Document:

EXHIBIT 10.1
                             2000 STOCK OPTION PLAN
                                       OF
                                SPAR GROUP, INC.

         Section 1.  Purposes of this Plan.  This stock option plan (as the same
may be  supplemented,  modified,  amended or  restated  from time to time in the
manner  provided  herein,  this  "Plan") is intended to provide an  incentive to
employees  (including  directors  and  officers  who  are  employees),   and  to
consultants and directors who are not employees, of SPAR Group, Inc., a Delaware
corporation (the "Company"), or any of its Subsidiaries (as such term is defined
in Section 19 hereof),  and to offer an  additional  inducement in obtaining the
services of such  individuals.  This Plan  provides for the grant of  "incentive
stock  options"  ("ISOs")  within the  meaning of  Section  422 of the  Internal
Revenue  Code of 1986,  as amended  (the "Tax  Code"),  and  nonqualified  stock
options  which  do  not  qualify  as  ISOs  ("NQSOs").   The  Company  makes  no
representation or warranty,  express or implied,  as to the qualification of any
option as an "incentive  stock option" under the Tax Code.  Each  reference to a
consultant  in the Plan  shall be deemed  to  include  each of the  consultant's
employees in the case of a consultant that is not a natural person.

         Section 2. Stock Subject to this Plan. (a) Subject to the provisions of
Section 12, the aggregate  number of shares of the Company's  Common Stock,  par
value $.01 per share  ("Common  Stock"),  for which options may be granted under
this Plan shall not exceed the number of shares of Common  Stock  covered by the
Unissued  Reserve (as defined below) and the Voided Options (as defined  below),
provided that in no event shall the  aggregate  number of shares of Common Stock
available  under  the Plan and the 1995  Plan (as  hereinafter  defined)  exceed
3,600,000.  Such shares of Common Stock may, in the  discretion  of the Board of
Directors of the Company (the "Board of Directors"),  consist either in whole or
in part of  authorized  but unissued  shares of Common Stock or shares of Common
Stock held in the treasury of the Company.  Subject to the provisions of Section
13 hereof,  any shares of Common Stock subject to an option which for any reason
expires, is canceled or is terminated unexercised or which ceases for any reason
to be exercisable shall again become available for the granting of options under
this Plan.  The Company  shall at all times during the term of this Plan reserve
and keep  available  such number of shares of Common Stock as will be sufficient
to satisfy the requirements of this Plan.

         (b) "Unissued  Reserve" shall mean the number of shares of Common Stock
as of the date of the adoption  hereof for which options were authorized but not
issued and outstanding under the Company's Amended and Restated 1995 Option Plan
(the "1995 Plan"). "Voided Options" shall mean any and all options in respect of
shares of Common  Stock  previously  granted  pursuant  to 1995 Plan that become
void,  expire,  are  canceled,  terminate  unexercised  or cease for any  reason
whatsoever to become exercisable.

         Section  3.  Administration  of  this  Plan.  (a)  This  Plan  will  be
administered  by the Board of  Directors,  or by a committee  (the  "Committee")
consisting of two or more directors  appointed by the Board of Directors.  Those
administering  this Plan shall be  referred  to herein as the  "Administrators."
Notwithstanding  the  foregoing,  if the  Company  is or  becomes a  corporation
issuing any class of common equity  securities  required to be registered  under
Section 12 of the  Securities  Exchange Act of 1934,  as amended (the  "Exchange
Act"), to the extent necessary to preserve any deduction under Section 162(m) of
the Tax Code or to comply with Rule 16b-3 promulgated under the Exchange Act, as
amended,  or any successor rule ("Rule 16b-3"),  any Committee  appointed by the
Board of  Directors  to  administer  this Plan shall be comprised of two or more
directors each of whom shall be (i) a "non-employee director" within the meaning
of Rule  16b-3,  and (ii) an "outside  director"  within the meaning of Treasury
Regulation  Section  1.162-27(e)(3).  The  delegation of powers to the Committee
shall be consistent  with all applicable  law  (including,  without  limitation,
applicable state law and Rule 16b-3).  Unless otherwise  provided in the By-Laws
of the Company,  by resolution  of the Board of Directors or  applicable  law, a
majority of the members of the Board or the Committee shall constitute a quorum,
and the acts of a majority  of the  members  present  at any  meeting at which a
quorum is present,  and any acts  approved  in writing by all members  without a
meeting, shall be the acts of the Board or the Committee.

         (b) Subject to the express  provisions of this Plan, the Administrators
shall have the authority,  in their sole  discretion,  to determine (among other
things): (i) the persons who shall be granted options;  (ii) the times when they
shall receive  options;  (iii) whether an option granted to an employee shall be
an ISO or a NQSO; the type (i.e.,  voting or non-voting) and number of shares of
Common  Stock to be  subject  to each  option;  (iv)  the  term of each  option,
including any provisions for early  termination;  (v) the date each option shall
become exercisable;  including any provisions for early vesting; (vi) whether an
option  shall  be  exercisable  in  whole  or  in   installments,   and,  if  in
installments,  the  number  of  shares of  Common  Stock to be  subject  to each
installment;  whether  the  installments  shall be  cumulative;  the  date  each
installment  shall become  exercisable and the term of each  installment;  (vii)
whether to accelerate the date of
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exercise of any option or installment; (viii) whether shares of Common Stock may
be issued upon the exercise of an option as partly  paid,  and, if so, the dates
when future  installments of the exercise price shall become due and the amounts
of such  installments;  (ix)  the  exercise  price of each  option;  the form of
payment of the  exercise  price;  (x) the fair market value of a share of Common
Stock;  (xi) whether and under what  conditions to restrict the pledge,  sale or
other  disposition  of any option  granted under this Plan, the shares of Common
Stock acquired upon the exercise of an option and, if so, whether and under what
conditions  to waive any such  restriction,  whether  individually,  by class or
otherwise;  (xii)  whether and under what  conditions to subject the exercise of
all or any portion of an option to the  fulfillment of certain  restrictions  or
contingencies as specified in the contract referred to in Section 11 hereof (the
"Contract"),   including  (without  limitation)  restrictions  or  contingencies
relating to (A) entering  into a covenant  not to compete with the Company,  its
Parent  (if any)  (as  such  term is  defined  in  Section  19  hereof)  and any
Subsidiaries, (B) financial objectives for the Company, any of its Subsidiaries,
a division,  a product line or other category and/or (C) the period of continued
employment  or  consulting  of  the  optionee  with  the  Company  or any of its
Subsidiaries,  and to determine whether such restrictions or contingencies  have
been met; (xiii) the amount, if any,  necessary to satisfy the obligation of the
Company,  any of its  Subsidiaries  or any  Parent  to  withhold  taxes or other
amounts;  (xiv) whether an optionee has a Disability (as such term is defined in
Section 19);  (xv) to cancel or modify an option  either with the consent of the
optionee or as provided in the Contract;  provided,  however,  that the modified
provision is permitted  to be included in an option  granted  under this Plan on
the  date  of  the  modification;  provided,  further,  that  in the  case  of a
modification  (within the meaning of Section  424(h) of the Tax Code) of an ISO,
such option as  modified  would be  permitted  to be granted on the date of such
modification  under the terms of this Plan;  (xvi) to  construe  the  respective
Contracts and this Plan; (xvii) to prescribe,  amend and rescind policies, rules
and regulations  relating to this Plan; (xviii) to approve any provision of this
Plan or any option  granted under this Plan,  or any  amendment to either,  that
under Rule 16b-3 or Section  162(m) of the Tax Code requires the approval of the
Board of Directors,  a committee of non-employee  directors or the stockholders,
in order  (1) to be exempt  under  Section  16(b) of the  Exchange  Act  (unless
otherwise  specifically  provided herein) or (2) to preserve any deduction under
Section  162(m)  of the Tax Code;  and  (xix) to make all  other  determinations
necessary or advisable for administering this Plan.

         (c) Any  controversy  or claim arising out of or relating to this Plan,
any  option  granted  under  this  Plan  or any  Contract  shall  be  determined
unilaterally by the  Administrators in their sole and absolute  discretion.  The
determinations  of the  Administrators  on matters referred to in this Section 3
shall be conclusive and binding on all parties.

         (d) No  Administrator or former  Administrator  shall be liable for any
action or  determination  made in good  faith  with  respect to this Plan or any
option granted hereunder.

         Section  4.  Eligibility.  The  Administrators  may from  time to time,
consistent  with the  purposes  of this Plan,  grant  options to such  employees
(including  officers and directors who are employees) of, or consultants to, the
Company or any of its Subsidiaries, and to such directors of the Company who, at
the time of grant,  are not common law employees of the Company or of any of its
Subsidiaries, as the Administrators may determine in their sole discretion. Such
options  granted  shall  cover  such  number of  shares  of Common  Stock as the
Administrators may determine in their sole discretion;  provided,  however, that
if on the date of grant of an option,  any class of common  stock of the Company
(including  without  limitation  the Common  Stock) is required to be registered
under  Section 12 of the Exchange Act, the maximum  number of shares  subject to
options that may be granted to any employee  during any calendar year under this
Plan shall be 1,000,000 shares; and provided, further, that the aggregate market
value  (determined  at the time the option is  granted)  of the shares of Common
Stock for which any eligible employee may be granted ISOs under this Plan or any
other plan of the Company,  or of a Parent or a Subsidiary of the Company,  that
are  exercisable  for the first time by such  optionee  during any calendar year
shall not exceed $100,000.  The $100,000 ISO limitation  amount shall be applied
by taking ISOs into account in the order in which they were granted.  Any option
(or portion  thereof)  granted in excess of such ISO limitation  amount shall be
treated as a NQSO to the extent of such excess.

         Section 5.  Exercise  Price.  (a) The  exercise  price of the shares of
Common  Stock under each option shall be  determined  by the  Administrators  in
their sole discretion; provided, however, that (i) except as provided below, the
exercise  price of an option shall not be less than the fair market value of the
Common Stock  subject to such option on the date of grant;  (ii) if, at the time
an ISO is granted,  the optionee owns (or is deemed to own under Section  424(d)
of the Tax  Code)  stock  possessing  more than ten  percent  (10%) of the total
combined  voting  power of all  classes of stock of the  Company,  of any of its
Subsidiaries  or of a Parent,  the exercise  price of such ISO shall not be less
than one hundred ten percent (110%) of the fair market value of the Common Stock
subject  to such ISO on the date of grant;  and (iii)  the  Administrators  must
first  obtain the  approval of the Board to grant a NQSO with an exercise  price
which is less  than  the

                                      -2-
<PAGE>

fair  market  value of the  shares  on the  date of the  granting  of the  NQSO;
provided, however, that with respect to any NQSO granted to a "covered employee"
(as such term is defined in Section 162(m) of the Tax Code),  the exercise price
of the shares of Common  Stock  underlying  such NQSO shall not be less than the
fair market value of such shares on the date of granting of such NQSO.

