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                                                                     EXHIBIT 4.4

                                                                  EXECUTION COPY

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                                DEPOSIT AGREEMENT

                                      Among

                               NETWORK PLUS CORP.,

             AMERICAN STOCK TRANSFER & TRUST COMPANY, as Depositary,

                                       and

                        THE HOLDERS FROM TIME TO TIME OF
                    THE DEPOSITARY RECEIPTS DESCRIBED HEREIN

                            Dated as of April 6, 2000

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                                TABLE OF CONTENTS

                                    ARTICLE I

                                   Definitions

                                   ARTICLE II

            Form of Receipts, Deposit of Convertible Preferred Stock,
                        Execution and Delivery, Transfer,
                      Surrender and Redemption of Receipts

SECTION 2.01.  Form and Transferability of Receipts ....................       3
SECTION 2.02.  Deposit of Convertible Preferred Stock;
                 Execution and Delivery of Receipts in
                 Respect Thereof .......................................       4
SECTION 2.03.  Conversion at the Option of Holders .....................       6
SECTION 2.04.  Redemption of Convertible Preferred
                 Stock .................................................       8
SECTION 2.05.  Registration of Transfer of Receipts ....................      10
SECTION 2.06.  Split-ups and Combinations of Receipts;
                 Surrender of Receipts and Withdrawal
                 of Convertible Preferred Stock ........................      11
SECTION 2.07.  Limitations on Execution and Delivery,
                 Transfer, Surrender and Exchange of
                 Receipts ..............................................      12
SECTION 2.08.  Lost Receipts, etc ......................................      13
SECTION 2.09.  Cancellation and Destruction of
                 Surrendered Receipts ..................................      13
SECTION 2.10.  Lost Depositary Share Certificates, etc. ................      13

                                   ARTICLE III

                         Certain Obligations of Holders
                           of Receipts and the Company

SECTION 3.01.  Filing Proofs, Certificates and Other
                 Information ...........................................      13
SECTION 3.02.  Payment of Taxes or Other Governmental
                 Charges ...............................................      14
SECTION 3.03.  Warranty as to Convertible Preferred
                 Stock .................................................      14
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                                   ARTICLE IV

                        The Deposited Securities; Notices

SECTION 4.01.  Cash Distributions ......................................      15
SECTION 4.02.  Distribution Other than Cash, Rights,
                 Preferences or Privileges .............................      15
SECTION 4.03.  Subscription Rights, Preferences or
                 Privileges ............................................      16
SECTION 4.04.  Notice of Dividends, etc.; Fixing
                 of Record Date for Holders of
                 Receipts ..............................................      17
SECTION 4.05.  Notice of Change of Control .............................      18
SECTION 4.06.  Voting Rights ...........................................      18
SECTION 4.07.  Changes Affecting Deposited Securities
                 and Reclassifications,
                 Recapitalizations, etc. ...............................      18
SECTION 4.08.  Inspection of Reports ...................................      19
SECTION 4.09.  Lists of Receipt Holders ................................      20

                                    ARTICLE V

                    The Depositary, the Depositary's Agents,
                          the Registrar and the Company

SECTION 5.01.  Maintenance of Offices, Agencies and
                 Transfer Books by the Depositary;
                 Registrar .............................................      20
SECTION 5.02.  Prevention of or Delay in Performance
                 by the Depositary, the Depositary's
                 Agents, the Registrar or the Company ..................      21
SECTION 5.03.  Obligations of the Depositary, the
                 Depositary's Agents, the Registrar
                 and the Company .......................................      21
SECTION 5.04.  Resignation and Removal of the Depositary;
                 Appointment of Successor Depositary ...................      23
SECTION 5.05.  Corporate Notices and Reports ...........................      24
SECTION 5.06.  Indemnification by the Company ..........................      24
SECTION 5.07.  Charges and Expenses ....................................      24
SECTION 5.08.  Tax Compliance ..........................................      25
SECTION 5.09.  Deposit of Convertible Preferred Stock
                 by the Company ........................................      25

                                   ARTICLE VI
                            Amendment and Termination
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SECTION 6.01.  Amendment ...............................................     26
SECTION 6.02.  Termination .............................................     26
SECTION 2.03.  Consents ................................................     26

                                   ARTICLE VII

                                  Miscellaneous

SECTION 7.01.  Counterparts ............................................     27
SECTION 7.02.  Exclusive Benefit of Parties ............................     28
SECTION 7.03.  Invalidity of Provisions ................................     28
SECTION 7.04.  Notices .................................................     28
SECTION 7.05.  Depositary's Agents .....................................     29
SECTION 7.06.  Holders of Receipts Are Parties .........................     29
SECTION 7.07.  Governing Law ...........................................     29
SECTION 7.08.  Inspection of Deposit Agreement .........................     29
SECTION 7.09.  Headings ................................................     29

TESTIMONIUM ............................................................     30
SIGNATURES .............................................................     30
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EXHIBIT A:  Form of Depositary Receipt
EXHIBIT B:  Resolutions

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                     DEPOSIT AGREEMENT dated as of April 6, 2000, among NETWORK
                  PLUS CORP., a Delaware corporation (the "Company"), AMERICAN
                  STOCK TRANSFER & TRUST COMPANY, a New York corporation (the
                  "Depositary"), and the holders from time to time of the
                  Receipts described herein.

            WHEREAS it is desired to provide, as hereinafter set forth in this
Deposit Agreement, for the deposit of 250,000 shares of Series A Cumulative
Convertible Preferred Stock ($500 Liquidation Preference per share), of Network
Plus Corp. with the Depositary for the purposes set forth in this Deposit
Agreement and for the issuance hereunder of Receipts evidencing Depositary
Shares in respect of the Stock so deposited; and

            WHEREAS the Receipts are to be substantially in the form of Exhibit
A hereto, with appropriate insertions, modifications and omissions, as
hereinafter provided in this Deposit Agreement;

            NOW, THEREFORE, in consideration of the premises and agreements
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, it is agreed by and among the parties
hereto as follows:

                                    ARTICLE I

                                   Definitions

            The following definitions shall for all purposes, unless otherwise
indicated, apply to the respective terms used in this Deposit Agreement:

            "Authorizing Resolutions" shall mean the resolutions adopted by the
Board of Directors of the Company or a duly authorized committee thereof
establishing and setting forth the rights, preferences and privileges of the
Convertible Preferred Stock and filed in the form of a certificate of the voting
powers, designations, preferences and relative participating, optional or other
special rights, and qualifications, limitations and restrictions thereof, of the
Convertible Preferred Stock with the Secretary of State of the State of Delaware
pursuant to Section 151 of the General
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Corporation Law of the State of Delaware, attached hereto as Exhibit B.

            "Certificate" shall mean the certificate of designations to the
Certificate of Incorporation of the Company filed with the Secretary of State of
Delaware establishing the Convertible Preferred Stock as a series of series
preferred stock, without par value $.01, of the Company.

            "Company" shall mean Network Plus Corp., a Delaware corporation, and
its successors.

            "Convertible Preferred Stock" shall mean shares of the Company's 7
1/2% Series A Cumulative Convertible Preferred Stock ($500 Liquidation
Preference per share).

            "Deposit Agreement" shall mean this Deposit Agreement, as amended or
supplemented from time to time.

            "Depositary" shall mean American Stock Transfer & Trust Company, a
New York corporation, and any successor as Depositary hereunder.

            "Depositary Shares" shall mean Depositary Shares, each representing
one-tenth (1/10) of a share of Convertible Preferred Stock and evidenced by a
Receipt.

            "Depositary's Agent" shall mean an agent
appointed by the Depositary pursuant to Section 7.05.

            "Depositary's Office" shall mean the principal office of the
Depositary in New York City, at which at any particular time its depositary
receipt business shall be administered.

            "Paying Agent" shall have the meaning specified
in the Certificate.

            "Receipt" shall mean one of the Depositary Receipts issued
hereunder, whether in definitive or temporary form.

            "record holder" as applied to a Receipt shall mean the person in
whose name a Receipt is registered on the books of the Depositary maintained for
such purpose.

            "Registrar" shall mean any bank or trust company which shall be
appointed to register ownership and transfers of Receipts as herein provided.

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                                   ARTICLE II

            Form of Receipts, Deposit of Convertible Preferred Stock,
                        Execution and Delivery, Transfer,
                      Surrender and Redemption of Receipts

            SECTION 2.01. Form and Transferability of Receipts. Definitive
Receipts shall be printed or lithographed on steel-engraved borders and shall be
substantially in the form set forth in Exhibit A annexed to this Deposit
Agreement, in each case with appropriate insertions, modifications and
omissions, as hereinafter provided. Pending the preparation of definitive
Receipts, the Depositary, upon the written order of the Company delivered in
compliance with Section 2.02, shall execute and deliver temporary Receipts which
shall be printed, lithographed, typewritten, mimeographed or otherwise
substantially of the tenor of the definitive Receipts in lieu of which they are
issued and in each case with such appropriate insertions, omissions,
substitutions and other variations as the persons executing such Receipts may
determine, as evidenced by their execution of such Receipts. If temporary
Receipts are issued, the Company and the Depositary will cause definitive
Receipts to be prepared without unreasonable delay. After the preparation of
definitive Receipts, the temporary Receipts shall be exchangeable for definitive
Receipts upon surrender of the temporary Receipts at an office described in
Section 2.02, without charge to the holder. Upon surrender for cancellation of
any one or more temporary Receipts, the Depositary shall execute and deliver in
exchange therefor definitive Receipts representing the same number of Depositary
Shares as represented by the surrendered temporary Receipt or Receipts. Such
exchange shall be made at the Company's expense and without any charge therefor.
Until so exchanged, the temporary Receipts shall in all respects be entitled to
the same benefits under this Agreement, and with respect to the Convertible
Preferred Stock, as definitive Receipts.

            Receipts shall be executed by the Depositary by the manual signature
of a duly authorized officer of the Depositary; provided, that such signature
may be a facsimile if a Registrar for the Receipts (other than the Depositary)
shall have been appointed and such Receipts are countersigned by manual
signature of a duly authorized officer of the Registrar. No Receipt shall be
entitled to any benefits under this Deposit Agreement or be valid or obligatory
for any purpose unless it shall

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have been executed manually by a duly authorized officer of the Depositary or,
if a Registrar for the Receipts (other than the Depositary) shall have been
appointed, by manual or facsimile signature of a duly authorized officer of the
Depositary and countersigned manually by a duly authorized officer of such
Registrar. The Depositary shall record on its books each Receipt so signed and
delivered as hereinafter provided.

            Receipts shall be in denominations of any number of whole Depositary
Shares up to but not in excess of Depositary Shares for any particular Receipt.

            Receipts may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with the provisions
of this Deposit Agreement as may be required by the Depositary or required to
comply with any applicable law or any regulation thereunder or with the rules
and regulations of any securities exchange upon which the Stock, the Depositary
Shares or the Receipts may be listed or to conform with any usage with respect
thereto, or to indicate any special limitations or restrictions to which any
particular Receipts are subject.

            Title to Depositary Shares (and the interest in the Convertible
Preferred Stock evidenced thereby) evidenced by a Receipt that is properly
endorsed, or accompanied by a properly executed instrument of transfer, shall be
transferable by delivery with the same effect as in the case of a negotiable
instrument; provided, however, that until transfer of a Receipt shall be
registered on the books of the Depositary as provided in Section 2.04, the
Depositary may, notwithstanding any notice to the contrary, treat the record
holder thereof at such time as the absolute owner thereof for the purpose of
determining the person entitled to distributions of dividends or other
distributions or payments with respect to the Convertible Preferred Stock, to
exercise conversion rights or to receive any notice provided for in this Deposit
Agreement and for all other purposes.

            The Depositary shall not lend any Convertible Preferred Stock
deposited hereunder.

            SECTION 2.02. Deposit of Convertible Preferred Stock; Execution and
Delivery of Receipts in Respect Thereof. Subject to the terms and conditions of
this Deposit Agreement, the Company or any holder of

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Convertible Preferred Stock may from time to time deposit shares of the
Convertible Preferred Stock under this Deposit Agreement by delivery to the
Depositary of a certificate or certificates for the Convertible Preferred Stock
to be deposited, properly endorsed or accompanied, if required by the
Depositary, by a duly executed instrument of transfer or endorsement, in form
satisfactory to the Depositary, together with all such certifications as may be
required by the Depositary in accordance with the provisions of this Deposit
Agreement, and together with a written order of the Company or such holder, as
the case may be, directing the Depositary to execute and deliver to, or upon the
written order of, the person or persons stated in such order a Receipt or
Receipts for the number of Depositary Shares representing such deposited
Convertible Preferred Stock.

            Deposited Convertible Preferred Stock shall be held by the
Depositary at the Depositary's Office or at such other place or places as the
Depositary shall determine.

            Simultaneously with the execution and delivery hereof, the Company,
on behalf of each underwriter of an interest in the Convertible Preferred Stock
that is to be represented by the Depositary Shares, is depositing under this
Deposit Agreement certificates representing all outstanding shares of
Convertible Preferred Stock, together with a written order directing the
Depositary to execute and deliver Depositary Shares representing such
Convertible Preferred Stock registered in such names as have been designated in
writing by Goldman, Sachs & Co., as the representative of the underwriters for
the Depositary Shares that are to represent such Convertible Preferred Stock.

            Upon each delivery to the Depositary of a certificate or
certificates for Convertible Preferred Stock to be deposited hereunder in
accordance with the provisions of this Section, together with the other
documents required as above specified, and as soon as transfer and recordation
of the Convertible Preferred Stock on the books of the Company in the name of
the Depositary or its nominee can be accomplished, the Depositary, subject to
the terms and conditions of this Deposit Agreement, shall execute and deliver
to, or upon the order of, the Exchange Agent a Receipt or Receipts for the
number of Depositary Shares representing the Convertible Preferred Stock so
deposited and registered in such name or names of the person or persons as

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specified in the written order delivered to the Depositary referred to in the
first paragraph of this Section. Deposited Convertible Preferred Stock shall be
held by the Depositary in trust for the benefit of the holders from time to time
of the Depositary Shares at the principal office of the Depositary or at such
other place or places as the Depositary shall determine, such deposited
Convertible Preferred Stock (and any dividends or other distributions thereon)
to be at all times segregated, separate and apart from the property of the
Depositary.

            Upon receipt by the Depositary of a certificate or certificates for
Convertible Preferred Stock deposited in accordance with the provisions of this
Section 2.02, together with the other documents required as above specified and
upon recordation of such Convertible Preferred Stock on the books of the Company
in the name of the Depositary or its nominee, the Depositary, subject to the
terms and conditions of this Deposit Agreement, shall execute and deliver to or
upon the order of the person or persons named in the written order referred to
above in this Section 2.02 one or more Depositary Shares for the number of
Depositary Shares attributable to such Convertible Preferred Stock so deposited
and registered in such name or names as requested by such person or persons. The
Depositary shall execute and deliver such Receipt or Receipts at the
Depositary's Office or such other offices, if any, as the Depositary may
designate. Delivery at other offices shall be at the risk and expense of the
person requesting such delivery. However, in each case subsequent to the initial
deposit hereunder, such delivery will be made only upon payment to the
Depositary of all taxes and governmental charges and fees payable in connection
with such deposit and the transfer of the deposited Convertible Preferred Stock.
The Depositary shall not issue any Depositary Shares certificates other than
Depositary Shares certificates for Depositary Shares representing Convertible
Preferred Stock actually deposited with the Depositary.

            Other than in the case of splits, combinations or other
reclassifications affecting the Convertible Preferred Stock, or in the case of
dividends or other distributions of Convertible Preferred Stock, if any, or
unless the Company provides written notice to the Depositary as to a different
number of shares of Convertible Preferred Stock, there shall be deposited
hereunder not more than 250,000 shares of Convertible Preferred Stock.

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            SECTION 2.03. Conversion at the Option of Holders. Subject to the
terms and conditions of this Deposit Agreement and the Authorizing Resolutions,
Depositary Shares may be surrendered at any time by the holders thereof with
written instructions to the Depositary to convert any specified number of shares
of Convertible Preferred Stock represented by such Depositary Shares into shares
of Common Stock (and cash in lieu of fractional shares of Common Stock) at the
conversion rate in respect of the Convertible Preferred Stock determined in
accordance with the Authorizing Resolutions. A holder of Depositary Shares may
surrender such Depositary Shares at such office as the Depositary may from time
to time designate for such purpose, together with a notice of conversion thereof
duly completed and executed, thereby instructing the Depositary to cause the
conversion of the number of shares of Convertible Preferred Stock specified in
such notice of conversion into shares of Common Stock.

