Document:

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                                                                     EXHIBIT 4.2

                      7.0% CONVERTIBLE SUBORDINATED NOTES
                                   DUE 2005

                         REGISTRATION RIGHTS AGREEMENT

                         Dated as of January 25, 2000

                                 by and among

                                EARTHWEB INC.,
                                as the Company,

              MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

                                      and

                     FLEETBOSTON ROBERTSON STEPHENS INC.,
                             as Initial Purchasers
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                               TABLE OF CONTENTS

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SECTION 1.  Definitions........................1
SECTION 2.  Shelf Registration Statement.......5
SECTION 3.  Liquidated Damages.................7
SECTION 4.  Registration Procedures............9
SECTION 5.  Registration Expenses.............15
SECTION 6.  Indemnification...................17
SECTION 7.  Underwritten Registration.........20
SECTION 8.  Miscellaneous.....................20
</TABLE>
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     This Registration Rights Agreement is made and entered into as of January
25, 2000 by and among EARTHWEB INC., a Delaware corporation (the "Company"),
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED and FLEETBOSTON ROBERTSON
STEPHENS INC. (the "Initial Purchasers") who have purchased or have the right to
purchase up to $75,000,000 principal amount of 7.0% Convertible Subordinated
Notes due 2005  (the "Notes") of the Company with the option to purchase a
further $11,250,000 in principal amount of Notes pursuant to the Purchase
Agreement (as such term is defined below).

     This Agreement is made pursuant to the Purchase Agreement, dated January
19, 2000, among the Company and the Initial Purchasers (the "Purchase
Agreement").  In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
provided for in this Agreement to the Initial Purchasers and their respective
direct and indirect transferees (i) for the benefit of the Initial Purchasers,
(ii) for the benefit of the holders from time to time of the Notes (including
the Initial Purchasers), (iii) for the benefit of the holders from time to time
of the Common Stock issuable or issued upon conversion of the Notes, and (iv)
for the benefit of the holders from time to time of the securities constituting
the Transfer Restricted Securities.  The execution of this Agreement is a
condition to the closing of the transactions contemplated by the Purchase
Agreement, and each Holder (as defined below) by participating in a Registration
Statement agrees to be bound by this Agreement.

     The parties hereby agree as follows:

     Section 1.  Definitions.    As used in this Agreement, the following terms
shall have the following meanings:

     Act:  As defined in this Section 1.

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

     Agreement:  This Registration Rights Agreement, as the same may be amended,
supplemented or modified from time to time in accordance with the terms hereof.
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     Business Day:  Each Monday, Tuesday, Wednesday, Thursday and Friday that is
not a day on which banking institutions in New York, New York are authorized or
obligated by law or executive order to close.

     Closing Date: January 25, 2000.

     Common Stock:  Common Stock, $.01 par value per share, of the Company and
any other shares of common stock as may constitute "Common Stock" for purposes
of the Indenture as issuable or issued upon conversion of the Notes.

     Company: EarthWeb Inc., a Delaware corporation, and any successor
corporation thereto.

     Controlling Person:  As defined in Section 6(a) hereof.

     Damages Payment Date:  Each of the semi-annual interest payment dates
provided in the Notes.

     Effectiveness Period:  As defined in Section 2(a) hereof.

     Effectiveness Target Date:  The 120th day following the Closing Date.

     Exchange Act:  The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the SEC thereunder.

     Filing Date:  The 60th day after the Closing Date.

     Holder:  Each owner of any Transfer Restricted Securities.

     Indemnified Person:  As defined in Section 6(a) hereof.

     Indenture:  The Indenture, dated as of the date hereof, between the Company
and the Trustee, pursuant to which the Notes are to be issued, as the same may
be amended, modified or supplemented from time to time in accordance with the
terms thereof.

     Initial Purchasers:  As defined in the first paragraph hereof.

     Liquidated Damages:  As defined in Section 3(a) hereof.

     Notice and Questionnaire: The Notice and Questionnaire attached hereto as
Exhibit A.

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     Proceeding:  An action, claim, suit or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.

     Prospectus:  The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed in reliance upon Rule 430A), as
amended or supplemented by any prospectus supplement, with respect to the resale
of any of the Transfer Restricted Securities covered by such Registration
Statement, and all other amendments and supplements to any such prospectus,
including post-effective amendments, and all materials incorporated by reference
or deemed to be incorporated by reference, if any, in such prospectus.

     Purchase Agreement:  As defined in the second paragraph hereof.

     Record Holder:  (i) with respect to any Damages Payment Date relating to
any shares of Common Stock as to which any such Liquidated Damages have accrued,
the registered Holder of such shares 15 days prior to the next succeeding
Damages Payment Date; and (ii) with respect to any Damages Payment Date relating
to any Notes as to which any such Liquidated Damages has accrued, the registered
Holder of such Notes 15 days prior to the next succeeding Damages Payment Date.

     Registration Default:  As defined in Section 3(a) hereof.

     Registration Statement:  Any registration statement of the Company filed
with the SEC pursuant to the Securities Act that covers the resale of any of the
Transfer Restricted Securities pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference, if any, in such registration statement.

     Requisite Information:  As defined in Section 2(c) hereof.

     Rule 144:  Rule 144 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any successor rule or
regulation.

     Rule 144A:  Rule 144A promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any successor rule or
regulation.

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     Rule 158:  Rule 158 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any successor rule or
regulation.

     Rule 415:  Rule 415 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any successor rule or
regulation.

     Rule 424:  Rule 424 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any successor rule or
regulation.

     Rule 430A:  Rule 430A promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any successor rule or
regulation.

     SEC:  The Securities and Exchange Commission.

     Securities Act:  The Securities Act of 1933, as amended, and the rules and
regulations promulgated by the SEC thereunder.

     Shelf Registration Statement:  As defined in Section 2(a) hereof.

     TIA:  The Trust Indenture Act of 1939, as amended, and the rules and
regulations promulgated by the SEC thereunder.

     Transfer Restricted Securities:  The Notes, the shares of Common Stock into
which such Notes are converted or convertible (including any shares of Common
Stock issued or issuable thereon upon any stock split, stock combination, stock
dividend or the like), upon original issuance thereof and at all times
subsequent thereto, and associated related rights, if any, until the earliest of
(i) the date on which the resale thereof has been effectively registered under
the Securities Act and disposed of in accordance with the Registration Statement
relating thereto, (ii) the date on which such security has been distributed to
the public pursuant to Rule 144 or is saleable pursuant to paragraph  (k) of
Rule 144 or (iii) the date on which it ceases to be outstanding.

     Transfer Agent:  The registrar and transfer agent for the Company's Common
Stock.

     Trustee:  The trustee under the Indenture.

     References herein to the term "Holders of a majority in interest of
Transfer Restricted Securities" or words to a similar effect shall mean, with
respect to any

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request, notice, demand, objection or other action by the Holders hereunder or
pursuant hereto (each, an "Act"), registered Holders of a number of shares of
then outstanding Common Stock constituting Transfer Restricted Securities and an
aggregate amount of then outstanding Notes constituting Transfer Restricted
Securities, such that the sum of such shares of Common Stock and the shares of
Common Stock issuable upon conversion of such Notes constitutes in excess of 50%
of the sum of all of the then outstanding shares of Common Stock constituting
Transfer Restricted Securities and the number of shares of Common Stock issuable
upon conversion of then outstanding Notes constituting Transfer Restricted
Securities. For purposes of the preceding sentence, Transfer Restricted
Securities owned, directly or indirectly, by the Company or its Affiliates shall
be deemed not to be outstanding.

     Section 2.  Shelf Registration Statement.

       (a)  The Company agrees to file with the SEC as soon as reasonably
practicable after the Closing Date, but in no event later than the Filing Date,
a Registration Statement for an offering to be made on a continuous basis
pursuant to Rule 415 covering all of the Transfer Restricted Securities or
separate Registration Statements for an offering to be made on a continuous
basis pursuant to Rule 415 covering all of the Common Stock and Notes
constituting Transfer Restricted Securities, respectively (such Registration
Statement or Statements, collectively, the "Shelf Registration Statement").
Each Shelf Registration Statement shall be on Form S-3 under the Securities Act
or another appropriate form selected by the Company permitting registration of
such Transfer Restricted Securities for resale by the Holders in the manner or
manners reasonably designated by Holders of a majority in interest of Transfer
Restricted Securities being sold.  The Company shall not permit any securities
other than the Transfer Restricted Securities to be included in any Shelf
Registration Statement.  The Company shall use all reasonable efforts to cause
each Shelf Registration Statement to be declared effective pursuant to the
Securities Act as soon as reasonably practicable following the filing thereof
and to keep each Shelf Registration Statement continuously effective under the
Securities Act for two years after the date on which all of the Transfer
Restricted Securities are sold (including those sold pursuant to the option
granted to the Initial Purchasers in the Purchase Agreement) to the Initial
Purchasers (the "Effectiveness Period"), or such shorter period ending when
there cease to be any Transfer Restricted Securities outstanding.

       (b)  Supplements and Amendments.  The Company shall use all reasonable
efforts to keep each Shelf Registration Statement continuously effective by
supplementing and amending the Shelf Registration Statement if

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required by the rules, regulations or instructions applicable to the
registration form used for such Shelf Registration Statement, if required by the
Securities Act or if reasonably requested by the Holders of a majority in
interest of the Transfer Restricted Securities or by any underwriter of such
Transfer Restricted Securities.

       (c)  Selling Securityholder Information. Each Holder wishing to sell
Transfer Restricted Securities pursuant to a Shelf Registration Statement and
related Prospectus agrees to deliver a Notice and Questionnaire that confirms
such Holder's agreement to be bound by the terms of this Agreement and includes
such information regarding it and the distribution of its Transfer Restricted
Securities as is required by law to be disclosed by the Holder in the applicable
Registration Statement (the "Requisite Information") to the Company prior to any
intended distribution of Transfer Restricted Securities under the Shelf
Registration Statement. The Company shall not be required to include in any
Shelf Registration Statement and related Prospectus the Transfer Restricted
Securities of any Holder that does not provide the Company with a Notice and
Questionnaire in accordance with this Section 2(c).  The Company shall file,
within five Business Days after the receipt of a Notice and Questionnaire from
any Holder which includes the Requisite Information with respect to such Holder,
a Prospectus supplement pursuant to Rule 424 or otherwise amend or supplement
such Registration Statement to include in the Prospectus the Requisite
Information as to such Holder (and the Transfer Restricted Securities held by
such Holder), and the Company shall provide such Holder within five Business
Days after receipt of such Notice and Questionnaire with a copy of such
Prospectus as so amended or supplemented containing the Requisite Information in
order to permit such Holder to comply with the Prospectus delivery requirements
of the Securities Act in a timely manner with respect to any proposed
disposition of such Holder's Transfer Restricted Securities and to file the same
with the SEC.  Each Holder shall promptly notify the Company of any material
changes to the Requisite Information contained in the Notice and Questionnaire
provided to the Company by such Holder.  If the Company shall fail to file the
appropriate supplement or amendment within five Business Days of receipt of such
notice, the Company shall pay the Holder Liquidated Damages in the manner set
forth in Section 3.  Furthermore, if the filing requires a post-effective
amendment to the Registration Statement and such amendment is not declared
effective within 45 Business Days of the filing of the post-effective amendment,
the Company shall pay the Holder Liquidated Damages in the manner set forth in
Section 3.

     If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require, in the event that such reference to such Holder by
name or otherwise is not required by the Securities Act or any similar Federal
statute

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then in force, the deletion of the reference to such Holder in such Registration
Statement at any time subsequent to the time that such reference ceases to be
required.

