to having complied with the requirements of Section subsection (a) of
this Section 7, have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.

         Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for

                                      -12-

<PAGE>

cancellation and retirement, and the Rights Agent shall so cancel and retire,
any Rights Certificate purchased or acquired by the Company otherwise than upon
the exercise thereof. The Rights Agent shall deliver all canceled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Rights Certificates, and in such case shall deliver a
certificate evidencing the destruction thereof to the Company.

         Section 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES.

               (a) The Company covenants and agrees that it will use its best
efforts to cause to be reserved and kept available out of its authorized and
unissued Preferred Shares not reserved for another purpose (and, following the
occurrence of a Triggering Event, out of its authorized and unissued Common
Shares and/or other securities), the number of Preferred Shares (and, following
the occurrence of the Triggering Event, Common Shares and/or other securities)
that will be sufficient to permit the exercise in full of all outstanding
Rights.

               (b) If the Company shall hereafter list any of its Preferred
Shares on a national securities exchange, then so long as the Preferred Shares
(and, following the occurrence of a Triggering Event, Common Shares and/or other
securities) issuable and deliverable upon exercise of the Rights may be listed
on such exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable (but only to the extent that it
is reasonably likely that the Rights will be exercised), all shares reserved for
such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.

               (c) The Company shall use its best efforts to (i) file, as soon
as practicable following the earliest date after the first occurrence of a
Triggering Event in which the consideration to be delivered by the Company upon
exercise of the Rights is described in Section 11(a)(ii) or Section 11(a)(iii)
hereof, or as soon as is required by law following the Distribution Date, as the
case may be, a registration statement under the Securities Act with respect to
the securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the date of expiration of the
Rights. The Company may temporarily suspend, for a period not to exceed ninety
(90) days after the date set forth in clause (i) of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating, and notify
the Rights Agent, that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement and notification to the Rights Agent
at such time as the suspension is no longer in effect. The Company will also
take such action as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. Notwithstanding any provision of this Agreement to
the contrary, the Rights shall not be exercisable in any jurisdiction, unless
the requisite qualification in such jurisdiction shall have been obtained, or an
exemption therefrom shall be available, and until a registration statement has
been declared and remains effective.

                                      -13-

<PAGE>

               (d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares (or other
securities of the Company) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such securities (subject to payment of the
Exercise Price), be duly and validly authorized and issued and fully paid and
nonassessable.

               (e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the original issuance or delivery of the
Rights Certificates or of any Preferred Shares (or other securities of the
Company) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any transfer
or delivery of Rights Certificates to a person other than, or the issuance or
delivery of certificates or depository receipts for the Preferred Shares (or
other securities of the Company) in a name other than that of, the registered
holder of the Rights Certificate evidencing Rights surrendered for exercise or
to issue or to deliver any certificates or depository receipts for Preferred
Shares (or other securities of the Company) upon the exercise of any Rights
until any such tax shall have been paid (any such tax being payable by the
holder of such Rights Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.

               Section 10. RECORD DATE. Each Person in whose name any
certificate for a number of one-thousandths (0.001) of a Preferred Share (or
other securities of the Company) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of Preferred Shares
(or other securities of the Company) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Total Exercise
Price with respect to which the Rights have been exercised (and any applicable
transfer taxes) was made; provided, however, that if the date of such surrender
and payment is a date upon which the transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding Business Day on which
the transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a holder of Preferred Shares (or other securities of the Company)
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.

        Section 11. ADJUSTMENT OF EXERCISE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS. The Exercise Price, the number and kind of shares or other property
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.

               (a) (i) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares (by reverse stock split or otherwise) into a
smaller number of Preferred Shares, or (D) issue any shares of its capital stock
in a reclassification of the Preferred Shares (including any such
reclassification in connection with a

                                      -14-

<PAGE>

consolidation or merger in which the Company is the continuing or surviving
corporation), then, in each such event, except as otherwise provided in this
Section 11 and Section 7(e) hereof: (1) the Exercise Price in effect at the time
of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification shall be adjusted so that the
Exercise Price thereafter shall equal the result obtained by dividing the
Exercise Price in effect immediately prior to such time by a fraction (the
"ADJUSTMENT FRACTION"), the numerator of which shall be the total number of
Preferred Shares (or shares of capital stock issued in such reclassification of
the Preferred Shares) outstanding immediately following such time and the
denominator of which shall be the total number of Preferred Shares outstanding
immediately prior to such time; PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of such Right; and (2) the number of one-thousandths (0.001) of a
Preferred Share (or share of such other capital stock) issuable upon the
exercise of each Right shall equal the number of one-thousandths (0.001) of a
Preferred Share (or share of such other capital stock) as was issuable upon
exercise of a Right immediately prior to the occurrence of the event described
in clauses (A)-(D) of this Section 11(a)(i), multiplied by the Adjustment
Fraction; PROVIDED, HOWEVER, that, no such adjustment shall be made pursuant to
this Section 11(a)(i) to the extent that there shall have simultaneously
occurred an event described in clause (i), (ii), (iii) or (iv) of subsection (n)
of this Section 11 with a proportionate adjustment being made thereunder. Each
Common Share that shall become outstanding after an adjustment has been made
pursuant to this Section 11(a)(i) shall have associated with it the number of
Rights, exercisable at the Exercise Price and for the number of one-thousandths
(0.001) of a Preferred Share (or shares of such other capital stock) as one
Common Share has associated with it immediately following the adjustment made
pursuant to this Section 11(a)(i).

               (ii) Subject to Section 24 of this Agreement, in the event that a
Triggering Event shall have occurred, then promptly following such Triggering
Event each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive for each Right, upon exercise thereof in
accordance with the terms of this Agreement and payment of the Exercise Price in
effect immediately prior to the occurrence of the Triggering Event, in lieu of a
number of one-thousandths (0.001) of a Preferred Share, such number of Common
Shares of the Company as shall equal the quotient obtained by dividing (A) the
product obtained by multiplying (1) the Exercise Price in effect immediately
prior to the occurrence of the Triggering Event by (2) the number of
one-thousandths (0.001) of a Preferred Share for which a Right was exercisable
(or would have been exercisable if the Distribution Date had occurred)
immediately prior to the first occurrence of a Triggering Event, by (B) fifty
percent (50%) of the Current Per Share Market Price for Common Shares on the
date of occurrence of the Triggering Event; PROVIDED, HOWEVER, that the Exercise
Price and the number of Common Shares of the Company so receivable upon exercise
of a Right shall be subject to further adjustment as appropriate in accordance
with Section 11(e) hereof to reflect any events occurring in respect of the
Common Shares of the Company after the occurrence of the Triggering Event.