         (b) The fair market  value of a share of Common  Stock on any day shall
be: (i) if the  principal  market for the Common Stock is a national  securities
exchange,  the closing  sales price per share of the Common Stock on such day as
reported by such exchange or on a consolidated  tape reflecting  transactions on
such  exchange;  (ii) if the  principal  market  for the  Common  Stock is not a
national  securities exchange and the Common Stock is quoted on the Nasdaq Stock
Market  ("Nasdaq"),  and (A) if actual sales price information is available with
respect to the Common  Stock,  the  closing  sales price per share of the Common
Stock on such day on Nasdaq,  or (B) if such  information is not available,  the
closing  bid and asked  prices  per share  for the  Common  Stock on such day on
Nasdaq;  or (iii) if the principal market for the Common Stock is not a national
securities  exchange and the Common  Stock is not quoted on Nasdaq,  the closing
bid and asked  prices per share for the Common  Stock on such day as reported on
the OTC Bulletin Board Service or by National Quotation Bureau,  Incorporated or
a comparable service; provided,  however, that if clauses (i), (ii) and (iii) of
this subsection are all  inapplicable  because the Company's Common Stock is not
publicly  traded,  or if no trades have been made or no quotes are available for
such day, the fair market  value of a share of Common Stock shall be  determined
by the  Administrators by any method consistent with any applicable  regulations
adopted by the Treasury Department relating to stock options.

         Section 6. Term. Each option granted pursuant to this Plan shall be for
such term as is established by the Administrators,  in their sole discretion, at
or before the time such option is granted;  provided,  however, that the term of
each option  granted  pursuant to this Plan shall be for a period not  exceeding
ten (10) years from the date of grant thereof, and provided further, that if, at
the time an ISO (but not an NQSO) is granted, the optionee owns (or is deemed to
own under Section 424(d) of the Tax Code) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company,
of any of its  Subsidiaries  or of a Parent,  the term of the ISO shall be for a
period not  exceeding  five (5) years from the date of grant.  Options  shall be
subject to earlier termination as hereinafter provided.

         Section 7. Exercise.

         (a)  An  option  (or  any  installment  thereof),  to the  extent  then
exercisable,  shall be exercised by giving  written notice to the Company at its
principal  office (i)  specifying  the option being  exercised and the number of
shares of Common  Stock as to which  such  option is being  exercised,  and (ii)
accompanied by payment in full of the aggregate  exercise price therefor (or the
amount due on exercise if the applicable Contract permits installment  payments)
(A) in cash  and/or  by  certified  check,  (B)  with the  authorization  of the
Administrators,  with  previously  acquired  shares  of Common  Stock  having an
aggregate fair market value  (determined  in accordance  with Section 5), on the
date of exercise,  equal to the  aggregate  exercise  price of all options being
exercised,  (C) with a concurrent sale of option shares to the extent  permitted
by subsection (b) of this Section,  or (D) some combination  thereof;  provided,
however, that in no case may shares be tendered if such tender would require the
Company  to  incur a  charge  against  its  earnings  for  financial  accounting
purposes.  The Company shall not be required to issue any shares of Common Stock
pursuant to the exercise of any option until all required  payments with respect
thereto,  including  payments for any required  withholding  amounts,  have been
made.

         (b) The Administrators may, in their sole discretion, permit payment of
the  exercise  price of an option by  delivery  by the  optionee  of a  properly
executed notice, together with a copy of the optionee's irrevocable instructions
to a broker  acceptable  to the  Administrators  to sell all or a portion of the
option  shares and  deliver  promptly  to the Company the amount of sale or loan
proceeds  sufficient to pay such exercise  price. In connection  therewith,  the
Company may enter into  agreements for  coordinated  procedures with one or more
brokerage firms.

         (c) An optionee shall not have the rights of a stockholder with respect
to such  shares of Common  Stock to be received  upon the  exercise of an option
until the date of  issuance  of a stock  certificate  to the  optionee  for such
shares or, in the case of uncertificated shares, until the date an entry is made
on the books of the Company's transfer agent representing such shares; provided,
however, that until such stock certificate is issued or until such book entry is
made, any optionee using  previously  acquired shares of Common Stock in payment
of an option  exercise  price shall continue to have the rights of a stockholder
with respect to such previously acquired shares.

         (d) In no case may a fraction of a share of Common  Stock be  purchased
or issued under this Plan.

                                      -3-
<PAGE>

         Section 8. Termination of Relationship.  (a) Except as may otherwise be
expressly  provided in the applicable  Contract or optionee's written employment
or  consulting  or  termination  contract,  any  optionee  whose  employment  or
consulting  relationship with the Company,  its Parent,  any of its Subsidiaries
and, in the case of consultants,  with any Affiliate or other  consultant of the
Company  has  terminated  for any reason  (other  than the  optionee's  death or
Disability)  may exercise  any option  granted to the optionee as an employee or
consultant,  to the extent  exercisable on the date of such termination,  at any
time within three (3) months after the date of  termination,  but not thereafter
and in no  event  after  the date  the  option  would  otherwise  have  expired;
provided, however, that if such relationship is terminated for Cause (as defined
in Section 19), such option shall terminate immediately.

         (b)  For the  purposes  of  this  Plan,  an  employment  or  consulting
relationship  shall be deemed to exist between an individual and the Company if,
at the time of the determination, the individual was an employee of the Company,
its Parent, any of its Subsidiaries or any of its consultants  (including any of
its  Affiliates).  As a result,  an individual on military leave,  sick leave or
other bona fide leave of absence shall  continue to be considered an employee or
consultant  for  purposes  of this Plan  during  such leave if the period of the
leave  does  not  exceed  ninety  (90)  days,  or,  if  longer,  so  long as the
individual's right to re-employment  with the Company,  any of its Subsidiaries,
Parent or Affiliate or other consultant, as the case may be is guaranteed either
by statute or by contract or the Company, its Parent, any of its Subsidiaries or
Affiliate or other  consultant,  as the case may be, has consented in writing to
longer  absence.  If the  period  of  leave  exceeds  ninety  (90)  days and the
individual's  right to re-employment  is not guaranteed by statute,  contract or
consent,  the  employment  or  consulting  relationship  shall be deemed to have
terminated on the 91st day of such leave.

         (c) Except as may  otherwise  be expressly  provided in the  applicable
Contract, an optionee whose directorship with the Company has terminated for any
reason (other than the optionee's  death or Disability) may exercise the options
granted to the optionee as a director  who was not an employee of or  consultant
to the Company or any of its Subsidiaries, to the extent exercisable on the date
of such  termination,  at any time  within  three (3)  months  after the date of
termination,  but not thereafter and in no event after the date the option would
otherwise have expired;  provided,  however, that if the optionee's directorship
is terminated for Cause, such option shall terminate immediately.

         (d) Nothing in this Plan or in any option granted under this Plan shall
confer on any person any right to  continue in the employ of or as a director of
or  consultant to the Company,  its Parent,  any of its  Subsidiaries  or any of
their respective  Affiliates,  or as a director of the Company,  or interfere in
any way with any right of the Company,  its Parent,  any of its  Subsidiaries or
any of their  respective  Affiliates to terminate such  relationship at any time
for any reason whatsoever  without liability to the Company,  its Parent, any of
its Subsidiaries or any of their respective Affiliates.

         Section  9.  Death or  Disability  of an  Optionee.  (a)  Except as may
otherwise be expressly provided in the applicable Contract or optionee's written
employment or consulting or termination  contract, if an optionee dies (i) while
he is employed  by, or a consultant  to, the  Company,  its Parent or any of its
Subsidiaries,  (ii)  within  three  (3)  months  after  the  termination  of the
optionee's  employment or consulting  relationship with the Company,  its Parent
and its  Subsidiaries  (unless  such  termination  was for Cause or without  the
consent of the Company) or (iii) within one (1) year  following the  termination
of such  employment  or  consulting  relationship  by reason  of the  optionee's
Disability, the options granted to the optionee as an employee of, or consultant
to, the Company or any of its Subsidiaries,  will become fully vested and may be
exercised,  by the optionee's Legal  Representative  (as such term is defined in
Section 19), at any time within one (1) year after death, but not thereafter and
in no event after the date the option would  otherwise  have expired.  Except as
may  otherwise be expressly  provided in the  applicable  Contract or optionee's
written  employment or consulting or  termination  contract,  any optionee whose
employment  or  consulting  relationship  with the  Company,  its Parent and its
Subsidiaries has terminated by reason of the optionee's  Disability may exercise
such  options,  to the  extent  exercisable  upon  the  effective  date  of such
termination, at any time within one (1) year after such date, but not thereafter
and in no event after the date the option would otherwise have expired.

         (b) Except as may  otherwise  be expressly  provided in the  applicable
Contract,  if an  optionee  dies (i) while the  optionee  is a  director  of the
Company,  (ii) within three (3) months after the  termination  of the optionee's
directorship  with the Company (unless such  termination was for Cause) or (iii)
within one (1) year after the  termination  of the  optionee's  directorship  by
reason of the optionee's  Disability,  the options  granted to the optionee as a
director who was not an employee of or  consultant  to the Company or any of its
Subsidiaries,  may be exercised,  to the extent  exercisable  on the date of the
optionee's death, by the optionee's Legal  Representative at any time within one
(1) year after  death,  but not  thereafter  and in no event  after the date the
option  would  otherwise  have  expired.  Except as may  otherwise  be

                                       -4-
<PAGE>

expressly  provided in the applicable  Contract,  an optionee whose directorship
with the Company has  terminated  by reason of  Disability,  may  exercise  such
options, to the extent exercisable on the effective date of such termination, at
any time within one (1) year after such date, but not thereafter and in no event
after the date the option would otherwise have expired.