       (d)  Material Events; Suspension of Sales.  Notwithstanding the
provisions contained in this Section 2, in the event that, in the judgment of
the Company's Board of Directors, it is advisable to suspend use of the
Prospectus due to pending corporate developments, public filings with the SEC or
similar events, the Company shall promptly deliver a written certificate to each
registered Holder, the Trustee, the Transfer Agent and the managing
underwriters, if any, to the effect that the use of the Prospectus is to be
suspended until the Company shall deliver a written notice that the use of the
Prospectus may be resumed.  Thereafter, the use of the Prospectus shall be
suspended, and the Company shall not be required to maintain the effectiveness
of, or amend or update the Shelf Registration Statement, or amend or supplement
the Prospectus; provided, however, that the Company shall only be permitted to
suspend the use of the Prospectus for a period not to exceed 30 days in any six-
month period or two periods not to exceed an aggregate of 60 days in any 12-
month period.  The Company will use its best efforts to ensure that the use of
the Prospectus may be resumed as soon as, in the judgment of the Company's Board
of Directors, disclosure of the material relating to such pending development,
filing or event would not have a material adverse effect on the Company.

       (e)  Additional Agreements of Holders.  Each Holder agrees not to dispose
of Transfer Restricted Securities pursuant to the Shelf Registration Statement
without complying with the prospectus delivery requirements under the Act and
the provisions of paragraph (d) above regarding use of the Prospectus.  Each
Holder further agrees that it will comply fully with applicable federal and
state securities laws in connection with the distribution of any Transfer
Restricted Securities pursuant to the Shelf Registration Statement.  Each Holder
further acknowledges having been advised by the Company that applicable federal
securities laws prohibit Holders from trading in securities of the Company at
any time while in possession of material non-public information about the
Company.

     Section 3.  Liquidated Damages.

       (a)  The Company and the Initial Purchasers agree that the Holders will
suffer damages if the Company fails to fulfill its obligations pursuant to
Section 2 hereof and that it would not be possible to ascertain the extent of
such damages.  Accordingly, the Company hereby agrees to pay liquidated damages
("Liquidated Damages") to each Holder under the circumstances and to the extent
set forth below:

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            (i)   if the Shelf Registration Statement has not been filed with
     the SEC on or prior to the Filing Date; or

            (ii)  if each Shelf Registration Statement is not declared effective
     by the SEC on or prior to the applicable Effectiveness Target Date; or

            (iii) any Shelf Registration Statement ceases to be effective or
     usable at any time during the Effectiveness Period (without being succeeded
     on the same day immediately by a post-effective amendment or supplement to
     such Registration Statement that cures such failure and that is itself, in
     the case of post-effective amendment, immediately declared effective) for a
     period of time which shall exceed 90 days in the aggregate in any period of
     365 consecutive days; (any of the foregoing, a "Registration Default").

     In the event of a Registration Default, the Company will pay Liquidated
Damages to each holder of Transfer Restricted Securities, during the first 90-
day period immediately following the occurrence of such Registration Default in
an amount equal to $0.05 per week per $1,000 principal amount of Notes adjusted
to an equivalent per share basis in accordance with the conversion price.  The
rate of accrual of the Liquidated Damages will increase by $0.05 per week per
$1,000 principal amount of Notes or Common Stock constituting Transfer
Restricted Securities (adjusted to an equivalent per share basis in accordance
with the conversion price for Common Stock constituting Transfer Restricted
Securities) for each subsequent 90-day period until the applicable Registration
Statement is filed, the applicable Registration Statement is declared effective
and becomes available for effecting sales of securities, or the Shelf
Registration Statement again becomes effective and becomes available for
effecting sales of securities, as the case may be, up to a maximum amount of
Liquidated Damages of $0.25 per week per $1,000 principal amount of Notes
adjusted to an equivalent per share basis in accordance with the conversion
price.  Following the cure of a Registration Default, Liquidated Damages will
cease to accrue with respect to such Registration Default (without in any way
limiting the effect of any subsequent Registration Default).  All accrued
Liquidated Damages shall be paid to the holders of (i) Notes constituting
Transfer Restricted Securities, pursuant to the terms of the Indenture with
respect to the payment of interest and (ii) shares of Common Stock, in the
manner as interest payments on the Notes on semiannual payment dates that
correspond to interest payment dates for the Notes.  The parties hereto agree
and acknowledge that the payment of Liquidated Damages to holders of Common
Stock upon a Registration Default pursuant to this Agreement shall not be a
dividend on such shares of Common Stock.

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       (b)  The Company shall notify the Transfer Agent or the Trustee, as the
case may be, within one Business Day after each and every date on which a
Registration Default occurs.  Liquidated Damages shall be paid by the Company to
the Record Holders of Common Stock on each Damages Payment Date by wire transfer
of immediately available funds to the accounts specified by them or by mailing
checks to their registered addresses as they appear in the register of the
Company for the Common Stock, if no such accounts have been specified in the
Notice and Questionnaire on or before the Damages Payment Date; and Liquidated
Damages shall be paid by the Company to the Record Holders of the Notes on each
semi-annual interest payment date together with interest to be paid on the Notes
pursuant to the terms of the Indenture, by wire transfer of immediately
available funds to the accounts specified by them or by mailing checks to their
registered addresses as they appear in the Notes Register (as defined in the
Indenture) if no such accounts have been specified in the Notice and
Questionnaire on or before the Damages Payment Date; provided, however, that any
Liquidated Damages accrued with respect to any Notes or portion thereof called
for redemption on a redemption date, repurchased on a repurchase date, or
converted into shares of Common Stock on a conversion date prior to the Damages
Payment Date shall, in any such event, be paid instead to the Holder who
submitted such Notes or portion thereof for redemption, repurchase or conversion
on the applicable redemption date, repurchase date or conversion date, as the
case may be, on such date.

     Section 4.  Registration Procedures.  In connection with the Company's
registration obligations hereunder, the Company shall effect such registrations
on the appropriate form selected by the Company to permit the resale of Transfer
Restricted Securities in accordance with the intended method or methods of
disposition thereof, and pursuant thereto the Company shall as expeditiously as
reasonably possible:

       (a)  No fewer than five Business Days prior to the initial filing of a
Registration Statement or Prospectus and no fewer than two Business Days prior
to the filing of any amendment or supplement thereto (excluding, unless
requested, any document that would be incorporated or deemed to be incorporated
therein by reference and then only to the Holder who so requested), furnish to
the Holders and the managing underwriters, if any, copies of all such documents
proposed to be filed (excluding, unless requested, those incorporated or deemed
to be incorporated by reference and then only to the Holder who so requested)
and cause the officers and directors of the Company, counsel to the Company and
independent certified public accountants to the Company to respond to such
inquiries as shall be necessary in connection with such Registration Statement,
in the opinion of counsel to such underwriters, to conduct a reasonable
investigation

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within the meaning of the Securities Act. The Company shall not file any such
Registration Statement or related Prospectus or any amendments or supplements
thereto (excluding any document that would be incorporated or deemed
incorporated by reference) to which the Holders of a majority in interest of the
Transfer Restricted Securities or the managing underwriters, if any, shall
reasonably object on a timely basis.

       (b)  Prepare and file with the SEC such amendments, including post-
effective amendments, to each Registration Statement as may be necessary to keep
such Registration Statement continuously effective for the applicable time
period set forth in Section 2(a) hereof; cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 under the Securities Act and the Exchange Act with
respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended method or methods
of disposition by the Holder set forth in such Registration Statement as so
amended or in such Prospectus as so supplemented (including, without limitation,
the filing of any Prospectus supplement pursuant to Rule 424 in order to add or
change any selling security holder information (including any such supplements
or amendments pursuant to Section 2(c) hereof, provided such Holder to which
such change applies complies with the Requisite Information requirements of
Section 2(c) hereof)).

       (c)  Notify the Holders and the managing underwriters, if any, promptly
(and in the case of an event specified by clause (i)(A) of this paragraph in no
event fewer than two Business Days prior to such filing), and (if requested by
any such person), confirm such notice in writing, (i) (A) when a Prospectus or
any Prospectus supplement or post-effective amendment is proposed to be filed,
and, (B) with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request of the SEC or
any other Federal or state governmental authority for amendments or supplements
to such Registration Statement or related Prospectus or for additional
information related thereto, (iii) of the issuance by the SEC, any state
securities commission, any other governmental agency or any court of any stop
order, order or injunction suspending or enjoining the use or the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose, (iv) if at any time any of the representations and warranties of the
Company contained in any agreement (including any underwriting agreement)
contemplated by Section 4(m) hereof are not true and correct in all material
respects, (v) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Transfer Restricted Securities for sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose,

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and (vi) of the existence of any fact and the happening of any event that makes
any statement made in such Registration Statement or related Prospectus untrue
in any material respect, or that requires the making of any changes in such
Registration Statement or Prospectus so that in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading and that, in the case of the Prospectus,
such Prospectus will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.

       (d)  Use all reasonable efforts to avoid the issuance of, or, if issued,
to obtain the withdrawal of any stop order or order enjoining or suspending the
use or effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Transfer Restricted Securities for sale in any jurisdiction, at the earliest
practicable moment.

       (e)  If requested by the managing underwriters, if any, or the Holders of
a majority in interest of the Transfer Restricted Securities being sold in
connection with such offering, (i) promptly include in a Prospectus supplement
or post-effective amendment such information as the managing underwriters, if
any, and such Holders agree should, in their reasonable judgment, be included
therein, and (ii) make all required filings of such Prospectus supplement or
such post-effective amendment as soon as reasonably practicable after the
Company has received notification of the matters to be included in such
Prospectus supplement or post-effective amendment; provided, however, that the
Company shall not be required to take any action pursuant to this Section 4(e)
that, in the opinion of counsel for the Company, would violate applicable law;

       (f)  Furnish to each Holder who so requests and each managing
underwriter, if any, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto, including financial
statements (but excluding schedules, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits, unless requested in writing
by such Holder or any managing underwriter);

       (g)  Deliver to each Holder and the underwriters, if any, without charge,
as many copies of the Prospectus or Prospectuses (including each form of
Prospectus) and each amendment or supplement thereto to as such persons may
reasonably request; and, unless the Company shall have given notice to such
Holder pursuant to Section 2(d), the Company hereby consents to the use of such

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Prospectus and each amendment or supplement thereto by each of the selling
Holders of Transfer Restricted Securities and the underwriters, if any, in
connection with the offering and sale of the Transfer Restricted Securities
covered by such Prospectus and any amendment or supplement thereto, provided,
however, that no Holder shall be entitled to use the Prospectus unless and until
such Holder shall have furnished to the Company any and all Requisite
Information pursuant to Section 2(c) hereof;

       (h)  Use all reasonable efforts to register or qualify, or cooperate with
the Holders of Transfer Restricted Securities to be sold or tendered for, the
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of, such Transfer Restricted Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions within the United States
as any Holder or underwriter reasonably requests in writing, keep each such
registration or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept effective and do any
and all other acts or things necessary legally to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the applicable
Registration Statement; provided, however, that the Company shall not be
required to qualify generally to do business in any jurisdiction where it is not
then so qualified, take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject or subject the
Company to any tax in any such jurisdiction where it is not then so subject;

       (i)  In connection with any sale or transfer of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders and the managing underwriters,
if any, to (i) facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold, which certificates shall
not bear any restrictive legends, shall bear a CUSIP number different from the
CUSIP number for the Transfer Restricted Securities and shall be in a form
eligible for deposit with The Depository Trust Company and (ii) enable such
Transfer Restricted Securities to be in such denominations and registered in
such names as the managing underwriters, if any, or Holders may reasonably
request at least two Business Days prior to any sale of Transfer Restricted
Securities;

       (j)  Use all reasonable efforts to cause the offering of the Transfer
Restricted Securities covered by the Registration Statement to be registered
with or approved by such other governmental agencies or authorities within the
United States, except as may be required as a consequence of the nature of a
Holder's business, in which case the Company will cooperate in all reasonable
respects