               (iii) In lieu of issuing Common Shares in accordance with
subsection (a)(ii) of this Section 11, the Company may, if the Company's Board
of Directors determines that such action is necessary or appropriate and not
contrary to the interest of holders of Rights and, in the event that the number
of Common Shares which are authorized by the Company's Certificate of
Incorporation but not outstanding or reserved for issuance for purposes

                                      -15-

<PAGE>

other than upon exercise of the Rights are not sufficient to permit the exercise
in full of the Rights, or if any necessary regulatory approval for such issuance
has not been obtained by the Company, the Company shall: (A) determine the
excess of (i) the value of the Common Shares issuable upon the exercise of a
Right (the "CURRENT VALUE") over (ii) the Exercise Price (such excess, the
"SPREAD") and (B) with respect to each Right, make adequate provision to
substitute for such Common Shares, upon exercise of the Rights, (1) cash, (2) a
reduction in the Exercise Price, (3) other equity securities of the Company
(including, without limitation, shares or units of shares of any series of
preferred stock which the Company's Board of Directors has deemed to have the
same value as Common Shares (such shares or units of shares of preferred stock
are herein called "COMMON STOCK EQUIVALENTS")), except to the extent that the
Company has not obtained any necessary stockholder or regulatory approval for
such issuance, (4) debt securities of the Company, except to the extent that the
Company has not obtained any necessary stockholder or regulatory approval for
such issuance, (5) other assets, or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such aggregate value has
been determined by the Company's Board of Directors based upon the advice of a
nationally recognized investment banking firm selected by the Company's Board of
Directors; PROVIDED, HOWEVER, that if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty (30) days
following the later of (x) the first occurrence of a Triggering Event and (y)
the date on which the Company's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to herein as the "SECTION
11(A)(II) TRIGGER DATE"), then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring payment of the
Exercise Price, Common Shares (to the extent available), except to the extent
that the Company has not obtained any necessary stockholder or regulatory
approval for such issuance, and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the Spread. If the Company's Board of
Directors shall determine in good faith that it is likely that sufficient
additional Common Shares could be authorized for issuance upon exercise in full
of the Rights or that any necessary regulatory approval for such issuance will
be obtained, the thirty (30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after the Section 11(a)(ii)
Trigger Date, in order that the Company may seek stockholder approval for the
authorization of such additional shares or take action to obtain such regulatory
approval (such period, as it may be extended, the "SUBSTITUTION PERIOD"). To the
extent that the Company determines that some action need be taken pursuant to
the first and/or second sentences of this Section 11(a)(iii), the Company (X)
shall provide, subject to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights and (Y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to seek any
authorization of additional shares, to take any action to obtain any required
regulatory approval and/or to decide the appropriate form of distribution to be
made pursuant to such first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the Common Shares
shall be the Current Per Share Market Price of the Common Shares on the Section
11(a)(ii) Trigger Date and the value of any Common Stock Equivalent shall be
deemed to have the same value as the Common Shares on such date.

                                      -16-

<PAGE>

               (b) In case the Company shall, at any time after the date of this
Agreement, fix a record date for the issuance of rights, options or warrants to
all holders of Preferred Shares entitling such holders (for a period expiring
within forty-five (45) calendar days after such record date) to subscribe for or
purchase Preferred Shares or Equivalent Shares or securities convertible into
Preferred Shares or Equivalent Shares at a price per share (or having a
conversion price per share, if a security convertible into Preferred Shares or
Equivalent Shares) less than the then Current Per Share Market Price of the
Preferred Shares or Equivalent Shares on such record date, then, in each such
case, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares and Equivalent Shares (if any) outstanding on such record date,
plus the number of Preferred Shares or Equivalent Shares, as the case may be,
which the aggregate offering price of the total number of Preferred Shares or
Equivalent Shares, as the case may be, to be offered or issued (and/or the
aggregate initial conversion price of the convertible securities to be offered
or issued) would purchase at such current market price, and the denominator of
which shall be the number of Preferred Shares and Equivalent Shares (if any)
outstanding on such record date, plus the number of additional Preferred Shares
or Equivalent Shares, as the case may be, to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible); PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Company's
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the holders
of the Rights. Preferred Shares and Equivalent Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights, options or warrants are
not so issued, the Exercise Price shall be adjusted to be the Exercise Price
which would then be in effect if such record date had not been fixed.

               (c) In case the Company shall, at any time after the date of this
Agreement, fix a record date for the making of a distribution to all holders of
the Preferred Shares or of any class or series of Equivalent Shares (including
any such distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend, if any, or
a dividend payable in Preferred Shares) or subscription rights, options or
warrants (excluding those referred to in Section 11(b)), then, in each such
case, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current Per Share
Market Price of a Preferred Share or an Equivalent Share on such record date,
less the fair market value per Preferred Share or Equivalent Share (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to a Preferred
Share or Equivalent Share, as the case may be, and the denominator of which
shall be such Current Per Share Market Price of a Preferred Share or Equivalent
Share on such record date; PROVIDED, HOWEVER, that in no event

                                      -17-

<PAGE>

shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. Such adjustments shall be made successively whenever
such a record date is fixed, and in the event that such distribution is not so
made, the Exercise Price shall be adjusted to be the Exercise Price which would
have been in effect if such record date had not been fixed.

               (d) Anything herein to the contrary notwithstanding, no
adjustment in the Exercise Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1. 0%) of the Exercise
Price; PROVIDED, HOWEVER, that any adjustments which by reason of this Section
11(d) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth (0.0001) of a
Common Share or other share or one hundred-thousandth (0.00001) of a Preferred
Share, as the case may be. Notwithstanding the first sentence of this Section
11(d), any adjustment required by this Section 11 shall be made no later than
the earlier of (i) three (3) years from the date of the transaction which
requires such adjustment and (ii) the Expiration Date.

               (e) If as a result of an adjustment made pursuant to Section
11(a) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Preferred Shares, thereafter the number of such other shares so receivable upon
exercise of any Right and, if required, the Exercise Price thereof, shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Preferred Shares
contained in subsections (a), (b), (c), (d), (g), (h), (i), (j), (k) and (l) if
this Section 11, and the provisions of Sections 7, 9, 10, 13 and 14 with respect
to the Preferred Shares shall apply on like terms to any such other shares.

               (f) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of one-thousandths (0.001)
of a Preferred Share purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.

               (g) Unless the Company shall have exercised its election as
provided in subsection (h) of this Section 11, upon each adjustment of the
Exercise Price as a result of the calculations made in subsections (b) and
(c) of this Section 11, each Right outstanding immediately prior to the making
of such adjustment shall thereafter evidence the right to purchase, at the
adjusted Exercise Price, that number of Preferred Shares (calculated to the
nearest one hundred-thousandth (0.00001) of a share) obtained by (i)
multiplying (x) the number of Preferred Shares covered by a Right immediately
prior to this adjustment by (y) the Exercise Price in effect immediately prior
to such adjustment of the Exercise Price, and (ii) dividing the product so
obtained by the Exercise Price in effect immediately after such adjustment of
the Exercise Price.

               (h) The Company may elect on or after the date of any adjustment
of the Exercise Price as a result of the calculations made in subsection (b) or
(c) of this Section 11 to adjust the number of Rights, in substitution for any
adjustment in the number of Preferred Shares purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment

                                      -18-

<PAGE>

of the number of Rights shall be exercisable for the number of one-thousandths
(0.001) of a Preferred Share for which a Right was exercisable immediately prior
to such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
one hundred-thousandth (0.00001)) obtained by dividing the Exercise Price in
effect immediately prior to adjustment of the Exercise Price by the Exercise
Price in effect immediately after adjustment of the Exercise Price. The Company
shall make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Exercise Price is adjusted or any day thereafter, but, if any Rights
Certificates have been issued, shall be at least ten (10) days later than the
date of the public announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this subsection (h) of this
Section 11, the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Rights Certificates
so to be distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Exercise Price) and shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the public announcement.