            Upon receipt by the Depositary of a Depositary Shares certificate,
together with a notice of conversion supplied by the Company containing the
applicable conversion rate instructing the Depositary to convert a specified
number of shares of Convertible Preferred Stock duly completed and executed, the
Depositary shall (a) give written notice to the transfer agent for the
Convertible Preferred Stock of the number of shares of Convertible Preferred
Stock surrendered for conversion and the number of shares of Common Stock to be
delivered upon conversion of such shares of Convertible Preferred Stock and the
amount of immediately available funds, if any, to be delivered to the holder of
such Depositary Shares in payment of any fractional shares of Common Stock
otherwise issuable, (b) cancel such Depositary Shares certificate or, if a
Registrar for Depositary Shares certificates (other than the Depositary) shall
have been appointed, cause such Registrar to cancel such Depositary Shares
certificate and (c) deliver to the transfer agent for the Convertible Preferred
Stock or any other authorized agent of the Company certificates for the
Convertible Preferred Stock represented by such Depositary Shares, which
certificates shall thereupon be canceled by such transfer agent or other
authorized agent. As promptly as practicable after such transfer agent or other
authorized agent of the Company has received such certificates from the
Depositary, (a) the Company shall cause to be furnished to the Depositary a
certificate or certificates evidencing such number of shares of Common Stock,
and such amount of immediately

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available funds, if any, as specified in a written notice to the Company and (b)
subject to the next succeeding sentence, the Depositary shall deliver at its
office designated for such purpose or such other place as may be requested by
any holder surrendering Depositary Shares as provided in this Section 2.03 (i) a
certificate or certificates evidencing the number of shares of Common Stock into
which the Convertible Preferred Stock represented by the Depositary Shares has
been converted,(ii) cash in lieu of receiving fractional shares of Common Stock
in accordance with Section 2.06 and (iii) the right to receive cash in an amount
in an amount equal to all accrued and unpaid dividends on such shares of
Convertible Preferred Stock to the extent provided in the Certificate of
Designations for the Convertible Preferred Stock. However, if a number of
Depositary Shares that is not divisible by 10, without remainder, is submitted
for conversion, any fractional share of Convertible Preferred Stock otherwise
issuable upon such conversion will be rounded down.

            Upon any optional conversion of the Convertible Preferred Stock
represented by the Depositary Shares, no allowance, adjustment or payment shall
be made with respect to dividends upon such Convertible Preferred Stock or
shares of Common Stock issued upon the conversion thereof, except as set forth
in the Authorizing Resolutions. If Depositary Shares representing shares of
Convertible Preferred Stock (other than Depositary Shares called for redemption
within such period in connection with a redemption of Convertible Preferred
Stock) are surrendered for conversion between the close of business on the
record date with respect to any dividend payment on such Convertible Preferred
Stock and the opening of business on the next succeeding dividend payment date,
any holder of Depositary Shares surrendered with instructions to the Depositary
for conversion of the Convertible Preferred Stock represented thereby shall
remit to the Depositary with such Depositary Shares an amount of funds equal to
the dividend payable on the underlying Convertible Preferred Stock on such
dividend payment date computed and paid as set forth in the Authorizing
Resolutions.

            Delivery of Common Stock and other property may be made by the
delivery of certificates and other proper documents of title, which, if required
by law, shall be properly endorsed or accompanied by proper instruments of
transfer. If such delivery is to be made otherwise than at the Depositary's
corporate trust office in New York

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City, such delivery shall be made, as hereinafter provided, without unreasonable
delay, at the risk of any holder surrendering Depositary Shares, and for the
account of such holder, to such place designated in writing by such holder.

            SECTION 2.04. Redemption of Convertible Preferred Stock. The
Convertible Preferred Stock represented by the Depositary Shares shall not be
redeemable by the Company prior to April 10, 2005. At any time and from time to
time on or after that date until immediately prior to the Mandatory Redemption
Date, the Company will have the right to redeem, in whole or in part, the
Convertible Preferred Stock represented by the Depositary Shares, at the price
per share of Convertible Preferred Stock specified pursuant to the Authorizing
Resolutions. Whenever the Company shall elect under the Authorizing Resolutions
to redeem shares of Convertible Preferred Stock, the Depositary shall effect a
simultaneous redemption, from the proceeds of such redemption by the Company, of
a number of Depositary Shares representing a number of shares of Convertible
Preferred Stock equal to the number of shares of Convertible Preferred Stock
being redeemed. In the case of any such redemption, the Company shall give the
Depositary not less than 30 nor more than 60 days' notice of the date of such
proposed redemption (the "redemption date"), the number of shares of the
Convertible Preferred Stock held by the Depositary to be so redeemed, the number
of Depositary Shares to be simultaneously redeemed and the applicable redemption
price, including the amount of any accumulated and unpaid dividends to the date
of such redemption computed as provided in the Authorizing Resolutions. The
Depositary shall mail notice of such redemption (which shall also constitute a
notice of redemption of Depositary Shares), by first-class mail, postage
prepaid, not less than 30 nor more than 60 days prior to the redemption date, to
the holders of record of Depositary Shares representing a number of shares of
Convertible Preferred Stock equal to the number of shares of Convertible
Preferred Stock held by the Depositary that are to be redeemed by the Company,
at the addresses of such holders as the same appear on the records of the
Depositary; but neither failure to mail any such notice, nor any defect in any
notice, to one or more holders shall affect the validity of the proceedings for
redemption except as to any holder to whom the Depositary has failed to give
said notice or whose notice was defective. Each such notice shall state the
redemption date, the number of shares of Convertible Preferred Stock

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and number of Depositary Shares to be redeemed, and, if less than all the shares
of Convertible Preferred Stock represented by Depositary Shares are to be
redeemed, the number of Depositary Shares to be redeemed from such holder; the
applicable redemption price; that dividends in respect of the Convertible
Preferred Stock represented by such Depositary Shares to be redeemed will cease
to accrue as of the date specified in the notice of redemption from the Company;
that the conversion rights with respect to such shares of Convertible Preferred
Stock will cease as of the redemption date (except as described below), and
instructions for the surrender of the certificates representing the Depositary
Shares to be redeemed. Any notice that is mailed in the manner herein provided
shall be conclusively presumed to have been duly given whether or not the holder
receives the notice. The Company shall make a public announcement (by press
release to the Dow Jones News Service) of any call for redemption prior to or at
the time of the mailing of such notice of redemption. In case less than all the
outstanding shares of Convertible Preferred Stock represented by Depositary
Shares are to be called for redemption, the Depositary Shares to be redeemed
(which shall represent a number of shares of Convertible Preferred Stock equal
to the total number of shares of Convertible Preferred Stock being held by the
Depositary that are to be redeemed) shall be selected by the Depositary in the
same manner as that determined by the Company with respect to the redemption by
the Company of the shares of Convertible Preferred Stock.

            Notice having been mailed by the Depositary as aforesaid, on and
after the redemption date, the Depositary Shares to be redeemed shall no longer
be deemed outstanding and all rights of the holders of such Depositary Shares
including any accrued and unpaid dividends shall cease, except the right to
receive a distribution of the redemption price, without interest as provided
herein, (unless the Company defaults in payment of the redemption price). As of
the close of business on the redemption date, if the Company shall have redeemed
the shares of Convertible Preferred Stock called for redemption, upon surrender
in accordance with such notice of the certificates representing the Depositary
Shares being redeemed from the proceeds of such redemption (properly endorsed or
assigned for transfer, if required and stated in such notice), the holders of
such Depositary Shares shall be entitled to receive, for each Depositary Share
surrendered, an amount equal to the redemption price per 1/10-share (10%) of
Convertible

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Preferred Stock redeemed plus all money and other property, if any, attributable
thereto pursuant to the Authorizing Resolutions, including cash in lieu of any
fractional shares of Common Stock in accordance with Section 2.06. On or
promptly following the redemption date, the Depositary shall surrender all
shares of Convertible Preferred Stock held by it that have been redeemed.

            If less than all of the Depositary Shares represented by a
Depositary Shares certificate are called for redemption, the Depositary will
deliver to the holder of the Depositary Shares certificate upon the later of (i)
the surrender of the Depositary Shares certificate to the Depositary and (ii)
the redemption date a new Depositary Shares certificate representing the
Depositary Shares not called for redemption together with the redemption
payment.

            If a notice of redemption of any shares of Convertible Preferred
Stock represented by Depositary Shares has been given pursuant to this Section
2.05, the right to convert the shares of Convertible Preferred Stock represented
by such Depositary Shares will terminate immediately prior to the close of
business on the relevant redemption date.

            Unless the Convertible Preferred Stock has already been redeemed or
converted, the Company will be required to redeem the Convertible Preferred
Stock on April 1, 2012, at a redemption price equal to 100% of the liquidation
preference, together with accumulated and unpaid dividends to April 1, 2012.

            SECTION 2.05. Registration of Transfer of Receipts. Subject to the
terms and conditions of this Deposit Agreement, the Depositary shall register on
its books from time to time transfers of Receipts upon any surrender thereof by
the holder in person or by duly authorized attorney, properly endorsed or
accompanied by a properly executed instrument of transfer. Thereupon the
Depositary shall execute a new Receipt or Receipts evidencing the same aggregate
number of Depositary Shares as those evidenced by the Receipt or Receipts
surrendered and deliver such new Receipt or Receipts to or upon the order of the
person entitled thereto.

            SECTION 2.06. Split-ups and Combinations of Receipts; Surrender of
Receipts and Withdrawal of Convertible Preferred Stock. Upon surrender of a
Receipt

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or Receipts at the Depositary's Office or at such other offices as it may
designate for the purpose of effecting a split-up or combination of such Receipt
or Receipts, and subject to the terms and conditions of this Deposit Agreement,
the Depositary shall execute and deliver a new Receipt or Receipts in the
authorized denomination or denominations requested, evidencing the aggregate
number of Depositary Shares evidenced by the Receipt or Receipts surrendered.

            Any holder of a Receipt or Receipts representing any number of whole
shares of Convertible Preferred Stock may (unless the related Depositary Shares
have previously been converted or called for redemption) withdraw the
Convertible Preferred Stock on the basis of one share of Convertible Preferred
Stock for every ten Depositary Shares surrendered and all money and other
property, if any, represented thereby by surrendering such Receipt or Receipts,
at the Depositary's office or at such other offices as the Depositary may
designate for such withdrawals. Thereafter, without unreasonable delay, the
Depositary shall deliver to such holder, or to the person or persons designated
by such holder as hereinafter provided, the number of whole shares of
Convertible Preferred Stock and all money and other property, if any,
represented by the Receipt or Receipts so surrendered for withdrawal, but
holders of such whole shares of Convertible Preferred Stock will not thereafter
be entitled to deposit such Convertible Preferred Stock hereunder or to receive
Depositary Shares therefor. However, if a Receipt delivered by the holder to the
Depositary in connection with such withdrawal shall evidence a number of
Depositary Shares that is not divisible by 10, without remainder, any fractional
share of Convertible Preferred Stock otherwise issuable upon conversion will be
rounded down. Delivery of the Convertible Preferred Stock and money and other
property being withdrawn may be made by the delivery of such certificates,
documents of title, which, if required by law, shall be properly endorsed or
accompanied by proper instruments of transfer, and other instruments as the
Depositary may deem appropriate.

            If the Convertible Preferred Stock and the money and other property
being withdrawn are to be delivered to a person or persons other than the record
holder of the Receipt or Receipts being surrendered for withdrawal of
Convertible Preferred Stock, such holder shall execute and deliver to the
Depositary a written order so directing the Depositary and the Depositary may
require

                                       12
<PAGE>   17
that the Receipt or Receipts surrendered by such holder for withdrawal of such
shares of Convertible Preferred Stock be properly endorsed in blank or
accompanied by a properly executed instrument of transfer in blank.

            Delivery of the Convertible Preferred Stock and the money and other
property, if any, represented by Receipts surrendered for withdrawal shall be
made by the Depositary at the Depositary's Office, except that, at the request,
risk and expense of the holder surrendering such Receipt or Receipts and for the
account of the holder thereof, such delivery may be made at such other place as
may be designated by such holder.

            SECTION 2.07. Limitations on Execution and Delivery, Transfer,
Surrender and Exchange of Receipts. As a condition precedent to the execution
and delivery, registration of transfer, split-up, combination, surrender or
exchange of any Receipt, or the exercise of any right of conversion, redemption
or withdrawal, the Depositary, any of the Depositary's Agents or the Company may
require payment to it of a sum sufficient for the payment (or, in the event that
the Depositary or the Company shall have made such payment, the reimbursement to
it) of any charges or expenses payable by the holder of a Receipt pursuant to
Section 5.07, may require the production of evidence satisfactory to it as to
the identity and genuineness of any signature and may also require compliance
with such regulations, if any, as the Depositary or the Company may establish
consistent with the provisions of this Deposit Agreement, or with the approval
of the Company, for any other reason. Without limitation of the foregoing, the
Depositary shall not knowingly accept for deposit under this Deposit Agreement
any Convertible Preferred Stock in connection with a distribution of Depositary
Shares which is required to be registered under the Securities Act of 1933,
unless a registration statement under such Act is in effect as to such
Depositary Shares and such Convertible Preferred Stock.

            The deposit of Convertible Preferred Stock may be refused, the
delivery of Receipts against Convertible Preferred Stock may be suspended, the
registration of transfer of Receipts may be refused and the registration of
transfer, surrender or exchange of outstanding Receipts may be suspended (i)
during any period when the register of stockholders of the Company is closed or
(ii) if any such action is deemed necessary or advisable by the Depositary, any
of the Depositary's Agents or the

                                       13
<PAGE>   18
Company at any time or from time to time because of any requirement of law or of
any government or governmental body or commission or under any provision of this
Deposit Agreement.

            SECTION 2.08. Lost Receipts, etc. In case any Receipt shall be
mutilated, destroyed, lost or stolen, the Depositary in its discretion may
execute and deliver a Receipt of like form and tenor in exchange and
substitution for such mutilated Receipt, or in lieu of and in substitution for
such destroyed, lost or stolen Receipt, upon (i) the filing by the holder
thereof with the Depositary of evidence satisfactory to the Depositary of such
destruction or loss or theft of such Receipt, of the authenticity thereof and of
his or her ownership thereof and (ii) the furnishing to the Depositary with
reasonable indemnification and/or surety bond satisfactory to it.

            SECTION 2.09. Cancellation and Destruction of Surrendered Receipts.
All Receipts surrendered to the Depositary or any Depositary's Agent shall be
canceled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy all Receipts so canceled.

            SECTION 2.10. Lost Depositary Share Certificates, etc. In case any
Depositary Share certificate shall be mutilated or be destroyed or lost or
stolen, the Depositary will execute and deliver a Depositary Share certificate
of like form and tenor in exchange and substitution for such mutilated
Depositary Share certificate, or in lieu of and in substitution for such
destroyed, lost or stolen Depositary Share certificate, upon the holder thereof
filing with the Registrar evidence satisfactory to the Depositary of such
destruction, loss or theft of such Depositary Share certificate and the
authenticity thereof and of his ownership thereof and furnishing the Depositary
with reasonable indemnification and/or surety bond satisfactory to it.

                                   ARTICLE III

                         Certain Obligations of Holders
                           of Receipts and the Company

            SECTION 3.01. Filing Proofs, Certificates and Other Information. Any
holder of a Receipt may be required from time to time to file such proof of

                                       14
<PAGE>   19
residence, or other matters or other information, to execute such certificates
and to make such representations and warranties as the Depositary or the Company
may be reasonably deem necessary or proper. The Depositary or the Company may
withhold the delivery, or delay the registration of transfer, redemption or
exchange, of any Receipt or the withdrawal of the Convertible Preferred Stock
represented by the Depositary Shares evidenced by any Receipt or the
distribution of any dividend or other distribution or the sale of any rights or
of the proceeds thereof or of the proceeds of the exercise of any conversion
right specified in Section 2.03 or the mandatory redemption pursuant to Section
2.04 until such proof or other information is filed or such certificates are
executed or such representations and warranties are made.

            SECTION 3.02. Payment of Taxes or Other Governmental Charges.
Holders of Receipts shall be obligated to make payments to the Depositary of
certain charges and expenses, as provided in Section 5.07. Registration of
transfer of any Receipt or any withdrawal of Convertible Preferred Stock and all
money or other property, if any, represented by the Depositary Shares evidenced
by such Receipt or of the proceeds of the exercise of any conversion right
specified in Section 2.03 or the mandatory redemption pursuant to Section 2.04
may be refused until any such payment due is made, and any dividends, interest
payments or other distributions may be withheld or any part of or all the
Convertible Preferred Stock or other property represented by the Depositary
Shares evidenced by such Receipt and not theretofore sold may be sold for the
account of the holder thereof (after attempting by reasonable means to notify
such holder prior to such sale), and such dividends, interest payments or other
distributions or the proceeds of any such sale or of the proceeds of the
exercise of any conversion right specified in Section 2.03 or the mandatory
redemption pursuant to Section 2.04 may be applied to any payment of such
charges or expenses, the holder of such Receipt remaining liable for any
deficiency.

            SECTION 3.03. Warranty as to Convertible Preferred Stock. The
Company hereby represents, with respect to the initial deposit of Convertible
Preferred Stock, and each subsequent depositor shall be deemed to represent,
with respect to any deposit made by such person, that each certificate for such
Convertible Preferred Stock so deposited is valid, and that the

                                       15
<PAGE>   20
person making such deposit is duly authorized so to do. The Company hereby
further represents and warrants that the Convertible Preferred Stock, when
issued, will be validly issued, fully paid and nonassessable. Such
representation and warranty shall survive the deposit of the Convertible
Preferred Stock and the issuance of Receipts.