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with the filing of such Registration Statement and the granting of such
approvals as may be reasonably necessary to enable the seller or sellers thereof
or the underwriters, if any, to consummate the disposition of such Transfer
Restricted Securities; provided, however, that the Company shall not be required
to register the Transfer Restricted Securities in any jurisdiction that would
require the Company to qualify to do business in any jurisdiction where it is
not then so qualified, subject it to general service of process in any such
jurisdiction where it is not then so subject or subject the Company to any tax
in any such jurisdiction where it is not then so subject or to;

       (k)  Upon the occurrence of any event contemplated by Section 4(c)(vi)
hereof, as promptly as reasonably practicable (subject to any suspension of
sales pursuant to Section 2(d) hereof), prepare a supplement or amendment,
including, if appropriate, a post-effective amendment, to each Registration
Statement or a supplement to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, such Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;

       (l)  Prior to the effective date of the first Registration Statement
relating to the Transfer Restricted Securities, to provide a CUSIP number for
the Transfer Restricted Securities to be sold pursuant to the Registration
Statement;

       (m)  Enter into such agreements (including any underwriting agreements in
form, scope and substance as are customary in underwritten offerings) reasonably
satisfactory to the Company and take all such other reasonable actions in
connection therewith (including those reasonably requested by the managing
underwriters, if any, or the Holders of a majority in interest of the Transfer
Restricted Securities being sold) in order to expedite or facilitate the sale of
such Transfer Restricted Securities; provided, however, that the Company is not
required to facilitate an underwritten offering without its consent.  In such
connection, whether or not an underwriting agreement is entered into and whether
or not the registration is an underwritten registration, the Company will (i)
make such representations and warranties to the Holders of such Transfer
Restricted Securities and the underwriters, if any, with respect to the business
of the Company and its subsidiaries (including with respect to businesses or
assets acquired or to be acquired by any of them), and the Registration
Statement, Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, in form, substance and scope as
are customarily made by issuers to underwriters in underwritten offerings and
reasonably

                                       13
<PAGE>

acceptable to the Company, and confirm the same if and when requested; (ii) seek
to obtain opinions of counsel to the Company and updates thereof (which counsel
and opinions (in form, scope and substance) shall be reasonably satisfactory to
the managing underwriters, if any, addressed to each selling Holder of Transfer
Restricted Securities and each of the underwriters, if any, covering the matters
customarily covered in opinions requested in underwritten offerings (including
any such matters as may be reasonably requested by such underwriters); (iii) use
all reasonable efforts to obtain customary "cold comfort" letters and updates
thereof from the independent certified public accountants of the Company (and,
if necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data is, or is required to be, included in
the Registration Statement), addressed (where reasonably possible) to each
selling Holder of Transfer Restricted Securities and each of the underwriters,
if any, such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with underwritten
offerings; (iv) if an underwriting agreement is entered into, the same shall
contain indemnification provisions and procedures no less favorable to the
selling Holders of Transfer Restricted Securities and the underwriters, if any,
than those set forth in Section 6 hereof (or such other provisions and
procedures acceptable to Holders of a majority in interest of the Transfer
Restricted Securities covered by such Registration Statement and the managing
underwriters); and (v) deliver such documents and certificates as may be
reasonably requested by the Holders of majority interest of the Transfer
Restricted Securities being sold or the managing underwriters, if any, to
evidence the continued validity of the representations and warranties made
pursuant to clause (i) of this Section 4(m) and to evidence compliance with any
customary conditions contained in the underwriting agreement or other agreement
entered into by the Company;

       (n)  Make available for inspection by a representative of the Holders of
Transfer Restricted Securities being sold, any underwriter participating in any
such disposition of Transfer Restricted Securities, if any, and any attorney,
consultant or accountant retained by such selling Holders or underwriter, at the
offices where normally kept, during reasonable business hours, all financial and
other records, pertinent corporate documents and properties of the Company and
its subsidiaries as they may reasonably request, and cause the officers,
directors, agents and employees of the Company and its subsidiaries to supply
all information in each case reasonably requested by any such representative,
underwriter, attorney, consultant or accountant in connection with such
Registration Statement, provided, however, that such persons shall first agree
in writing with the Company that any information that is reasonably and in good
faith designated by the Company in writing as confidential at the time of
delivery

                                       14
<PAGE>

or inspection (as the case may be) of such information shall be kept
confidential by such persons, unless (i) disclosure of such information is
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure of such information is
required by law (including any disclosure requirements pursuant to Federal
securities laws in connection with the filing of any Registration Statement or
the use of any Prospectus), (iii) such information becomes generally available
to the public other than as a result of a disclosure or failure to safeguard by
any such person or (iv) such information becomes available to any such person
from a source other than the Company and such source is not bound by a
confidentiality agreement.

       (o)  Use all reasonable efforts to cause the Indenture to be qualified
under the TIA not later than the effective date of the first Registration
Statement relating to the Transfer Restricted Securities; and in connection
therewith, cooperate with the Trustee and the Holders of Notes or Common Stock
constituting Transfer Restricted Securities to effect such changes to the
Indenture, if any, as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute, and use its best efforts to
cause the Trustee to execute, all customary documents as may be required to
effect such changes, and all other forms and documents (including Form T-1)
required to be filed with the SEC to enable the Indenture to be so qualified
under the TIA in a timely manner.

       (p)  Comply with applicable rules and regulations of the SEC and make
generally available to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act or Rule 158 (or any similar
rule promulgated under the Securities Act), no later than 45 days after the end
of any 12-month period (or 90 days after the end of any 12-month period if such
period is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Transfer Restricted Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter after the effective date of a Registration Statement, which
statement shall cover said period, consistent with the requirements of Rule 158;
and

       (q)  (i) list all shares of Common Stock covered by any Registration
Statements on any securities exchange on which the Common Stock is then listed
or (ii) authorize for quotation on the SmallCap Market or the National Market of
the National Association of Securities Dealers Automated Quotation System
("Nasdaq") all Common Stock covered by all such Registration Statements if the
Common Stock is then so authorized for quotation.

     Section 5.  Registration Expenses.

                                       15
<PAGE>

     All fees and expenses incident to the performance of or compliance with
this Agreement by the Company shall be borne by it whether or not any
Registration Statement is filed or becomes effective and whether or not any
securities are offered or sold pursuant to any Registration Statement.  The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filings fees (including, without
limitation, fees and expenses (A) with respect to filings required to be made
with the National Association of Securities Dealers, Inc. and (B) in compliance
with securities or Blue Sky laws (including, without limitation and in addition
to that provided for in (b) below, fees and disbursements of counsel for the
underwriters in connection with Blue Sky qualifications of the Transfer
Restricted Securities and determination of the eligibility of the Transfer
Restricted Securities for investment under the laws of such jurisdictions as the
managing underwriters, if any, or Holders of a majority in interest of Transfer
Restricted Securities, may designate)), (ii) printing expenses (including,
without limitation, of printing Prospectuses if the printing of Prospectuses is
required by the managing underwriters, if any, or by the Holders of a majority
in interest of the Transfer Restricted Securities included), (iii) messenger,
telephone and delivery expenses, (iv) reasonable fees and disbursements of
counsel for the Company (plus any local counsel deemed appropriate by the
Holders of a majority in interest of the Transfer Restricted Securities) in
accordance with the provisions of Section 5(b) hereof, (v) fees and
disbursements of all independent certified public accountants referred to in
Section 4(m)(iii) (including, without limitation, the expenses of any special
audit and "comfort" letters required by or incident to such performance), (vi)
fees and expenses of all other persons retained by the Company.  In addition,
the Company shall pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of an annual audit and the fees and expenses
incurred in connection with the listing of the securities to be registered on
any securities exchange or the Nasdaq SmallCap Market or the Nasdaq National
Market.  Notwithstanding anything in this Agreement to the contrary, each Holder
shall pay all underwriting discounts and brokerage commissions with respect to
any Transfer Restricted Securities sold by it.

     Section 6.  Indemnification.

       (a)  The Company agrees to indemnify and hold harmless (i) each of the
Initial Purchasers, (ii) each Holder, (iii) each person, if any, who controls
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) any of the foregoing (any of the persons referred to in this
clause (iii) being hereinafter referred to as a "controlling person"), and (iv)
the respective officers, directors, partners, employees, representatives and
agents of the Initial Purchasers,

                                       16
<PAGE>

the Holders (including predecessor Holders), or any controlling person (any
person referred to in clause (i), (ii), (iii) or (iv) may hereinafter be
referred to as an "Indemnified Person"), from and against any and all losses,
claims, damages, liabilities, expenses and judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus or in any amendment or supplement thereto
or in any preliminary Prospectus, or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein (in the case of any Prospectus or supplement
thereto, in light of the circumstances under which they were made) not
misleading, except insofar as such losses, claims, damages, liabilities,
expenses or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Indemnified Person furnished to the Company by or on behalf of such Indemnified
Person expressly for use therein (which shall include, without limitation, the
Requisite Information in the Notice and Questionnaire provided to the Company by
such Indemnified Person); provided, however, that the foregoing indemnity with
respect to any preliminary Prospectus shall not inure to the benefit of any
Indemnified Person from whom the person asserting such losses, claims, damages,
liabilities, expenses and judgments purchased securities if such untrue
statement or omission or alleged untrue statement or omission made in such
preliminary Prospectus is eliminated or remedied in the Prospectus and a copy of
the Prospectus shall not have been furnished to such person in a timely manner
due to the wrongful action or wrongful inaction of such Indemnified Person,
whether as a result of negligence or otherwise.

       (b)  In case any action shall be brought against any Indemnified Person,
based upon any Registration Statement or any such Prospectus or any amendment or
supplement thereto and with respect to which indemnity may be sought against the
Company, such Indemnified Person shall promptly notify the Company in writing
and the Company shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Indemnified Person and payment of all
fees and expenses.  Any Indemnified Person shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Person, unless (i) the employment of such counsel shall have been
specifically authorized in writing by the Company, (ii) the Company shall have
failed to assume the defense and employ counsel or (iii) such Indemnified Person
or Persons shall have been advised by counsel that there may be a conflict
between the positions of the indemnifying party or parties and of the
indemnified party or parties in conducting the defense of such action or
proceeding or that there may be legal defenses available to such Indemnified
Person or Persons

                                       17
<PAGE>

different from or in addition to those available to the indemnifying party or
parties (in which case the Company shall not have the right to assume the
defense of such action on behalf of such Indemnified Person, it being
understood, however, that the Company shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all such Indemnified Persons, which firm
shall be designated in writing by such Indemnified Persons, and that all such
fees and expenses shall be reimbursed as they are incurred). The Company shall
not be liable for any settlement of any such action effected without its written
consent but if settled with the written consent of the Company, the Company
agrees to indemnify and hold harmless any Indemnified Person from and against
any loss or liability by reason of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.

       (c)  In connection with any Registration Statement pursuant to which any
Holder (or predecessor Holder) sold or offered for resale Transfer Restricted
Securities, such Holder agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, officers, employees, representatives and
agents and any person controlling the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, to the same extent as
the foregoing indemnity from the Company to each Indemnified Person but only
with reference to information relating to such Indemnified Person furnished by
or on behalf of such Indemnified Person expressly for use in such Registration
Statement (which shall include, without limitation, the Requisite Information in
the Notice and Questionnaire provided to the Company by such Indemnified
Person).  In case any action shall be brought against the Company, any of its
directors, officers, employees, representatives and agents, or any person
controlling the Company based on such Registration Statement and in respect of
which indemnity may be sought against any Indemnified Person, the Indemnified
Person shall have the rights and duties given to the Company (except that if the
Company shall have assumed the defense thereof, such Indemnified Person shall
not be required to do so, but may employ separate counsel therein and
participate in defense thereof but the fees and expenses of such counsel shall
be at the expense of such Indemnified Person), and the Company, its directors,
officers, employees, representatives and agents, and any person controlling the
Company

                                       18
<PAGE>

shall have the rights and duties given to the Indemnified Person by Section 6(b)
hereof.