               (i) Irrespective of any adjustment or change in the Exercise
Price or the number of Preferred Shares issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Exercise Price per one one-thousandth (0.001) of a Preferred
Share and the number of one-thousandths (0.001) of a Preferred Share which were
expressed in the initial Rights Certificates issued hereunder.

               (j) Before taking any action that would cause an adjustment
reducing the Exercise Price below the par or stated value, if any, of the number
of one-thousandths (0.001) of a Preferred Share issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue as fully paid and nonassessable shares such number of one-thousandths
(0.001) of a Preferred Share at such adjusted Exercise Price.

               (k) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the number of one-thousandths (0.001) of a Preferred Share and other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of one-thousandths (0.001) of a Preferred Share and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Exercise Price in effect prior to such adjustment; PROVIDED,
HOWEVER, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) upon the occurrence of the event requiring such
adjustment.

                                      -19-

<PAGE>

               (l) Anything in this Section 11 to the contrary notwithstanding,
prior to the Distribution Date, the Company shall be entitled to make such
reductions in the Exercise Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole discretion
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred or Common Shares, (ii) issuance wholly for cash of
any Preferred or Common Shares at less than the current market price, (iii)
issuance wholly for cash of Preferred or Common Shares or securities which by
their terms are convertible into or exchangeable for Preferred or Common Shares,
(iv) stock dividends, or (v) issuance of rights, options or warrants referred to
in this Section 11, hereafter made by the Company to holders of its Preferred or
Common Shares shall not be taxable to such stockholders.

               (m) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Sections 23, 24 or 27 hereof, take (or
permit to be taken) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.

               (n) In the event that the Company shall at any time after the
date of this Agreement (i) declare a dividend on the Common Shares payable in
Common Shares, (ii) subdivide the outstanding Common Shares, (iii) combine the
outstanding Common Shares (by reverse stock split or otherwise) into a smaller
number of Common Shares, or (iv) issue any shares of its capital stock in a
reclassification of the Common Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then, in each such event, except as otherwise
provided in this Section 11(a) and Section 7(e) hereof: (A) each Common Share
(or shares of capital stock issued in such reclassification of the Common
Shares) outstanding immediately following such time shall have associated with
it the number of Rights as were associated with one Common Share immediately
prior to the occurrence of the event described in clauses (i)-(iv) above; (B)
the Exercise Price in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification shall
be adjusted so that the Exercise Price thereafter shall equal the result
obtained by multiplying the Exercise Price in effect immediately prior to such
time by a fraction, the numerator of which shall be the total number of Common
Shares outstanding immediately prior to the event described in clauses (i)-(iv)
above, and the denominator of which shall be the total number of Common Shares
outstanding immediately after such event; PROVIDED, HOWEVER, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of such Right; and (C) the number of one-thousandths (0.001) of a
Preferred Share (or shares of such other capital stock) issuable upon the
exercise of each Right outstanding after such event shall equal the number of
one-thousandths (0.001) of a Preferred Share (or shares of such other capital
stock) as were issuable with respect to one Right immediately prior to such
event. Each Common Share that shall become outstanding after an adjustment has
been made pursuant to this Section 11(n) shall have associated with it the
number of Rights, exercisable at the Exercise Price and for the number of
one-thousandths (0.001) of a Preferred Share (or shares of such other capital
stock) as one Common Share has associated with it immediately following the
adjustment made pursuant to this Section 11(n). If an event occurs which would
require an adjustment under both this

                                      -20-

<PAGE>

Section 11(n) and subsection (a)(ii) of this Section 11, the adjustment
provided for in this Section 11(n) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to subsection (a)(ii) of this
Section 11.

         Section 12. CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall promptly (i) prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (ii) file
with the Rights Agent and with each transfer agent for the Preferred Shares a
copy of such certificate, and (iii) mail a brief summary thereof to each holder
of a Rights Certificate in accordance with Section 26 hereof. Notwithstanding
the foregoing sentence, the failure of the Company to make such certification or
give such notice shall not affect the validity of such adjustment or the force
or effect of the requirement for such adjustment. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment
contained therein and shall not be deemed to have knowledge of such adjustment
unless and until it shall have received such certificate.

         Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.

             (a) In the event that, following a Triggering Event, directly or
indirectly:

               (i) the Company shall consolidate with, or merge with and into,
any other Person (other than a wholly-owned Subsidiary of the Company in a
transaction the principal purpose of which is to change the state of
incorporation of the Company and which complies with Section 11(m) hereof);

               (ii) any Person shall consolidate with the Company, or merge with
and into the Company and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such merger,
all or part of the Common Shares shall be changed into or exchanged for stock or
other securities of any other person (or the Company); or

               (iii) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating fifty percent (50%) or more of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company or one or more of
its wholly owned Subsidiaries in one or more transactions, each of which
individually (and together) complies with Section 11(m) hereof),

                      then, concurrent with and in each such case,

                    (A) each holder of a Right (except as provided in Section
7(e) hereof) shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the Total Exercise Price applicable immediately
prior to the occurrence of the Section 13 Event in accordance with the terms of
this Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable Common Shares of the Principal Party, free of
any liens, encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by dividing such Total Exercise Price by
an amount equal to fifty percent (50%) of the Current Per Share Market Price of
the Common Shares of such Principal Party on the date of consummation of such
Section 13 Event, PROVIDED, HOWEVER, that the Exercise Price and the

                                      -21-

<PAGE>

number of Common Shares of such Principal Party so receivable upon exercise of
a Right shall be subject to further adjustment as appropriate in accordance
with Section 11(e) hereof;

                    (B) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations and duties
of the Company pursuant to this Agreement;

                    (C) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event;

                    (D) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of its Common Shares)
in connection with the consummation of any such transaction as may be necessary
to ensure that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to its Common Shares thereafter deliverable
upon the exercise of the Rights;

                    (E) upon the subsequent occurrence of any consolidation,
merger, sale or transfer of assets or other extraordinary transaction in respect
of such Principal Party, each holder of a Right shall thereupon be entitled to
receive, upon exercise of a Right and payment of the Total Exercise Price as
provided in this Section 13(a), such cash, shares, rights, warrants and other
property which such holder would have been entitled to receive had such holder,
at the time of such transaction, owned the Common Shares of the Principal Party
receivable upon the exercise of such Right pursuant to this Section 13(a), and
such Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property; and

                    (F) For purposes hereof, the "earning power" of the Company
and its Subsidiaries shall be determined in good faith by the Company's Board of
Directors on the basis of the operating income of each business operated by the
Company and its Subsidiaries during the three fiscal years preceding the date of
such determination (or, in the case of any business not operated by the Company
or any Subsidiary during three full fiscal years preceding such date, during the
period such business was operated by the Company or any Subsidiary).