                                   ARTICLE IV

                        The Deposited Securities; Notices

            SECTION 4.01. Cash Distributions. Whenever the Depositary shall
receive any cash dividend or other cash distribution on the Convertible
Preferred Stock, the Depositary shall, subject to Sections 3.01 and 3.02 hereof,
distribute to record holders of Receipts on the record date fixed pursuant to
Section 4.04 such amounts of such dividend or distribution as are, as nearly as
practicable, in proportion to the respective numbers of Depositary Shares
evidenced by the Receipts held by such holders; provided, however, that in case
the Company or the Depositary shall be required to withhold and shall withhold
from any cash dividend or other cash distribution in respect of the Convertible
Preferred Stock an amount on account of taxes, the amount made available for
distribution or distributed in respect of Depositary Shares shall be reduced
accordingly. The Depositary shall distribute or make available for distribution,
as the case may be, only such amount, however, as can be distributed without
attributing to any holder of Depositary Shares a fraction of one cent, and any
balance not so distributable shall be held by the Depositary (without liability
for interest thereon) and shall be added to and be treated as part of the next
sum received by the Depositary for distribution of record holders of Receipts
then outstanding.

            SECTION 4.02. Distribution Other than Cash, Rights, Preferences or
Privileges. Whenever the Depositary shall receive any distribution other than
cash, rights, preferences or privileges upon Convertible Preferred Stock, the
Depositary shall, subject to Sections 3.01 and 3.02 hereof, distribute to record
holders of Receipts on the record date fixed pursuant to Section 4.04 such
amounts of the securities or property received by it as are, as nearly as
practicable, in proportion to the respective numbers of Depositary Shares
evidenced by the Receipts held by such holders, in any

                                       16
<PAGE>   21
manner that the Depositary may deem equitable and practicable for accomplishing
such distribution. If in the opinion of the Depositary such distribution cannot
be made proportionately among such record holders, or if for any other reason
(including any requirement that the Company or the Depositary withhold an amount
on account of taxes) the Depositary deems, after consultation with the Company,
such distribution not to be feasible, the Depositary may, with the approval of
the Company, adopt such method as it deems equitable and practicable for the
purpose of effecting such distribution, including the sale (at public or private
sale) of the securities or property thus received, or any part thereof, at such
place or places and upon such terms as it may deem proper. The net proceeds of
any such sale shall, subject to Sections 3.01 and 3.02, be distributed or made
available for distribution, as the case may be, by the Depositary to record
holders of Receipts as provided by Section 4.01 in the case of a distribution
received in cash. The Company shall not make any distribution of such securities
unless the Company shall have provided an opinion of counsel stating that such
securities have been registered under the Securities Act of 1933 or do not need
to be registered.

            SECTION 4.03. Subscription Rights, Preferences or Privileges. If the
Company shall at any time offer or cause to be offered to the persons in whose
names Convertible Preferred Stock is recorded on the books of the Company any
rights, preferences or privileges to subscribe for or to purchase any securities
or any rights, preferences or privileges of any other nature, such rights,
preferences or privileges shall in each such instance be made available by the
Depositary to the record holders of Receipts in such manner as the Depositary
may determine, either by the issue to such record holders of warrants
representing such rights, preferences or privileges or by such other method as
may be approved by the Depositary in its discretion, with the approval of the
Company; provided, however, that (i) if at the time of issue or offer of any
such rights, preferences or privileges the Depositary determines (after
consultation with the Company) that it is not lawful or not feasible to make
such rights, preferences or privileges available to holders of Receipts by the
issue of warrants or otherwise, or (ii) if and to the extent so instructed by
holders of Receipts who do not desire to exercise such rights, preferences or
privileges, then the Depositary, in its discretion (with the approval of the
Company, in any case where the

                                       17
<PAGE>   22
Depositary has determined that it is not feasible to make such rights,
preferences or privileges available), may, if applicable laws or the terms of
such rights, preferences or privileges permit such transfer, sell such rights,
preferences or privileges at public or private sale, at such place or places and
upon such terms as it may deem proper. The net proceeds of any such sale shall,
subject to Sections 3.01 and 3.02, be distributed by the Depositary to the
record holders of Receipts entitled thereto as provided by Section 4.01 in the
case of a distribution received in cash. The Company shall not make any
distribution of any such rights, preferences or privileges unless the Company
shall have provided an opinion of counsel stating that such rights, preferences
or privileges have been registered under the Securities Act of 1933 or do not
need to be registered.

            If registration under the Securities Act of 1933 of the securities
to which any rights, preferences or privileges relate is required in order for
holders of Receipts to be offered or sold the securities to which such rights,
preferences or privileges relate, the Company agrees with the Depositary that it
will file promptly a registration statement pursuant to such Act with respect to
such rights, preferences or privileges and securities and use its best efforts
and take all steps available to it to cause such registration statement to
become effective sufficiently in advance of the expiration of such rights,
preferences or privileges to enable such holders to exercise such rights,
preferences or privileges. In no event shall the Depositary make available to
the holders of Receipts any right, preference or privilege to subscribe for or
to purchase any securities unless and until such registration statement shall
have become effective, or unless the offering and sale of such securities to
such holders are exempt from registration under the provisions of such Act.

            If any other action under the laws of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to holders
of Receipts, the Company agrees with the Depositary that the Company will use
its best efforts to take such action or obtain such authorization, consent or
permit sufficiently in advance of the expiration of such rights, preferences or
privileges to enable such holders to exercise such rights, preferences or
privileges.

                                       18
<PAGE>   23
            SECTION 4.04. Notice of Dividends, etc.; Fixing of Record Date for
Holders of Receipts. Whenever any cash dividend or other cash distribution shall
become payable or any distribution other than cash shall be made, or if rights,
preferences or privileges shall at any time be offered, with respect to the
Convertible Preferred Stock, or whenever the Depositary shall receive notice of
any meeting at which holders of Convertible Preferred Stock are entitled to vote
or of which holders of Convertible Preferred Stock are entitled to notice or any
request for action by written consent, or whenever the Depositary and the
Company shall decide it is appropriate, the Depositary shall in each such
instance fix a record date (which shall be the same date as the record date
fixed by the Company with respect to the Convertible Preferred Stock) for the
determination of the holders of Receipts who shall be entitled to receive such
dividend, distribution, rights, preferences or privileges or the net proceeds of
the sale thereof, or to give instructions for the exercise of voting rights at
any such meeting, or who shall be entitled to notice of such meeting or any
request for action by written consent or for any other appropriate reasons.

            SECTION 4.05. Notice of Change of Control. Upon receipt of notice of
any change of control offer (as defined in the Certificate of Designations with
respect to the Convertible Preferred Stock), the Depositary shall, as soon as
practicable thereafter, mail to the record holders of Receipts a notice which
shall contain (i) such information as is contained in such notice of change of
control offer and (ii) if applicable, a statement that the holders may, subject
to any applicable restrictions, instruct the Depositary as to the exercise of
the voting rights of the holders in compliance with Section 4.06 herein. Upon
receipt of notice from the Company of any change of control (as defined in the
Certificate of Designations with respect to the Convertible Preferred Stock),
the Depositary shall, as soon as practicable thereafter, mail to the record
holders of Receipts a notice that shall contain (i) a description of the
transaction or transactions constituting the change of control and (ii) the
offer from the Company to repurchase the Depositary Shares or Convertible
Preferred Stock, as the case may be, on the date specified in such notice,
pursuant to the procedures set forth in the Certificate of Designations with
respect to the Convertible Preferred Stock.

                                       19
<PAGE>   24
            SECTION 4.06. Voting Rights. Upon receipt of notice of any meeting
at which the holders of Convertible Preferred Stock are entitled to vote, the
Depositary shall, as soon as practicable thereafter, mail to the record holders
of Receipts a notice which shall contain (i) such information as is contained in
such notice of meeting and (ii) a statement that the holders may, subject to any
applicable restrictions, instruct the Depositary as to the exercise of the
voting rights pertaining to the amount of Convertible Preferred Stock
represented by their respective Depositary Shares (including an express
indication that instructions may be given to the Depositary to give a
discretionary proxy to a person designated by the Company) and a brief statement
as to the manner in which such instructions maybe be given. Upon the written
request of the holders of Receipts on the relevant record date (which shall be
the same date as the record date for the Convertible Preferred Stock), the
Depositary shall endeavor insofar as practicable to vote or cause to be voted,
in accordance with the instructions set forth in such requests, the maximum
number of whole shares of Convertible Preferred Stock represented by the
Depositary Shares evidenced by all Receipts as to which any particular voting
instructions are received. The Company hereby agrees to take all action which
may be deemed necessary by the Depositary in order to enable the Depositary to
vote such Convertible Preferred Stock or cause such Convertible Preferred Stock
to be voted. In the absence of specific instructions from the holder of a
Receipt, the Depositary will abstain from voting (but, at its discretion, not
from appearing at any meeting with respect to such Convertible Preferred Stock
unless directed to the contrary by the holders of all the Receipts) to the
extent of the Convertible Preferred Stock represented by the Depositary Shares
evidenced by such Receipt. Any voting instructions given hereunder shall be
revocable to the same extent as a proxy granted with respect to the Convertible
Preferred Stock represented thereby.

            SECTION 4.07. Changes Affecting Deposited Securities and
Reclassifications, Recapitalizations, etc. Upon any change in par or stated
value or liquidation preference, split-up, combination or any other
reclassification of the Convertible Preferred Stock, or upon any
recapitalization, reorganization, merger, amalgamation or consolidation
affecting the Company or to which it is a party, the Depositary may in its
discretion with the approval of, and shall upon the instructions of,

                                       20
<PAGE>   25
the Company, and (in either case) in such manner as the Depositary may deem
equitable, (i) make such adjustments as are certified by the Company in (x) the
fraction of an interest represented by one Depositary Share in one share of
Convertible Preferred Stock and (y) the ratio of the redemption price per
Depositary Share to the redemption price of a share of Convertible Preferred
Stock, in each case as may be necessary fully to reflect the effects of such
change in par or stated value or liquidation preference, split-up, combination
or other reclassification of Convertible Preferred Stock, or of such
recapitalization, reorganization, merger, amalgamation or consolidation and (ii)
treat any securities which shall be received by the Depositary in exchange for
or upon conversion of or in respect of the Convertible Preferred Stock as new
deposited securities so received in exchange for or upon conversion or in
respect of such Convertible Preferred Stock. In any such case, the Depositary
may in its discretion, with the approval of the Company, execute and deliver
additional Receipts, or may call for the surrender of all outstanding Receipts
to be exchanged for new Receipts specifically describing such new deposited
securities. Anything to the contrary herein notwithstanding, holders of Receipts
shall have the right from and after the effective date of any such change in par
or stated value or liquidation preference, split-up, combination or other
reclassification of the Convertible Preferred Stock or any such
recapitalization, reorganization, merger, amalgamation or consolidation to
surrender such Receipts to the Depositary with instructions to convert, exchange
or surrender the Convertible Preferred Stock represented thereby only into or
for, as the case may be, the kind and amount of shares of stock and other
securities and property and cash into which the Convertible Preferred Stock
represented by such Receipts might have been converted or for which such
Convertible Preferred Stock might have been exchanged or surrendered immediately
prior to the effective date of such transaction.

            SECTION 4.08. Inspection of Reports. The Depositary shall transmit
to the record holders of Receipts, at the addresses of such record holders as
set forth on the books of the Depositary, and shall make available for
inspection by holders of Receipts at the Depositary's office, and at such other
places as it may from time to time deem advisable, any reports and
communications received from the Company which are received by the Depositary as
the holder of Convertible Preferred Stock. The Registrar for the Depositary
Shares

                                       21
<PAGE>   26
will keep books for the transfer of the Depositary Shares. At all reasonable
times such books will be open for inspection by holders of the Depositary Shares
to the same extent as a record holder of the shares of Convertible Preferred
Stock may inspect books for the transfer thereof.

            SECTION 4.09. Lists of Receipt Holders. Promptly upon request from
time to time by the Company, the Depositary shall furnish to it a list, as of a
recent date, of the names, addresses and holdings of Depositary Shares of all
persons in whose names Receipts are registered on the books of the Depositary.

                                    ARTICLE V

                    The Depositary, the Depositary's Agents,
                          the Registrar and the Company

            SECTION 5.01. Maintenance of Offices, Agencies and Transfer Books by
the Depositary; Registrar. Upon execution of this Deposit Agreement and until
termination of this Deposit Agreement in accordance with its terms, the
Depositary shall maintain at the Depositary's Office, facilities for the
execution and delivery, registration and registration of transfer, surrender and
exchange of Receipts, and at the offices of the Depositary's Agents, if any,
facilities for the delivery, registration of transfer, surrender and exchange of
Receipts, all in accordance with the provisions of this Deposit Agreement.

            The Depositary shall keep books at the Depositary's Office for the
registration and registration of transfer of Receipts, which books at all
reasonable times shall be open for inspection by the record holders of Receipts;
provided, that any such holder requesting to exercise such right shall certify
to the Depositary that such inspection shall be for a proper purpose reasonably
related to such person's interest as an owner of Depositary Shares evidenced by
the Receipts.

            The Depositary may close such books, at any time or from time to
time, when deemed expedient by it in connection with the performance of its
duties hereunder.

            The Depositary may, with the approval of the Company, appoint a
Registrar for registration of the Receipts or the Depositary Shares evidenced
thereby. If the Receipts or the Depositary Shares evidenced thereby

                                       22
<PAGE>   27
or the Convertible Preferred Stock represented by such Depositary Shares shall
be listed on the Nasdaq National Market, the Depositary will appoint a Registrar
(acceptable to the Company) for registration of such Receipts or Depositary
Shares in accordance with any requirements of the Nasdaq National Market. Such
Registrar (which may be the Depositary if so permitted by the requirements of
the Nasdaq National Market) may be removed and a substitute registrar appointed
by the Depositary upon the request or with the approval of the Company. If the
Receipts, such Depositary Shares or such Convertible Preferred Stock are listed
on one or more stock exchanges or other automated quotation systems, the
Depositary will, at the request of the Company, arrange such facilities for the
delivery, registration, registration of transfer, surrender and exchange of such
Receipts, such Depositary Shares or such Convertible Preferred Stock as may be
required by law or applicable stock exchange or automated quotation system
regulation.

            SECTION 5.02. Prevention of or Delay in Performance by the
Depositary, the Depositary's Agents, the Registrar or the Company. None of the
Depositary, any Depositary's Agent, the Registrar or the Company shall incur any
liability to any holder of any Receipt if by reason of any provision of any
present or future law, or regulation thereunder, of the United States of America
or of any other governmental authority or, in the case of the Depositary, the
Depositary's Agent or the Registrar, by reason of any provision, present or
future, of the Company's Restated Certificate of Incorporation (including the
Certificate) or by reason of any act of God or war or other circumstance beyond
the control of the relevant party, the Depositary, the Depositary's Agent, the
Registrar or the Company shall be prevented or forbidden from, or subjected to
any penalty on account of, doing or performing any act or thing which the terms
of this Deposit Agreement provide shall be done or performed; nor shall the
Depositary, any Depositary's Agent, any Registrar or the Company incur any
liability to any holder of a Receipt (i) by reason of any nonperformance or
delay, caused as aforesaid, in the performance of any act or thing which the
terms of this Deposit Agreement provide shall or may be done or performed, or
(ii) by reason of any exercise of, or failure to exercise, any discretion
provided for in this Deposit Agreement except, in case of any such exercise or
failure to exercise discretion not caused as aforesaid, if caused by the
negligence or willful misconduct of the party charged with such exercise or
failure to exercise.

                                       23
<PAGE>   28
            SECTION 5.03. Obligations of the Depositary, the Depositary's
Agents, the Registrar and the Company. None of the Depositary, any Depositary's
Agent, the Registrar or the Company assumes any obligation or shall be subject
to any liability under this Deposit Agreement to holders of Receipts other than
for its gross negligence or willful misconduct and each of them agrees to use
its best judgment and good faith in the performance of such duties as are
specifically set forth in this Deposit Agreement and shall perform such duties
and otherwise act hereunder on behalf of the holders of Depositary Shares.

            None of the Depositary, any Depositary's Agent, the Registrar or the
Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding in respect of the Convertible Preferred Stock,
the Depositary Shares or the Receipts which in its opinion may involve it in
expense or liability unless indemnity satisfactory to it against all expense and
liability be furnished as often as may be required.

            None of the Depositary, any Depositary's Agent, any Registrar or the
Company shall be liable for any action or any failure to act by it in good faith
reliance upon the written advice of legal counsel or accountants, or information
from any person presenting Convertible Preferred Stock for deposit, any holder
of a Receipt or any other person believed by it in good faith to be competent to
give such information. The Depositary, any Depositary's Agent, the Registrar and
the Company may each rely and shall each be protected in acting upon any written
notice, request, direction or other document believed by it to in good faith be
genuine and to have been signed or presented by the proper party or parties.