       (d)  If the indemnification provided for in this Section 6 is applicable
by its terms but unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities, expenses or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities, expenses and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and each Indemnified Person on the other hand pursuant
to the Purchase Agreement or from the offering for resale of the Transfer
Restricted Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and each such Indemnified Person in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities, expenses or judgments, as well as any other relevant equitable
considerations.  The relative fault of the Company and each such Indemnified
Person shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Company or such Indemnified
Person and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

     The Company, the Holders and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 6(d) were
determined by pro rata allocation (even if the Indemnified Person were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in the immediately
preceding paragraph.  The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities, expenses or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim.  Notwithstanding the provisions of this
Section 6, no Indemnified Person shall be required to contribute any amount in
excess of the amount by which the total net profit received by it in connection
with the sale of the Transfer Restricted Securities pursuant to this Agreement
exceeds the amount of any damages which such Indemnified Person has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.  No person guilty of fraudulent misrepresentation
(within the meaning of

                                       19
<PAGE>

Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Indemnified
Persons' obligations to contribute pursuant to this Section 6(d) are several in
proportion to the respective amount of Transfer Restricted Securities included
in and sold pursuant to any such Registration Statement by each Indemnified
Person and not joint.

     Section 7.  Underwritten Registration.

     If any of the Transfer Restricted Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be investment bankers of recognized national
standing selected by the Holders of a majority in interest of such Transfer
Restricted Securities included in such offering, subject to the consent of the
Company (which will not be unreasonably withheld or delayed).

     No person may participate in any underwritten registration hereunder unless
such person (i) agrees to sell such person's Transfer Restricted Securities on
the basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up agreements and other documents reasonably required under the
terms of such underwriting arrangements.

     Section 8.  Miscellaneous.

       (a)  Remedies.  In the event of a breach by the Company or by a Holder of
any of their respective obligations under this Agreement, each Holder or the
Company, in addition to being entitled to exercise all rights granted by law,
including, without limitation, recovery of damages, will be entitled to specific
performance of its rights under this Agreement.  The Company and each Holder
agree that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agree that, in the event of any action for specific
performance in respect of such breach, they shall waive the defense that a
remedy at law would be adequate.  This Section 8(a) shall not apply to any
breach for which Liquidated Damages have been specifically provided hereunder.

       (b)   No Inconsistent Agreements.  The Company shall not enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof.  The Company is not currently a party to any agreement

                                       20
<PAGE>

granting any registration rights with respect  to any of its securities to any
person which conflicts with the Company's obligations hereunder or gives any
other party the right to include any securities in any Registration Statement
filed pursuant hereto, except for such rights and conflicts as have been
irrevocably waived.  Without limiting the generality of the foregoing, without
the written consent of the Holders of a majority in interest of the Transfer
Restricted Securities, the Company shall not grant to any person the right to
request it to register any of its securities under the Securities Act unless the
rights so granted are subject in all respect to the prior rights of the Holders
set forth herein, and are not otherwise in conflict or inconsistent with the
provisions of this Agreement.

       (c)  No Adverse Action Affecting the Transfer Restricted Securities.  The
Company will not take any action with respect to the Transfer Restricted
Securities which would adversely affect the ability of any of the Holders to
include such Transfer Restricted Securities in a registration undertaken
pursuant to this Agreement.

       (d)  No Piggyback on Registrations.  After the date hereof, the Company
shall not grant to any of its security holders (other than the Holders in such
capacity) the right to include any of its securities in any Shelf Registration
Statement.

       (e)  Amendments and Waivers.  The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof, may not be
given, without the written consent of the Holders of a majority in interest of
the Transfer Restricted Securities; provided, however, that, for the purposes of
this Agreement, Transfer Restricted Securities that are owned, directly or
indirectly, by either the Company or an Affiliate of the Company are not deemed
outstanding.  Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders whose Transfer Restricted Securities are being sold pursuant
to an underwritten offering and that does not directly or indirectly affect the
rights of other Holders may be given by Holders of a majority in interest of the
Transfer Restricted Securities being sold by such Holders pursuant to such an
underwritten offering; provided, however, that the provisions of this sentence
may not be amended, modified, or supplemented except in accordance with the
provisions of the immediately preceding sentence.

       (f) Notices.  All notices and other communications provided for herein
shall be made in writing by hand-delivery, next day air courier, certified
first-class mail, return receipt requested or telecopy:

                                       21
<PAGE>

            (i)  if to a Holder, to the address of such Holder as it appears in
     the Notice and Questionnaire, or, if not so specified, in the Common Stock
     or Notes register of the Company, as applicable;

            (ii) if to the Company, to:

                 EarthWeb Inc.
                 3 Park Avenue
                 New York, NY 10016
                 Attn.: Jack D. Hidary
                 Telecopy No.: 212-725-6599

     Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given, when delivered by hand, if personally
delivered; one Business Day after being timely delivered to a next-day air
courier, five Business Days after being deposited in the mail, postage prepaid,
if mailed; and when receipt is acknowledged by the recipient's telecopier
machine, if telecopied.

       (g)  Successors and Assigns.  This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each existing and future Holder.  The
Company may not assign its rights or obligations hereunder without the prior
written consent of the Holders of a majority in interest of the Transfer
Restricted Securities, other than by operation of law pursuant to a merger or
consolidation to which the Company is a party.

     (h)  Counterparts.  This Agreement may be executed in any number of
counterparts by the parties hereto, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same instrument.

       (i)  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.

       (j)  Severability.  The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.  If any term, provision, covenant or

                                       22
<PAGE>

restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction.  It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

       (k)  Headings.  The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.  All
references made in this Agreement to "Section" and "paragraph" refer to such
Section or paragraph of this Agreement, unless expressly stated otherwise.

       (l)  Attorneys' Fees.  In any action or proceeding brought to enforce
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the prevailing party, as determined by the court, shall
be entitled to recover its reasonable attorneys' fees in addition to any other
available remedy.

                                       23
<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first written above.

                            EARTHWEB INC.

                            By:_________________________
                               Name:
                               Title:

The foregoing Registration Rights
Agreement is hereby confirmed and
agreed to as of the date first
written above:

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
          INCORPORATED
FLEETBOSTON ROBERTSON STEPHENS INC.

By:  MERRILL LYNCH, PIERCE, FENNER & SMITH
                INCORPORATED

     By:______________________________________
                   Authorized Signatory

Acting on behalf of itself and the Initial Purchasers

                                       24
<PAGE>

                                                                       Exhibit A

                                    Notice

     The undersigned beneficial owner (the "Selling Securityholder") of Transfer
Restricted Securities hereby gives notice to the Company of its intention to
sell or otherwise dispose of Transfer Restricted Securities beneficially owned
by it and listed below in Item (3), unless otherwise specified in Item (3),
pursuant to the Shelf Registration Statement.  The undersigned, by signing and
returning this Notice and Questionnaire, understands and agrees that it will be
bound by the terms and conditions of this Notice and Questionnaire and the
Registration Rights Agreement.

     Pursuant to the Registration Rights Agreement, the undersigned has agreed
to indemnify and hold harmless the Company, the Company's directors and the
Company's officers who sign the Shelf Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), from and against certain losses arising in connection with
statements concerning the undersigned made in the Shelf Registration Statement
or the related prospectus in reliance upon the information provided in this
Notice and Questionnaire.

     The undersigned hereby provides the following information to the Company
and represents and warrants that such information is accurate and complete:

                                 Questionnaire

1.  (a)  Full Legal Name of Selling Securityholder:

    ___________________________________________________________________________

    (b)  Full Legal Name of Registered Holder (if not the same as (a) above)
         through which Transfer Restricted Securities listed in Item (3) below
         are held:

    ___________________________________________________________________________

    (c)  Full Legal Name of DTC Participant (if applicable and if not the same
         as (b) above) through which Transfer Restricted Securities listed in
         Item (3) below are held:

    ___________________________________________________________________________

2.  Address for Notices to Selling Securityholder:

                                      A-1
<PAGE>

       _________________________________________________________________________
       Telephone: ______________________________________________________________
       Fax: ____________________________________________________________________
       Contact Person: _________________________________________________________

3.  Beneficial Ownership of Transfer Restricted Securities:
       (a)  Type and Amount of Transfer Restricted Securities beneficially
            owned:

            ____________________________________________________________________

       (b)  CUSIP No(s). of such Transfer Restricted Securities beneficially
            owned:

            ____________________________________________________________________

       (c)  Type and Amount of Transfer Restricted Securities to be registered:

            ____________________________________________________________________

4.  Beneficial Ownership of Other Securities of the Company owned by the Selling
       Securityholder:

       Except as set forth below in this Item (4), the undersigned is not the
       beneficial or registered owner of any securities of the Company other
       than the Transfer Restricted Securities listed above in Item (3).

       (a)  Type and Amount of Other Securities beneficially owned:

            ____________________________________________________________________
            ____________________________________________________________________

       (b)  CUSIP No(s). of such Other Securities beneficially owned:

            ____________________________________________________________________

5.  Relationship with the Company:

       Except as set forth below, neither the undersigned nor any of its
       affiliates, officers, directors or principal equity holders (5% or more)
       has held any position or office or has had any other material
       relationship with the Company (or its predecessors or affiliates) during
       the past three years.

       State any exceptions here:

       _________________________________________________________________________
       _________________________________________________________________________
       _________________________________________________________________________

6.  Plan of Distribution:

                                      A-2
<PAGE>

       Except as set forth below, the undersigned (including its donees or
       pledgees) intends to distribute the Transfer Restricted Securities listed
       above in Item (3) pursuant to the Shelf Registration Statement only as
       follows (if at all): Such Transfer Restricted Securities may be sold from
       time to time directly by the undersigned or alternatively, through
       underwriters, broker-dealers or agents. If the Transfer Restricted
       Securities are sold through underwriters or broker-dealers, the Selling
       Securityholder will be responsible for underwriting discounts and
       commissions and/or agent's commissions. Such Transfer Restricted
       Securities may be sold in one or more transactions at fixed prices, at
       prevailing market prices at the time of sale, at varying prices
       determined at the time of sale, or at negotiated prices. Such sales may
       be effected in transactions (which may involve cresses or block
       transactions) (i) on any national securities exchange or quotation
       service on which the Transfer Restricted Securities may be listed or
       quoted at the time of sale, (ii) in the over-the-counter market, (iii) in
       transactions otherwise than on such exchanges or services or in the over-
       the-counter market, or (iv) through the writing of options. In connection
       with sales of the Transfer Restricted Securities or otherwise, the
       undersigned may enter into hedging transactions with broker-dealers,
       which may in turn engage in short sales of the Transfer Restricted
       Securities in the course of hedging the positions they assume. The
       Selling Securityholder may also sell Transfer Restricted Securities short
       and deliver Transfer Restricted Securities to close out such short
       positions, or loan or pledge Transfer Restricted Securities to broker-
       dealers that in turn may sell such securities.

       State any exceptions here:

       _________________________________________________________________________
       _________________________________________________________________________
       _________________________________________________________________________

       Note: In no event will such method(s) of distribution take the form of an
       underwritten offering of the Transfer Restricted Securities without the
       prior agreement of the Company.

          The undersigned acknowledges that it understands its obligation to
comply with the provisions of the Exchange Act and the rules thereunder relating
to stock manipulation, particularly Regulation M thereunder (or any successor
rules or regulations), in connection with any offering of Transfer Restricted
Securities pursuant to the Shelf Registration Statement. The undersigned agrees
that neither it nor any person acting on its behalf will engage in any
transaction in violation of such provisions.