         Section 10.  Compliance with Securities  Laws. (a) It is a condition to
the exercise of any option that either (i) a  Registration  Statement  under the
Securities Act of 1933, as amended (the "Securities  Act"),  with respect to the
shares of Common Stock to be issued upon such  exercise  shall be effective  and
current at the time of exercise, or (ii) there is an exemption from registration
under the  Securities  Act for the  issuance of the shares of Common  Stock upon
such  exercise.  Nothing  herein shall be construed as requiring  the Company to
register  shares  subject to any option under the  Securities Act or to keep any
Registration Statement effective or current.

         (b) The  Administrators  may require,  in their sole  discretion,  as a
condition to the grant or exercise of an option,  that the optionee  execute and
deliver to the Company such optionee's  representations and warranties, in form,
substance and scope  satisfactory to the  Administrators,  as the Administrators
may determine to be necessary or convenient to facilitate  the  perfection of an
exemption from the registration  requirements of the Securities Act,  applicable
state  securities  laws  or  other  legal   requirements,   including   (without
limitation)  that (i) the shares of Common  Stock to be issued upon  exercise of
the option are being  acquired by the optionee for the  optionee's  own account,
for investment only and not with a view to the resale or  distribution  thereof,
and (ii) any subsequent resale or distribution of shares of Common Stock by such
optionee will be made only pursuant to (A) a  Registration  Statement  under the
Securities  Act which is  effective  and current  with  respect to the shares of
Common  Stock  being sold,  or (B) a specific  exemption  from the  registration
requirements  of  the  Securities  Act,  but in  claiming  such  exemption,  the
optionee,  prior to any offer of sale or sale of such  shares  of Common  Stock,
shall  provide  the  Company  with  a  favorable   written  opinion  of  counsel
satisfactory to the Company,  in form,  substance and scope  satisfactory to the
Company,  as to the  applicability  of  such  Securities  Act  exemption  to the
proposed sale or distribution.

         (c) In addition, if at any time the Administrators shall determine that
the  listing  or  qualification  of the shares of Common  Stock  subject to such
option on any securities  exchange,  Nasdaq or under any applicable law, or that
the  consent or approval  of any  governmental  agency or  regulatory  body,  is
necessary or desirable as a condition to, or in connection with, the granting of
an option or the issuance of shares of Common Stock thereunder,  such option may
not be granted or exercised in whole or in part, as the case may be, unless such
listing, qualification, consent or approval shall have been effected or obtained
by  the   Administrators   free  of  any   conditions   not  acceptable  to  the
Administrators.

         Section 11. Stock Option  Contracts.  Each option shall be evidenced by
an  appropriate  Contract duly  executed by the Company and the  optionee.  Such
Contract shall contain such terms,  provisions  and conditions not  inconsistent
herewith as may be determined by the  Administrators  in their sole  discretion.
The terms of each option and Contract need not be identical.

         Section   12.   Adjustments   upon   Changes  in  Common   Stock.   (a)
Notwithstanding  any other provision of this Plan, in the event of any change in
the outstanding  Common Stock by reason of a stock  dividend,  recapitalization,
spin-off,  split-up,  combination or exchange of shares or the like that results
in a  change  in the  number  or  kind of  shares  of  Common  Stock  that  were
outstanding  immediately  prior to such event,  the aggregate number and kind of
shares subject to this Plan, the aggregate  number and kind of shares subject to
each outstanding  option and the exercise price thereof,  and the maximum number
of shares subject to options that may be granted to any employee in any calendar
year,  shall  be  appropriately  adjusted  by  the  Board  of  Directors,  whose
determination  shall be conclusive and binding on all parties.  Such  adjustment
may provide for the  elimination  of fractional  shares that might  otherwise be
subject to options without payment therefor.  Notwithstanding the foregoing,  no
adjustment  shall be made  pursuant to this  Section 12 if such  adjustment  (i)
would cause this Plan to fail to comply with Section 422 of the Tax Code or with
Rule 16b-3 (if  applicable to such  option),  or (ii) would be considered as the
adoption of a new plan requiring stockholder approval.

         (b) Except as provided below, unless the Administrators shall, in their
sole discretion,  determine otherwise, upon (i) the dissolution,  liquidation or
sale of all or substantially  all of the business,  properties and assets of the
Company,  (ii) any reorganization,  merger or consolidation in which the Company
does not survive, (iii) any reorganization, merger, consolidation or exchange of
securities  in  which  the  Company  does  survive  and  any  of  the  Company's
stockholders  have the  opportunity  to  receive  cash,  securities  of  another
corporation  and/or other  property in exchange for their  capital  stock of the
Company,  or (iv) any  acquisition by any person or group (as defined in Section
13(d) of the Exchange  Act) of  beneficial

                                      -5-
<PAGE>

ownership of more than fifty  percent (50%) of the  Company's  then  outstanding
shares of Common Stock (each of the events described in clauses (i), (ii), (iii)
and (iv) are referred to herein individually as an "Extraordinary  Event"), this
Plan and each outstanding  option shall  terminate.  In such event each optionee
shall have the right to exercise,  in whole or in part, any unexpired  option or
options  issued to the  optionee,  to the extent that said option is then vested
and  exercisable  pursuant to the  provisions of said option or options and this
Plan within fifteen (15) Business Days of the Company's giving of written notice
to the optionee of such Extraordinary Event.

         (c) Except as otherwise expressly provided in this Plan, the applicable
Contract or the  optionee's  written  employment or  consulting  or  termination
contract,  the  termination of employment of, or the termination of a consulting
or other  relationship  with,  an optionee for any reason shall not,  unless the
Administrators  decide  otherwise,  accelerate or otherwise affect the number of
shares with respect to which an option may be exercised; provided, however, that
the option may only be  exercised  with  respect to that number of shares  which
could have been purchased  under the option had the option been exercised by the
optionee on the date of such termination.

         (d) Notwithstanding anything to the contrary contained in this Plan, or
any  provision  to  the  contrary  contained  in  a  particular  Contract,   the
Administrators, in their sole discretion, at any time, or from time to time, may
elect to  accelerate  the  vesting  or all or any  portion  of any  option  then
outstanding.  The decision by the  Administrators  to accelerate an option or to
decline to accelerate an option shall be final,  conclusive and binding.  In the
event of the  acceleration of the  exercisability  of options as the result of a
decision by the  Administrators  pursuant to this  Section 12, each  outstanding
option so accelerated  shall be exercisable for a period from and after the date
of  such   acceleration  and  upon  such  other  terms  and  conditions  as  the
Administrators may determine in their sole discretion;  provided,  however, that
such terms and conditions  (other than terms and conditions  relating  solely to
the  acceleration  of  exercisability  and the related  termination of an option
after the stated  period) may not  adversely  affect the rights of any  optionee
without  the consent of the  optionee so  adversely  affected.  Any  outstanding
option  that has not been  exercised  by the  holder  at the end of such  stated
period shall terminate automatically and become null and void.

         Section 13.  Amendments  and  Termination  of this Plan.  This Plan was
adopted by the Board of Directors on December 4, 2000.  No option may be granted
under this Plan after December 4, 2010. The Board of Directors,  without further
approval of the  Company's  stockholders,  may at any time  suspend or terminate
this Plan,  in whole or in part,  or amend it from time to time in such respects
as it may deem  advisable,  including  (without  limitation)  in order that ISOs
granted  hereunder meet the requirements for "incentive stock options" under the
Tax Code, or to comply with the  provisions of Rule 16b-3 of the Exchange Act or
Section 162(m) of the Tax Code or any change in applicable  laws or regulations,
ruling  or  interpretation  of  any  governmental  agency  or  regulatory  body;
provided,  however, that no amendment shall be effective,  without the requisite
prior or subsequent stockholder approval,  that would (a) except as contemplated
in Section 12,  increase the maximum  number of shares of Common Stock for which
options may be granted  under this Plan or change the  maximum  number of shares
for which options may be granted to employees in any calendar  year,  (b) change
the  eligibility  requirements  for  individuals  entitled  to  receive  options
hereunder,  or (c) make any change for which  applicable law or any governmental
agency  or  regulatory  body  requires  stockholder  approval.  No  termination,
suspension  or  amendment of this Plan shall  adversely  affect the rights of an
optionee  under any option  granted  under  this Plan  without  such  optionee's
consent.  The power of the  Administrators to construe and administer any option
granted  under this Plan prior to the  termination  or  suspension  of this Plan
shall continue after such termination or during such suspension.

         Section 14. Non-Transferability. (a) Except as otherwise provided below
or in the  applicable  Contract,  no option  granted  under  this Plan  shall be
transferable  other than by will or the laws of descent  and  distribution,  and
options  may be  exercised,  during the  lifetime of the  optionee,  only by the
optionee or the optionee's Legal Representatives.  Except to the extent provided
below or in the applicable Contract,  options may not be assigned,  transferred,
pledged,  hypothecated or disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process,
and  any  such  attempted  assignment,   transfer,   pledge,   hypothecation  or
disposition  shall be null and void ab initio and of no force or effect,  unless
and to the extent the Board, in the case of NQSOs, has given its express written
consent to any pledge or  hypothecation  to (and  subsequent  disposition  by) a
financial institution, which NQSOs shall continue to be subject to the terms and
provisions of this Plan and the  applicable  Contract and may be subject to such
additional  limits,  conditions  and  provisions as the Board may require in its
sole and absolute discretion as a condition of such consent.

                                      -6-
<PAGE>

         (b) The  Administrators  may, in their  discretion,  authorize all or a
portion of any NQSO granted to an optionee to be on terms which permit  transfer
by such optionee to (i) the spouse,  children or  grandchildren  of the optionee
("Immediate Family Members"),  including (without  limitation)  adopted children
and  grandchildren,  (ii) a trust or trusts  for the  exclusive  benefit of such
Immediate Family Members,  or (iii) a partnership in which such Immediate Family
Members are the only partners,  provided that (A) there may be no  consideration
for any such transfer (other than natural love and affection,  the beneficial or
equity  interests  therein  received in  connection  with any such transfer to a
trust or  partnership,  or the legal  consideration  for such a  transfer  to be
enforceable),  and (B) the  Contract  pursuant to which such options are granted
must  (1) be  specifically  approved  by the  Administrators  and (2)  expressly
provide for transferability in a manner consistent with this Section 14.