            The Depositary shall not be responsible for any failure to carry out
any instruction to vote any of the shares of Convertible Preferred Stock or for
the manner or effect of any such vote made, as long as any such action or
non-action is in good faith. The Depositary undertakes, and the Registrar shall
be required to undertake, to perform such duties and only such duties as are
specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Depositary or the
Registrar. The Depositary will be liable to the Company for any liability which
may arise out of acts performed or omitted by the Depositary or the Depositary's
Agents due to its or their gross negligence or willful misconduct.

                                       24
<PAGE>   29
The Depositary, the Depositary's Agents, and any Registrar may own and deal in
any class of securities of the Company and its affiliates and in Receipts. The
Depositary may also act as transfer agent or registrar of any of the securities
of the Company and its affiliates.

            SECTION 5.04. Resignation and Removal of the Depositary; Appointment
of Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by notice of its election so to do delivered to the Company, such
resignation to take effect upon the appointment of a successor Depositary and
its acceptance of such appointment as hereinafter provided.

            The Depositary may at any time be removed by the Company by notice
of such removal delivered to the Depositary, such removal to take effect upon
the appointment of a successor Depositary and its acceptance of such appointment
as hereinafter provided.

            In case at any time the Depositary acting hereunder shall resign or
be removed, the Company shall, within 45 days after the delivery of the notice
of resignation or removal, as the case may be, appoint a successor Depositary, a
bank or trust company having its principal office in the United States of
America and having a combined capital and surplus of at least $50,000,000. If no
successor Depositary shall have been so appointed and have accepted appointment
within 45 days after delivery of such notice, the resigning or removed
Depositary may petition any court of competent jurisdiction for the appointment
of a successor Depositary. Every successor Depositary shall execute and deliver
to its predecessor and to the Company an instrument in writing accepting its
appointment hereunder, and thereupon such successor Depositary, without any
further act or deed, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor and for all purposes shall be the
Depositary under this Deposit Agreement, and such predecessor, upon payment of
all sums due it and on the written request of the Company, shall execute and
deliver an instrument transferring to such successor all rights and powers of
such predecessor hereunder, shall duly assign, transfer and deliver all right,
title and interest in the Convertible Preferred Stock and any moneys or property
held hereunder to such successor, and shall deliver to such successor a list of
the record holders of all outstanding Receipts. Any successor

                                       25
<PAGE>   30
Depositary shall promptly mail notice of its appointment to the record holders
of Receipts.

            Any corporation into or with which the Depositary may be merged,
consolidated or converted shall be the successor of such Depositary without the
execution or filing of any document or any further act, and notice thereof shall
not be required hereunder. Such successor Depositary may authenticate the
Receipts in the name of the predecessor Depositary or in the name of the
successor Depositary.

            SECTION 5.05. Corporate Notices and Reports. The Company agrees that
it will transmit to the record holders of Receipts, in each case at the
addresses furnished to it pursuant to Section 4.08, all notices and reports
(including without limitation financial statements) required by law, by the
rules of any national securities exchange upon which the Convertible Preferred
Stock, the Depositary Shares or the Receipts are listed or by the Company's
Restated Certificate of Incorporation (including the Certificate) to be
furnished by the Company to holders of Convertible Preferred Stock. Such
transmission will be at the Company's expense and the Company will provide the
Depositary with such number of copies of such documents as the Depositary may
reasonably request for such purpose. In addition, the Depositary will transmit
to the holders of Depositary Shares (at Company expense) such other documents as
may be requested by the Company. The Company further agrees that it will
promptly notify the Depositary in writing of any change in the conversion rate
and conversion price in respect of the Convertible Preferred Stock.

            SECTION 5.06. Indemnification by the Company. The Company shall
indemnify the Depositary, any Depositary's Agent and any Registrar against, and
hold each of them harmless from, any loss, liability or expense (including the
costs and expenses of defending itself and reasonable counsel fees) which may
arise out of (a) acts performed or omitted in connection with this Deposit
Agreement and the Receipts (i) by the Depositary, the Registrar or any of their
respective agents (including any Depositary's Agent), except for any liability
arising out of negligence or bad faith on the respective parts of any such
person or persons, or (ii) by the Company or any of its agents, or (b) the
offer, sale or registration of the Receipts, the Depositary Shares or the
Convertible Preferred Stock pursuant to the provisions hereof. The obligations
of the

                                       26
<PAGE>   31
Company set forth in this Section 5.06 shall survive any succession of any
Depositary, Registrar or Depositary's Agent.

            SECTION 5.07. Charges and Expenses. The Company shall pay all
transfer and other taxes and governmental charges arising solely from the
existence of the depositary arrangements hereunder. The Company shall pay all
charges of the Depositary in connection with the initial deposit of the
Convertible Preferred Stock and the initial issuance of the Depositary Shares,
redemption of the Convertible Preferred Stock at the option of the Company and
all withdrawals of shares of the Convertible Preferred Stock by owners of
Depositary Shares. All other transfer and other taxes and governmental charges
shall be at the expense of holders of Depositary Shares. If, at the request of a
holder of Receipts, the Depositary incurs charges or expenses for which it is
not otherwise liable hereunder, such holder will be liable for such charges and
expenses. All other charges and expenses of the Depositary and any Depositary's
Agent hereunder and of the Registrar (including, in each case, reasonable fees
and expenses of counsel) incident to the performance of their respective
obligations hereunder will be paid upon consultation and agreement between the
Depositary and the Company as to the amount and nature of such charges and
expenses. The Depositary shall present its statement for charges and expenses to
the Company once every three months or at such other intervals as the Company
and the Depositary may agree.

            SECTION 5.08. Tax Compliance. (a) The Depositary, on its own behalf
and on behalf of the Company will comply with all applicable certification,
information reporting and withholding (including "backup" withholding)
requirements imposed by applicable tax laws, regulations or administrative
practice with respect to (i) any payments made with respect to the Depositary
Shares or (ii) the issuance, delivery, holding, transfer, redemption or exercise
of rights under the Depositary Receipts or the Depositary Shares. Such
compliance shall include, without limitation, the preparation and timely filing
of required returns and the timely payment of all amounts required to be
withheld to the appropriate taxing authority or its designated agent.

            (b) The Depositary shall comply with any direction received from the
Company with respect to the

                                       27
<PAGE>   32
application of such requirements to particular payments or holders or in other
particular circumstances, and may for purposes of this Agreement rely on any
such direction in accordance with the provisions of Section 5.03 hereof.

            (c) The Depositary shall maintain all appropriate records
documenting compliance with such requirements, and shall make such records
available on request to the Company or to its authorized representatives.

            SECTION 5.09. Deposit of Convertible Preferred Stock by the Company.
The Company agrees with the Depositary that neither the Company nor any company
controlled by the Company will at any time deposit any Convertible Preferred
Stock if such Convertible Preferred Stock is required to be registered under the
provisions of the Securities Act of 1933 unless a registration statement is in
effect as to such Convertible Preferred Stock.

                                   ARTICLE VI
                            Amendment and Termination

            SECTION 6.01. Amendment. The form of the Receipts and any provisions
of this Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect which they may
deem necessary or desirable; provided, however, that no such amendment (other
than any change in the fees of any Depositary, Registrar or Transfer Agent)
which shall materially and adversely alter the rights of the holders of Receipts
shall be effective unless such amendment shall have been approved by the holders
of Receipts evidencing at least 66 2/3% of the Depositary Shares then
outstanding. Every holder of an outstanding Receipt at the time any such
amendment becomes effective, or any transferee of such holder shall be deemed,
by continuing to hold such Receipt, or by reason of the acquisition thereof, to
consent and agree to such amendment and to be bound by the Deposit Agreement as
amended thereby. In no event shall any amendment impair the right, subject to
the applicable provisions hereof, of any owner of Depositary Shares to withdraw
the Convertible Preferred Stock represented by the Depositary Shares or to
convert the shares of Convertible Preferred Stock represented thereby into
Common Stock, except as

                                       28
<PAGE>   33
provided in the Authorizing Resolutions or in order to comply with mandatory
provisions of applicable law.

            SECTION 6.02. Termination. This Agreement may be terminated by the
Company or the Depositary only after (i) all outstanding Depositary Shares shall
have been redeemed pursuant to Section 2.03 or (ii) there shall have been made a
final distribution in respect of the Convertible Preferred Stock in connection
with any liquidation, dissolution or winding up of the Company and such
distributions shall have been distributed to the holders of Receipts evidencing
the Depositary Shares pursuant to Section 4.01 or 4.02, as applicable.

            Upon the termination of this Deposit Agreement, the Company shall be
discharged from all obligations under this Deposit Agreement except for its
obligations to the Depositary, any Depositary's Agent and any Registrar under
Sections 5.06 and 5.07.

            SECTION 6.03. Consents. Consents of holders of Depositary Shares
required by this Article VI may be evidenced by one or more instruments signed
by such holder or by his agent duly appointed in writing, and shall be effective
when delivered to the Depositary. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Deposit Agreement and conclusive in favor of the Depositary, the Registrar
and the Company, if made in the manner herein provided.

            The execution of any proxy, consent or other instrument by the
holder of Depositary Shares or his agent or proxy shall be revocable, except as
otherwise specifically provided, and be deemed sufficient and conclusive for all
purposes of this Deposit Agreement if (a) the Depositary, Registrar or Company,
as the case may be, shall have mailed or delivered to the holder at his address
as shown on the books of the Depositary such proxy, consent or other instrument,
(b) the proxy, consent or other instrument shall have been returned to the
Depositary, Registrar or Company, as the case may be, bearing a signature
purporting and reasonably appearing to be that of the holder, his agent or
proxy, and (c) the person receiving the executed proxy, consent or other
instrument shall have no actual knowledge or notice of any irregularity or of
any fact or circumstance, which, if substantiated, would impair the validity of
such proxy, consent or other instrument. The matters referred to in clauses (a),
(b) and (c) above may be evidenced by

                                       29
<PAGE>   34
a certificate of the Depositary, Registrar or Company, as the case may be.

            The ownership of Depositary Shares shall be proved by the books of
the Depositary or, if a Registrar for Depositary Shares (other than the
Depositary) shall have been appointed, the Registrar or by a certificate of the
Depositary or Registrar, as applicable.

            The Depositary shall not be bound to recognize any person as a
holder unless and until his title to the Depositary Shares held by him is proved
in the manner provided herein.

            Any such consent of the holder of any Depositary Shares shall bind
every future holder of the same Depositary Shares including the holder of every
Depositary Shares issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, whether or not notation of such consent is
made upon any such Depositary Shares.

                                   ARTICLE VII

                                  Miscellaneous

            SECTION 7.01. Counterparts. This Deposit Agreement may be executed
in any number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed an original, but all such counterparts taken together shall constitute
one and the same instrument.

            SECTION 7.02. Exclusive Benefit of Parties. This Deposit Agreement
is for the exclusive benefit of the parties hereto, and their respective
successors hereunder, and shall not be deemed to give any legal or equitable
right, remedy or claim to any other person whatsoever.

            SECTION 7.03. Invalidity of Provisions. In case any one or more of
the provisions contained in this Deposit Agreement or in the Receipts should be
or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein or
therein shall in no way be affected, prejudiced or disturbed thereby.

                                       30
<PAGE>   35
            SECTION 7.04. Notices. Any and all notices to be given to the
Company hereunder or under the Receipts shall be in writing and shall be deemed
to have been duly given if personally delivered or sent by mail or telegram,
telex or telecopier confirmed by letter, addressed to the Company at 234
Copeland Street, Quincy, MA 02169, fax 617-786-4013 to the attention of the
Office of the Secretary, or at any other address of which the Company shall have
notified the Depositary in writing, with a copy to Hale and Dorr LLP, 60 State
Street, Boston, MA 02109, fax 617-526-5000, attention: Jeffrey N. Carp, Esq.

            Any and all notices to be given to the Depositary hereunder or under
the Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail or by telegram, telex or telecopier
confirmed by letter, addressed to the Depositary at the Depositary's Office, at
40 Wall Street, New York, NY 10005, fax 718-236-4588, attention: Executive Vice
President or at any other address of which the Depositary shall have notified
the Company and the record holders of the Receipts in writing.

            Any and all notices to be given to any record holder of a Receipt
hereunder or under the Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail or by telegram, telex or
telecopier confirmed by letter, addressed to such record holder at the address
of such record holder as it appears on the books of the Depositary, or if such
holder shall have filed with the Depositary a written request that notices
intended for such holder be mailed to some other address, at the address
designated in such request.

            Delivery of a notice sent by mail or by telegram, telex or
telecopier shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a confirmation thereof in the case of a telegram,
telex or telecopier message) is deposited, postage prepaid, in a post office
letter box. The Depositary or the Company however, act upon any telegram, telex
or telecopier message received by it from the other or from any holder of a
Receipt, notwithstanding that such telegram, telex or telecopier message shall
not subsequently be confirmed by letter or as aforesaid.

                                       31
<PAGE>   36
            SECTION 7.05. Depositary's Agents. The Depositary may from time to
time appoint Depositary's Agents to act in any respect for the Depositary for
the purposes of this Deposit Agreement and may at any time appoint additional
Depositary's Agents and vary or terminate the appointment of such Depositary's
Agent. The Depositary will notify the Company of any such action.

            SECTION 7.06. Holders of Receipts Are Parties. The holders of
Receipts from time to time shall be parties to this Deposit Agreement and shall
be bound by all of the terms and conditions hereof and of the Receipts by
acceptance of delivery thereof.

            SECTION 7.07. Governing Law. This Deposit Agreement and the Receipts
and all rights hereunder and thereunder and provisions hereof and thereof shall
be governed by, and construed in accordance with, the laws of the State of New
York.

            SECTION 7.08. Inspection of Deposit Agreement. Copies of this
Deposit Agreement shall be filed with the Depositary and the Depositary's Agents
and shall be open to inspection during business hours at the Depositary's Office
and the respective offices of the Depositary's Agents, if any, by any holder of
a Receipt.

            SECTION 7.09. Headings. The headings of articles and sections in
this Deposit Agreement and in the form of the Receipt set forth in Exhibit A
hereto have been inserted for convenience only and are not to be regarded as a
part of this Deposit Agreement or the Receipts or to have any

                                       32
<PAGE>   37
bearing upon the meaning or interpretation of any provision contained herein or
in the Receipts.

            IN WITNESS WHEREOF, the Company and the Depositary have duly
executed this Agreement as of the day and year first above set forth, and all
holders of Receipts shall become parties hereto by and upon acceptance by them
of delivery of Receipts issued in accordance with the terms hereof.

                                     NETWORK PLUS CORP.,

                                     by

                                     /s/ Joanne Callahan
                                     -------------------

                                     AMERICAN STOCK TRANSFER &
                                     TRUST COMPANY

                                     by

                                     /s/[signature illegible]
                                     ------------------------

                                       33
<PAGE>   38
                                    Exhibit A
                            [FORM OF FACE OF RECEIPT]

TEMPORARY RECEIPT - Exchangeable for Definitive Engraved Receipt When Ready for
Delivery

          NUMBER ____________________________________ DEPOSITARY SHARES

            CERTIFICATE FOR TWO MILLION FIVE HUNDRED THOUSAND DEPOSITARY SHARES

TDR

   DEPOSITARY RECEIPT FOR DEPOSITARY SHARES, REPRESENTING 1/10 OF A SHARE OF
              7 1/2 Series A Cumulative Convertible Preferred Stock
               ($500 LIQUIDATION PREFERENCE) OF NETWORK PLUS CORP.

                                                                 CUSIP 64122D605

            INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE  SEE REVERSE
FOR
CERTAIN DEFINITIONS

AMERICAN STOCK TRANSFER & TRUST COMPANY, as Depositary (the "Depositary"),
hereby certifies that is the registered owner of

                                                               DEPOSITARY SHARES

("Depositary Shares"), each Depositary Share representing 1/10 of one share of
7 1/2% Series A Cumulative Convertible Preferred Stock ($500 Liquidation
Preference) (the "Convertible Preferred Stock"), of Network Plus Corp., a
Delaware corporation (the "Corporation"), on deposit with the Depositary,
subject to the terms and entitled to the benefits of the Deposit Agreement dated
as of April 6, 2000 (the "Deposit Agreement"), among the Corporation, the
Depositary and the

                                       A-1
<PAGE>   39
holders from time to time of the depositary receipts described therein. By
accepting this Depositary Receipt the holder hereof becomes a party to and
agrees to be bound by all the terms and conditions of the Deposit Agreement.
This Depositary Receipt shall not be valid or obligatory for any purpose or
entitled to any benefits under the Deposit Agreement unless it shall have been
executed by the Depositary by the manual signature of a duly authorized officer
or, if executed in facsimile by the Depositary, countersigned by a Registrar in
respect of the Depositary Receipts by the manual signature of a duly authorized
officer thereof.