                                      A-3
<PAGE>

     The Selling Securityholder hereby acknowledges its obligations under the
Registration Rights Agreement to indemnify and hold harmless certain persons as
set forth therein.  Pursuant to the Registration Rights Agreement, the Company
has agreed under certain circumstances to indemnify the Selling Securityholders
against certain liabilities.

     In accordance with the undersigned's obligation under the Registration
Rights Agreement to provide such information as may be required by law for
inclusion in the Shelf Registration Statement, the undersigned agrees to
promptly notify the Company of any inaccuracies or changes in the information
provided herein that may occur subsequent to the date hereof at any time while
the Shelf Registration Statement remains effective.  All notices hereunder and
pursuant to the Registration Rights Agreement shall be made in writing, by hand
delivery, first-class mail or air courier guaranteeing overnight delivery at the
address set forth below.  In the absence of any such notification, the Company
shall be entitled to continue to rely on the accuracy of the information in this
Notice and Questionnaire.

     By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to items (1) through (6) above and
inclusion of such information in the Shelf Registration Statement and the
Prospectus.  The undersigned understands that such information will be relied
upon by the Company in connection with the preparation, amendment or
supplementation of the Shelf Registration Statement and the Prospectus.

     The terms of this Notice and Questionnaire, and the representations and
warranties contained herein, shall be binding upon, shall inure to the benefit
of and shall be enforceable by the respective successors, heirs, personal
representatives, and assigns of the Company and the Selling Securityholder with
respect to the Transfer Restricted Securities beneficially owned by the Selling
Securityholder and listed in Item (3) above.  This agreement shall be governed
by, and construed and enforced in accordance with, the laws of the State of New
York applicable to contracts made in the State of New York.

     IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused
this Notice and Questionnaire to be executed and delivered either in person or
by its duly authorized agent.

Date:                            ______________________________________________
                                 Selling Securityholder (Print or type full
                                 legal name of beneficial owner of Transfer
                                 Restricted Securities)

                                      A-4
<PAGE>

                           By:________________________________________
                              Name:
                              Title:

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO:

                           EarthWeb Inc.
                           3 Park Place
                           32/nd/ Floor
                           New York, NY 10016
                           Attention: Jack D. Hidary

                                with a copy to:

                           Morrison & Foerster LLP
                           1290 Avenue of the Americas
                           New York, NY 10104
                           Attention: John R. Hempill, Esq.

                                      A-5<PAGE>

                         Consent Solicitation Statement

                             AM GENERAL CORPORATION

        Solicitation of Consents for Amendments of Indenture Provisions

                         12 7/8 % Senior Notes Due 2002

     AM General Corporation (the "Company") hereby solicits (the "Solicitation")
consents (the "Consents") for certain proposed amendments as described herein in
Section 5 and shown in Annex A hereto (the "Proposed Amendments") to the
indenture, dated as of April 27, 1995 (the "Indenture"), by and among AM General
Corporation, as issuer, and Shawmut Bank Connecticut, National Association (now
known as Fleet National Bank), as trustee (the "Trustee"), pursuant to which the
12 7/8% Senior Notes due 2002 of the Company were issued ("Notes").  The
Proposed Amendments are necessary for the Company to enter into a transaction
(the "Transaction") with General Motors Corporation ("GM"), described herein in
Section 2 and consisting of the agreements summarized in Annex B hereto.  The
completion, execution and delivery of the Consent and Letter of Transmittal by a
holder of the Notes ("Holder") in connection with the Solicitation will be
deemed to constitute the Consent of such Holder to the Proposed Amendments.  The
adoption of the Proposed Amendment require the valid Consents of the Holders of
at least 75% in aggregate principal amount of the Notes outstanding (the
"Requisite Consents"). The Company intends to effect the Proposed Amendments by
execution of a supplemental indenture (the "Supplemental Indenture") immediately
upon receipt of the Requisite Consents.

     The consideration for Consents pursuant to the Solicitation (the
"Consideration") shall be $2.50 per $1,000 aggregate principal amount of Notes
for which a Consent was validly made, provided that no Holder will be entitled
to Consideration unless the Company (i) receives the Requisite Consents and (ii)
enters into the Transaction.

     Holders are urged to review this Consent Solicitation Statement carefully.
In no event should a Holder tender or deliver any Notes.

--------------------------------------------------------------------------------
 THE SOLICITATION WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
 DECEMBER 6, 1999 (THE "EXPIRATION DATE"), UNLESS EXTENDED.  CONSENTS MAY NOT
 BE REVOKED.
--------------------------------------------------------------------------------

 The Solicitation is made to record owners as of 5:00 pm New York City time on
November 23, 1999 (the "Record Date"). See Section 3 for discussions of certain
factors that should be considered in evaluating the Solicitation.

                               November 23, 1999
<PAGE>

                                   IMPORTANT

     Any Holder desiring to consent to the Proposed Amendments should either (a)
complete and sign the Consent and Letter of Transmittal (or a manually signed
facsimile thereof) in accordance with the instructions in the Consent and Letter
of Transmittal, have the signature thereon guaranteed if required by Instruction
1 of the Consent and Letter of Transmittal and deliver it and any other required
documents to State Street Bank and Trust Company (the "Tabulation Agent") or (b)
request its broker, dealer, commercial bank, trust company or other nominee to
execute the Consent and Letter of Transmittal for such Holder. Beneficial owners
whose Notes are registered in the name of a broker, dealer, commercial bank,
trust company or other nominee must contact such broker, dealer, commercial
bank, trust company or other nominee if they desire to deliver Consents with
respect to Notes so registered. See Section 6.

     Consents and Letters of Transmittal should be sent to the Tabulation Agent
only, and the method of delivery of such documents to the Tabulation Agent is at
the election and risk of the Holder.  Questions and requests for assistance may
be directed to the Company or to The Renco Group, Inc. at the address and
telephone number of each as set forth on the back cover of this Consent
Solicitation Statement (the "Statement").  Additional copies of the Statement,
the Consent and Letter of Transmittal, the Notice of Guaranteed Delivery and
other related materials may be obtained from the Company.

     THIS STATEMENT DOES NOT CONSTITUTE A SOLICITATION OF CONSENTS IN ANY
JURISDICTION IN WHICH, OR FROM ANY PERSON FROM WHOM, IT IS UNLAWFUL TO MAKE SUCH
SOLICITATION UNDER APPLICABLE SECURITIES OR BLUE SKY LAWS.  THE DELIVERY OF THIS
STATEMENT SHALL NOT UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREIN OR
IN ANY ATTACHMENTS HERETO OR IN THE AFFAIRS OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES OR AFFILIATES SINCE THE DATE HEREOF.

                             AVAILABLE INFORMATION

     In the absence of any legal obligation to do so, the Indenture obligates
the Company to file pursuant to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the Company files
reports and other information with the Securities and Exchange Commission (the
"Commission").  Reports, proxy and information statements and other information
filed by the Company can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center,
13th Floor, New York, New York 10048.  Copies of such material may be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.  Such material also can be reviewed
through the Commission's Electronic Data Gathering, Analysis, and Retrieval
System, which is publicly available through the Commission's website
(http://www.sec.gov).

                          CERTAIN SOLICITATION MATTERS

     Consents are irrevocable.  Notwithstanding the foregoing, if prior to the
Consent Date, the Solicitation is amended in a manner determined by the Company,
in its sole discretion, to constitute a material adverse change to the Holders,
the Company promptly will disclose such amendment and may extend the
Solicitation for a period deemed by the Company to be adequate to permit Holders
to properly deliver or revoke Consents delivered prior to such amendment.  See
Section 4.  Holders who revoke Consents pursuant to the preceding sentence will
not receive Consideration for the revoked Consents.

                                    ii
<PAGE>

              THIS STATEMENT AND THE RELATED CONSENT AND LETTER OF
                TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH
                  SHOULD BE READ CAREFULLY BEFORE ANY DECISION
                   IS MADE WITH RESPECT TO THE SOLICITATION.

                                      iii
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<S>                                                                <C>
SECTION 1.     SUMMARY                                                   1

SECTION 2.     PURPOSES OF THE SOLICITATION                              3

SECTION 3.     CERTAIN SIGNIFICANT CONSIDERATIONS                        4

SECTION 4.     PRINCIPAL TERMS OF THE SOLICITATION                       6

SECTION 5.     PROPOSED AMENDMENTS TO THE INDENTURE                      7

SECTION 6.     PROCEDURES FOR DELIVERING CONSENTS                        8

SECTION 7.     TABULATION AGENT                                         10

SECTION 8.     FEES AND EXPENSES                                        10

SECTION 9.     CERTAIN FEDERAL INCOME TAX CONSIDERATIONS                11

SECTION 10.    MISCELLANEOUS                                            12

TEXT OF PROPOSED AMENDMENTS                                        ANNEX A

SUMMARY OF AGREEMENTS WHICH COMPRISE THE TRANSACTION               ANNEX B
</TABLE>

                                      iv
<PAGE>

Section 1.     Summary

     The following summary is qualified in its entirety by reference to, and
should be read in conjunction with, the information appearing elsewhere in this
Statement, Annex A and Annex B hereto.

Overview

     The Company is the largest supplier of light Tactical Wheeled Vehicles for
the Department of Defense ("DoD"). The Company (including its predecessors) has
a history of over 50 years of successfully competing for government procurement
contracts. The Company is the designer and the sole manufacturer of the High
Mobility Multipurpose Wheeled Vehicle (the HUMVEE), which it sells to the U.S.
and foreign military services. From the introduction of the HUMVEE in 1984
through October 31, 1999, the Company delivered approximately 151,000 HUMVEES to
the military services of the U.S. and 40 foreign countries.

     The Company introduced the HUMMER, a commercial version of the HUMVEE (the
"Current Vehicle") in 1993 with the objective of expanding the market for the
Company's vehicles to industrial and retail users. The Company has also invested
significant resources in the promotion, marketing and distribution of the
Current Vehicle. In that regard, the Company established a dealer network
through which it has sold 7,500 Current Vehicles. Notwithstanding these efforts
over the past 6 years, the Company presently believes that the business
prospects for the Current Vehicle are limited with respect to demand, price and
profitability. As a result, the Company has investigated various strategies to
maximize the value of its non-military business.

     In that regard, the Company has substantially completed a series of
agreements with GM through which the Company intends to more fully utilize the
widespread recognition of the HUMMER name to generate incremental revenues and
cash flow. Pursuant to the terms of the Transaction GM will, at GM's sole
expense, design, engineer, certify and release a new generation vehicle bearing
the HUMMER trademark (the "New Vehicle") and retain the Company to assemble New
Vehicles over a seven and one half year period. As part of the Transaction, the
Company will assign the HUMMER trademark and trade name (the "Trademark") to GM.
If the New Vehicle is a success, the Transaction could result in substantial
revenues for the Company.
     With respect to the creation of the New Vehicle, GM will lend the Company
approximately $235 million through a non-interest bearing loan (the "GM Loan").
The proceeds of the GM Loan will be used to finance (i) the engineering and
construction of a new structure, (ii) the purchase of certain machinery and
equipment, and (iii) all other costs (except for the cost of the time dedicated
to the project by the Company's management and employees) required for the
Company to become prepared to assemble the New Vehicle (collectively, the "New
Facility").
The GM Loan will be non-recourse to the Company, but will be secured by a lien
on the assets acquired with the proceeds of the GM Loan. To repay the GM Loan,
the Company will, for each New Vehicle assembled, pay to GM a pre-agreed portion
of the fee it receives for such assembly. At any time, the Company has the
option to repay the full outstanding balance on the GM Loan or any portion
thereof. In addition, GM has the option, at various points in time, to convert
all or part of the outstanding balance on the GM Note into equity in the
Company, but in no case more than 40% of the Company's voting stock.

     In addition to the Requisite Consents, the Company requires the consents of
the Company's senior lender and the lessor of the Company's primary facilities
in order to proceed with the Transaction.