             (b) For purposes of this Agreement, the term "PRINCIPAL PARTY"
shall mean:

                    (i) in the case of any transaction described in clause (i)
or (ii) of Section 13(a) hereof: (A) the Person that is the issuer of the
securities into which the Common Shares are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer the Common
Shares of which have the greatest aggregate market value of shares outstanding,
or (B) if no securities are so issued, (x) the Person that is the other party to
the merger, if such Person survives said merger, or, if there is more than one
such Person, the Person the Common Shares of which have the greatest aggregate
market value of shares outstanding or (y) if the Person that is the other party
to the merger does not survive the merger, the Person that does survive the
merger (including the Company if it survives) or (z) the Person resulting from
the consolidation; and

                                      -22-

<PAGE>

                    (ii) in the case of any transaction described in clause
(iii) of Section 13(a) hereof, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if more than one Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred and each such portion would, were it not for the other
equal portions, constitute the greatest portion of the assets or earning power
so transferred, or if the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such Persons is the issuer of
Common Shares having the greatest aggregate market value of shares outstanding;
PROVIDED, HOWEVER, that in any such case described in the foregoing clause
(b)(i) or (b)(ii), if the Common Shares of such Person are not at such time or
have not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (A) if such Person is a direct or indirect
Subsidiary of another Person the Common Shares of which are and have been so
registered, the term "Principal Party" shall refer to such other Person, or (B)
if such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Shares of which are and have been so registered, the term "Principal
Party" shall refer to whichever of such Persons is the issuer of Common Shares
having the greatest aggregate market value of shares outstanding, or (C) if such
Person is owned, directly or indirectly, by a joint venture formed by two or
more Persons that are not owned, directly or indirectly by the same Person, the
rules set forth in clauses (A) and (B) above shall apply to each of the owners
having an interest in the venture as if the Person owned by the joint venture
was a Subsidiary of both or all of such joint venturers, and the Principal Party
in each such case shall bear the obligations set forth in this Section 13 in the
same ratio as its interest in such Person bears to the total of such interests.

               (c) The Company shall not consummate any Section 13 Event unless
the Principal Party shall have a sufficient number of authorized Common Shares
that have not been issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and unless prior thereto
the Company and such issuer shall have executed and delivered to the Rights
Agent a supplemental agreement confirming that such Principal Party shall, upon
consummation of such Section 13 Event, assume this Agreement in accordance with
Sections 13(a) and 13(b) hereof, that all rights of first refusal or preemptive
rights in respect of the issuance of Common Shares of such Principal Party upon
exercise of outstanding Rights have been waived, that there are no rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights and that such transaction shall not result in a default by such Principal
Party under this Agreement, and further providing that, as soon as practicable
after the date of such Section 13 Event, such Principal Party will:

                    (i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, use its best efforts to cause
such registration statement to become effective as soon as practicable after
such filing and use its best efforts to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date, and similarly comply with applicable
state securities laws;

                                      -23-

<PAGE>

                    (ii) use its best efforts to list (or continue the listing
of) the Rights and the securities purchasable upon exercise of the Rights on a
national securities exchange or to meet the eligibility requirements for
quotation on Nasdaq and list (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on Nasdaq; and

                    (iii) deliver to holders of the Rights historical financial
statements for such Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act.

     In the event that at any time after the occurrence of a Triggering Event
some or all of the Rights shall not have been exercised at the time of a
transaction described in this Section 13, the Rights which have not theretofore
been exercised shall thereafter be exercisable in the manner described in
Section 13(a) (without taking into account any prior adjustment required by
Section 11(a)(ii)).

               (d) In case the "Principal Party" for purposes of Section 13(b)
hereof has provision in any of its authorized securities or in its certificate
of incorporation or by-laws or other instrument governing its corporate affairs,
which provision would have the effect of (i) causing such Principal Party to
issue (other than to holders of Rights pursuant to Section 13 hereof), in
connection with, or as a consequence of, the consummation of a Section 13 Event,
Common Shares or Equivalent Shares of such Principal Party at less than the then
Current Per Share Market Price thereof or securities exercisable for, or
convertible into, Common Shares or Equivalent Shares of such Principal Party at
less than such then Current Per Share Market Price, or (ii) providing for any
special payment, tax or similar provision in connection with the issuance of the
Common Shares of such Principal Party pursuant to the provisions of Section 13
hereof, then, in such event, the Company hereby agrees with each holder of
Rights that it shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with or as a consequence of, the consummation of
the proposed transaction.

               (e) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, effect or permit to occur any Section 13
Event, if (i) at the time or immediately after such Section 13 Event there are
any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights, (ii) prior to,
simultaneously with or immediately after such Section 13 Event, the stockholders
of the Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(b) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates or Associates, or (iii)
the form or nature of organization of the Principal Party would preclude or
limit the exercisability of the Rights.

               (f) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.

                                      -24-

<PAGE>

Section  14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

               (a) The Company shall not be required to issue fractions of
Rights or to distribute Rights Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered holders of
the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable, as determined pursuant to
the second sentence of Section 1(j) hereof.

               (b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions that are integral multiples of one
one-thousandth (0.001) of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions that are integral multiples of one one-thousandth (0.001) of a
Preferred Share). Interests in fractions of Preferred Shares in integral
multiples of one one-thousandth (0.001) of a Preferred Share may, at the
election of the Company, be evidenced by depository receipts, pursuant to an
appropriate agreement between the Company and a depository selected by it;
PROVIDED, HOWEVER, that such agreement shall provide that the holders of such
depository receipts shall have all the rights, privileges and preferences to
which they are entitled as beneficial owners of the Preferred Shares represented
by such depository receipts. In lieu of fractional Preferred Shares that are not
integral multiples of one one-thousandth (0.001) of a Preferred Share, the
Company shall pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of a Preferred Share. For purposes of this
Section 14(b), the current market value of a Preferred Share shall be (x) one
thousand (1,000) multiplied by (y) the closing price of a Common Share (as
determined pursuant to the second sentence of Section 1(j) hereof) for the
Trading Day immediately prior to the date of such exercise.

               (c) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common
Shares upon the exercise or exchange of Rights. In lieu of such fractional
Common Shares, the Company shall pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of a Common
Share. For purposes of this Section 14(c), the current market value of a Common
Share shall be the closing price of a Common Share (as determined pursuant to
the second sentence of Section 1(j) hereof) for the Trading Day immediately
prior to the date of such exercise.

               (d) The holder of a Right by the acceptance of the Right
expressly waives his or her right to receive any fractional Rights or any
fractional shares (other than fractions that are integral multiples of one
one-thousandth (0.001) of a Preferred Share) upon exercise of a Right.

         Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Rights Certificate (or, prior
to the Distribution Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his or her own behalf and for
his or her own benefit, enforce,

                                      -25-

<PAGE>

and may institute and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, his or her right to exercise
the Rights evidenced by such Rights Certificate in the manner provided in such
Rights Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.

         Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:

               (a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;

               (b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed; and

               (c) subject to Sections 6(a) and 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name the Rights Certificate
(or, prior to the Distribution Date, the associated Common Shares certificate)
is registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Shares certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary.

         Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose to be the holder of the Preferred Shares
or any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as specifically provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.