Dated:                                    Countersigned:

[             ]               [               ]            [               ]
Depositary                    Registrar                     Transfer Agent

By
Authorized officer            By Authorized Officer        By Authorized officer

                                       A-2
<PAGE>   40
                          [FORM OF REVERSE OF RECEIPT]

                               NETWORK PLUS CORP.

NETWORK PLUS CORP. WILL FURNISH WITHOUT CHARGE TO EACH RECEIPT HOLDER WHO SO
REQUESTS A COPY OF THE DEPOSIT AGREEMENT AND A STATEMENT OR SUMMARY OF THE
POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF WHICH THE CORPORATION IS
AUTHORIZED TO ISSUE AND -OF THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF
SUCH PREFERENCES AND/OR RIGHTS. ANY SUCH REQUEST IS TO BE ADDRESSED TO THE
TRANSFER AGENT NAMED ON THE FACE OF THIS RECEIPT.

The following abbreviations when used in the inscription on the face of this
receipt shall be construed as though they were written out in full according to
applicable laws or regulations.

TEN COM - as tenants in common       UNIF GIFT MIN ACT -
_________
Custodian  _______                          (Cust)

(Minor)

      TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act

      JT TEN - as joint tenants with right of survivorship and not as tenants
in common

____________                         ______________________
                                     (State)

      Additional abbreviations may also be used though not in the above list

      For value received, ______________________ hereby sells, assigns and
transfers unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
OTHER IDENTIFYING NUMBER OF ASSIGNEE

_______________________________________________________________________________

_______________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
<PAGE>   41
_______________________________________________________________________________
_______________________________________________________________________________
Depositary Shares represented by the within Receipt, and do
hereby irrevocably constitute and appoint

_______________________________________________________________________________
Attorney to transfer the said Depositary Shares on the books of the within-named
Depositary with full power of substitution in the premises

Dated________________

_________________________
Name:
Title:

NOTICE The signature to the assignment must correspond with the name as written
upon the face of this Receipt in every particular, without alteration or
enlargement or any change whatsoever.

                                        2
<PAGE>   42
                                    EXHIBIT B
                                  [RESOLUTIONS]

                                       B-1<PAGE>

                                                        Exhibit 4.1 to Form 8-K,
                                                        dated April 11, 2000, of
                                                        Specialty Catalog Corp.

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

                             SPECIALTY CATALOG CORP.

                                       and

                   CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
                                 as Rights Agent

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

                                RIGHTS AGREEMENT

                           Dated as of April 11, 2000

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

<PAGE>

                                TABLE OF CONTENTS
                                -----------------

<TABLE>
<CAPTION>
                                                                                                          Page
                                                                                                          ----
<S>             <C>                                                                                      <C>
Section 1.      Certain Definitions.........................................................................1

Section 2.      Appointment of Rights Agent.................................................................5

Section 3.      Issue of Right Certificates.................................................................5

Section 4.      Form of Right Certificates..................................................................7

Section 5.      Countersignature and Registration...........................................................7

Section 6.      Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
                Lost or Stolen Right Certificates...........................................................8

Section 7.      Exercise of Rights, Purchase Price; Expiration Date of Rights...............................8

Section 8.      Cancellation and Destruction of Right Certificates..........................................9

Section 9.      Availability of Shares of Preferred Stock..................................................10

Section 10.     Preferred Stock Record Date................................................................11

Section 11.     Adjustment of Purchase Price, Number and Kind of Shares and Number of Rights...............11

Section 12.     Certificate of Adjusted Purchase Price or Number of Shares.................................18

Section 13.     Consolidation, Merger or Sale or Transfer of Assets or Earning Power.......................18

Section 14.     Fractional Rights and Fractional Shares....................................................21

Section 15.     Rights of Action...........................................................................22

Section 16.     Agreement of Right Holders.................................................................23

Section 17.     Right Certificate Holder Not Deemed a Stockholder..........................................23

Section 18.     Concerning the Rights Agent................................................................23

Section 19.     Merger or Consolidation or Change of Name of Rights Agent..................................24

Section 20.     Duties of Rights Agent.....................................................................24
</TABLE>

                                        i

<PAGE>

<TABLE>
<CAPTION>
                                                                                                          Page
                                                                                                          ----
<S>             <C>                                                                                     <C>
Section 21.     Change of Rights Agent.....................................................................26

Section 22.     Issuance of New Right Certificates.........................................................27

Section 23.     Redemption.................................................................................27

Section 24.     Exchange...................................................................................28

Section 25.     Notice of Certain Events...................................................................29

Section 26.     Notices....................................................................................29

Section 27.     Supplements and Amendments.................................................................30

Section 28.     Successors.................................................................................30

Section 29.     Benefits of this Agreement.................................................................30

Section 30.     Determinations and Actions by the Board of Directors.......................................30

Section 31.     Severability...............................................................................31

Section 32.     Governing Law..............................................................................31

Section 33.     Counterparts...............................................................................31

Section 34.     Descriptive Headings.......................................................................31
</TABLE>

                                       ii

<PAGE>

                                RIGHTS AGREEMENT
                                ----------------

     Rights Agreement, dated as of April 11, 2000 ("Agreement"), between
Specialty Catalog Corp., a Delaware corporation (the "Company"), and Continental
Stock Transfer & Trust Company, as Rights Agent (the "Rights Agent").

     The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each share of
Common Stock (as hereinafter defined) of the Company outstanding as of the Close
of Business (as defined below) on April 28, 2000 (the "Record Date"), each Right
representing the right to purchase one one-thousandth (subject to adjustment) of
a share of Preferred Stock (as hereinafter defined), upon the terms and subject
to the conditions herein set forth, and has further authorized and directed the
issuance of one Right (subject to adjustment as provided herein) with respect to
each share of Common Stock 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); provided, however, that Rights may be issued with
respect to shares of Common Stock that shall become outstanding after the
Distribution Date and prior to the Expiration Date in accordance with Section
22.

     Accordingly, in consideration of the premises 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 meaning indicated:

     (a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which shall be the Beneficial Owner (as such term is hereinafter
defined) of 15% or more of the shares of Common Stock then outstanding, but
shall not include an Exempt Person (as such term is hereinafter defined);
provided, however, that (i) if the Board of Directors of the Company determines
in good faith that a Person who would otherwise be an "Acquiring Person" became
the Beneficial Owner of a number of shares of Common Stock such that the Person
would otherwise qualify as an "Acquiring Person" inadvertently (including,
without limitation, because (A) such Person was unaware that it beneficially
owned a percentage of Common Stock that would otherwise cause such Person to be
an "Acquiring Person" or (B) such Person was aware of the extent of its
Beneficial Ownership of Common Stock 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, then such Person
shall not be deemed to be or to have become an "Acquiring Person" for any
purposes of this Agreement unless and until such Person shall have failed to
divest itself, as soon as practicable (as determined, in good faith, by the
Board of Directors of the Company), of Beneficial Ownership of a sufficient
number of shares of Common Stock so that such Person would no longer otherwise
qualify as an "Acquiring Person"; (ii) if, as of the date hereof or prior to the
first public announcement of the adoption of this Agreement, any Person is or
becomes the Beneficial Owner of 15% or more of the shares of Common Stock
outstanding, such Person shall not be deemed to be or to become an "Acquiring
Person" unless and until such time as such Person shall, after the first public
announcement of the adoption of this Agreement, become the Beneficial Owner of
additional shares of Common Stock (other than pursuant to a dividend or
distribution paid or made by the Company on the outstanding Common Stock or
pursuant to a split or subdivision of the outstanding Common Stock), unless,
upon becoming the Beneficial Owner of

                                        1

<PAGE>

such additional shares of Common Stock, such Person is not then the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding; and (iii)
no Person shall become an "Acquiring Person" as the result of an acquisition of
shares of Common Stock by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares of Common Stock
beneficially owned by such Person to 15% or more of the shares of Common Stock
then outstanding, provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the shares of Common Stock then outstanding
by reason of such share acquisitions by the Company and shall thereafter become
the Beneficial Owner of any additional shares of Common Stock (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding Common Stock or pursuant to a split or subdivision of the
outstanding Common Stock), then such Person shall be deemed to be an "Acquiring
Person" unless upon becoming the Beneficial Owner of such additional shares of
Common Stock such Person does not beneficially own 15% or more of the shares of
Common Stock then outstanding. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding at any
particular time, including for purposes of determining the particular percentage
of such outstanding shares of Common Stock 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 Securities Exchange Act of 1934,
as amended (the "Exchange Act"), as in effect on the date hereof.

     (b) "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 hereof.

     (c) A Person shall be deemed the "Beneficial Owner" of, shall be deemed to
have "Beneficial Ownership" of and shall be deemed to "beneficially own" any
securities:

          (i) which such Person or any of such Person's Affiliates or Associates
is deemed to beneficially own, directly or indirectly, within the meaning of
Rule l3d-3 of the General Rules and Regulations under the Exchange Act as in
effect on the date hereof;

          (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, warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially own, (x)
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, (y) securities which such Person
has a right to acquire upon the exercise of Rights at any time prior to the time
that any Person becomes an Acquiring Person or (z) securities issuable upon the
exercise of Rights from and after the time that any Person becomes an Acquiring
Person if such Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to Section
3(a) or Section 22 hereof ("Original Rights") or pursuant to Section 11(i) or
Section 11(n) with respect to an adjustment to Original Rights; or (B) the right
to vote pursuant to any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security by

                                        2

<PAGE>

reason of such agreement, arrangement or understanding 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 promulgated under 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 and with respect to which such Person or any of such Person's
Affiliates or Associates has 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) for the
purpose of acquiring, holding, voting (except to the extent contemplated by the
proviso to Section 1(c)(ii)(B)) or disposing of such securities of the Company;

provided, however, that no Person who is an officer, director or employee of an
Exempt Person shall be deemed, solely by reason of such Person's status or
authority as such, to be the "Beneficial Owner" of, to have "Beneficial
Ownership" of or to "beneficially own" any securities that are "beneficially
owned" (as defined in this Section l(c)), including, without limitation, in a
fiduciary capacity, by an Exempt Person or by any other such officer, director
or employee of an Exempt Person.

     (d) "Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in the State of New York or the city in which
the principal office of the Rights Agent is located are authorized or obligated
by law or executive order to close.

     (e) "Close of Business" on any given date shall mean 5:00 P.M., New York
City time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business
Day.

     (f) "Common Stock" when used with reference to the Company shall mean the
Common Stock, presently par value $.01 per share, of the Company. "Common Stock"
when used with reference to any Person other than the Company shall mean the
common stock (or, in the case of an unincorporated entity, the equivalent 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.

     (g) "Common Stock Equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof.

     (h) "Current Value" shall have the meaning set forth in Section 11(a)(iii)
hereof.

     (i) "Distribution Date" shall have the meaning set forth in Section 3
hereof.

     (j) "Equivalent Preferred Shares" shall have the meaning set forth in
Section 11(b) hereof.

                                        3

<PAGE>

     (k) "Exempt Person" shall mean the Company or any Subsidiary (as such term
is hereinafter defined) of the Company, in each case including, without
limitation, in its fiduciary capacity, or any employee benefit plan of the
Company or of any Subsidiary of the Company, or any entity or trustee holding
Common Stock for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for employees of the
Company or of any Subsidiary of the Company.

     (l) "Exchange Ratio" shall have the meaning set forth in Section 24 hereof.

     (m) "Expiration Date" shall have the meaning set forth in Section 7 hereof.

     (n) "Final Expiration Date" shall have the meaning set forth in Section 7
hereof.

     (o) "Flip-In Event" shall have the meaning set forth in Section 11(a)(ii)
hereof.

     (p) "NASDAQ" shall mean The Nasdaq Stock Market.

     (q) "New York Stock Exchange" shall mean the New York Stock Exchange, Inc.

     (r) "Person" shall mean any individual, firm, corporation, partnership,
limited liability company, trust or other entity, and shall include any
successor (by merger or otherwise) to such entity.

     (s) "Preferred Stock" shall mean the Series A Junior Participating
Preferred Stock, par value $1.00 per share, of the Company having the rights and
preferences set forth in the Form of Certificate of Designation attached to this
Agreement as Exhibit A.

     (t) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.

     (u) "Purchase Price" shall have the meaning set forth in Section 7(b)
hereof.

     (v) "Redemption Date" shall have the meaning set forth in Section 7 hereof.

     (w) "Redemption Price" shall have the meaning set forth in Section 23
hereof.

     (x) "Right Certificate" shall have the meaning set forth in Section 3
hereof.

     (y) "Securities Act" shall mean the Securities Act of 1933, as amended.

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

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

     (bb) "Stock 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

                                        4

<PAGE>

Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such, or such earlier date as a majority of the
Board of Directors shall become aware of the existence of an Acquiring Person.

     (cc) "Subsidiary" of any Person shall mean any corporation or other entity
of which securities or other ownership interests having ordinary voting power
sufficient to elect a majority of the board of directors or other persons
performing similar functions are beneficially owned, directly or indirectly, by
such Person, and any corporation or other entity that is otherwise controlled by
such Person.

     (dd) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.

     (ee) "Summary of Rights" shall have the meaning set forth in Section 3
hereof.

     (ff) "Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.

     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 be the
holders of Common Stock) 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.

     Section 3. Issue of Right Certificates.

     (a) Until the Close of Business on the earlier of (i) the tenth day after
the Stock Acquisition Date or (ii) the tenth Business Day (or such later date as
may be determined by action of the Board of Directors prior to such time as any
Person becomes an Acquiring Person) after the date of the commencement by any
Person (other than an Exempt Person) of, or of the first public announcement of
the intention of such Person (other than an Exempt Person) to commence, a tender
or exchange offer the consummation of which would result in any Person (other
than an Exempt Person) becoming the Beneficial Owner of shares of Common Stock
aggregating 15% or more of the Common Stock then outstanding (the earlier of
such dates being herein referred to as the "Distribution Date", provided,
however, that if either of such dates occurs after the date of this Agreement
and on or prior to the Record Date, then the Distribution Date shall be the
Record Date), (x) the Rights will be evidenced (subject to the provisions of
Section 3(b) hereof) by the certificates for Common Stock registered in the
names of the holders thereof and not by separate Right Certificates, and (y) the
Rights will be transferable only in connection with the transfer of Common
Stock. 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, insured, postage-prepaid mail, to each record holder of Common
Stock as of the close of business on the Distribution Date (other than any
Acquiring Person or any Associate or Affiliate of an Acquiring Person), at the
address of such holder shown on the records of the Company, a Right Certificate,
in substantially the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right (subject to adjustment as provided herein) for each share
of

                                        5

<PAGE>

Common Stock so held. As of the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.

     (b) On the Record Date, or as soon as practicable thereafter, the Company
will send a copy of a Summary of Rights to Purchase Shares of Preferred Stock,
in substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Stock as of
the Close of Business on the Record Date (other than any Acquiring Person or any
Associate or Affiliate of any Acquiring Person), at the address of such holder
shown on the records of the Company. With respect to certificates for Common
Stock 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. Until the Distribution Date (or, if
earlier, the Expiration Date), the surrender for transfer of any certificate for
Common Stock outstanding on the Record Date, with or without a copy of the
Summary of Rights, shall also constitute the transfer of the Rights associated
with the Common Stock represented thereby.

     (c) Rights shall be issued in respect of all shares of Common Stock issued
or disposed of (including, without limitation, upon disposition of Common Stock
out of treasury stock or issuance or reissuance of Common Stock out of
authorized but unissued shares) after the Record Date but prior to the earlier
of the Distribution Date and the Expiration Date, or in certain circumstances
provided in Section 22 hereof, after the Distribution Date. Certificates issued
for Common Stock (including, without limitation, upon transfer of outstanding
Common Stock, disposition of Common Stock out of treasury stock or issuance or
reissuance of Common Stock out of authorized but unissued shares) after the
Record Date but prior to the earlier of the Distribution Date and the Expiration
Date shall have impressed on, printed on, written on or otherwise affixed to
them the following legend:

     This certificate also evidences and entitles the holder hereof to
     certain rights as set forth in a Rights Agreement between Specialty
     Catalog Corp. (the "Company") and Continental Stock Transfer & Trust
     Company, as Rights Agent, dated as of April 11, 2000 and as amended
     from time to time (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 the 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. The Company will mail to the holder of this
     certificate a copy of the Rights Agreement without charge after
     receipt of a written request therefor. Under certain circumstances,
     as set forth in the Rights Agreement, Rights owned by or transferred
     to any Person who is or becomes an Acquiring Person (as defined in
     the Rights Agreement) and certain transferees thereof will become
     null and void and will no longer be transferable.

With respect to such certificates containing the foregoing legend, until the
Distribution Date the Rights associated with the Common Stock represented by
such certificates shall be evidenced by

                                        6

<PAGE>

such certificates alone, and the surrender for transfer of any such certificate,
except as otherwise provided herein, shall also constitute the transfer of the
Rights associated with the Common Stock represented thereby. In the event that
the Company purchases or otherwise acquires any Common Stock after the Record
Date but prior to the Distribution Date, any Rights associated with such Common
Stock shall be deemed canceled and retired so that the Company shall not be
entitled to exercise any Rights associated with the Common Stock which are no
longer outstanding.