     The Company anticipates that the agreements that comprise the Transaction
would be executed shortly after receipt of the Requisite Consents and the
consents required from the Company's senior lender and the lessor of the
Company's primary facilities. The design and construction of the New Facility
will commence shortly thereafter. The anticipated economic benefit from the
Transaction is estimated to occur after the scheduled maturity of the Notes.

                                       1
<PAGE>

Purposes of the Solicitation

     The Indenture in its current form may limit the Company's ability to enter
into the Transaction with GM. The purpose of the Solicitation is to obtain the
Requisite Consents to execute the Proposed Amendments to permit the Transaction.
The Solicitation is being made prior to the consummation of definitive
agreements in order to facilitate the Company's entering into the Transaction.
The agreements which as a whole comprise the Transaction are summarized in Annex
B hereto.

The Solicitation

The Solicitation                        The Company is seeking Consents from
                                        Holders to the Proposed Amendments to
                                        the Indenture. See Section 5.
Consideration for Consents              The consideration for Consents pursuant
                                        to the Solicitation shall be $2.50 per
                                        $1,000 aggregate principal amount of
                                        Notes for which a Consent was validly
                                        made, provided that no Holder will be
                                        entitled to Consideration unless the
                                        Company (i) receives the Requisite
                                        Consents and (ii) enters into the
                                        Transaction.
Requisite Consents                      Approval of the Proposed Amendments to
                                        the Indenture requires the Consent of
                                        the Holders of at least 75% in aggregate
                                        principal amount of the Notes
                                        outstanding.
Effectiveness of Proposed Amendments    Immediately upon receipt of the
                                        Requisite Consents, the Supplemental
                                        Indenture providing for the Proposed
                                        Amendments will be executed and become
                                        effective upon execution. If the
                                        Proposed Amendments become effective,
                                        all persons who continue to hold Notes
                                        thereafter will be subject to the
                                        provisions of the Indenture as amended
                                        by the Proposed Amendments.
Proposed Amendments                     The Proposed Amendments would
                                        effectively (i) waive all or part of the
                                        following covenants in the Indenture
                                        solely for purposes of consummating the
                                        Transaction: Section 4.9--Limitation on
                                        Incurrence of Indebtedness and Issuance
                                        of Preferred Stock; Section 4.12--
                                        Limitation on Liens; and 4.13--
                                        Limitation on Asset Sales; and (ii)
                                        modify certain definitions contained in
                                        the Indenture, as appropriate. See
                                        Section 5 and Appendix A.
Expiration Date                         12:00 midnight, New York City time, on
                                        December 6, 1999, 1999, unless extended.
Procedure to Consent                    For a Holder to validly Consent pursuant
                                        to the Solicitation, a properly
                                        completed and duly executed Consent and
                                        Letter of Transmittal (or a manually
                                        signed facsimile thereof), together with
                                        any signature guarantees and any other
                                        documents required by the instructions
                                        to the Consent and Letter of
                                        Transmittal, must be received by the
                                        Tabulation Agent prior to the Expiration
                                        Date.
Withdrawal of Consents                  Consents may not be revoked at any time,
                                        except after notice of a material
                                        amendment to the Solicitation.
Certain Significant Considerations      See Section 3 for a discussion of
                                        certain significant considerations that
                                        should be carefully considered in
                                        evaluating the Solicitation.
Tabulation Agent                        State Street Bank and Trust Company is
                                        serving as Tabulation Agent in
                                        connection with the Solicitation. Its

                                      -2-
<PAGE>

                                      address and telephone number are set forth
                                      on the back cover of this Statement.
Certain Federal Income Tax            See Section 9 for a discussion of certain
Considerations                        federal income tax considerations relating
                                      to the Solicitation.

Section 2.     Purposes of the Solicitation

Background

     The terms of the Transaction are set forth in a series of agreements that
the Company and GM are prepared to execute. The agreements which as a whole
comprise the Transaction are summarized in Annex B hereto.

     The Indenture in its current form may limit the Company's ability to enter
into the Transaction. The purpose of the Solicitation is to obtain the Requisite
Consents to execute the Proposed Amendments to facilitate and permit the Company
to enter into the Transaction.

The New Vehicle

     GM will, at GM's sole expense, design, engineer, certify and release the
New Vehicle. GM will be the manufacturer of and own design rights for the New
Vehicle and will be responsible for providing, at GM's sole expense, component
parts and materials for the New Vehicle. In addition, at GM's sole expense, GM
will provide all vendor tooling. For at least seven and one half years, the
Company will assemble, upon GM's request, New Vehicles, according to agreed-upon
specifications, for a specified fee which varies with sales volumes (the
"Assembly Fee"). The Company will have the right to assemble GM's requirements,
up to the first 40,000 units annually. See Annex B for a description of the New
Vehicle Assembly Agreement.

GM Right of Access

     In the event of certain defaults by the Company, GM will have a right to
enter, occupy and utilize certain real and personal property of the Company for
the production of the New Vehicle (the "Right of Access"). See Annex B,
description of Right of Access Agreement.

Assignment of HUMMER Trademark

     The Transaction includes the Company's execution of an exclusive and
irrevocable assignment of the Trademark in favor of GM. GM, in turn, will grant
the Company a limited license that allows the Company to use the Trademark in
connection with the Current Vehicle for the duration of the New Vehicle Assembly
Agreement. After such period, GM will consider, upon the Company's request,
extending the term of such license or replacing such license with an equivalent
license. However, the extension or replacement of such license will be at GM's
sole discretion. See Annex B for a description of the Assignment Agreement and
the License Agreement.

Impact on Current Business

     The Company's existing manufacture and design rights with respect to the
Current Vehicle and the military HUMVEE will remain unchanged, except that the
Company's use of the Trademark on the Current Vehicle will be through license
instead of ownership.

                                      -3-
<PAGE>

Construction and Finance of the New Facility

     The Company will construct and own the New Facility which will be financed
by the proceeds of the GM Loan. Pursuant to the New Vehicle Assembly Agreement,
the Company will execute in favor of GM a non-interest bearing, debt instrument
or note (the "GM Note") in the amount of the GM Loan (financing construction of
the New Facility) which will be secured by a lien on and limited to the New
Facility (the "GM Lien").

     To repay the GM Note, the Company will repay to GM a pre-agreed portion of
the Assembly Fee received for assembling each New Vehicle. If New Vehicles are
ordered and assembled at the forecasted rate, the GM Note would be repaid within
seven and one half years. Except as provided above, the Company is not required
to repay the outstanding balance of the GM Note but it may elect to do so at any
time. If the Company pays such balance, it will own the New Facility free of
liens held by GM and, upon completion of the New Vehicle Assembly Agreement, be
permitted to use the New Facility for any purpose.

     At various times, GM will have the annual option to convert all or any part
of the unpaid balances, if any, on the GM Note into an equity interest in the
Company pursuant to certain terms and conditions. Notwithstanding the foregoing,
in no case will such equity interest allow GM to control more than 40% of the
voting stock of the Company. See Annex B, description of Equity Rights
Agreement.

The Company's Reasons for Entering into the Transaction

     The Company launched the Current Vehicle in 1993 and believes that the
business prospects for the Current Vehicle are limited with respect to demand,
price and profitability. The Company believes that annual sales levels are not
likely to grow substantially beyond levels reached in 1997 and 1998. The
Transaction presents the Company with an opportunity to generate greater
revenues and cash flow from the commercial use of the Trademark by assigning the
Trademark to GM and in return being hired by GM to be the primary assembler of
the New Vehicle.

     The Company believes that GM's resources and expertise in the design,
marketing and distribution of automobiles should result in the sale of a
significantly greater number of New Vehicles with the opportunity for
substantially greater manufacturing revenues and cash flow than have been
achieved by the Company in manufacturing and selling the Current Vehicle. The
Company further believes that the Transaction presents the Company with an
opportunity to improve the Company's financial results.

     The Transaction does not interfere with the Company's manufacture and sale
of the military HUMVEE.

Proposed Amendments

     Several provisions in the Indenture, described in detail in Section 5 of
this Solicitation, may limit the Company's ability to enter into the
Transaction. The Indenture places certain restrictions on Indebtedness (as
defined in the Indenture) that would prevent the Company from borrowing funds
from GM and executing the GM Note. Similarly, although no existing Company
assets will secure the GM Note, the lien on the New Facility is prohibited by
the Indenture and certain currently existing Company assets may be subject to
the Right of Access. Additionally, the assignment of the Trademark to GM may
constitute an "Asset Sale" as defined by the Indenture, making it subject to
restrictions on the type of consideration received and the use of the proceeds
resulting from the transfer. This Solicitation asks you to consent to the
Proposed Amendments to the Indenture, described herein in Section 5 and quoted
in full in Annex A hereto, that will waive these provisions solely for purposes
of consummating the Transaction.

Section 3.     Certain Significant Considerations

     If the Proposed Amendments become effective, the Company will be able to
proceed with the Transaction without violating certain restrictive covenants in
the Indenture. If the New Vehicle is successful, the Transaction

                                      -4-
<PAGE>

could have a positive effect on the market price of the Notes. However, the
Company cannot guarantee that the Transaction will have such desired effect or
even that the Notes will maintain the current market price.

Specific Risks Associated with Consenting to the Proposed Amendments

     The Company plans to enter into the Transaction if it obtains the Requisite
Consents. When deciding whether or not to consent to the Proposed Amendments,
Holders and their financial advisors should consider the following risks which
are associated with the Transaction:

     .    GM will be assigned the Trademark and the Company's only payment or
          consideration for the Trademark will be GM's entering into the
          Transaction.

     .    GM may at any time choose not to proceed with the creation of the New
          Vehicle or, once created, may not succeed in achieving anticipated
          sales volumes or may discontinue the New Vehicle.

     .    GM has agreed to loan the Company up to $235 million to construct the
          New Facility. While the Company believes that $235 million is
          sufficient, if the New Facility costs more than such amount, the
          Company may have to expend its own resources to meet its contractual
          obligations.

     .    The Company will agree to assemble the New Vehicle for GM in exchange
          for the Assembly Fee per New Vehicle, which varies with sales volumes.
          There is no assurance that the Company will be able to assemble the
          New Vehicle at costs less than the Assembly Fee per New Vehicle,
          particularly if GM only requests a small number of New Vehicles.

     .    Under certain circumstances, GM will have the right to temporarily
          occupy and use the New Facility and other assets of the Company, or to
          replace the Company as assembler of the New Vehicle, as may be
          necessary to ensure continued deliveries. See Annex B, Summary of
          Right of Access Agreement.

     .    GM will become responsible for the distribution and marketing of the
          Current Vehicle. The Company has no assurance that GM's marketing
          effort will have a positive effect on sales of the Current Vehicle.

     .    If and when the Company's license to use the Trademark on the Current
          Vehicle is no longer in effect and the Company wishes to continue to
          produce the Current Vehicle, the Company will be required to do so
          under a name other than HUMMER.

     .    The Company has no contractual right to participate in the use of the
          Trademark on GM vehicles other than the New Vehicle (and its
          derivatives).

     .    The assignment of the Trademark to GM should result in a gain taxable
          to the Company. The Company believes that such taxable gain will not
          be substantial and will not impair the Company's ability to meet
          obligations to Holders. However, the Company can provide no assurance
          that the Internal Revenue Service will not dispute valuation of the
          Trademark and demand substantial tax payments.

     .    The Company will be precluded from developing new vehicles that bear
          the HUMMER name both independently or with a partner other than GM.

                                      -5-
<PAGE>

Section 4.     Principal Terms of the Solicitation

     The Company is soliciting Consents to the Proposed Amendments from Holders
of Notes upon the terms set forth herein and in the related Consent and Letter
of Transmittal. The completion, execution and delivery of the Consent and Letter
of Transmittal will constitute the Consent of such Holder to the Proposed
Amendments with respect to such Notes. The consideration for Consents pursuant
to the Solicitation shall be $2.50 per $1,000 aggregate principal amount of
Notes for which a Consent was validly made, provided that no Holder will be
entitled to Consideration unless the Company (i) receives the Requisite Consents
and (ii) enters into the Transaction.