         Section 18. CONCERNING THE RIGHTS AGENT.

         (a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The

                                      -26-

<PAGE>

Company also agrees to indemnify the Rights Agent and its affiliates, directors,
officers and other employees (collectively, the "INDEMNITEES") for, and to hold
them harmless against, any loss, liability, damage, cost or expense, incurred
without gross negligence, bad faith or willful misconduct on the part of the
Indemnitees, for anything done or omitted by the Indemnitees in connection with
the acceptance and administration of this Agreement, including the reasonable
costs and expenses of defending against any claim of liability in the premises.
In no event will the Indemnitees be liable for special, indirect, incidental,
punitive or consequential loss or damage of any kind whatsoever, even if the
Indemnitees have been advised of the possibility of such loss or damage.

               (b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any
Rights Certificate or certificate for the Preferred Shares or Common Shares or
for other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document reasonably believed by it to
be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the advice of
counsel as set forth in Section 20 hereof.

        Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.

               (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; PROVIDED, HOWEVER, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.

               (b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.

                                      -27-

<PAGE>

         Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:

               (a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.

               (b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of Current Per Share Market Price) be proved or established by
the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Chief Financial Officer, the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.

               (c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own gross negligence, bad faith or willful
misconduct.

               (d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.

               (e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
or any adjustment in the terms of the Rights (including the manner, method or
amount thereof) provided for in Sections 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Rights
Certificates after receipt by the Rights Agent of a certificate furnished
pursuant to Section 12 describing such change or adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable.

               (f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and

                                      -28-

<PAGE>

other acts, instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.

               (g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Chief Financial Officer, the Secretary or any Assistant
Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance with instructions of
any such officer or for any delay in acting while waiting for those
instructions. Any application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this Rights
Agreement and the date on and/or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five (5) Business Days after the
date on which any officer of the Company actually receives such application,
unless any such officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.

               (h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.

               (i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.

               (j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its rights
if there shall be reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is not reasonably
assured to it.

               (k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.

                                      -29-

<PAGE>

         Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company and to each
transfer agent of the Preferred Shares and the Common Shares by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Preferred
Shares and the Common Shares by registered or certified mail, and to the holders
of the Rights Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his or her Rights
Certificate for inspection by the Company), then the registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of any state of the United
States, in good standing, which is authorized under such laws to exercise
corporate trust or stockholder services powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $100
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Preferred
Shares and the Common Shares, and mail a notice thereof in writing to the
registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Exercise Price and the number or kind or class of shares or other securities
or property purchasable under the Rights Certificates made in accordance with
the provisions of this Agreement. In addition, in connection with the issuance
or sale of Common Shares following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a) shall, with respect to
Common Shares so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement or upon the exercise, conversion or
exchange of other securities of the Company outstanding at the date hereof or
upon the exercise, conversion or exchange of securities hereinafter issued by
the Company, and (b) may, in any other case, if deemed necessary or appropriate
by the Board of Directors of the Company, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
PROVIDED, HOWEVER, that (i) no such Rights

                                      -30-

<PAGE>

Certificate shall be issued and this sentence shall be null and void AB INITIO
if, and to the extent that, such issuance or this sentence would create a
significant risk of or result in material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued or would
create a significant risk of or result in such options' or employee plans' or
arrangements' failing to qualify for otherwise available special tax treatment,
and (ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.

         Section 23. REDEMPTION.

               (a) The Company may, at its option and with the approval of the
Board of Directors, at any time prior to the Close of Business on the earlier of
(i) the fifth (5th) day following the Shares Acquisition Date (or such later
date as may be determined by action of the Company's Board of Directors and
publicly announced by the Company), and (ii) the Final Expiration Date, redeem
all but not less than all the then outstanding Rights at a redemption price of
$0.001 per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such redemption
price being herein referred to as the "REDEMPTION PRICE") and the Company may,
at its option, pay the Redemption Price either in Common Shares (based on the
Current Per Share Market Price thereof at the time of redemption) or cash. Such
redemption of the Rights by the Company may be made effective at such time, on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish. The date on which the Board of Directors elects to
make the redemption effective shall be referred to as the "REDEMPTION DATE."

               (b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have been
filed with the Rights Agent, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such redemption; PROVIDED,
HOWEVER, that the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within ten (10) days after the action of
the Board of Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.

        Section 24. EXCHANGE.

               (a) Subject to applicable laws, rules and regulations, and
subject to subsection (c) of this Section 24, the Company may, at its option, by
action of the Board of Directors, at any time after the occurrence of a
Triggering Event, exchange all or part of the then

                                      -31-

<PAGE>

outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 7(e) hereof) for Common Shares
at an exchange ratio of one (1) Common Share per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter referred to as the
"EXCHANGE RATIO"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or any such Subsidiary, or any entity holding Common Shares for or
pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of fifty percent (50%)
or more of the Common Shares then outstanding.

               (b) Immediately upon the action of the Board of Directors
ordering the exchange of any Rights pursuant to subsection (a) of this Section
24 and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall give public notice of any such exchange; PROVIDED, HOWEVER, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company shall mail a notice of any such exchange to all of
the holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Common Shares for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.

               (c) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with subsection (a) of this Section 24, the
Company shall either take such action as may be necessary to authorize
additional Common Shares for issuance upon exchange of the Rights or
alternatively, at the option of a majority of the Board of Directors, with
respect to each Right (i) pay cash in an amount equal to the Current Value (as
hereinafter defined), in lieu of issuing Common Shares in exchange therefor, or
(ii) issue debt or equity securities or a combination thereof, having a value
equal to the Current Value, in lieu of issuing Common Shares in exchange for
each such Right, where the value of such securities shall be determined by a
nationally recognized investment banking firm selected by majority vote of the
Board of Directors, or (iii) deliver any combination of cash, property, Common
Shares and/or other securities having a value equal to the Current Value in
exchange for each Right. For purposes of this Section 24(c) only, the Current
Value shall mean the product of the Current Per Share Market Price of Common
Shares on the date of the occurrence of the event described above in subsection
(a), multiplied by the number of Common Shares for which the Right otherwise
would be exchangeable if there were sufficient shares available. To the extent
that the Company determines that some action need be taken pursuant to clauses
(i), (ii) or (iii) of this Section 24(c), the Board of Directors may temporarily
suspend the exercisability of the Rights for a period of up to sixty (60) days
following the date on which the event described in subs (a) of Section 24 shall
have occurred, in order to seek any authorization of additional Common

                                      -32-

<PAGE>

Shares and/or to decide the appropriate form of distribution to be made pursuant
to the above provision and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.

               (d) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional Common Shares would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Common Share (as
determined pursuant to the second sentence of Section 1(j) hereof).

               (e) The Company may, at its option, by majority vote of the Board
of Directors, at any time before any Person has become an Acquiring Person,
exchange all or part of the then outstanding Rights for rights of substantially
equivalent value, as determined reasonably and with good faith by the Board of
Directors based upon the advice of one or more nationally recognized investment
banking firms.