     Notwithstanding this paragraph (c), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.

     Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such
legends, 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 interdealer quotation system on which the Rights may from time to
time be listed or quoted, or to conform to usage. Subject to the provisions of
this Agreement, the Right Certificates shall entitle the holders thereof to
purchase such number of one one-thousandths of a share of Preferred Stock as
shall be set forth therein at the Purchase Price, but the number of such one
one-thousandths of a share of Preferred Stock and the Purchase Price shall be
subject to adjustment as provided herein.

     Section 5. Countersignature and Registration.

     (a) The Right Certificates shall be executed on behalf of the Company by
the President of the Company, either manually or by facsimile signature, shall
have affixed thereto the Company's seal or a facsimile thereof and shall be
attested by the Secretary of the Company, either manually or by facsimile
signature. The Right 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 Right Certificates shall
cease to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right 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 Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any Person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this 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 an office or agency designated for such purpose, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.

     Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates;

                                        7

<PAGE>

Mutilated, Destroyed, Lost or Stolen Right Certificates.

     (a) Subject to the provisions of this Agreement, at any time after the
Distribution Date and prior to the Expiration Date, any Right Certificate or
Right Certificates may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered holder
to purchase a like number of one one-thousandths of a share of Preferred Stock
as the Right Certificate or Right Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office or agency of the Rights Agent designated for such
purpose. Thereupon the Rights Agent shall countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment 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 Right Certificates.

     (b) Subject to the provisions of this Agreement, at any time after the
Distribution Date and prior to the Expiration Date, upon receipt by the Company
and the Rights Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right 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 Right Certificate if mutilated, the Company will
make and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.

     Section 7. Exercise of Rights, Purchase Price; Expiration Date of Rights.

     (a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered holder of
any Right Certificate may, subject to Section 11(a)(ii) hereof and except as
otherwise provided herein, exercise the Rights evidenced thereby in whole or in
part upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at the
office or agency of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price with respect to the total number of one
one-thousandths of a share of Preferred Stock (or other securities, cash or
other assets, as the case may be) as to which the Rights are exercised, at any
time which is both after the Distribution Date and prior to the time (the
"Expiration Date") that is the earliest of (i) the Close of Business on April
11, 2010 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date") or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof.

     (b) The Purchase Price shall be initially $15 for each one one-thousandth
of a share of Preferred Stock purchasable upon the exercise of a Right. The
Purchase Price and the number of one one-thousandths of a share of Preferred
Stock or other securities or property to be acquired upon exercise of a Right
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

                                        8

<PAGE>

accordance with paragraph (c) of this Section 7.

     (c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the aggregate Purchase Price
for the shares of Preferred Stock to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof, in cash or by certified check,
cashier's check or money order payable to the order of the Company, the Rights
Agent shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Stock, or make available if the Rights Agent is the transfer agent
for the Preferred Stock, certificates for the number of shares of Preferred
Stock to be purchased, and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B) requisition from a
depositary agent appointed by the Company depositary receipts representing
interests in such number of one one-thousandths of a share of Preferred Stock as
are to be purchased (in which case certificates for the Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent), and the Company hereby directs any such depositary 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) promptly after receipt of such
certificates or depositary receipts, cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder and (iv) when appropriate,
after receipt, promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate.

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

     (e) 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 of Rights upon the occurrence of any purported
transfer or exercise of Rights pursuant to Section 6 hereof or this Section 7
unless such registered holder shall have (i) completed and signed the
certificate contained in the form of assignment or form of election to purchase
set forth on the reverse side of the Rights Certificate surrendered for such
transfer or exercise and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) thereof as the Company
shall reasonably request.

     Section 8. Cancellation and Destruction of Right Certificates. All Right
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 Right
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 cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such

                                        9

<PAGE>

canceled Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.

     Section 9. Availability of Shares of Preferred Stock.

     (a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued shares of Preferred Stock or
any shares of Preferred Stock held in its treasury, the number of shares of
Preferred Stock that will be sufficient to permit the exercise in full of all
outstanding Rights.

     (b) So long as the shares of Preferred Stock issuable upon the exercise of
Rights may be listed or admitted to trading on any national securities exchange,
or quoted on NASDAQ, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares reserved for such
issuance to be listed or admitted to trading on such exchange, or quoted on
NASDAQ, upon official notice of issuance upon such exercise.

     (c) From and after such time as the Rights become exercisable, the Company
shall use its best efforts, if then necessary to permit the issuance of shares
of Preferred Stock upon the exercise of Rights, to register and qualify such
shares of Preferred Stock under the Securities Act and any applicable state
securities or "Blue Sky" laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become
effective as soon as possible after such filing and keep such registration and
qualifications effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the earlier of the date as of which
the Rights are no longer exercisable for such securities and the Expiration
Date. The Company may temporarily suspend, for a period of time not to exceed 90
days, the exercisability of the Rights in order to prepare and file a
registration statement under the Securities Act and permit it to become
effective. Upon 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. 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 and until
a registration statement under the Securities Act shall have been declared
effective, unless an exemption therefrom is available.

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

     (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 issuance or delivery of the Right Certificates or of
any shares of Preferred Stock 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 Right Certificates to a Person other
than, or the issuance or delivery of certificates or depositary receipts for the
Preferred Stock in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or deliver
any certificates or depositary receipts for Preferred Stock upon the exercise of
any

                                       10

<PAGE>

Rights until any such tax shall have been paid (any such tax being payable by
that holder of such Right Certificate at the time of surrender) or until it has
been established to the Company's reasonable satisfaction that no such tax is
due.

     Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for Preferred Stock is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the shares of
Preferred Stock represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Stock 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 Preferred Stock transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Preferred Stock for which the
Rights shall be exercisable, including, without limitation, the right to vote or
to receive dividends or other distributions, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.

     Section 11. Adjustment of Purchase Price, Number and Kind of Shares and
Number of Rights. The Purchase Price, the number of shares of Preferred Stock or
other securities or property purchasable upon exercise of each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.

     (a)(i) In the event the Company shall at any time after the date of this
Agreement (A) declare and pay a dividend on the Preferred Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C)
combine the outstanding Preferred Stock into a smaller number of shares of
Preferred Stock or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this Section 11(a),
the number and kind of shares of capital stock issuable upon exercise of a Right
as of the record date for such dividend or the effective date of such
subdivision, combination or reclassification shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, the holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification.

     (ii) Subject to Section 24 of this Agreement, in the event any Person
becomes an Acquiring Person (the first occurrence of such event being referred
to hereinafter as the "Flip-In Event"), then (A) the Purchase Price shall be
adjusted to be the Purchase Price in effect immediately prior to the Flip-In
Event multiplied by the number of one one-thousandths of a share of Preferred
Stock for which a Right was exercisable immediately prior to such Flip-In Event,
whether or not such Right was then exercisable, and (B) each holder of a Right,
except as otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii)
hereof, shall thereafter have the right to receive, upon exercise thereof at a
price equal to the Purchase Price (as so adjusted), in accordance with the terms
of this Agreement and in lieu of shares of Preferred Stock, such number of
shares of Common Stock as

                                       11

<PAGE>

shall equal the result obtained by dividing the Purchase Price (as so adjusted)
by 50% of the current per share market price of the Common Stock (determined
pursuant to Section 11(d) hereof) on the date of such Flip-In Event; provided,
however, that the Purchase Price (as so adjusted) and the number of shares of
Common Stock so receivable upon exercise of a Right shall, following the Flip-
In Event, be subject to further adjustment as appropriate in accordance with
Section 11(f) hereof. Notwithstanding anything in this Agreement to the
contrary, however, from and after the Flip-In Event, any Rights that are
beneficially owned by (x) any Acquiring Person (or any Affiliate or Associate of
any Acquiring Person), (y) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who becomes a transferee after the Flip-In Event or (z)
a transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the Flip-In Event pursuant to
either (I) a transfer from the Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (II) a transfer
which the Board of Directors has determined is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the provisions of this
paragraph, and subsequent transferees of such Persons, shall be void without any
further action and any holder of such Rights shall thereafter have no rights
whatsoever with respect to such Rights under any provision of this Agreement.
The Company shall use all reasonable efforts to ensure that the provisions of
this Section 11(a)(ii) are complied with, but shall have no liability to any
holder of Right Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. From and after the Flip-In Event, no Right
Certificate shall be issued pursuant to Section 3 or Section 6 hereof that
represents Rights that are or have become void pursuant to the provisions of
this paragraph, and any Right Certificate delivered to the Rights Agent that
represents Rights that are or have become void pursuant to the provisions of
this paragraph shall be canceled. From and after the occurrence of an event
specified in Section 13(a) hereof, any Rights that theretofore have not been
exercised pursuant to this Section 11(a)(ii) shall thereafter be exercisable
only in accordance with Section 13 and not pursuant to this Section 11(a)(ii).

     (iii) The Company may at its option substitute for a share of Common Stock
issuable upon the exercise of Rights in accordance with the foregoing
subparagraph (ii) a number of shares of Preferred Stock or fraction thereof such
that the current per share market price of one share of Preferred Stock
multiplied by such number or fraction is equal to the current per share market
price of one share of Common Stock. In the event that there shall not be
sufficient shares of Common Stock issued but not outstanding or authorized but
unissued to permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii), the Board of Directors shall, with respect to such
deficiency, to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party, (A) determine the
excess (such excess, the "Spread") of (1) the value of the shares of Common
Stock issuable upon the exercise of a Right in accordance with the foregoing
subparagraph (ii) (the "Current Value") over (2) the Purchase Price (as adjusted
in accordance with the foregoing subparagraph (ii)), and (B) with respect to
each Right (other than Rights which have become void pursuant to the foregoing
subparagraph (ii)), make adequate provision to substitute for the shares of
Common Stock issuable in accordance with the foregoing subparagraph (ii) upon
exercise of the Right and payment of the Purchase Price (as adjusted in
accordance therewith), (1) cash, (2) a reduction in such Purchase Price, (3)
shares of Preferred Stock or other equity securities of the Company (including,
without limitation, shares or fractions of shares of preferred stock which, by
virtue of having dividend, voting and liquidation

                                       12

<PAGE>

rights substantially comparable to those of the shares of Common Stock, are
deemed in good faith by the Board of Directors to have substantially the same
value as the shares of Common Stock (such shares of Preferred Stock and shares
or fractions of shares of preferred stock are hereinafter referred to as "Common
Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or
(6) any combination of the foregoing, having a value which, when added to the
value of the shares of Common Stock issued upon exercise of such Right, shall
have an aggregate value equal to the Current Value (less the amount of any
reduction in such Purchase Price), where such aggregate value has been
determined by the Board of Directors upon the advice of a nationally recognized
investment banking firm selected in good faith by the Board of Directors;
provided, however, that if the Company shall not make adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following the
Flip-In Event (the date of the Flip-In Event being the "Section 11(a)(ii)
Trigger Date"), then the Company shall be obligated to deliver, to the extent
permitted by applicable law and any material agreements then in effect to which
the Company is a party, upon the surrender for exercise of a Right and without
requiring payment of such Purchase Price, shares of Common Stock (to the extent
available), and then, if necessary, such number or fractions of shares of
Preferred Stock (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If, upon the
occurrence of the Flip-In Event, the Board of Directors shall determine in good
faith that it is likely that sufficient additional shares of Common Stock could
be authorized for issuance upon exercise in full of the Rights, then, if the
Board of Directors so elects, 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 (such thirty (30) day
period, as it may be extended, is herein called the "Substitution Period"). To
the extent that the Company determines that some action need be taken pursuant
to the second and/or third sentence of this Section 11(a)(iii), the Company (x)
shall provide, subject to Section 11(a)(ii) hereof and the last sentence of this
Section 11(a)(iii) 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 and/or to decide the appropriate form of distribution to be
made pursuant to such second 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 shares of
Common Stock shall be the current per share market price (as determined pursuant
to Section 11(d)(i)) on the Section 11(a)(ii) Trigger Date and the per share or
fractional value of any "Common Stock Equivalent" shall be deemed to equal the
current per share market price of the Common Stock. The Board of Directors of
the Company may, but shall not be required to, establish procedures to allocate
the right to receive shares of Common Stock upon the exercise of the Rights
among holders of Rights pursuant to this Section 11(a)(iii).

     (b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Stock entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase Preferred Stock (or shares having the same rights, privileges and
preferences as the Preferred Stock ("Equivalent Preferred Shares")) or
securities convertible into Preferred Stock or Equivalent Preferred Shares at a
price per share of Preferred Stock or Equivalent Preferred Shares (or having a
conversion price per share, if a security convertible into shares of Preferred
Stock or Equivalent Preferred Shares) less than the then current

                                       13

<PAGE>

per share market price of the Preferred Stock (determined pursuant to Section
11(d) hereof) on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock and Equivalent Preferred Shares
outstanding on such record date plus the number of shares of Preferred Stock and
Equivalent Preferred Shares which the aggregate offering price of the total
number of shares of Preferred Stock and/or Equivalent Preferred Shares so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price, and
the denominator of which shall be the number of shares of Preferred Stock and
Equivalent Preferred Shares outstanding on such record date plus the number of
additional shares of Preferred Stock and/or Equivalent Preferred Shares 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 Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Shares of Preferred Stock and Equivalent Preferred
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 Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.

     (c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Stock (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 or a dividend payable in
Preferred Stock) or subscription rights or warrants (excluding those referred to
in Section 11(b) hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
then current per share market price of the Preferred Stock (determined pursuant
to Section 11(d) hereof) on such record date, less the fair market value (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 assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to one share of Preferred
Stock, and the denominator of which shall be such current per share market price
(determined pursuant to Section 11(d) hereof) of the Preferred Stock; 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 to be issued 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 Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such record date had not
been fixed.

     (d)(i) Except as otherwise provided herein, for the purpose of any
computation hereunder, the "current per share market price" of any security (a
"Security" for the purpose of this Section 11(d)(i)) on any date shall be deemed
to be the average of the daily closing prices per share

                                       14

<PAGE>

of such Security for the 30 consecutive Trading Days (as such term is
hereinafter defined) 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 (A)
a dividend or distribution on such Security payable in shares of such Security
or securities convertible into such shares, or (B) any subdivision, combination
or reclassification of such Security, and prior to the expiration of 30 Trading
Days 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 by 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 quoted price or, if not so
quoted, 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. The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to trading is
open for the transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange, a Business Day.

     (ii) For the purpose of any computation hereunder, if the Preferred Stock
is publicly traded, the "current per share market price" of the Preferred Stock
shall be determined in accordance with the method set forth in Section 11(d)(i).
If the Preferred Stock is not publicly traded but the Common Stock is publicly
traded, the "current per share market price" of the Preferred Stock shall be
conclusively deemed to be the current per share market price of the Common Stock
as determined pursuant to Section 11(d)(i) multiplied by the then applicable
Adjustment Number (as defined in and determined in accordance with the
Certificate of Designation for the Preferred Stock). If neither the Common Stock
nor the Preferred Stock is publicly 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.

     (e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) 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 one hundred-thousandth of a
share of Preferred Stock or one-hundredth of a share of Common Stock or other
share or security as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the transaction which
requires such adjustment or (ii) the Expiration Date.

                                       15

<PAGE>

     (f) If as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than the Preferred Stock,
thereafter the Purchase Price and the number of such other shares so receivable
upon exercise of a Right 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 Stock contained in Sections 11(a), 11(b), 11(c), 11(e),
11(h), 11(i) and 11(m) hereof, as applicable, and the provisions of Sections 7,
9, 10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like
terms to any such other shares.

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

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

     (i) The Company may elect on or after the date of any adjustment of the
Purchase Price pursuant to Sections 11(b) or 11(c) hereof to adjust the number
of Rights, in substitution for any adjustment in the number of one
one-thousandths of a share of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one one-thousandths of a share of
Preferred Stock 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-hundredth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase 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. Such record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company may, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right 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
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and

                                       16

<PAGE>

countersigned in the manner provided for herein and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.

     (j) Irrespective of any adjustment or change in the Purchase Price or the
number of one one-thousandths of a share of Preferred Stock issuable upon the
exercise of a Right, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price and the number of one one-thousandths
of a share of Preferred Stock which were expressed in the initial Right
Certificates issued hereunder.

     (k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the fraction of Preferred
Stock or other shares of capital stock issuable upon exercise of a Right, 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
fully paid and nonassessable shares of Preferred Stock or other such shares at
such adjusted Purchase Price.

     (l) In any case in which this Section 11 shall require that an adjustment
in the Purchase 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 issuing
to the holder of any Right exercised after such record date the Preferred Stock
and other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase 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 upon
the occurrence of the event requiring such adjustment.

     (m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such adjustments in the Purchase 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 consolidation or subdivision of the Preferred Stock, issuance
wholly for cash of any shares of Preferred Stock at less than the current market
price, issuance wholly for cash of Preferred Stock or securities which by their
terms are convertible into or exchangeable for Preferred Stock, dividends on
Preferred Stock payable in shares of Preferred Stock or issuance of rights,
options or warrants referred to hereinabove in Section 11(b), hereafter made by
the Company to holders of its Preferred Stock shall not be taxable to such
stockholders.