     Pursuant to the terms of the Indenture, the adoption of Proposed Amendments
in their entirety will require the written consent of the Holders of at least
75% in aggregate principal amount of the Notes outstanding. If the Requisite
Consents are received and the Supplemental Indenture is executed, the
Supplemental Indenture reflecting the Proposed Amendments will become operative,
and all persons who hold Notes thereafter will be subject to the provisions of
the Indenture as amended by the Proposed Amendments.

     Upon receipt of the Requisite Consents from Holders of Notes, the Company
will certify in writing to the Trustee that the Requisite Consents to the
adoption of the Proposed Amendments have been received with respect to the
Notes. After receipt by the Trustee of, among other things, certification by the
Company that the Requisite Consents with respect to the Notes have been
received, the Company and the Trustee will execute the Supplemental Indenture to
evidence the adoption of the Proposed Amendments.  Upon the acceptance by the
Company of the Requisite Consents from Holders of Notes and the execution of the
Supplemental Indenture, the Supplemental Indenture evidencing the Proposed
Amendments will immediately become effective.

     Upon the receipt of the Requisite Consents and the execution of the
Supplemental Indenture (a) the Tabulation Agent, as soon as practicable, will
transmit a copy of the Supplemental Indenture to all registered Holders of Notes
which remain outstanding, and (b) Holders will hold their Notes under the
Indenture as amended by the Supplemental Indenture evidencing the Proposed
Amendments, whether or not that Holder consented to the Proposed Amendments.

Expiration Date; Extension; Amendment; Termination

     The Solicitation will expire at 12:00 midnight, New York City time, on the
Expiration Date unless extended by the Company. The Company expressly reserves
the right to extend the Solicitation on a daily basis or for such period or
periods as it may determine in its sole discretion from time to time by giving
written or oral notice followed by written notice to the Tabulation Agent and by
making a public announcement by press release (which shall include disclosure of
the approximate principal amount of Notes for which Consents have been delivered
to date) to the Dow Jones News Service prior to 9:00 a.m., New York City time,
on the next business day following the previously scheduled Expiration Date, in
which event the term "Expiration Date" shall mean the latest time and date at
which the Solicitation, as the case may be, as so extended by the Company, shall
expire. During any extension of the Solicitation, all Consents previously
delivered will remain subject to terms of the Solicitation, as applicable. For
purposes of the Solicitation, the term "business day" means any day other than a
Saturday, Sunday or Federal holiday and consists of the time period from 12:01
a.m. through midnight, New York City time.

     Notwithstanding anything herein to the contrary, the Company expressly
reserves the absolute right, in its sole discretion, at any time and from time
to time, to amend any term of the Solicitation, including the amount of
Consideration paid for consents. Any amendment applicable to the Solicitation
will apply to all Notes for which a Consent was delivered, regardless of when or
in what order such Consents were delivered. If the Solicitation is amended prior
to the Expiration Date in a manner determined by the Company to constitute a
change materially adverse to the Holders of Notes, including but not limited to
a reduction in the amount of Consideration to be paid for Consents, the Company
will promptly disclose such amendment in a public announcement and will extend
the Solicitation for a period deemed by it to be adequate to permit such Holders
to revoke their Consents made prior to such amendment. Holders who revoke
Consents pursuant to the preceding sentence will not be entitled to receive
Consideration for the revoked Consents.

                                      -6-
<PAGE>

Section 5.     Proposed Amendments to the Indenture

Purposes and Effects

     The Notes were issued pursuant to the Indenture. In connection with the
Transaction, the Company is seeking Consents to the Proposed Amendments in the
Solicitation in order to permit the Transaction and to suspend certain
restrictive covenants in the Indenture solely for the purpose of consummating
the Transaction.

     This Section sets forth a list of the covenants and certain other sections
of the Indenture proposed to be modified by the Proposed Amendments for which
Consents are being sought pursuant to the Solicitation. Each Holder, by
executing and delivering a Consent and Letter of Transmittal, will consent to
the Proposed Amendments as described below and set forth in Annex A hereto. The
Proposed Amendments constitute a single proposal and a consenting Holder must
consent to the Proposed Amendments in their entirety and may not consent
selectively with respect to certain of the Proposed Amendments. The Proposed
Amendments will be embodied in an amendment to the Indenture in the form of the
Supplemental Indenture which will be executed upon receipt of the Requisite
Consents. The Proposed Amendments, however, will not become operative until the
requisite number of solicitations have been obtained. Thereafter, the Proposed
Amendments will be binding on all Holders, including any non-consenting Holders.

Proposed Amendments

     The paragraphs below describe how the current covenants limit the Company's
ability to enter into the Transaction and the covenants modified by the Proposed
Amendments. Holders should refer to the full text of the Proposed Amendments
contained in Annex A hereto. Each capitalized term used below and not otherwise
defined herein shall have the meaning ascribed to it in the Indenture. Holders
may obtain copies of the Indenture and the proposed form of Supplemental
Indenture from the Company without charge.

Indebtedness

     Section 4.9 of the current Indenture prohibits the Company from incurring
Indebtedness unless (i) the Indebtedness falls within certain exceptions or (ii)
the Company incurs the Indebtedness at least eighteen months after the Issue
Date and at the time of such incurrence and after giving pro forma effect
thereto, the Fixed Charge Coverage Ratio of the Company is at least equal to
2.5:1.00.

     The Indenture would prohibit the Company from executing the GM Loan
Agreement and the GM Note if after giving pro forma effect to the Transaction,
the Company did not have a Fixed Charge Coverage Ratio that is at least equal to
2.5:1.00. The Proposed Amendments waive Section 4.9 of the Indenture solely for
the purpose of consummating the Transaction. Section 4.9 will continue to apply
to Indebtedness not incurred as a result of the Transaction.

Fixed Charge Coverage Ratio

     The Indenture limits the Company's ability to engage in certain activities,
including the payment of Restricted Payments and incurrence of Indebtedness,
unless it maintains a Fixed Charge Coverage Ratio of at least 2.5:1.00. The
definition of the Fixed Charge Coverage Ratio reflects, with respect to any
Person for any period (and according to the terms specified in the Indenture),
the ratio of the Consolidated Cash Flow of such Person and its Subsidiaries for
such period to the Fixed Charges of such Person and its Subsidiaries for such
period. Fixed Charges are defined as, with respect to any Person for any period,
the sum of certain charges and expenses (specified in the Indenture) associated
with such period, including interest expense resulting from amortization of
original issue discount.

     The GM Loan could affect the Company's Fixed Charge Coverage Ratio. GM will
receive the right to convert the GM Loan into an equity interest in the Company
at various points during the agreement, with a discount from estimated market
value based on a discounted value of the New Vehicle Assembly Agreement. This
beneficial conversion feature may require the Company to record a discount on
the GM Loan and to recognize on the Company's financial statements significant
interest expense as the discount is amortized through the date when GM

                                      -7-
<PAGE>

can first exercise GM's conversion option. The additional interest expense, if
any, will impact the Fixed Charge Coverage Ratio and could preclude the Company
from engaging in certain actions in the future.

          The Proposed Amendments amend the definition of "Fixed Charges" to
provide that notwithstanding the normal method of calculating the Fixed Charges,
the amortization of debt discount associated with the GM Loan will have no
impact on Fixed Charges.

Liens

     Section 4.12 of the Indenture currently prevents the Company from incurring
Liens, other than Permitted Liens, unless the Notes are equally and ratably
secured for as long as Indebtedness secured by such Liens is secured.

     The Transaction includes the GM Lien securing the GM Loan through a lien on
the New Facility and would be subject to the restriction described in the
preceding paragraph. To facilitate the transaction, the Proposed Amendments
amend the definition of "Permitted Liens" in the Indenture to include the GM
Lien. Accordingly, the Proposed Amendments would allow the Company to enter into
the Transaction and incur the GM Lien without being subject to Section 4.12.
Section 4.12 will remain in effect for all other purposes.

Asset Sales

     Section 4.13 of the Indenture currently provides, generally, that the
Company may engage in an Asset Sale only if the Company receives at the time of
the Asset Sale consideration at least equal to the fair market value of the
asset, and at least 85% of such consideration consists of cash or Cash
Equivalents. The Indenture provides that within 180 days after any Asset Sale,
the Company must reinvest the proceeds of such Asset Sale in the business of the
Company or, when such unreinvested amounts exceed $5 million, make an offer to
all Holders to purchase the maximum principal amount of Notes that can be bought
with such funds at an offer price in cash in an amount equal to 101% of the
principal amount thereof.

     Assuming the Trademark is worth more than $500,000, the assignment of the
Trademark would be subject to Section 4.13 of the Indenture. The Transaction
would then violate the Indenture in numerous ways, including the failure of the
Company (i) to receive 85% of the consideration for the Asset Sale in cash or
Cash Equivalents and (ii) to receive such consideration immediately.

     The Proposed Amendments amend the definition of "Asset Sale" in the
Indenture to exclude assignment of the Trademark in connection with the
Transaction. Accordingly, under the Proposed Amendments, the assignment of the
Trademark to GM would not be subject to Section 4.13 of the Indenture's
Limitation of Asset Sales provision. Section 4.13, however, would continue to
apply to all other Asset Sales.

Section 6.     Procedures for Delivering Consents

General

     Delivery of the Consent and Letter of Transmittal in accordance with the
procedures described below will constitute the delivering Holder's consent to
the Proposed Amendments. All questions as to the form of all documents and the
validity (including the time of receipt), eligibility, acceptance or withdrawal
of delivery or revocation of Consents will be determined by the Company, in its
sole discretion, which determination shall be final and binding. Alternative,
conditional or contingent deliveries of Consents will not be considered valid.
The Company reserves the absolute right, subject to applicable law, to waive any
defect or irregularity as to delivery of particular Consents. None of the
Company, the Tabulation Agent, the Trustee or any other person will be under any
duty to give notification of any defects or irregularities in Consents or will
incur any liability for failure to give any such notification. The Company's
interpretation of the terms and conditions of the Solicitation (including the
Consent and Letter of Transmittal and the instructions thereto) will be final
and binding on all parties.

                                      -8-
<PAGE>

          For a Holder to validly Consent pursuant to the Solicitation, a
properly completed and validly executed Consent and Letter of Transmittal (or a
manually signed facsimile thereof), together with any signature guarantees and
any other documents required by the instructions to the Consent and Letter of
Transmittal, must be received by the Tabulation Agent at one of its addresses
set forth on the back cover of this Statement prior to the Expiration Date.

     THE SOLICITATION IS NOT BEING MADE TO HOLDERS IN ANY JURISDICTION IN WHICH
THE SOLICITATION WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION.

     Holders of Notes should review this Statement and the accompanying Consent
and Letter of Transmittal carefully.

Delivery of Consent and Letter of Transmittal

     If the Consent and Letter of Transmittal is signed by a beneficial owner
who is not either (a) the registered owner of the Notes or (b) the agent thereof
duly appointed by written proxy delivered to the Tabulation Agent, the
registered owner must complete and sign the "Consent Box" set forth in the
Consent and Letter of Transmittal, as only registered owners (or such duly
appointed agents) are entitled to deliver Consents.

     Any beneficial owner whose Notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to
deliver a Consent should contact such registered holder promptly and instruct
such registered holder to deliver Consents on such beneficial owner's behalf. If
such beneficial owner wishes to personally deliver the Consents, such beneficial
owner must, prior to completing and executing the Consent and Letter of
Transmittal and, where applicable, delivering such Consents, either make
appropriate arrangements to register ownership of the Notes in such beneficial
owner's name or follow the procedures described in the immediately preceding
paragraph. The transfer of record ownership may take a considerable amount of
time.