               (f) Immediately upon the action of the Board of Directors
ordering the exchange of any Rights pursuant to subsection (e) of this Section
24 and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of rights in exchange therefor as has
been determined by the Board of Directors in accordance with subsection (e) of
this Section 24. The Company shall give public notice of any such exchange;
PROVIDED, HOWEVER, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company shall mail a notice of any
such exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the transfer agent for the Common Shares
of the Company. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the Rights will be
effected.

         Section 25. NOTICE OF CERTAIN EVENTS.

               (a) In case the Company shall propose to effect or permit to
occur any Triggering Event or Section 13 Event, the Company shall give notice
thereof to each holder of Rights in accordance with Section 26 hereof at least
twenty (20) days prior to occurrence of such Triggering Event or such Section 13
Event.

               (b) In case any Triggering Event or Section 13 Event shall occur,
then, in any such case, the Company shall as soon as practicable thereafter give
to each holder of a Rights Certificate, in accordance with Section 26 hereof, a
notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Sections 11(a)(ii) and 13
hereof.

         Section 26. NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, sent by facsimile

                                      -33-

<PAGE>

transmission (which is confirmed) or sent by an overnight courier service such
as Federal Express, addressed (until another address is filed in writing with
the Rights Agent) as follows:

                                    Hewlett-Packard Company
                                    3000 Hanover Street
                                    Palo Alto, California 94304-1112
                                    Attention:  General Counsel
                                    Facsimile No.: (650) 857-2012

                                    with a copy to:

                                    Wilson Sonsini Goodrich & Rosati
                                    Professional Corporation
                                    650 Page Mill Road
                                    Palo Alto, California 94304-1050
                                    Attention: Larry W. Sonsini
                                    Facsimile No.: (650) 493-6811

         Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Rights Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, sent by facsimile
transmission (which is confirmed) or sent by an overnight courier service such
as Federal Express, addressed (until another address is filed in writing with
the Company) as follows:

                                    Computershare Investor Services, LLC
                                    Two North LaSalle Street
                                    Chicago, Illinois  60602
                                    Attention:  Edward Gurgul
                                    Facsimile No.:  (312) 601-4348

                                    with a copy to:

                                    Computershare Investor Services, LLC
                                    Two North LaSalle Street
                                    Chicago, Illinois  60602
                                    Attention: Keith Bradley
                                    Facsimile No.: (312) 601-4348

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.

         Section 27. SUPPLEMENTS AND AMENDMENTS. Prior to the occurrence of a
Distribution Date, the Company may supplement or amend this Agreement in any
respect without the approval of any holders of Rights and the Rights Agent
shall, if the Company so directs, execute

                                      -34-

<PAGE>

such supplement or amendment. From and after the occurrence of a Distribution
Date, the Company and the Rights Agent may from time to time supplement or amend
this Agreement without the approval of any holders of Rights in order to (i)
cure any ambiguity, (ii) correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, (iii)
shorten or lengthen any time period hereunder, or (iv) to change or supplement
the provisions hereunder in any manner that the Company may deem necessary or
desirable and that shall not adversely affect the interests of the holders of
Rights (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); PROVIDED, this Agreement may not be supplemented or amended
to lengthen, pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the Rights are not
then redeemable, or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person). Upon the delivery of a
certificate from an appropriate officer of the Company that states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Shares.

         Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

         Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding Common Shares of which any Person
is the Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board, or the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power (i) to interpret the provisions of this
Agreement, and (ii) to make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (B) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (A) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights Certificates and all other parties, and
(B) not subject the Board to any liability to the holders of the Rights.

         Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable right, remedy or
claim pursuant to this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, the Common
Shares).

                                      -35-

<PAGE>

         Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, HOWEVER, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the Close of Business on the
tenth (10th) day following the date of such determination by the Board of
Directors.

         Section 32. GOVERNING LAW. This Agreement and each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.

         Section 33. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.

         Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

                                      -36-

<PAGE>

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

"COMPANY"                   HEWLETT-PACKARD COMPANY

                            By:    /s/ Ann O. Baskins
                                 -----------------------------------------------

                            Name:  Ann O. Baskins
                                 -----------------------------------------------

                            Title: Vice President, General Counsel and Secretary
                                 -----------------------------------------------

"RIGHTS AGENT"              COMPUTERSHARE INVESTOR SERVICES, LLC

                            By:    /s/ Petrine Nielsen
                                 -----------------------------------------------

                            Name:  Petrine Nielsen
                                 -----------------------------------------------

                            Title: Operations Executive
                                 -----------------------------------------------

<PAGE>

                                    EXHIBIT A

                CERTIFICATE OF DESIGNATION OF RIGHTS, PREFERENCES
                                AND PRIVILEGES OF
                     SERIES A PARTICIPATING PREFERRED STOCK
                           OF HEWLETT-PACKARD COMPANY

      The undersigned, Charles N. Charnas, does hereby certify that:

      1. He is the duly elected and acting Assistant Secretary of
Hewlett-Packard Company, a Delaware corporation (the "CORPORATION").

      2. Pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation of the Corporation, the Board of Directors of the
Corporation on August 31, 2001 adopted the following resolutions creating a
series of Preferred Stock designated as Series A Participating Preferred Stock:

         "RESOLVED: That pursuant to the authority vested in the Board of
Directors by the Certificate of Incorporation, the Board of Directors does
hereby provide for the issue of a series of Preferred Stock, and does hereby fix
and herein state and express the powers, designations, privileges, preferences
and relative, participating, optional and other special rights, and the
qualifications, limitations and restrictions, of such series of Preferred Stock
as follows:

      1. DESIGNATION AND AMOUNT. The shares of such series shall be designated
as "SERIES A PARTICIPATING PREFERRED STOCK." The Series A Participating
Preferred Stock shall have a par value $0.01 per share, and the number of shares
constituting such series shall be 4,500,000.

      2. PROPORTIONAL ADJUSTMENT. In the event that the Corporation shall at any
time after the issuance of any share or shares of Series A Participating
Preferred Stock (i) declare any dividend on Common Stock of the Corporation
("COMMON STOCK") payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the Corporation shall
simultaneously effect a proportional adjustment to the number of outstanding
shares of Series A Participating Preferred Stock.

      3. DIVIDENDS AND DISTRIBUTIONS.

            (a) Subject to the prior and superior right of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series A Participating Preferred Stock with respect to dividends, the holders
of shares of Series A Participating Preferred Stock shall be entitled to receive
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the last day
of January, April, July and October in each year (each such date being referred
to herein as a "QUARTERLY DIVIDEND PAYMENT DATE"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or fraction
of a share of Series A Participating Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to 1,000 times the aggregate

<PAGE>

per share amount of all cash dividends, and 1,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared
on the Common Stock since the immediately preceding Quarterly Dividend Payment
Date, or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A Participating
Preferred Stock.

            (b) The Corporation shall declare a dividend or distribution on the
Series A Participating Preferred Stock as provided in paragraph (a) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock).

            (c) Dividends shall begin to accrue on outstanding shares of
Series A Participating Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series A Participating
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series A
Participating Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Participating Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Participating Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 30 days prior to the date fixed for the
payment thereof.

      4. VOTING RIGHTS. The holders of shares of Series A Participating
Preferred Stock shall have the following voting rights:

            (a) Each share of Series A Participating Preferred Stock shall
entitle the holder thereof to 1,000 votes on all matters submitted to a vote of
the stockholders of the Corporation.