         (c) Following any permitted  transfer,  any such options shall continue
to be subject to the same terms and  conditions as were  applicable  immediately
prior to transfer,  provided that for purposes of Sections 7 and 10 reference to
"optionee" shall be deemed to refer to the transferee. The provisions in Section
8 hereof  respecting  the effect of  termination  of  employment  and  Section 9
respecting  the effect of death or Disability  shall continue to be applied with
respect  to  the  original  optionee,  following  which  the  options  shall  be
exercisable by the transferee only to the extent,  and for the periods specified
in the  Contract.  Any  permitted  transferee  shall  be  required  prior to any
transfer  of an  option  or shares of  Common  Stock  acquired  pursuant  to the
exercise  of an option  to  execute  a  written  undertaking  to be bound by the
provisions of this Plan and the applicable Contract.

         Section 15.  Withholding  Taxes.  The  Company,  or its  Subsidiary  or
Parent,  as  applicable,  may  withhold  (a) cash or (b) with the consent of the
Administrators  (in the  Contract or  otherwise),  shares of Common  Stock to be
issued upon exercise of an option or a combination of cash and shares, having an
aggregate fair market value  (determined in accordance  with Section 5) equal to
the amount  which the  Administrators  determine  is  necessary  to satisfy  the
obligation of the Company, a Subsidiary or Parent to withhold Federal, state and
local income taxes or other  amounts  incurred by reason of the grant,  vesting,
exercise or disposition of an option or the disposition of the underlying shares
of Common Stock.  Alternatively,  the Company may require the optionee to pay to
the Company such amount, in cash, promptly upon demand.

         Section 16. Legends;  Payment of Expenses.  (a) The Company may endorse
such legend or legends upon the  certificates  for shares of Common Stock issued
upon  exercise of an option  under this Plan and may issue such "stop  transfer"
instructions  to its transfer  agent in respect of such shares as it determines,
in its  sole  discretion,  to be  necessary  or  appropriate  to (i)  prevent  a
violation of, or to perfect an exemption from, the registration  requirements of
the  Securities   Act,   applicable   state   securities  laws  or  other  legal
requirements,  (ii)  implement  the  provisions  of this  Plan or any  agreement
between  the  Company  and the  optionee  with  respect to such shares of Common
Stock,   or  (iii)  permit  the  Company  to  determine  the   occurrence  of  a
"disqualifying  disposition," as described in Section 421(b) of the Tax Code, of
the shares of Common Stock transferred upon the exercise of an ISO granted under
this Plan.

         (b) The  Company  shall pay all  issuance  taxes  with  respect  to the
issuance of shares of Common Stock upon the exercise of an option  granted under
this  Plan,  as well  as all  fees  and  expenses  incurred  by the  Company  in
connection with such issuance.

         Section 17. Use of Proceeds.  Except to the extent required by law, the
Company's  Certificate  of  Incorporation,  or the Company's  By-laws,  the cash
proceeds to be received  upon the exercise of an option under this Plan shall be
added to the general funds of the Company and used for such  corporate  purposes
as the Board of Directors may determine, in its sole discretion.

         Section  18.  Substitutions  and  Assumptions  of  Options  of  Certain
Constituent Corporations. Anything in this Plan to the contrary notwithstanding,
the Board of  Directors  may,  without  further  approval  by the  stockholders,
substitute new options for prior options of a Constituent  Corporation  (as such
term is defined in Section 19) or assume the prior  options of such  Constituent
Corporation.

         Section 19. Definitions.

         (a)  "Affiliate"  shall  mean with  respect to the  Company,  any other
corporation or other entity (other than a Parent or a Subsidiary),  who directly
or  indirectly,  is in control of, is controlled  by or is under common  control
with the Company.  For the purposes of this  definition,  "control"  (including,
with correlative  meaning,  the terms  "controlled by" and "under common control
with") as used with respect to any  corporation or other entity,  shall mean the
possession,  directly  or  indirectly,  of the  power to  direct  or  cause

                                      -7-
<PAGE>
the  direction  of the  management  and  policies of such  corporation  or other
entity,  whether  through  the  ownership  of  capital  stock,  by  contract  or
otherwise.

         (b)  "Business  Day" shall mean any day other than (i) any  Saturday or
Sunday or (ii) New Year's Day, Martin Luther King's  Birthday,  Presidents' Day,
Memorial  Day,  Independence  Day,  Labor  Day,  Columbus  Day,  Veterans'  Day,
Thanksgiving, and Christmas.

         (c) "Cause," in connection with the  termination of an optionee,  shall
mean (i) "cause",  as such term (or any similar  term,  such as "with cause") is
defined in any employment, consulting or other applicable agreement for services
or termination  agreement between the Company and such optionee,  or (ii) in the
absence of such an  agreement,  "cause" as such term is defined in the  Contract
executed by the Company  and such  optionee  pursuant to Section 11, or (iii) in
the absence of both of the  foregoing,  (A)  indictment of such optionee for any
illegal conduct,  (B) failure of such optionee to adequately  perform any of the
optionee's  duties and  responsibilities  in any capacity held with the Company,
any of its  Subsidiaries  or any Parent  (other than any such failure  resulting
solely from such optionee's physical or mental  incapacity),  (C) the commission
of any act or failure to act by such  optionee that  involves  moral  turpitude,
dishonesty,  theft,  destruction of property,  fraud,  embezzlement or unethical
business  conduct,  or that is otherwise  injurious  to the Company,  any of its
Subsidiaries  or any Parent or any other  affiliate  of the  Company  (or its or
their respective employees), whether financially or otherwise, (D) any violation
by such  optionee of any Company  rule or policy,  or (E) any  violation by such
optionee of the  requirements of such Contract,  any other contract or agreement
between the  Company  and such  optionee or this Plan (as in effect from time to
time);  in each case,  with respect to clauses (A) through (E), as determined by
the Board of Directors in their sole and absolute discretion.

         (d) "Constituent  Corporation" shall mean any corporation which engages
with the Company, its Parent or any Subsidiary in a transaction to which Section
424(a)  of the Tax Code  applies  (or  would  apply  if the  option  assumed  or
substituted were an ISO), or any Parent or any Subsidiary of such corporation.

         (e) "Disability" shall mean a permanent and total disability within the
meaning of Section 22(e)(3) of the Tax Code.

         (f) "Legal  Representative"  shall mean the executor,  administrator or
other  person who at the time is  entitled  by law to  exercise  the rights of a
deceased or incapacitated  optionee with respect to an option granted under this
Plan.

         (g) "Parent"  shall mean a "parent  corporation"  within the meaning of
Section 424(e) of the Tax Code.

         (h)  "Subsidiary"  shall  mean a  "subsidiary  corporation"  within the
meaning of Section 424(f) of the Tax Code.

         Section 20.  Governing  Law. This Plan,  such options as may be granted
hereunder,  the  Contracts  and all related  matters  shall be governed  by, and
construed  in  accordance  with,  the laws of the State of Delaware  (other than
those that would defer to the substantive laws of another jurisdiction).

         Section 21.  Construction.  Neither this Plan nor any Contract shall be
construed or interpreted  with any presumption  against the Company by reason of
the Company  causing  this Plan or Contract  to be  drafted.  Whenever  from the
context it appears appropriate, any term stated in either the singular or plural
shall include the plural and singular,  respectively, and any term stated in the
masculine,  feminine  or neuter  gender  shall  include the other forms as well.
Captions and headings  have been provided for  convenience  and shall not affect
the meaning or interpretation of this Plan or any Contract.

         Section  22.  Partial   Invalidity.   The  invalidity,   illegality  or
unenforceability of any provision in this Plan, any option or Contract shall not
affect the validity,  legality or enforceability of any other provision,  all of
which shall be valid,  legal and enforceable to the fullest extent  permitted by
applicable law.

         Section  23.  Stockholder  Approval.  This  Plan  shall be  subject  to
approval by (a) the  holders of a majority of the votes  present in person or by
proxy  entitled  to  vote  hereon  at a  duly  held  meeting  of  the  Company's
stockholders  at which a quorum is  present  or (b) the  Company's  stockholders
acting in accordance with the provisions of Section 228 of the Delaware  General
Corporation  Law. No options  granted  hereunder may be exercised  prior to such
approval,  provided,  however,  that the date of  grant of any  option  shall be
determined   as  if  this  Plan  had  not  been   subject   to  such   approval.
Notwithstanding  the  foregoing,  if this Plan is not  approved by a vote of the
stockholders  of the Company on or before  December  4, 2001,  this Plan and any
options granted hereunder shall terminate.

                                      -8-<PAGE>

                                                                     EXHIBIT 4.1

                               COMMERCE ONE, INC.

                                       AND

                               FLEET NATIONAL BANK

                                  RIGHTS AGENT

                        PREFERRED STOCK RIGHTS AGREEMENT

                           DATED AS OF APRIL 18, 2001
<PAGE>

                                TABLE OF CONTENTS

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

Section 2.   Appointment of Rights Agent.........................................................................8

Section 3.   Issuance of Rights Certificates.....................................................................8

Section 4.   Form of Rights Certificates........................................................................10

Section 5.   Countersignature and Registration..................................................................11

Section 6.   Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
             Destroyed, Lost or Stolen Rights Certificates......................................................11

Section 7.   Exercise of Rights; Exercise Price; Expiration Date of Rights......................................12

Section 8.   Cancellation and Destruction of Rights Certificates................................................14

Section 9.   Reservation and Availability of Preferred Shares...................................................14

Section 10.  Record Date........................................................................................15

Section 11.  Adjustment of Exercise Price, Number of Shares or Number of Rights.................................16

Section 12.  Certificate of Adjusted Exercise Price or Number of Shares.........................................22

Section 13.  Consolidation, Merger or Sale or Transfer of Assets or Earning Power...............................22

Section 14.  Fractional Rights and Fractional Shares............................................................26

Section 15.  Rights of Action...................................................................................27

Section 16.  Agreement of Rights Holders........................................................................27

Section 17.  Rights Certificate Holder Not Deemed a Stockholder.................................................28

Section 18.  Concerning the Rights Agent........................................................................28

Section 19.  Merger or Consolidation or Change of Name of Rights Agent..........................................29

Section 20.  Duties of Rights Agent.............................................................................29

Section 21.  Change of Rights Agent.............................................................................31
</TABLE>

                                 -ii-
<PAGE>

                           TABLE OF CONTENTS
                              (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                              PAGE
                                                                                                              ----
<S>         <C>                                                                                                <C>
Section 22.  Issuance of New Rights Certificates................................................................32

Section 23.  Redemption.........................................................................................32

Section 24.  Exchange...........................................................................................33

Section 25.  Notice of Certain Events...........................................................................35

Section 26.  Notices............................................................................................35

Section 27.  Supplements and Amendments.........................................................................36

Section 28.  Successors.........................................................................................37

Section 29.  Determinations and Actions by the Board of Directors, etc..........................................37

Section 30.  Benefits of this Agreement.........................................................................37

Section 31.  Severability.......................................................................................37

Section 32.  Governing Law......................................................................................38

Section 33.  Counterparts.......................................................................................38

Section 34.  Descriptive Headings...............................................................................38

EXHIBITS

Exhibit A    Form of Certificate of Designation

Exhibit B    Form of Rights Certificate

Exhibit C    Summary of Rights
</TABLE>

                                     -iii-
<PAGE>

                        PREFERRED STOCK RIGHTS AGREEMENT

       This Preferred Stock Rights Agreement, is dated as of April 18, 2001,
between Commerce One, Inc., a Delaware corporation, and Fleet National Bank.