     (n) Anything in this Agreement to the contrary notwithstanding, in the
event that at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare and pay any dividend on the
Common Stock payable in Common Stock or (ii) effect a subdivision, combination
or consolidation of the Common Stock (by reclassification or otherwise than by
payment of a dividend payable in Common Stock) into a greater or lesser number
of shares of Common Stock, then, in each such case, the number of Rights
associated with each share of Common Stock then outstanding, or issued or
delivered thereafter, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by a
fraction the numerator of which shall

                                       17

<PAGE>

be the total number of shares of Common Stock outstanding immediately prior to
the occurrence of the event and the denominator of which shall be the total
number of shares of Common Stock outstanding immediately following the
occurrence of such event.

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

     Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Common Stock and the
Preferred Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 25 hereof (if
so required under Section 25 hereof). The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment therein contained and
shall not be deemed to have knowledge of any 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, directly or indirectly, at any time after the Flip-In
Event (i) the Company shall consolidate with or shall merge into any other
Person, (ii) any Person shall merge with and into the Company and the Company
shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Stock shall be changed
into or exchanged for stock or other securities of any other Person (or of the
Company) or cash or any other property, 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 50%
or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person (other than the Company or one or more
wholly-owned Subsidiaries of the Company), then upon the first occurrence of
such event, proper provision shall be made so that: (A) each holder of a Right
(other than Rights which have become void pursuant to Section 11(a)(ii) hereof)
shall thereafter have the right to receive, upon the exercise thereof at the
Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii)
hereof), in accordance with the terms of this Agreement and in lieu of shares of
Preferred Stock or Common Stock of the Company, such number of validly
authorized and issued, fully paid, non-assessable and freely tradeable shares of
Common Stock of the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall equal the result obtained by dividing the Purchase Price (as
theretofore adjusted in accordance with Section 11(a)(ii) hereof) by 50% of the
current per share market price of the Common Stock of such Principal Party
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; provided, however, that the
Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii)
hereof) and the number of shares of Common Stock of such Principal Party so
receivable upon exercise of a Right shall be subject to further adjustment as
appropriate in accordance with Section 11(f) hereof to reflect any events
occurring in respect of the

                                       18

<PAGE>

Common Stock of such Principal Party after the occurrence of such consolidation,
merger, sale or transfer; (B) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, 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; and (D) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of its shares of
Common Stock in accordance with Section 9 hereof) in connection with such
consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the shares of its Common Stock thereafter deliverable upon
the exercise of the Rights; provided that, 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
Purchase 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 Stock
of the Principal Party receivable upon the exercise of a 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.

     (b) "Principal Party" shall mean:

          (i) in the case of any transaction described in (i) or (ii) of the
first sentence of Section 13(a) hereof: (A) the Person that is the issuer of the
securities into which the shares of Common Stock are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer the shares
of Common Stock 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 shares of Common Stock 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

          (ii) in the case of any transaction described in (iii) of the first
sentence 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 each Person that is a party to such
transaction or transactions receives the same 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 Stock 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 Stock of such Person is not at such time or has
not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, the term "Principal Party" shall refer to such other Person, or (2)
if such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stock of all of which is and has been

                                       19

<PAGE>

so registered, the term "Principal Party" shall refer to whichever of such
Persons is the issuer of Common Stock having the greatest aggregate market value
of shares outstanding, or (3) 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 (1) and (2) 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 consolidation, merger, sale or
transfer referred to in Section 13(a) hereof unless prior thereto the Company
and the Principal Party involved therein shall have executed and delivered to
the Rights Agent an agreement confirming that the requirements of Sections 13(a)
and (b) hereof shall promptly be performed in accordance with their terms and
that such consolidation, merger, sale or transfer of assets shall not result in
a default by the Principal Party under this Agreement as the same shall have
been assumed by the Principal Party pursuant to Sections 13(a) and (b) hereof
and providing that, as soon as practicable after executing such agreement
pursuant to this Section 13, the Principal Party will:

          (i) prepare and file a registration statement under the Securities
Act, if necessary, 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;

          (ii) use its best efforts, if the Common Stock of the Principal Party
shall be listed or admitted to trading on the New York Stock Exchange or on
another national securities exchange, to list or admit to trading (or continue
the listing of) the Rights and the securities purchasable upon exercise of the
Rights on the New York Stock Exchange or such securities exchange, or, if the
Common Stock of the Principal Party shall not be listed or admitted to trading
on the New York Stock Exchange or a national securities exchange, to cause the
Rights and the securities receivable upon exercise of the Rights to be
authorized for quotation on NASDAQ or on such other system then in use;

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

          (iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the Common Stock of the Principal Party subject to purchase
upon exercise of outstanding Rights.

     (d) In case the Principal Party has a provision in any of its authorized
securities or in its certificate of incorporation or by-laws or other instrument
governing its affairs, which provision would have the effect of (i) causing such
Principal Party to issue (other than to holders of Rights pursuant to this
Section 13), in connection with, or as a consequence of, the consummation

                                       20

<PAGE>

of a transaction referred to in this Section 13, shares of Common Stock or
Common Stock Equivalents of such Principal Party at less than the then current
market price per share thereof (determined pursuant to Section 11(d) hereof) or
securities exercisable for, or convertible into, Common Stock or Common Stock
Equivalents of such Principal Party at less than such then current market price,
or (ii) providing for any special payment, tax or similar provision in
connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of Section 13, 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 Flip- In Event, enter into any transaction of the type described in clauses
(i) through (iii) of Section 13(a) hereof if (i) at the time of or immediately
after such consolidation, merger, sale, transfer or other transaction 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 consolidation, merger, sale,
transfer or other transaction, 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.

     Section 14. Fractional Rights and Fractional Shares.

     (a) The Company shall not be required to issue fractions of Rights (except
prior to the Distribution Date in accordance with Section 11(n) hereof) or to
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
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. The closing price for any 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 Rights are 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 Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, 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 Rights are 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 Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is making a

                                       21

<PAGE>

market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.

     (b) The Company shall not be required to issue fractions of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock) or to distribute certificates which evidence
fractional shares of Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock) upon the exercise
or exchange of Rights. Interests in fractions of Preferred Stock in integral
multiples of one one- thousandth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it;
provided, that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-thousandth of a share of Preferred Stock, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised or exchanged as herein provided an amount in cash
equal to the same fraction of the current market value of a whole share of
Preferred Stock (as determined in accordance with Section 14(a) hereof) for the
Trading Day immediately prior to the date of such exercise or exchange.

     (c) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock upon the exercise or exchange of Rights. In lieu of such fractional
shares of Common Stock, the Company shall pay to the registered holders of the
Right Certificates with regard to which such fractional shares of Common Stock
would otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock (as determined in
accordance with Section 14(a) hereof) for the Trading Day immediately prior to
the date of such exercise or exchange.

     (d) The holder of a Right by the acceptance of the Right expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise or exchange of a Right (except as provided above).

     Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), on his own behalf and for his own
benefit, may enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate (or, prior to
the Distribution Date, such Common Stock) in the manner provided therein 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.

                                       22

<PAGE>

     Section 16. Agreement of Right 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 Stock;

     (b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office or
agency of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer; and

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

     Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Preferred Stock or any other
securities of the Company which may at any time be issuable on the exercise or
exchange of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
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 provided in this Agreement), or to receive dividends or
subscription rights, or otherwise, until the Rights evidenced by such Right
Certificate shall have been exercised or exchanged 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 Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability or expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability arising therefrom, directly or indirectly.

     (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 Right Certificate or
certificate for the Preferred Stock or Common

                                       23

<PAGE>

Stock 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 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
stock transfer or corporate trust powers 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, 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 Right 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 Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right 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
Right Certificates shall have the full force provided in the Right 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 Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.

     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 Right 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 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 the President and the Secretary of the
Company and delivered

                                       24

<PAGE>

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 Right
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 Right 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 Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in
the terms of the Rights provided for in Sections 3, 11, 13, 23 and 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 Right
Certificates after receipt 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 shares of Preferred Stock or other securities to be issued
pursuant to this Agreement or any Right Certificate or as to whether any shares
of Preferred Stock or other securities 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 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
person reasonably believed by the Rights Agent to be one of the President or the
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 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 Business Days after the date 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

                                       25

<PAGE>

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) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has not been completed to certify the holder is not an
Acquiring Person (or an Affiliate or Associate thereof) or a transferee thereof,
the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.

     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 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock or Preferred Stock by registered or certified mail, and,
following the Distribution Date, to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 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
Common Stock or Preferred Stock by registered or certified mail, and, following
the Distribution Date, to the holders of the Right 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 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 Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered holder of
any Right 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 the laws of any state of the
United States or the District of Columbia, in good standing, having an office in
the State of Massachusetts or the State of New York, which is authorized under
such laws to exercise corporate trust or stock transfer 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 $50 million. After appointment, the successor Rights Agent shall be vested
with

                                       26

<PAGE>

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 Common Stock or Preferred Stock, and, following the Distribution Date, mail
a notice thereof in writing to the registered holders of the Right 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 Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such forms as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of Common Stock following the Distribution Date and prior to the Expiration
Date, the Company may with respect to shares of Common Stock so issued or sold
pursuant to (i) the exercise of stock options, (ii) under any employee plan or
arrangement, (iii) upon the exercise, conversion or exchange of securities,
notes or debentures issued by the Company or (iv) a contractual obligation of
the Company, in each case existing prior to the Distribution Date, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale.

     Section 23. Redemption.

     (a) The Board of Directors of the Company may, at any time prior to the
Flip-In Event, redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring in respect of the Common
Stock after the date hereof (the redemption price being hereinafter referred to
as the "Redemption Price"). The redemption of the Rights 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 Redemption Price shall be payable, at
the option of the Company, in cash, shares of Common Stock, or such other form
of consideration as the Board of Directors shall determine.

     (b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights pursuant to paragraph (a) of this Section 23 (or at
such later time as the Board of Directors may establish for the effectiveness of
such redemption), 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 10 days after such action of the Board of Directors
ordering the redemption of the Rights (or such later time as the Board of
Directors may establish for the effectiveness of such redemption), the Company
shall mail a notice of redemption to all the holders of the then outstanding
Rights at their last addresses as they

                                       27

<PAGE>

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 Stock. 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
shall state the method by which the payment of the Redemption Price will be
made.

     Section 24. Exchange.

     (a) The Board of Directors of the Company may, at its option, at any time
after the Flip-In Event, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring in
respect of the Common Stock after the date hereof (such amount per Right 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 an Acquiring Person shall have become the Beneficial Owner of shares
of Common Stock aggregating 50% or more of the shares of Common Stock then
outstanding. From and after the occurrence of an event specified in Section
13(a) hereof, any Rights that theretofore have not been exchanged pursuant to
this Section 24(a) shall thereafter be exercisable only in accordance with
Section 13 and may not be exchanged pursuant to this Section 24(a). The exchange
of the Rights by the Board of Directors 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.

     (b) Immediately upon the effectiveness of the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to
paragraph (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 shares
of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly 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 promptly mail a notice of any such exchange to all of the holders of the
Rights so exchanged 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
shares of Common Stock 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 11(a)(ii)
hereof) held by each holder of Rights.

     (c) The Company may at its option substitute, and, in the event that there
shall not be sufficient shares of Common Stock issued but not outstanding or
authorized but unissued to permit an exchange of Rights for Common Stock as
contemplated in accordance with this Section 24, the Company shall substitute to
the extent of such insufficiency, for each share of Common Stock that would
otherwise be issuable upon exchange of a Right, a number of shares of Preferred
Stock or fraction thereof (or Equivalent Preferred Shares, as such term is
defined in Section 11(b)) such that the current per share market price
(determined pursuant to Section 11(d) hereof) of one share of Preferred Stock
(or Equivalent Preferred Share) multiplied by such number or fraction is equal

                                       28

<PAGE>

to the current per share market price of one share of Common Stock (determined
pursuant to Section 11(d) hereof) as of the date of such exchange.

     Section 25. Notice of Certain Events.

     (a) In case the Company shall at any time after the earlier of the
Distribution Date or the Stock Acquisition Date propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Stock or to make
any other distribution to the holders of its Preferred Stock (other than a
regular quarterly cash dividend), (ii) to offer to the holders of its Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision or combination of
outstanding Preferred Stock), (iv) to effect the liquidation, dissolution or
winding up of the Company, or (v) to pay any dividend on the Common Stock
payable in Common Stock or to effect a subdivision, combination or consolidation
of the Common Stock (by reclassification or otherwise than by payment of
dividends in Common Stock), then, in each such case, the Company shall give to
each holder of a Right Certificate, in accordance with Section 26 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such dividend or distribution or offering of rights or warrants, or
the date on which such liquidation, dissolution, winding up, reclassification,
subdivision, combination or consolidation is to take place and the date of
participation therein by the holders of the Common Stock and/or Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the Common Stock and/or Preferred Stock, whichever shall be
the earlier.

     (b) In case any event described in Section 11(a)(ii) or Section 13 shall
occur then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate (or if occurring prior to the Distribution Date,
the holders of the Common Stock) in accordance with Section 26 hereof, a notice
of the occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) and
Section 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 Right Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:

                             Specialty Catalog Corp.
                             21 Bristol Drive
                             South Easton, Massachusetts  02375
                             Attention: Chief Financial Officer

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
Right Certificate to or on the Rights

                                       29

<PAGE>

Agent shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Company)
as follows:

                            Continental Stock Transfer & Trust Company
                            2 Broadway
                            New York, New York 10004
                            Attention: Compliance Department

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right 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. Except as provided in the
penultimate sentence of this Section 27, for so long as the Rights are then
redeemable, the Company may in its sole and absolute discretion, and the Rights
Agent shall if the Company so directs, supplement or amend any provision of this
Agreement in any respect without the approval of any holders of the Rights. At
any time when the Rights are no longer redeemable, except as provided in the
penultimate sentence of this Section 27, the Company may, and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights, provided that no such supplement or amendment
may (a) adversely affect the interests of the holders of Rights as such (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person),
(b) cause this Agreement again to become amendable other than in accordance with
this sentence or (c) cause the Rights again to become redeemable.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price. Upon
the delivery of a certificate from an appropriate officer of the Company which
states that the supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment,
provided that any supplement or amendment that does not amend Sections 18, 19,
20 or 21 hereof in a manner adverse to the Rights Agent shall become effective
immediately upon execution by the Company, whether or not also executed by the
Rights Agent.

     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. 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 Right Certificates (and, prior to the Distribution
Date, the Common Stock) any legal or equitable right, remedy or claim under 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 Right Certificates
(and, prior to the Distribution Date, the Common Stock).

     Section 30. Determinations and Actions by the Board of Directors. The Board
of Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise the rights and powers specifically
granted to the Board of Directors of the Company

                                       30

<PAGE>

or to the Company, or as may be necessary or advisable in the administration of
this Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including, without limitation, a determination to redeem or not redeem the
Rights or to amend or not amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) that are done or made by the Board
of Directors of the Company in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights, as such,
and all other parties, and (y) not subject the Board of Directors to any
liability to the holders of the Rights.

     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.

     Section 32. Governing Law. This Agreement and each Right 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.

                                       31

<PAGE>

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

                                            SPECIALTY CATALOG CORP.

                                            By: /s/ Thomas McCain
                                                ----------------------------
                                                Name: Thomas McCain
                                                Title: Senior Vice President

                                            CONTINENTAL STOCK TRANSFER &
                                            TRUST COMPANY,
                                            as Rights Agent

                                            By: /s/ R. Bernhammer
                                                ----------------------------
                                                Name: R. Bernhammer
                                                Title: Vice President

                                       32

<PAGE>

                                                                Exhibit A to the
                                                                Rights Agreement

                                     FORM OF
                           CERTIFICATE OF DESIGNATION

                                       of

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       of

                             SPECIALTY CATALOG CORP.

             Pursuant to Section 151 of the General Corporation Law
                            of the State of Delaware

     Specialty Catalog Corp., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), in
accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:

     That pursuant to the authority vested in the Board of Directors in
accordance with the provisions of the Certificate of Incorporation of the said
Corporation, the said Board of Directors on April 11, 2000 adopted the following
resolution creating a series of 4,400 shares of Preferred Stock designated as
"Series A Junior Participating Preferred Stock":

          RESOLVED, that pursuant to the authority vested in the Board
     of Directors of this Corporation in accordance with the provisions
     of the Certificate of Incorporation, a series of Preferred Stock,
     par value $1.00 per share, of the Corporation be and hereby is
     created, and that the designation and number of shares thereof and
     the voting and other powers, preferences and relative, participating,
     optional or other rights of the shares of such series and the
     qualifications, limitations and restrictions thereof are as follows:

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

     1. Designation and Amount. There shall be a series of Preferred Stock that
shall be designated as "Series A Junior Participating Preferred Stock," and the
number of shares constituting such series shall be 4,400. Such number of shares
may be increased or decreased by resolution of the Board of Directors; provided,
however, that no decrease shall reduce the number of shares of Series A Junior
Participating Preferred Stock to less than the number of shares then issued and
outstanding plus the number of shares issuable upon exercise of outstanding
rights, options or warrants or upon conversion of outstanding securities issued
by the Corporation.