            (b) Except as otherwise provided herein or by law, the holders of
shares of Series A Participating Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.

            (c) Except as required by law, the holders of Series A Participating
Preferred Stock shall have no special voting rights and their consent shall not
be required (except to the extent that they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.

                                      -2-
<PAGE>

      5. CERTAIN RESTRICTIONS.

            (a) The Corporation shall not declare any dividend on, make any
distribution on, or redeem or purchase or otherwise acquire for consideration
any shares of Common Stock after the first issuance of a share or fraction of a
share of Series A Participating Preferred Stock unless concurrently therewith it
shall declare a dividend on the Series A Participating Preferred Stock as
required by Section 3 hereof.

            (b) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Participating Preferred Stock as provided in Section 3
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Participating
Preferred Stock outstanding shall have been paid in full, the Corporation shall
not

                  (i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Participating Preferred Stock;

                  (ii) declare or pay dividends on, or make any other
distributions on any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Participating
Preferred Stock, except dividends paid ratably on the Series A Participating
Preferred Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all such
shares are then entitled;

                  (iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Participating
Preferred Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such parity stock in exchange for shares of
any stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Participating Preferred
Stock;

                  (iv) purchase or otherwise acquire for consideration any
shares of Series A Participating Preferred Stock, or any shares of stock ranking
on a parity with the Series A Participating Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.

            (c) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (a) of
this Section 5, purchase or otherwise acquire such shares at such time and in
such manner.

      6. REACQUIRED SHARES. Any shares of Series A Participating Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired

                                      -3-
<PAGE>

and canceled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein and in the Certificate of
Incorporation, as then amended.

      7. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
dissolution or winding up of the Corporation, the holders of shares of Series A
Participating Preferred Stock shall be entitled to receive an aggregate amount
per share equal to 1,000 times the aggregate amount to be distributed per share
to holders of shares of Common Stock plus an amount equal to any accrued and
unpaid dividends on such shares of Series A Participating Preferred Stock.

      8. CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case the shares of Series A
Participating Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share equal to 1,000 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged.

      9. NO REDEMPTION. The shares of Series A Participating Preferred Stock
shall not be redeemable.

      10. RANKING. The Series A Participating Preferred Stock shall rank junior
to all other series of the Corporation's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.

      11. AMENDMENT. If any shares of Series A Participating Preferred Stock
have not been issued, the Certificate of Incorporation of the Corporation shall
not be further amended in any manner which would materially alter or change the
powers, preferences, privileges or relative, participating, optional or other
special rights, or the qualifications, limitations or restrictions, of the
Series A Participating Preferred Stock so as to affect them adversely without
the affirmative vote of the holders of a majority of the outstanding shares of
Series A Participating Preferred Stock, voting separately as a series.

      12. FRACTIONAL SHARES. Series A Participating Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Participating Preferred Stock.

                                      -4-
<PAGE>

      RESOLVED FURTHER, that the Chief Executive Officer, President, any Vice
President, the Secretary or any Assisting Secretary of HP (each, an "Authorized
Officer") or any persons authorized by an Authorized Officer (together with
the Authorized Officers, the "Authorized Persons") be, and each of them hereby
is, authorized and directed on behalf of HP to prepare and file a Certificate
of Designation of Rights, Preferences and Privileges of Series A Participating
Preferred Stock of HP in accordance with the foregoing resolution and the
applicable provisions of Delaware law, and to take such actions as they may
deem necessary or appropriate to carry out the intent of the foregoing
resolution."

      I further declare under penalty of perjury that the matters set forth in
the foregoing Certificate of Designation are true and correct of my own
knowledge.

      Executed at New York, New York on September 4, 2001.

                                 ---------------------------------------------
                                 Charles N. Charnas
                                 Assistant Secretary
                                 Hewlett-Packard Company

                                      -5-
<PAGE>

                                    EXHIBIT B

                           FORM OF RIGHTS CERTIFICATE

Certificate No. R-                                              _________ Rights

      NOT EXERCISABLE AFTER THE EARLIER OF (i) SEPTEMBER 14, 2011, (ii) THE DATE
      TERMINATED BY THE COMPANY OR (iii) THE DATE THE COMPANY EXCHANGES THE
      RIGHTS PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO
      REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.001 PER RIGHT ON THE TERMS
      SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
      BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF
      AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
      AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE
      RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
      OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
      ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
      AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
      REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
      IN SECTION 7(e) OF SUCH RIGHTS AGREEMENT.]1

                               RIGHTS CERTIFICATE

                             HEWLETT-PACKARD COMPANY

      This certifies that ______________________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Preferred Stock Rights Agreement dated as of August 31, 2001, (the "RIGHTS
AGREEMENT"), between Hewlett-Packard Company, a Delaware corporation (the
"COMPANY"), and Computershare Investor Services, LLC ( the "RIGHTS AGENT"), to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 P.M., New York time, on
September 17, 2011 at the office of the Rights Agent designated for such
purpose, or at the office of its successor as Rights Agent, one one-thousandth
(0.001) of a fully paid and non-assessable share of Series A Participating
Preferred Stock, par value $0.01 per share (the "PREFERRED SHARES"), of

-------------
1     The portion of the legend in bracket shall be inserted only if applicable
      and shall replace the preceding sentence.

<PAGE>

the Company, at an Exercise Price of One Hundred and Eighty Dollars and no cents
($180.00) per one-thousandth (0.001) of a Preferred Share (the "EXERCISE
PRICE"), upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase and related Certificate duly executed. The number
of Rights evidenced by this Rights Certificate (and the number of
one-thousandths (0.001) of a Preferred Share which may be purchased upon
exercise hereof) set forth above are the number and Exercise Price as of
September 17, 2001 based on the Preferred Shares as constituted at such date. As
provided in the Rights Agreement, the Exercise Price and the number and kind of
Preferred Shares or other securities which may be purchased upon the exercise of
the Rights evidenced by this Rights Certificate are subject to modification and
adjustment upon the happening of certain events.

      This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company and the above-mentioned office of the Rights Agent.

      Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Rights Certificate (i) may be redeemed by the Company, at its option, at a
redemption price of $0.001 per Right or (ii) may be exchanged by the Company in
whole or in part for Common Shares, substantially equivalent rights or other
consideration as determined by the Company.

      This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
amount of securities as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.

      No fractional portion of less than one one-thousandth (0.001) of a
Preferred Share will be issued upon the exercise of any Right or Rights
evidenced hereby but in lieu thereof a cash payment will be made, as provided in
the Rights Agreement.

      No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or

                                      -2-
<PAGE>

subscription rights, or otherwise, until the Right or Rights evidenced by this
Rights Certificate shall have been exercised as provided in the Rights
Agreement.

      This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.

      WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of _______________, _____.