       On March 23, 2001 (the "RIGHTS DIVIDEND DECLARATION DATE"), the Board of
Directors of the Company authorized and declared a dividend of one Preferred
Share Purchase Right (a "RIGHT") for each Common Share (as hereinafter defined)
of the Company outstanding as of the Close of Business (as hereinafter defined)
on April 30, 2001 (the "RECORD DATE"), each Right representing the right to
purchase one one-thousandth (0.001) of a share of Series A Participating
Preferred Stock (as such number may be adjusted pursuant to the provisions of
this Agreement), having the rights, preferences and privileges set forth in the
form of Certificate of Designations of Rights, Preferences and Privileges of
Series A Participating Preferred Stock attached hereto as EXHIBIT A, upon the
terms and subject to the conditions herein set forth, and further authorized and
directed the issuance of one Right (as such number may be adjusted pursuant to
the provisions of this Agreement) with respect to each Common Share that shall
become outstanding between the Record Date and the earlier of the Distribution
Date and the Expiration Date (as such terms are hereinafter defined), and in
certain circumstances after the Distribution Date.

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

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

              (a)    "ACQUIRING PERSON" shall mean any Person, who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the Common Shares then outstanding, but shall
not include any Excluded Person (as such term is hereinafter defined) or any
Excepted Person (as such term is hereinafter defined) BUT IN THE CASE OF AN
EXCEPTED PERSON ONLY FOR SO LONG AS SUCH PERSON CONTINUES TO MEET THE DEFINITION
OF AN EXCEPTED PERSON, AS DETERMINED BY THE BOARD OF DIRECTORS OF THE COMPANY IN
ITS GOOD FAITH DISCRETION. Notwithstanding the foregoing, no Person shall be
deemed to be an Acquiring Person as the result of an acquisition of Common
Shares by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such Person
to 15% or more of the Common Shares of the Company then outstanding; PROVIDED,
HOWEVER, that if a Person shall become the Beneficial Owner of 15% or more of
the Common Shares of the Company then outstanding by reason of share purchases
by the Company and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Shares of the Company (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding Common Shares in Common Shares or pursuant to a split or subdivision
of the outstanding Common Shares), then such Person shall be deemed to be an
Acquiring Person unless upon becoming the Beneficial Owner of such additional
Common Shares of the Company such Person does not

<PAGE>

beneficially own 15% or more of the Common Shares of the Company then
outstanding. Notwithstanding the foregoing, (i) if the Company's Board of
Directors determines in good faith that Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently (including, without limitation,
because (A) such Person was unaware that it beneficially owned a percentage of
the Common Shares that would otherwise cause such Person to be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this paragraph (a),
or (B) such Person was aware of the extent of the Common Shares it beneficially
owned but had no actual knowledge of the consequences of such beneficial
ownership under this Agreement) and without any intention of changing or
influencing control of the Company, and if such Person divested or divests as
promptly as practicable a sufficient number of Common Shares so that such Person
would no longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed to be or
to have become an "Acquiring Person" for any purposes of this Agreement; and
(ii) if, as of the date hereof, any Person is the Beneficial Owner of 15% or
more of the Common Shares outstanding, such Person shall not be or become an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), unless and until such time as such Person shall become the
Beneficial Owner of additional Common Shares (other than pursuant to a dividend
or distribution paid or made by the Company on the outstanding Common Shares in
Common Shares or pursuant to a split or subdivision of the outstanding Common
Shares), unless, upon becoming the Beneficial Owner of such additional Common
Shares, such Person is not then the Beneficial Owner of 15% or more of the
Common Shares then outstanding.

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

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

              (d)    A Person shall be deemed the "BENEFICIAL OWNER" of and
shall be deemed to "BENEFICIALLY OWN" any securities:

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

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

                                      -2-
<PAGE>

or exchange, or (2) securities which a Person or any of such Person's Affiliates
or Associates may be deemed to have the right to acquire pursuant to any merger
or other acquisition agreement between the Company and such Person (or one or
more of its Affiliates or Associates) if such agreement has been approved by the
Board of Directors of the Company prior to there being an Acquiring Person; or
(B) the right to vote pursuant to any agreement, arrangement or understanding;
PROVIDED, HOWEVER, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security under this Section 1(d)(ii)(B) if the
agreement, arrangement or understanding to vote such security (1) arises solely
from a revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations of the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or

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

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

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

              (g)    "COMMON SHARES" when used with reference to the Company
shall mean the shares of Common Stock of the Company, par value $0.0001 per
share. Common Shares when used with reference to any Person other than the
Company shall mean the capital stock (or equity interest) with the greatest
voting power of such other Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately control such
first-mentioned Person.

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

                                      -3-
<PAGE>

              (i)    "COMPANY" shall mean Commerce One, Inc., a Delaware
corporation, subject to the terms of Section 13(a)(iii)(C) hereof.

              (j)    "CURRENT PER SHARE MARKET PRICE" of any security (a
"Security" for purposes of this definition), for all computations other than
those made pursuant to Section 11(a)(iii) hereof, shall mean the average of the
daily closing prices per share of such Security for the thirty (30) consecutive
Trading Days immediately prior to such date, and for purposes of computations
made pursuant to Section 11(a)(iii) hereof, the Current Per Share Market Price
of any Security on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the ten (10) consecutive Trading
Days immediately prior to such date; PROVIDED, HOWEVER, that in the event that
the Current Per Share Market Price of the Security is determined during a period
following the announcement by the issuer of such Security of (i) a dividend or
distribution on such Security payable in shares of such Security or securities
convertible into such shares or (ii) any subdivision, combination or
reclassification of such Security, and prior to the expiration of the applicable
thirty (30) Trading Day or ten (10) Trading Day period, after the ex-dividend
date for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the Current Per
Share Market Price shall be appropriately adjusted to reflect the current market
price per share equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Security is not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last sale price or, if such last sale price is not reported, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by Nasdaq or such other system then in use, or, if on any such date the
Security is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Security selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Security, the fair value of such
shares on such date as determined in good faith by the Board of Directors of the
Company shall be used. If the Preferred Shares are not publicly traded, the
Current Per Share Market Price of the Preferred Shares shall be conclusively
deemed to be the product of (x) the Current Per Share Market Price of the Common
Shares as determined pursuant to this Section 1(j), as appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof, multiplied by (y) 1000. If the Security is not publicly held or
so listed or traded, Current Per Share Market Price shall mean the fair value
per share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.

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

                                      -4-
<PAGE>

              (l)    "DISTRIBUTION DATE" shall mean the earlier of (i) the Close
of Business on the tenth day (or such later date as may be determined by action
of the Company's Board of Directors) after the Shares Acquisition Date (or, if
the tenth day after the Shares Acquisition Date occurs before the Record Date,
the Close of Business on the Record Date) or (ii) the Close of Business on the
tenth Business Day (or such later date as may be determined by action of the
Company's Board of Directors) after the date that a tender or exchange offer by
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or pursuant to
the terms of any such plan) is first published or sent or given within the
meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange
Act, if, assuming the successful consummation thereof, such Person would be an
Acquiring Person.

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

              (n)    "EXCEPTED PERSON" shall mean (i) Ford and any Ford
Controlled Entity to the extent, and only to the extent, that Ford "Beneficially
Owns" (as such term is defined in the Standstill Agreement), Voting Stock such
that the Total Current Voting Power of the Company represented by all Shares
Beneficially Owned (as such term is defined in the Standstill Agreement) by Ford
and its Affiliates (as such term is defined in the Standstill Agreement) is not
in excess of the Standstill Limit, irrespective of whether a Standstill
Termination Event has occurred, or the Standstill Agreement is otherwise not in
effect, at the time of such determination; and (ii) GM any GM Controlled Entity,
to the extent, and only to the extent, that GM "Beneficially Owns" (as such term
is defined in the Standstill Agreement), Voting Stock such that the Total
Current Voting Power of the Company represented by all Shares Beneficially Owned
(as such term is defined in the Standstill Agreement) by GM and its Affiliates
(as such term is defined in the Standstill Agreement) is not in excess of the
Standstill Limit, irrespective of whether a Standstill Termination Event has
occurred, or the Standstill Agreement is otherwise not in effect, at the time of
such determination.

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

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

              (q)    "EXCLUDED PERSON" shall mean the Company, any Subsidiary of
the Company or any employee benefit plan of the Company or of any Subsidiary of
the Company, any entity holding Common Shares for or pursuant to the terms of
any such plan, or for purposes of the proposed reorganization of the Company
into a holding company structure pursuant to the Formation Agreement, New
Commerce One Holding, Inc.

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

                                      -5-
<PAGE>

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

              (t)    "FINAL EXPIRATION DATE" shall mean April 30, 2011.

              (u)    "FORD" shall have the meaning ascribed to it in the
Standstill Agreement.

              (v)    "FORD CONTROLLED ENTITY" shall have the meaning ascribed to
it in the Standstill Agreement.

              (w)    "FORMATION AGREEMENT" shall mean the Formation Agreement,
dated as of December 8, 2000, among the Company, Ford Motor Company, General
Motors Corporation, New Commerce One Holding, Inc. , Daimler Chrysler (solely
for the purposes of Section 11.3 thereof), and Covisint, LLC (solely for the
purposes of Sections 2.4, 11.2 and 11.9 thereof).

              (x)    "GM" shall have the meaning ascribed to it in the
Standstill Agreement.

              (y)    "GM CONTROLLED ENTITY" shall have the meaning ascribed to
it in the Standstill Agreement.