                                       A-1

<PAGE>

     2. Dividends and Distribution.

          (A) Subject to the prior and superior rights of the holders of any
shares of any class or series of stock of the Corporation ranking prior and
superior to the shares of Series A Junior Participating Preferred Stock with
respect to dividends, the holders of shares of Series A Junior Participating
Preferred Stock, in preference to the holders of shares of any class or series
of stock of the Corporation ranking junior to the Series A Junior Participating
Preferred Stock in respect thereof, 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 15th day of March, June,
September and December, 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 Junior Participating Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $10 or (b) the Adjustment
Number (as defined below) times the aggregate per share amount of all cash
dividends, and the Adjustment Number 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, par value $.01 per share, of the Corporation (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 Junior Participating Preferred
Stock. The "Adjustment Number" shall initially be 1000. In the event the
Corporation shall at any time after April 11, 2000 (i) declare and pay any
dividend on 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 Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such Adjustment
Number by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.

          (B) The Corporation shall declare a dividend or distribution on the
Series A Junior 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 and be cumulative on outstanding
shares of Series A Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
A Junior 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 Junior 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 and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount

                                       A-2

<PAGE>

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 Junior Participating Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon, which record
date shall be no more than 60 days prior to the date fixed for the payment
thereof.

     3. Voting Rights. The holders of shares of Series A Junior Participating
Preferred Stock shall have the following voting rights:

          (A) Each share of Series A Junior Participating Preferred Stock shall
entitle the holder thereof to a number of votes equal to the Adjustment Number
on all matters submitted to a vote of the stockholders of the Corporation.

          (B) Except as required by law, by Section 3(C) and by Section 10
hereof, holders of Series A Junior Participating Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.

          (C) If, at the time of any annual meeting of stockholders for the
election of directors, the equivalent of six quarterly dividends (whether or not
consecutive) payable on any share or shares of Series A Junior Participating
Preferred Stock are in default, the number of directors constituting the Board
of Directors of the Corporation shall be increased by two. In addition to voting
together with the holders of Common Stock for the election of other directors of
the Corporation, the holders of record of the Series A Junior Participating
Preferred Stock, voting separately as a class to the exclusion of the holders of
Common Stock, shall be entitled at said meeting of stockholders (and at each
subsequent annual meeting of stockholders), unless all dividends in arrears on
the Series A Junior Participating Preferred Stock have been paid or declared and
set apart for payment prior thereto, to vote for the election of two directors
of the Corporation, the holders of any Series A Junior Participating Preferred
Stock being entitled to cast a number of votes per share of Series A Junior
Participating Preferred Stock as is specified in paragraph (A) of this Section
3. Until the default in payments of all dividends which permitted the election
of said directors shall cease to exist, any director who shall have been so
elected pursuant to the provisions of this Section 3(C) may be removed at any
time, without cause, only by the affirmative vote of the holders of the shares
of Series A Junior Participating Preferred Stock at the time entitled to cast a
majority of the votes entitled to be cast for the election of any such director
at a special meeting of such holders called for that purpose, and any vacancy
thereby created may be filled by the vote of such holders. If and when such
default shall cease to exist, the holders of the Series A Junior Participating
Preferred Stock shall be divested of the foregoing special voting rights,
subject to revesting in the event of each and every subsequent like default in
payments of dividends. Upon the termination of the foregoing special voting
rights, the terms of office of all persons who may have been elected directors
pursuant to said special voting rights shall forthwith terminate, and the number
of directors constituting the Board of Directors shall be reduced by two. The
voting rights granted by this Section 3(C) shall be in addition to any other
voting rights granted to the holders of the Series A Junior Participating
Preferred Stock in this Section 3.

                                       A-3

<PAGE>

     4. Certain Restrictions.

          (A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Junior
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 Junior 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 Junior Participating
Preferred Stock, except dividends paid ratably on the Series A Junior
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; or

               (iii) purchase or otherwise acquire for consideration any shares
of Series A Junior Participating Preferred Stock, or any shares of stock ranking
on a parity with the Series A Junior 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 Series A Junior
Participating Preferred Stock, or to such holders and holders of any such shares
ranking on a parity therewith, 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.

          (B) 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 4,
purchase or otherwise acquire such shares at such time and in such manner.

     5. Reacquired Shares. Any shares of Series A Junior Participating Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired promptly after the acquisition thereof. All such
shares shall upon their retirement 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
any conditions and restrictions on issuance set forth herein.

     6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation,
dissolution or winding up of the Corporation, voluntary or otherwise, no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation,

                                       A-4

<PAGE>

dissolution or winding up) to the Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received an amount per share (the "Series A
Liquidation Preference") equal to the greater of (i) $10 plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, or (ii) the Adjustment Number times the per share
amount of all cash and other property to be distributed in respect of the Common
Stock upon such liquidation, dissolution or winding up of the Corporation.

          (B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other classes and series of stock of the
Corporation, if any, that rank on a parity with the Series A Junior
Participating Preferred Stock in respect thereof, then the assets available for
such distribution shall be distributed ratably to the holders of the Series A
Junior Participating Preferred Stock and the holders of such parity shares in
proportion to their respective liquidation preferences.

          (C) Neither the merger or consolidation of the Corporation into or
with another corporation nor the merger or consolidation of any other
corporation into or with the Corporation shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of this
Section 6.

     7. Consolidation, Merger, Etc. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the outstanding
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 each share of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share equal to the Adjustment
Number 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.

     8. No Redemption. Shares of Series A Junior Participating Preferred Stock
shall not be subject to redemption by the Corporation.

     9. Ranking. The Series A Junior Participating Preferred Stock shall rank
junior to all other series of the Preferred Stock as to the payment of dividends
and as to the distribution of assets upon liquidation, dissolution or winding
up, unless the terms of any such series shall provide otherwise, and shall rank
senior to the Common Stock as to such matters.

     10. Amendment. At any time that any shares of Series A Junior Participating
Preferred Stock are outstanding, the Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of two-thirds of the outstanding shares of
Series A Junior Participating Preferred Stock, voting separately as a class.

     11. Fractional Shares. Series A Junior Participating Preferred Stock may be
issued in fractions of a share that shall entitle the holder, in proportion to
such holder's fractional

                                       A-5

<PAGE>

shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series A
Junior Participating Preferred Stock.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate this 11th
day of April, 2000.

                                                     SPECIALTY CATALOG CORP.

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

                                       A-6

<PAGE>

                                                                Exhibit B to the
                                                                Rights Agreement

                            Form of Right Certificate

Certificate No. R-______

               NOT EXERCISABLE AFTER APRIL 11, 2010 OR EARLIER IF
               REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT
               TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE
               TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
               CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
               RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR
               BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
               AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME
               NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.

                                RIGHT CERTIFICATE

                             SPECIALTY CATALOG CORP.

     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 Rights Agreement, dated as of April 11, 2000, as the same may be amended
from time to time (the "Rights Agreement"), between Specialty Catalog Corp., a
Delaware corporation (the "Company"), and Continental Stock Transfer & Trust
Company, as Rights Agent (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 City time, on April 11, 2010 at the
office or agency of the Rights Agent designated for such purpose, or of its
successor as Rights Agent, one one-thousandth of a fully paid non-assessable
share of Series A Junior Participating Preferred Stock, par value $1.00 per
share (the "Preferred Stock"), of the Company at a purchase price of $15 per one
one-thousandth of a share of Preferred Stock (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of one one-thousandths of a share of Preferred Stock
which may be purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of April 11, 2000,
based on the Preferred Stock as constituted at such date. As provided in the
Rights Agreement, the Purchase Price, the number of one one-thousandths of a
share of Preferred Stock (or other securities or property) which may be
purchased upon the exercise of the Rights and the number of Rights evidenced by
this Right Certificate are subject to modification and adjustment

                                       B-1

<PAGE>

upon the happening of certain events.

     This Right 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 Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned office or agency of the Rights Agent. The
Company will mail to the holder of this Right Certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.

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

     Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right or (ii) may be exchanged in whole or in part for shares of the
Company's Common Stock, par value $.01 per share, or shares of Preferred Stock.

     No fractional shares of Preferred Stock or Common Stock will be issued upon
the exercise or exchange of any Right or Rights evidenced hereby (other than
fractions of Preferred Stock which are integral multiples of one one-thousandth
of a share of Preferred Stock, which may, at the election of the Company, be
evidenced by depository receipts), but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.

     No holder of this Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred Stock
or of any other securities of the Company which may at any time be issuable on
the exercise or exchange 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 subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised or exchanged as provided in the Rights
Agreement.

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

                                       B-2

<PAGE>

     WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of April 11, 2000.

                                                   SPECIALTY CATALOG CORP.

                                                   By:
                                                       ------------------------
                                                              [Title]

ATTEST:

-------------------------------------------
[Title]

Countersigned:

CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
as Rights Agent

By
  -----------------------------------------
         [Title]

                                       B-3

<PAGE>

                    Form of Reverse Side of Right Certificate

                               FORM OF ASSIGNMENT
                               ------------------

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

     FOR VALUE RECEIVED __________________________ hereby sells, assigns and
transfers unto ______________________________________________________ (Please
print name and address of transferee)

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

Dated:
      ------------------------------
                                            ------------------------------------
                                                 Signature

Signature Guaranteed:

     Signatures must be guaranteed by a bank, trust company, broker, dealer or
other eligible institution participating in a recognized signature guarantee
medallion program.

 ....................................................
                          (To be completed)

     The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by, were not acquired by the undersigned
from, and are not being assigned to an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).

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

                                       B-4

<PAGE>

              Form of Reverse Side of Right Certificate - continued

                          FORM OF ELECTION TO PURCHASE
                          ----------------------------

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

To SPECIALTY CATALOG CORP.:

     The undersigned hereby irrevocably elects to exercise ________ Rights
represented by this Right Certificate to purchase the shares of Preferred Stock
(or other securities or property) issuable upon the exercise of such Rights and
requests that certificates for such shares of Preferred Stock (or such other
securities) be issued in the name of:

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

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

If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right 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 must conform to holder specified on Right Certificate)

Signature Guaranteed:

     Signature must be guaranteed by a bank, trust company, broker, dealer or
other eligible institution participating in a recognized signature guarantee
medallion program.

                                       B-5

<PAGE>

              Form of Reverse Side of Right Certificate - continued

     ----------------------------------------------------------------------
                                (To be completed)

     The undersigned certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by, and were not acquired by the
undersigned from, an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).

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

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

                                     NOTICE
                                     ------

     The signature in the Form of Assignment or Form of Election to Purchase, as
the case may be, must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.

     In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, such
Assignment or Election to Purchase will not be honored.

                                       B-6

<PAGE>

                                                                Exhibit C to the
                                                                Rights Agreement

          UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
          AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON
          WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE
          RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL
          BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.

                          SUMMARY OF RIGHTS TO PURCHASE
                          SHARES OF PREFERRED STOCK OF
                             SPECIALTY CATALOG CORP.

     On April 11, 2000, the Board of Directors of Specialty Catalog Corp. (the
"Company") declared a dividend of one preferred share purchase right (a "Right")
for each outstanding share of common stock, par value $.01 per share, of the
Company (the "Common Stock"). The dividend is payable on April 28, 2000 (the
"Record Date") to the stockholders of record on that date. Each Right entitles
the registered holder to purchase from the Company one one-thousandth of a share
of Series A Junior Participating Preferred Stock, par value $1.00 per share, of
the Company (the "Preferred Stock") at a price of $15 per one one-thousandth of
a share of Preferred Stock (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement dated as
of April 11, 2000, as the same may be amended from time to time (the "Rights
Agreement"), between the Company and Continental Stock Transfer & Trust Company,
as Rights Agent (the "Rights Agent").

     Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (with certain
exceptions, an "Acquiring Person") has acquired beneficial ownership of 15% or
more of the outstanding shares of Common Stock or (ii) 10 business days (or such
later date as may be determined by action of the Board of Directors prior to
such time as any person or group of affiliated persons becomes an Acquiring
Person) following the commencement of, or announcement of an intention to make,
a tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of the outstanding
shares of Common Stock (the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of the Common Stock
certificates outstanding as of the Record Date, by such Common Stock certificate
together with this Summary of Rights.

     The Rights Agreement provides that, until the Distribution Date (or earlier
expiration of the Rights), the Rights will be transferred with and only with the
Common Stock. Until the Distribution Date (or earlier expiration of the Rights),
new Common Stock certificates issued after the Record Date upon transfer or new
issuances of Common Stock will contain a notation

                                       C-1

<PAGE>

incorporating the Rights Agreement by reference. Until the Distribution Date (or
earlier expiration of the Rights), the surrender for transfer of any
certificates for shares of Common Stock outstanding as of the Record Date, even
without such notation or a copy of this Summary of Rights, will also constitute
the transfer of the Rights associated with the shares of Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights.

     The Rights are not exercisable until the Distribution Date. The Rights will
expire on April 11, 2010 (the "Final Expiration Date"), unless the Final
Expiration Date is advanced or extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case as described below.

     The Purchase Price payable, and the number of shares of Preferred Stock or
other securities or property issuable, upon exercise of the Rights is subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights
or warrants to subscribe for or purchase Preferred Stock at a price, or
securities convertible into Preferred Stock with a conversion price, less than
the then-current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness or
assets (excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).

     The number of outstanding Rights is subject to adjustment in the event of a
stock dividend on the Common Stock payable in shares of Common Stock or
subdivisions, consolidations or combinations of the Common Stock occurring, in
any such case, prior to the Distribution Date.

     Shares of Preferred Stock purchasable upon exercise of the Rights will not
be redeemable. Each share of Preferred Stock will be entitled, when, as and if
declared, to a minimum preferential quarterly dividend payment of the greater of
(a) $10 per share, and (b) an amount equal to 1000 times the dividend declared
per share of Common Stock. In the event of liquidation, dissolution or winding
up of the Company, the holders of the Preferred Stock will be entitled to a
minimum preferential payment of the greater of (a) $10 per share (plus any
accrued but unpaid dividends), and (b) an amount equal to 1000 times the payment
made per share of Common Stock. Each share of Preferred Stock will have 1000
votes, voting together with the Common Stock. Finally, in the event of any
merger, consolidation or other transaction in which outstanding shares of Common
Stock are converted or exchanged, each share of Preferred Stock will be entitled
to receive 1000 times the amount received per share of Common Stock. These
rights are protected by customary antidilution provisions.

     Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the value of the one one-thousandth interest in a share of
Preferred Stock purchasable upon exercise

                                       C-2

<PAGE>

of each Right should approximate the value of one share of Common Stock.

     In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become void),
will thereafter have the right to receive upon exercise of a Right that number
of shares of Common Stock having a market value of two times the exercise price
of the Right.

     In the event that, after a person or group has become an Acquiring Person,
the Company is acquired in a merger or other business combination transaction or
50% or more of its consolidated assets or earning power are sold, proper
provisions will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person which will have become void) will
thereafter have the right to receive upon the exercise of a Right that number of
shares of common stock of the person with whom the Company has engaged in the
foregoing transaction (or its parent) that at the time of such transaction have
a market value of two times the exercise price of the Right.

     At any time after any person or group becomes an Acquiring Person and prior
to the earlier of one of the events described in the previous paragraph or the
acquisition by such Acquiring Person of 50% or more of the outstanding shares of
Common Stock, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such Acquiring Person which will have become void),
in whole or in part, for shares of Common Stock or Preferred Stock (or a series
of the Company's preferred stock having equivalent rights, preferences and
privileges), at an exchange ratio of one share of Common Stock, or a fractional
share of Preferred Stock (or other preferred stock) equivalent in value thereto,
per Right.

     With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock or Common Stock
will be issued (other than fractions of Preferred Stock which are integral
multiples of one one-thousandth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts), and in lieu
thereof an adjustment in cash will be made based on the current market price of
the Preferred Stock or the Common Stock.

     At any time prior to the time an Acquiring Person becomes such, the Board
of Directors of the Company may redeem the Rights in whole, but not in part, at
a price of $.01 per Right (the "Redemption Price") payable, at the option of the
Company, in cash, shares of Common Stock or such other form of consideration as
the Board of Directors of the Company shall determine. The redemption of the
Rights 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.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.

     For so long as the Rights are then redeemable, the Company may, except with
respect

                                       C-3

<PAGE>

to the Redemption Price, amend the Rights Agreement in any manner. After the
Rights are no longer redeemable, the Company may, except with respect to the
Redemption Price, amend the Rights Agreement in any manner that does not
adversely affect the interests of holders of the Rights.

     Until a Right is exercised or exchanged, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.

     A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
April 11, 2000. A copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
as the same may be amended from time to time, which is hereby incorporated
herein by reference.

                                       C-4

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