ATTEST:                               HEWLETT-PACKARD COMPANY

                                      By:
--------------------------------         ---------------------------------------
Secretary

                                      Its:
                                          --------------------------------------

Countersigned:

COMPUTERSHARE INVESTOR SERVICES, LLC
as Rights Agent

By:
   ---------------------------------

Its:
    --------------------------------

                                      -3-
<PAGE>

                   FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE

                               FORM OF ASSIGNMENT

                (To be executed by the registered holder if such
               holder desires to transfer the Rights Certificate)

      FOR VALUE RECEIVED _______________ hereby sells, assigns and transfers
unto

--------------------------------------------------------------------------------
                 (Please print name and address of transferee)

--------------------------------------------------------------------------------
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.

Dated: _______________, ____

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

Signature Guaranteed:

      Signatures must be guaranteed by an "Eligible Guarantor Institution" (with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.

<PAGE>

                                   CERTIFICATE

      The undersigned hereby certifies by checking the appropriate boxes that:

            (1) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person,
or an Affiliate or Associate of any such Person (as such terms are defined in
the Rights Agreement);

            (2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of any such Person.

Dated: _______________, ____

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

Signature Guaranteed:

      Signatures must be guaranteed by an "Eligible Guarantor Institution" (with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.

<PAGE>

             FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE -- CONTINUED

                          FORM OF ELECTION TO PURCHASE

                      (To be executed if holder desires to
                        exercise the Rights Certificate)

To:___________________________

      The undersigned hereby irrevocably elects to exercise
_________________________ Rights represented by this Rights Certificate to
purchase the number of one-thousandths (0.001) of a Preferred Share issuable
upon the exercise of such Rights and requests that certificates for such number
of one-thousandths (0.001) of a Preferred Share issued in the name of:

Please insert social security
or other identifying number

--------------------------------------------------------------------------------
                         (Please print name and address)

--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:

Please insert social security
or other identifying number

--------------------------------------------------------------------------------
                         (Please print name and address)

Dated: _______________, ____

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

Signature Guaranteed:

      Signatures must be guaranteed by an "Eligible Guarantor Institution" (with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.

<PAGE>

                                   CERTIFICATE

      The undersigned hereby certifies by checking the appropriate boxes that:

            (1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement);

            (2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of any such Person.

Dated: _______________, ____

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

Signature Guaranteed:

      Signatures must be guaranteed by an "Eligible Guarantor Institution" (with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.

<PAGE>

      FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE -- CONTINUED

                                     NOTICE

      The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.

<PAGE>

                                    EXHIBIT C

                             STOCKHOLDER RIGHTS PLAN
                             HEWLETT-PACKARD COMPANY

                                SUMMARY OF RIGHTS

DISTRIBUTION AND TRANSFER     The Board of Directors has declared a dividend of
OF RIGHTS; RIGHTS             one (1) Right for each share of Common Stock of
CERTIFICATE:                  Hewlett-Packard Company (the "COMPANY")
                              outstanding. Prior to the Distribution Date
                              referred to below, the Rights will be evidenced by
                              and trade with the certificates for the Common
                              Stock. After the Distribution Date, the Company
                              will mail Rights certificates to the Company's
                              stockholders and the Rights will become
                              transferable apart from the Common Stock

DISTRIBUTION DATE:            Rights will separate from the Common Stock and
                              become exercisable following (a) the tenth (10th)
                              day (or such later date as may be determined by
                              the Company's Board of Directors) after a person
                              or group acquires beneficial ownership of 15% or
                              more of the Company's Common Stock or (b) the
                              tenth (10th) business day (or such later date as
                              may be determined by the Company's Board of
                              Directors) after a person or group announces a
                              tender or exchange offer, the consummation of
                              which would result in ownership by a person or
                              group of 15% or more of the Company's Common
                              Stock.

PREFERRED STOCK               After the Distribution Date, each Right will
PURCHASABLE UPON EXERCISE     entitle the holder to purchase for $180.00 (the
OF RIGHTS:                    "EXERCISE PRICE"), a fraction of a share of the
                              Company's Preferred Stock with economic terms
                              similar to that of one share of the Company's
                              Common Stock.

FLIP-IN:                      If an acquiror (an "ACQUIRING PERSON") obtains 15%
                              or more of the Company's Common Stock, THEN each
                              Right (other than Rights owned by an Acquiring
                              Person or its affiliates) will entitle the holder
                              thereof to purchase, for the Exercise Price, a
                              number of shares of the Company's Common Stock
                              having a then-current market value of twice the
                              Exercise Price.

FLIP-OVER:                    If, after an Acquiring Person obtains 15% or more
                              of the Company's Common Stock, (a) the Company
                              merges into another entity, (b) an acquiring
                              entity merges into the Company, or (c) the Company
                              sells more than 50% of the Company's assets or
                              earning power, THEN each Right (other than Rights
                              owned ---- by an Acquiring Person or its
                              affiliates) will entitle the holder thereof to
                              purchase, for the Exercise Price, a number of
                              shares of Common Stock of the person engaging in
                              the transaction having a then current market value
                              of twice the Exercise Price.

EXCHANGE PROVISION:           At any time after the date on which an  Acquiring
                              Person obtains 15% or more of the Company's Common
                              Stock and prior to the acquisition by the
                              Acquiring Person of 50% of the outstanding Common
                              Stock, the Board of Directors of the Company may
                              exchange the Rights (other than Rights owned by
                              the Acquiring Person or its affiliates), in whole
                              or in part, for shares of Common Stock of the
                              Company at an exchange ratio of one share of
                              Common Stock per Right (subject to adjustment).

REDEMPTION OF THE RIGHTS:     Rights will be redeemable at the Company's option
                              for $0.001 per Right at any time on or prior to
                              the fifth day (or such later date as may be
                              determined by the Company's Board of Directors)
                              after public announcement that a

<PAGE>

                              Person has acquired beneficial ownership of 15%
                              or more of the Company's Common Stock (the
                              "SHARES ACQUISITION DATE").

EXPIRATION OF THE RIGHTS:     The Rights expire on the earlier to occur of (a)
                              September 17, 2011 or (b) exchange or redemption
                              of the Rights as described above.

AMENDMENT OF TERMS OF         The terms of the Rights and the Rights Agreement
RIGHTS:                       may be amended in any respect without the consent
                              of the Rights holders prior to the Distribution
                              Date. From and after the Distribution Date, the
                              terms of the Rights and the Rights Agreement may
                              be amended without the consent of the Rights
                              holders in order to cure any ambiguities or to
                              make changes which do not adversely affect the
                              interests of Rights holders (other than the
                              Acquiring Person).

VOTING RIGHTS:                Rights will not have any voting rights.

ANTI-DILUTION PROVISIONS:     Rights will have the benefit of certain customary
                              anti-dilution provisions.

TAXES:                        The Rights distribution should not be  taxable for
                              federal income tax purposes. However, following an
                              event which renders the Rights exercisable or upon
                              redemption of the Rights, stockholders may
                              recognize taxable income.

The foregoing is a summary of certain principal terms of the Rights Plan only
and is qualified in its entirety by reference to the Preferred Stock Rights
Agreement dated as of August 31, 2001 between the Company and Computershare
Investor Services, LLC as Rights Agent (the "RIGHTS AGREEMENT"). The Rights
Agreement may be amended from time to time. A copy of the Rights Agreement was
filed with the Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A dated September [___], 2001. A copy of the
Rights Agreement is available free of charge from the Company.

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