              (z)    "NASDAQ" shall mean the National Association of Securities
Dealers, Inc. Automated Quotations System.

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

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

              (cc)   "PREFERRED SHARES" shall mean shares of Series A
Participating Preferred Stock,. par value $0.0001 per share, of the Company.

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

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

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

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

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

                                      -6-
<PAGE>

              (ii)   "RIGHTS AGENT" shall mean (i) Fleet National Bank (ii) its
successor or replacement as provided in Sections 19 and 21 hereof or (iii) any
additional Person appointed pursuant to Section 2 hereof.

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

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

              (ll)   "SECTION 11(a)(ii) TRIGGER DATE" shall have the meaning set
forth in Section 11(a)(iii) hereof.

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

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

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

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

              (qq)   "STANDSTILL AGREEMENT" shall mean the Standstill and Stock
Restriction Agreement, dated December 8, 2000, by and among the Company, Ford
Motor Company, General Motors Corporation and New Commerce One Holding, Inc.

              (rr)   "STANDSTILL LIMIT" shall have the meaning ascribed to it in
the Standstill Agreement.

              (ss)   "STANDSTILL TERMINATION EVENT" shall have the meaning
ascribed to it in the Standstill Agreement.

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

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

                                      -7-
<PAGE>

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

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

              (xx)   "TOTAL CURRENT VOTING POWER" shall have the meaning
ascribed to it in the Standstill Agreement.

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

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

              (aaa)  "VOTING STOCK" shall have the meaning ascribed to it in the
Standstill Agreement.

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

       Section 3.    ISSUANCE OF RIGHTS CERTIFICATES.

              (a)    Until the Distribution Date, (i) the Rights will be
evidenced (subject to the provisions of Sections 3(b) and 3(c) hereof) by the
certificates for Common Shares registered in the names of the holders thereof
(which certificates shall also be deemed to be Rights Certificates) and not by
separate Rights Certificates and (ii) the right to receive Rights Certificates
will be transferable only in connection with the transfer of Common Shares.
Until the earlier of the Distribution Date or the Expiration Date, the surrender
for transfer of certificates for Common Shares shall also constitute the
surrender for transfer of the Rights associated with the Common Shares
represented thereby. As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send) by first-class, postage-prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date, at the address of
such holder shown on the records of the Company, a Rights Certificate evidencing
one Right for each Common Share so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights per Common Share
has been made pursuant to Section 11 hereof, then at the time of distribution of
the Rights

                                      -8-
<PAGE>

Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates and may be
transferred by the transfer of the Rights Certificates as permitted hereby,
separately and apart from any transfer of Common Shares, and the holders of such
Rights Certificates as listed in the records of the Company or any transfer
agent or registrar for the Rights shall be the record holders thereof.

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

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

       THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN
       RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN COMMERCE ONE, INC. AND
       FLEET NATIONAL BANK, AS THE RIGHTS AGENT, DATED AS OF APRIL 18, 2001,
       (THE "RIGHTS AGREEMENT"), THE TERMS OF WHICH ARE HEREBY INCORPORATED
       HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
       EXECUTIVE OFFICES OF COMMERCE ONE, INC. 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. COMMERCE ONE, INC. 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 SET FORTH IN
       THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS,
       WAS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF
       (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY
       HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY
       BECOME NULL AND VOID.

                                      -9-
<PAGE>

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

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

       Section 4.    FORM OF RIGHTS CERTIFICATES.

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

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

       THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
       BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR
       AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
       DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
       AND THE

                                      -10-
<PAGE>

       RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
       SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.

       Section 5.    COUNTERSIGNATURE AND REGISTRATION.

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

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

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

              (a)    Subject to the provisions of Sections 7(e), 14 and 24
hereof, at any time after the Close of Business on the Distribution Date, and at
or prior to the Close of Business on the Expiration Date, any Rights Certificate
or Rights Certificates may be transferred, split up, combined or exchanged for
another Rights Certificate or Rights Certificates, entitling the registered
holder to purchase a like number of one-thousandths of a Preferred Share (or,
following a Triggering Event, other securities, cash or other assets, as the
case may be) as the Rights Certificate or Rights Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Rights Certificates
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Rights Certificates to be transferred, split
up, combined or exchanged at the office of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional

                                      -11-
<PAGE>

evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Sections 7(e), 14 and 24 hereof,
countersign and deliver to the person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.

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

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

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

       The Exercise Price for each one-thousandth of a Preferred Share issuable
pursuant to the exercise of a Right shall initially be seventy dollars ($70.00),
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.

              (b)    Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Exercise Price for the number of one-thousandths
of a Preferred Share (or, following a Triggering Event, other securities, cash
or other assets as the case may be) to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Rights
Certificate in accordance with Section 9(e) hereof, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares (or make available, if the Rights Agent
is the transfer agent for the Preferred Shares) a certificate or certificates
for the number of one-thousandths of a Preferred Share (or, following a
Triggering Event, other securities, cash or other assets as the case may be) to
be purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests or (B) if the Company shall have elected to
deposit the total number of one-thousandths of a Preferred Share (or, following
a Triggering Event, other securities, cash or other assets as the case may be)
issuable upon exercise of the Rights hereunder

                                      -12-
<PAGE>

with a depositary agent, requisition from the depositary agent depositary
receipts representing such number of one-thousandths of a Preferred Share (or,
following a Triggering Event, other securities, cash or other assets as the case
may be) as are to be purchased (in which case certificates for the Preferred
Shares (or, following a Triggering Event, other securities, cash or other assets
as the case may be) represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company hereby directs the
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) 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 Rights Certificate, registered in
such name or names as may be designated by such holder and (iv) when
appropriate, after receipt thereof, deliver such cash to or upon the order of
the registered holder of such Rights Certificate. The payment of the Exercise
Price (as such amount may be reduced (including to zero) pursuant to Section
11(a)(iii) hereof) and an amount equal to any applicable transfer tax required
to be paid by the holder of such Rights Certificate in accordance with Section
9(e) hereof, may be made in cash or by certified bank check, cashier's check or
bank draft payable to the order of the Company. In the event that the Company is
obligated to issue securities of the Company other than Preferred Shares, pay
cash and/or distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other securities, cash
and/or other property are available for distribution by the Rights Agent, if and
when appropriate.

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

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

                                      -13-
<PAGE>

failure to make any determinations with respect to an Acquiring Person or any of
such Acquiring Person's Affiliates, Associates or transferees hereunder.

              (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 upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall, in
addition to having complied with the requirements of Section 7(a), have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.

       Section 8.    CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any Rights Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver all canceled
Rights Certificates to the Company, or shall, at the written request of the
Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate evidencing the destruction thereof to the Company.

       Section 9.    RESERVATION AND AVAILABILITY OF PREFERRED SHARES.

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

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

              (c)    The Company shall use its best efforts to (i) file, as soon
as practicable following the earliest date after the first occurrence of a
Triggering Event in which the consideration to be delivered by the Company upon
exercise of the Rights is described in Section 11(a)(ii) or Section 11(a)(iii)
hereof, or as soon as is required by law following the Distribution Date, as the
case

                                      -14-
<PAGE>

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

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

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

       Section 10.   RECORD DATE. Each Person in whose name any certificate for
a number of one-thousandths of a Preferred Share (or other securities of the
Company) is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of Preferred Shares (or other securities of
the Company) represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Total Exercise Price with respect to which the
Rights have been exercised (and any applicable transfer taxes) was made;
PROVIDED, HOWEVER, that if the date of such surrender and payment is a date

                                      -15-
<PAGE>

upon which the transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a holder
of Preferred Shares (or other securities of the Company) for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.

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

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

                                      -16-
<PAGE>

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

                     (iii)  In lieu of issuing Common Shares in accordance with
Section 11(a)(ii) hereof, the Company may, if the Company's Board of Directors
determines that such action is necessary or appropriate and not contrary to the
interest of holders of Rights and, in the event that the number of Common Shares
which are authorized by the Company's Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit the exercise in full of the Rights, or
if any necessary regulatory approval for such issuance has not been obtained by
the Company, the Company shall: (A) determine the excess of (1) the value of the
Common Shares issuable upon the exercise of a Right (the "CURRENT VALUE") over
(2) the Exercise Price (such excess, the "SPREAD") and (B) with respect to each
Right, make adequate provision to substitute for such Common Shares, upon
exercise of the Rights, (1) cash, (2) a reduction in the Exercise Price, (3)
other equity securities of the Company (including, without limitation, shares or
units of shares of any series of preferred stock which the Company's Board of
Directors has deemed to have the same value as Common Shares (such shares or
units of shares of preferred stock are herein called "COMMON STOCK
EQUIVALENTS")), except to the extent that the Company has not obtained any
necessary stockholder or regulatory approval for such issuance, (4) debt
securities of the Company, except to the extent that the Company has not
obtained any necessary stockholder or regulatory approval for such issuance, (5)
other assets or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has been determined by
the Company's Board of Directors based upon the advice of a nationally
recognized investment banking firm selected by the Company's Board of Directors;
PROVIDED, HOWEVER, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following the
later of (x) the first occurrence of a Triggering Event and (y) the date on
which the Company's right of redemption pursuant to Section 23(a) expires (the
later of (x) and (y) being referred to herein as the "SECTION 11(a)(ii) TRIGGER
DATE"), then the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Exercise Price, Common
Shares (to the extent available), except to the extent that the Company has not
obtained any necessary stockholder or regulatory approval for such issuance, and
then, if necessary, cash, which shares and/or cash have an aggregate

                                      -17-
<PAGE>

value equal to the Spread. If the Company's Board of Directors shall determine
in good faith that it is likely that sufficient additional Common Shares could
be authorized for issuance upon exercise in full of the Rights or that any
necessary regulatory approval for such issuance will be obtained, the thirty
(30) day period set forth above may be extended to the extent necessary, but not
more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order
that the Company may seek stockholder approval for the authorization of such
additional shares or take action to obtain such regulatory approval (such
period, as it may be extended, the "SUBSTITUTION PERIOD"). To the extent that
the Company determines that some action need be taken pursuant to the first
and/or second sentences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares, to take any action to obtain any required
regulatory approval and/or to decide the appropriate form of distribution to be
made pursuant to such first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the Common Shares
shall be the Current Per Share Market Price of the Common Shares on the Section
11(a)(ii) Trigger Date and the value of any Common Stock Equivalent shall be
deemed to have the same value as the Common Shares on such date.

              (b)    In case the Company shall, at any time after the date of
this Agreement, fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Shares entitling such holders (for a period
expiring within forty-five (45) calendar days after such record date) to
subscribe for or purchase Preferred Shares or Equivalent Shares or securities
convertible into Preferred Shares or Equivalent Shares at a price per share (or
having a conversion price per share, if a security convertible into Preferred
Shares or Equivalent Shares) less than the then Current Per Share Market Price
of the Preferred Shares or Equivalent Shares on such record date, then, in each
such case, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares and Equivalent Shares (if any) outstanding on such record date,
plus the number of Preferred Shares or Equivalent Shares, as the case may be,
which the aggregate offering price of the total number of Preferred Shares or
Equivalent Shares, as the case may be, to be offered or issued (and/or the
aggregate initial conversion price of the convertible securities to be offered
or issued) would purchase at such current market price, and the denominator of
which shall be the number of Preferred Shares and Equivalent Shares (if any)
outstanding on such record date, plus the number of additional Preferred Shares
or Equivalent Shares, as the case may be, to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible); PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Company's
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the holders
of the Rights. Preferred Shares and Equivalent Shares owned by or held for

                                      -18-
<PAGE>

the account of the Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights, options or warrants are
not so issued, the Exercise Price shall be adjusted to be the Exercise Price
which would then be in effect if such record date had not been fixed.

              (c)    In case the Company shall, at any time after the date of
this Agreement, fix a record date for the making of a distribution to all
holders of the Preferred Shares or of any class or series of Equivalent Shares
(including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly cash
dividend, if any, or a dividend payable in Preferred Shares) or subscription
rights, options or warrants (excluding those referred to in Section 11(b)),
then, in each such case, the Exercise Price to be in effect after such record
date shall be determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
Current Per Share Market Price of a Preferred Share or an Equivalent Share on
such record date, less the fair market value per Preferred Share or Equivalent
Share (as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent) of the portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to a Preferred
Share or Equivalent Share, as the case may be, and the denominator of which
shall be such Current Per Share Market Price of a Preferred Share or Equivalent
Share on such record date; PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. Such adjustments shall be made successively whenever such
a record date is fixed, and in the event that such distribution is not so made,
the Exercise Price shall be adjusted to be the Exercise Price which would have
been in effect if such record date had not been fixed.

              (d)    Anything herein to the contrary notwithstanding, no
adjustment in the Exercise Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1.00%) of the Exercise
Price; PROVIDED, HOWEVER, that any adjustments which by reason of this Section
11(d) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth of a Common
Share or other share or one hundred-thousandth of a Preferred Share, as the case
may be. Notwithstanding the first sentence of this Section 11(d), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
(3) years from the date of the transaction which requires such adjustment or
(ii) the Expiration Date.

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

                                      -19-
<PAGE>

11(j), 11(k) and 11(l), and the provisions of Sections 7, 9, 10, 13 and 14 with
respect to the Preferred Shares shall apply on like terms to any such other
shares.

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

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

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

                                      -20-
<PAGE>

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

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

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

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

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

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

                                      -21-
<PAGE>

connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then, in each such event, except as otherwise
provided in this Section 11(a) and Section 7(e) hereof: (1) each Common Share
(or shares of capital stock issued in such reclassification of the Common
Shares) outstanding immediately following such time shall have associated with
it the number of Rights as were associated with one Common Share immediately
prior to the occurrence of the event described in clauses (A)-(D) above; (2) the
Exercise Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification shall be
adjusted so that the Exercise Price thereafter shall equal the result obtained
by multiplying the Exercise Price in effect immediately prior to such time by a
fraction, the numerator of which shall be the total number of Common Shares
outstanding immediately prior to the event described in clauses (A)-(D) above,
and the denominator of which shall be the total number of Common Shares
outstanding immediately after such event; PROVIDED, HOWEVER, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of such Right; and (3) the number of one-thousandths of a
Preferred Share (or shares of such other capital stock) issuable upon the
exercise of each Right outstanding after such event shall equal the number of
one-thousandths of a Preferred Share (or shares of such other capital stock) as
were issuable with respect to one Right immediately prior to such event. Each
Common Share that shall become outstanding after an adjustment has been made
pursuant to this Section 11(n) shall have associated with it the number of
Rights, exercisable at the Exercise Price and for the number of one-thousandths
of a Preferred Share (or shares of such other capital stock) as one Common Share
has associated with it immediately following the adjustment made pursuant to
this Section 11(n). If an event occurs which would require an adjustment under
both this Section 11(n) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(n) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii) hereof.

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

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

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

                     (i)    the Company shall consolidate with, or merge with
and into, any other Person (other than a wholly-owned Subsidiary of the Company
in a transaction the principal purpose

                                      -22-
<PAGE>

of which is to change the state of incorporation of the Company and which
complies with Section 11(m) hereof);

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

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

                            then, concurrent with and in each such case,

                            (A)    each holder of a Right (except as provided in
Section 7(e) hereof) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the Total Exercise Price applicable
immediately prior to the occurrence of the Section 13 Event in accordance with
the terms of this Agreement, such number of validly authorized and issued, fully
paid, nonassessable and freely tradeable Common Shares of the Principal Party
(as hereinafter defined), free of any liens, encumbrances, rights of first
refusal or other adverse claims, as shall be equal to the result obtained by
dividing such Total Exercise Price by an amount equal to fifty percent (50%) of
the Current Per Share Market Price of the Common Shares of such Principal Party
on the date of consummation of such Section 13 Event, PROVIDED, HOWEVER, that
the Exercise Price and the number of Common Shares of such Principal Party so
receivable upon exercise of a Right shall be subject to further adjustment as
appropriate in accordance with Section 11(e) hereof;

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

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

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

                            (E)    upon the subsequent occurrence of any
consolidation, merger, sale or transfer of assets or other extraordinary
transaction in respect of such Principal Party, each

                                      -23-
<PAGE>

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

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

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

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

                     (ii)   in the case of any transaction described in clause
(iii) of Section 13(a) hereof, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if more than one Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred and each such portion would, were it not for the other
equal portions, constitute the greatest portion of the assets or earning power
so transferred, or if the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such Persons is the issuer of
Common Shares having the greatest aggregate market value of shares outstanding;
PROVIDED, HOWEVER, that in any such case described in the foregoing clause
(b)(i) or (b)(ii), if the Common Shares of such Person are not at such time or
have not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the Common Shares of which are and have been so
registered, the term "Principal Party" shall refer to such other Person, or (2)
if such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Shares of which are and have been so registered, the term "Principal
Party" shall refer to whichever of such Persons is the issuer of Common Shares
having the greatest aggregate market value of shares outstanding, or (3) if such

                                      -24-
<PAGE>

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 ration as its interest in such Person bears to the total of such interests.

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

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

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

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

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

              (d)    In case the "Principal Party" for purposes of Section 13(b)
hereof has provision in any of its authorized securities or in its certificate
of incorporation or by-laws or other

                                      -25-
<PAGE>

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

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

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

       Section 14.   FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

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

              (b)    The Company shall not be required to issue fractions of
Preferred Shares (other than fractions that are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions that are integral multiples of one one-thousandth of a Preferred
Share). Interests in fractions of Preferred Shares in integral multiples of one
one-thousandth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate

                                      -26-
<PAGE>

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 Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not integral multiples
of one one-thousandth of a Preferred Share, the Company shall pay to the
registered holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of a Preferred Share. For purposes of this Section 14(b), the
current market value of a Preferred Share shall be the product equal to (x) one
thousandth multiplied by (y) the closing price of a Common Share (as determined
pursuant to the second sentence of Section 1(j) hereof) for the Trading Day
immediately prior to the date of such exercise.

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

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

       Section 15.   RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Rights Certificate (or, prior
to the Distribution Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his or her own behalf and for
his or her own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
his or her right to exercise the Rights evidenced by such Rights Certificate in
the manner provided in such Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.

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

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

                                      -27-
<PAGE>

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

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

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

       Section 18.   CONCERNING THE RIGHTS AGENT.

              (a)    The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability or expense, incurred without gross 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 in the premises. In no event will the Rights Agent be liable for
special, indirect, incidental or consequential loss or damage of any kind
whatsoever, even if the Rights Agent has been advised of the possibility of such
loss or damage.

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

                                      -28-
<PAGE>

necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.

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

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

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

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

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

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

                                      -29-
<PAGE>

the Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.

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

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

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

              (f)    The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.

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

                                      -30-
<PAGE>

application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in
the case of an omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken
or omitted.

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

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

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

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

       Section 21.   CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company and to each
transfer agent of the Preferred Shares and the Common Shares by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Preferred
Shares and the Common Shares by registered or certified mail, and to the holders
of the Rights Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his or her Rights
Certificate for inspection by the Company), then the registered holder of any
Rights Certificate may apply to any court of competent jurisdiction

                                      -31-
<PAGE>

for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of any state of the
United States, in good standing, which is authorized under such laws to exercise
corporate trust or stockholder services powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $100
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Preferred
Shares and the Common Shares, and mail a notice thereof in writing to the
registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

       Section 22.   ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Exercise Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Shares following the Distribution Date and
prior to the redemption or expiration of the Rights, the Company (a) shall, with
respect to Common Shares so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement or upon the exercise,
conversion or exchange of other securities of the Company outstanding at the
date hereof or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; PROVIDED, HOWEVER, that (i) no such Rights Certificate
shall be issued and this sentence shall be null and void AB INITIO if, and to
the extent that, such issuance or this sentence would create a significant risk
of or result in material adverse tax consequences to the Company or the Person
to whom such Rights Certificate would be issued or would create a significant
risk of or result in such options' or employee plans' or arrangements' failing
to qualify for otherwise available special tax treatment and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.

       Section 23.   REDEMPTION.

       (a)    The Company may, at its option and with the approval of the Board
of Directors, at any time prior to the Close of Business on the earlier of (i)
the fifth day following the Shares Acquisition Date (or such later date as may
be determined by action of the Company's Board of Directors and publicly
announced by the Company) and (ii) the Final Expiration Date, redeem all but

                                      -32-
<PAGE>

not less than all the then outstanding Rights at a redemption price of $0.0001
per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price being
herein referred to as the "REDEMPTION PRICE") and the Company may, at its
option, pay the Redemption Price either in Common Shares (based on the Current
Per Share Market Price thereof at the time of redemption) or cash. Such
redemption of the Rights by the Company may be made effective at such time, on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish. The date on which the Board of Directors elects to
make the redemption effective shall be referred to as the "REDEMPTION DATE."

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

       Section 24.   EXCHANGE.

              (a)    Subject to applicable laws, rules and regulations, and
subject to subsection 24(c) below, the Company may, at its option, by action of
the Board of Directors, at any time after the occurrence of a Triggering Event,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
7(e) hereof) for Common Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "EXCHANGE RATIO"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any such Subsidiary, or any entity
holding Common Shares for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Shares then outstanding.

                                      -33-
<PAGE>

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

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

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

                                      -34-
<PAGE>

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

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

       Section 25.   NOTICE OF CERTAIN EVENTS.

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

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

       Section 26.   NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:

                                      -35-
<PAGE>

                           Commerce One, Inc.
                           4440 Rosewood Drive
                           Pleasanton, CA 94588

                           with a copy to:
                           Wilson Sonsini Goodrich & Rosati
                           Professional Corporation
                           650 Page Mill Road
                           Palo Alto, California 94304-1050
                           Attn: N. Anthony Jeffries

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

                           Fleet National Bank
                           c/o EquiServe Limited Partnership
                           150 Royall Street
                           Canton, MA 02021
                           Attn: Client Administration

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

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

                                      -36-
<PAGE>

of this Section 27, the Rights Agent shall execute such supplement or amendment.
Prior to the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Shares.

       Section 28.   SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
In furtherance and not in limitation of the foregoing, all covenants and
provisions of the Agreement by or for the benefit of the Company shall bind and
inure to the benefit of New Commerce One Holding, Inc. upon the reorganization
of the Company into a holding company structure as contemplated by the Formation
Agreement.

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

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

       Section 31.   SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, HOWEVER, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of

                                      -37-
<PAGE>

redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the Close of Business on the tenth day following the date of such
determination by the Board of Directors.

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

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

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

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

"COMPANY"                               COMMERCE ONE, INC.

                                        By:_____________________________________

                                        Name:___________________________________

                                        Title:__________________________________

"RIGHTS AGENT"                          FLEET NATIONAL BANK

                                        By:_____________________________________

                                        Name:___________________________________

                                        Title:__________________________________

                                      -38-
<PAGE>

                                    EXHIBIT A

                CERTIFICATE OF DESIGNATION OF RIGHTS, PREFERENCES
                                AND PRIVILEGES OF
                     SERIES A PARTICIPATING PREFERRED STOCK
                              OF COMMERCE ONE, INC.

       The undersigned, Mark B. Hoffman and Robert M. Tarkoff, do hereby
certify:

       1.     That they are the duly elected and acting Chief Executive
Officer and Secretary, respectively, of Commerce One, Inc., a Delaware
corporation (the "CORPORATION").

       2.     That pursuant to the authority conferred upon the Board of
Directors by the Restated Certificate of Incorporation of the Corporation, the
Board of Directors on March 23, 2001, adopted the following resolution creating
a series of 300,000 shares of Preferred Stock designated as Series A
Participating Preferred Stock:

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

       Section 1.   DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "SERIES A PARTICIPATING PREFERRED STOCK." The Series A
Participating Preferred Stock shall have a par value of $0.0001 per share, and
the number of shares constituting such series shall be 300,000.

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

       Section 3.    DIVIDENDS AND DISTRIBUTIONS.

              (a)    Subject to the prior and superior right of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Participating Preferred Stock with respect to dividends, the
holders of shares of Series A Participating Preferred Stock shall be entitled to
receive when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the last day
of February, May, August and November in each year (each such date being
referred to herein as a "QUARTERLY

<PAGE>

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

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

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

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

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

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

              (c)    Except as required by law, the holders of Series A
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent

                                      -2-
<PAGE>

that they are entitled to vote with holders of Common Stock as set forth herein)
for taking any corporate action.

       Section 5.    CERTAIN RESTRICTIONS.

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

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

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

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

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

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

              (c)    The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the

                                      -3-
<PAGE>

Corporation could, under paragraph (a) of this Section 5, purchase or otherwise
acquire such shares at such time and in such manner.

       Section 6.    REACQUIRED SHARES. Any shares of Series A Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein and in the Restated Certificate of Incorporation, as then amended.

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

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

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

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

         Section 11. AMENDMENT. The Restated Certificate of Incorporation of the
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preference or special rights of the Series A
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority of the outstanding shares of
Series A Participating Preferred Stock, voting separately as a series.

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

                                      -4-
<PAGE>

       RESOLVED FURTHER, that the Chief Executive Officer, President or any
Vice President and the Secretary or any Assistant Secretary of this
corporation be, and they hereby are, authorized and directed to prepare and
file a Certificate of Designation of Rights, Preferences and Privileges in
accordance with the foregoing resolution and the provisions of Delaware law
and to take such actions as they may deem necessary or appropriate to carry
out the intent of the foregoing resolution."

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

       Executed at Pleasanton, California on April 18, 2001.

                                          /s/ MARK B. HOFFMAN
                                          ------------------------------------
                                          Chairman and Chief Executive Officer

                                          /s/ ROBERT M. TARKOFF
                                          ------------------------------------
                                          Secretary

                                      -5-
<PAGE>

                                    EXHIBIT B

                           FORM OF RIGHTS CERTIFICATE

Certificate No. R-                                              _________ Rights

       NOT EXERCISABLE AFTER THE EARLIER OF (i) APRIL 30, 2001, (ii) THE DATE
       TERMINATED BY THE COMPANY OR (iii) THE DATE THE COMPANY EXCHANGES THE
       RIGHTS PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO
       REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.0001 PER RIGHT ON THE
       TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
       RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
       ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
       AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
       VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
       BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR
       AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
       DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
       AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
       CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH RIGHTS AGREEMENT.](*)

                               RIGHTS CERTIFICATE

                               COMMERCE ONE, INC.

       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 18, 2001, (the "RIGHTS
AGREEMENT"), between Commerce One, Inc, a Delaware corporation (the "COMPANY"),
and Fleet National Bank ( the "RIGHTS AGENT"), to purchase from the Company at
any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., New York time, on April 30, 2001, at the
office of the Rights Agent designated for such purpose, or at the

_______________________
(*) The portion of the legend in bracket shall be inserted only if applicable
and shall replace the preceding sentence.

<PAGE>

office of its successor as Rights Agent, one one-thousandth (1/1,000) of a fully
paid and non-assessable share of Series A Participating Preferred Stock, par
value $0.0001 per share (the "PREFERRED SHARES"), of the Company, at an Exercise
Price of $70.00 per one-thousandth of a Preferred Share (the "EXERCISE PRICE"),
upon presentation and surrender of this Rights Certificate with the Form of
Election to Purchase and related Certificate duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of one-thousandths of a
Preferred Share which may be purchased upon exercise hereof) set forth above are
the number and Exercise Price as of April 30, 2001, based on the Preferred
Shares as constituted at such date. As provided in the Rights Agreement, the
Exercise Price and the number and kind of Preferred Shares or other securities
which may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events.

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

       Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Rights Certificate (i) may be redeemed by the Company, at its option, at
a redemption price of $0.0001 per Right or (ii) may be exchanged by the Company
in whole or in part for Common Shares, substantially equivalent rights or other
consideration as determined by the Company.

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

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

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

                                      -2-
<PAGE>

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

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

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

ATTEST:                                  COMMERCE ONE, INC.

__________________________________       By:____________________________________
Secretary

                                         Its:___________________________________

Countersigned:

FLEET NATIONAL BANK
as Rights Agent

By:_______________________________

Its:______________________________

                                      -3-
<PAGE>

                   FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE

                               FORM OF ASSIGNMENT

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

       FOR VALUE RECEIVED _______________ hereby sells, assigns and transfers
unto____________________________________________________________________________
                  (Please print name and address of transferee)

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

Dated: _______________, ____

                                        ________________________________________
                                        Signature

Signature Guaranteed:

       Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.

<PAGE>

                                   CERTIFICATE

       The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated: _______________, ____

                                        ________________________________________
                                        Signature

Signature Guaranteed:

       Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.

<PAGE>

             FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE -- CONTINUED

                          FORM OF ELECTION TO PURCHASE

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

To:___________________________

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

Please insert social security
or other identifying number

________________________________________________________________________________
                         (Please print name and address)

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

Please insert social security
or other identifying number

________________________________________________________________________________
                         (Please print name and address)

________________________________________________________________________________

Dated: _______________, ____

                                        ________________________________________
                                        Signature

Signature Guaranteed:

       Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.

<PAGE>

                                   CERTIFICATE

       The undersigned hereby certifies by checking the appropriate boxes that:

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

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

Dated: _______________, ____

                                        ________________________________________
                                        Signature

Signature Guaranteed:

       Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.

<PAGE>

             FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE -- CONTINUED

                                     NOTICE

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

<PAGE>

                                    EXHIBIT C

                             SHAREHOLDER RIGHTS PLAN
                               COMMERCE ONE, INC.

                                SUMMARY OF RIGHTS

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

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

PREFERRED STOCK               After the Distribution Date, each Right will
PURCHASABLE UPON              entitle the holder to purchase for $70 (the
EXERCISE OF RIGHTS:           "EXERCISE PRICE"), a fraction of a share of the
                              Company's Preferred Stock with economic terms
                              similar to that of one share of the Company's
                              Common Stock.

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

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

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

<PAGE>

                              adjustment).

REDEMPTION OF THE             Rights will be redeemable at the Company's option
RIGHTS:                       for $0.0001 per Right at any time on or prior to
                              the fifth day (or such later date as may be
                              determined by the Company's Board of Directors)
                              after public announcement that a Person has
                              acquired  beneficial ownership of 15% or more of
                              the Company's Common Stock (the "SHARES
                              ACQUISITION DATE").

EXPIRATION OF THE             The Rights expire on the earliest of (a)
RIGHTS:                       April 30, 2011, or (b) exchange or redemption of
                              the Rights as described above.

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

VOTING RIGHTS:                Rights will not have any voting rights.

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

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

The foregoing is a summary of certain principal terms of the Stockholder Rights
Plan. It may be amended from time to time. A copy of the Rights Agreement will
be filed with the Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A dated April 18, 2001. A copy of the Rights
Agreement is available free of charge from the Company.

                                      -2-

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