     CONSENTS AND LETTERS OF TRANSMITTAL, SHOULD BE SENT TO THE TABULATION AGENT
ONLY AND NOT TO THE COMPANY OR THE TRUSTEE. IN NO EVENT SHOULD A HOLDER TENDER
OR DELIVER ANY NOTES.

     THE METHOD OF DELIVERY OF THE CONSENT AND LETTER OF TRANSMITTAL TO THE
TABULATION AGENT IS AT THE ELECTION AND RISK OF THE DELIVERING HOLDER AND,
EXCEPT AS OTHERWISE PROVIDED PURSUANT TO GUARANTEED DELIVERY, DELIVERY WILL BE
DEEMED MADE WHEN ACTUALLY RECEIVED BY THE TABULATION AGENT. INSTEAD OF EFFECTING
DELIVERY BY MAIL IT IS RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND
DELIVERY SERVICE. IF SUCH DELIVERY IS BY MAIL, IT IS SUGGESTED THAT THE HOLDER
USE PROPERLY INSURED, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, AND THAT
THE MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO PERMIT
DELIVERY TO THE TABULATION AGENT PRIOR TO SUCH DATE.

          Signature Guarantees

          Signatures on the Consent and Letter of Transmittal must be guaranteed
by a firm which is a member of the Securities Transfer Agents Medallion Program,
the New York Stock Exchange Medallion Signature Program or the Stock Exchanges
Medallion Program or by any other "Eligible Guarantor Institution" as such term
is defined in Rule 17Ad-15 under the Exchange Act (each of the foregoing being
referred to herein as an "Eligible Institution") unless (a) the Consent and
Letter of Transmittal is signed by the registered Holder of the Notes for which
Consents are delivered and the "Special Payment Instructions" box on the Consent
and Letter of Transmittal is not completed, or (b) such Consents are delivered
for the account of an Eligible Institution. If Notes are registered in the name
of a person other than the signer of the Consent and Letter of Transmittal or if
payment is to be made to a person other than the registered Holder, then the
registered Holder should complete and sign the appropriate box on the Consent
and Letter of Transmittal, with such signature guaranteed by an Eligible
Institution.

                                      -9-
<PAGE>

          Special Payment Instructions

          Holders should indicate in the applicable box in the Consent and
Letter of Transmittal the name and address to which payment of the Consideration
is to be sent, if different from the name and address of the person signing the
Consent and Letter of Transmittal. If no such instructions are given, payment of
the Consideration will be made to the registered Holder of Notes for which
Consents are given.

          Backup Federal Income Tax Withholding

          To prevent backup federal income tax withholding, each Holder of Notes
delivering Consents must provide the Tabulation Agent with such Holder's correct
taxpayer identification number and certify that such Holder is not subject to
backup federal income tax withholding by completing the Substitute Form W-9
included in the Consent and Letter of Transmittal.  See Section 9.

          Other Matters

          NOTWITHSTANDING ANY OTHER PROVISION HEREOF, PAYMENT OF THE
CONSIDERATION FOR CONSENTS DELIVERED AND ACCEPTED PURSUANT TO THE SOLICITATION
WILL OCCUR ONLY AFTER TIMELY RECEIPT BY THE TABULATION AGENT OF A PROPERLY
COMPLETED AND VALIDLY EXECUTED CONSENT AND LETTER OF TRANSMITTAL (OR A MANUALLY
SIGNED FACSIMILE THEREOF) TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND
ANY OTHER REQUIRED DOCUMENTS.

Section 7.     Tabulation Agent

Tabulation Agent

     State Street Bank and Trust Company has been appointed Tabulation Agent for
the Solicitation. All deliveries and correspondence sent to the Tabulation Agent
should be directed to one of its addresses set forth on the back cover of this
Statement.

     Requests for assistance or additional copies of this Statement and the
Consent and Letter of Transmittal may be directed to the Tabulation Agent at its
address and telephone number set forth on the back cover of this Statement.

Section 8.     Fees and Expenses

     The Company will pay the Tabulation Agent reasonable and customary fees for
its services (and will reimburse it for its reasonable out-of-pocket expenses in
connection therewith), and will pay brokerage houses and other custodians,
nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them
in forwarding copies of this Statement and related documents to the beneficial
owners of the Notes and in handling or forwarding Consents. In addition, the
Company will indemnify the Tabulation Agent against certain liabilities in
connection with its services, including liabilities under the federal securities
laws.

     In connection with the Solicitation, directors, officers and regular
employees of the Company (who will not be specifically compensated for such
services) may solicit consents by use of the mails, personally or by telephone,
telegram or facsimile transmissions.

                                      -10-
<PAGE>

Section 9.     Certain Federal Income Tax Considerations

     The following summary discusses certain U.S. federal tax consequences of
the Solicitation and adoption of the Proposed Amendments to Holders of Notes.
For purposes of this summary, a "U.S. Holder" means a beneficial owner of a Note
that is for U.S. federal income tax purposes:

     .    an individual who is a citizen or resident of the United States;

     .    a corporation, partnership or other business entity created or
          organized under the laws of the United States or any state or
          political subdivision thereof (including the District of Columbia);

     .    an estate, the income of which is subject to U.S. federal income
          taxation regardless of its source; or

     .    a trust with respect to which a court within the United States is able
          to exercise primary supervision over its administration, and one or
          more United States persons have the authority to control all of its
          substantial decisions.

     An individual may, subject to certain exceptions, be deemed to be a
resident of the United States by reason of being present in the United States
for at least 31 days in the calendar year and for an aggregate of at least 183
days during a three-year period ending in the current calendar year (counting
for such purposes of all the days present in the current year, one-third of the
days present in the immediately preceding year, and one-sixth of the days
present in the second preceding year). A "Non-U.S. Holder" is a beneficial owner
of a Note that is not a U.S. Holder.

     This summary is based on interpretations of the Internal Revenue Code of
1986, as amended (the "Code"), regulations issued thereunder, and rulings and
decisions currently in effect (or in some cases proposed), all of which are
subject to change. Any such change may be applied retroactively and may
adversely affect the federal tax consequences described herein. This summary
addresses only Holders that beneficially own Notes as capital assets and not as
part of a "straddle" or a "conversion transaction" for U.S. federal income tax
purposes or as part of some other integrated investment. This summary does not
discuss all of the tax consequences that may be relevant to particular investors
or to investors subject to special treatment under the U.S. federal income tax
laws (such as life insurance companies, tax-exempt entities, regulated
investment companies, securities dealers, or investors whose functional currency
is not the U.S. dollar). Holders should consult their tax advisors concerning
the application of U.S. federal tax laws to their particular situations as well
as any consequences of the Solicitation and adoption of the Proposed Amendments
under the laws of any state or other taxing jurisdiction.

Federal Income Tax Consequences to U.S. Holders of the Consideration

     The Company intends to treat the Consideration for U.S. federal income tax
purposes as compensation paid to U.S. Holders that grant Consent to the Proposed
Amendments pursuant to the Solicitation. If this treatment is respected, a U.S.
Holder would be required to recognize ordinary income for U.S. federal income
tax purposes in an amount equal to the Consideration to which it is entitled,
when the Consideration is received or accrued, in accordance with its method of
accounting. U.S. Holders should consult their tax advisors regarding the proper
federal income tax treatment of the Consideration.

Federal Income Tax Consequences to U.S. Holders of the Adoption of the Proposed
Amendments

     The adoption of the Proposed Amendments will not be treated as a taxable
event for U.S. federal income tax purposes. Therefore, U.S. Holders will not
recognize any taxable gain or loss, and will retain their adjusted tax basis and
holding period in their Notes after adoption of the Proposed Amendments.

                                      -11-
<PAGE>

Federal Income Tax Consequences to Non-U.S. Holders of the Adoption of the
Proposed Amendments

     Although it is unclear whether Non-U.S. Holders are subject to U.S. federal
income tax with respect to the Consideration, the Company will withhold tax from
the Consideration paid to such Non-U.S. Holders at a rate of 30% unless (i) such
Non-U.S. Holder is engaged in the conduct of a trade or business in the United
States to which the receipt of the Consideration is effectively connected and
such Non-U.S. Holder provides a properly executed IRS Form W-8ECI or (ii) a tax
treaty between the United States and the country of residence of the Non-U.S.
Holder eliminates or reduces the withholding tax in respect of the Consideration
and such Non-U.S. Holder provides a properly executed IRS Form W-8BEN. Non-U.S.
Holders should consult their own tax advisors regarding the availability of a
refund of any U.S. withholding tax.

Backup Withholding Tax

     The receipt of the Consideration by a U.S. Holder may be subject to backup
withholding at the rate of 31% with respect to such payments unless such Holder
(i) is a corporation or comes within certain other exempt categories and, when
required, demonstrates this fact, or (ii) provides a correct taxpayer
identification number, certifies as to no loss of exemption from backup
withholding and otherwise complies with applicable requirements of the backup
withholding rules. Any amount withheld under these rules will be credited
against the U.S. Holder's U.S. federal income tax liability. If backup
withholding results in an overpayment of U.S. federal income taxes, a refund may
be obtained from the IRS provided the required information is furnished. A U.S.
Holder who does not provide its correct taxpayer identification number may be
subject to penalties imposed by the IRS.

     THE FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF U.S. FEDERAL INCOME
TAXATION THAT MAY BE RELEVANT TO PARTICULAR HOLDERS IN LIGHT OF THEIR PARTICULAR
CIRCUMSTANCES AND INCOME TAX SITUATIONS, AND DOES NOT DISCUSS ANY POSSIBLE
STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE SOLICITATION AND ADOPTION OF
THE WAIVERS. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR TAX
CONSEQUENCES TO THEM OF THE SOLICITATION AND ADOPTION OF THE WAIVERS, INCLUDING
THE EFFECT OF ANY FEDERAL, STATE, LOCAL, FOREIGN TAX AND OTHER LAWS.

Section 10.    Miscellaneous

     THE SOLICITATION IS NOT BEING MADE TO HOLDERS OF NOTES IN ANY JURISDICTION
IN WHICH THE MAKING OR OF THE SOLICITATION WOULD NOT BE IN COMPLIANCE WITH THE
LAWS OF SUCH JURISDICTION.  HOWEVER, THE COMPANY IN ITS SOLE DISCRETION, MAY
TAKE SUCH ACTION AS IT MAY DEEM NECESSARY TO MAKE THE SOLICITATION IN ANY SUCH
JURISDICTION, AND MAY EXTEND THE SOLICITATION TO HOLDERS OF NOTES IN SUCH
JURISDICTION.

     No person has been authorized to give any information or make any
representation on behalf of the Company which is not contained in this Statement
or in the Consent and Letter of Transmittal and if given or made, such
information or representation should not be relied upon.

     THE DELIVERY OF THIS STATEMENT SHALL NOT UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE
INFORMATION SET FORTH HEREIN OR IN ANY ANNEXES HERETO OR IN THE AFFAIRS OF THE
COMPANY OR ANY OF ITS SUBSIDIARIES OR AFFILIATES SINCE THE DATE HEREOF.

                                      -12-
<PAGE>

     The Consent and Letter of Transmittal should be sent or delivered by each
Holder or his or her broker, dealer, commercial bank, trust company or other
nominee to the Tabulation Agent at the address set forth below.

                 The Tabulation Agent for the Solicitation is:

                      State Street Bank and Trust Company

                                  Telephone:
                                (617) 662-1548

<TABLE>
<S>                                       <C>
By Overnight Courier or Hand Delivery:                   By Mail:

 State Street Bank and Trust Company         State Street Bank and Trust Company
    Global Investor Services Group              Global Investor Services Group
        2 Avenue de Lafayette                     Corporate Trust Department
       Corporate Trust Window                            P.O. Box 778
             Fifth Floor                            Boston, MA 02102-0778
       Boston, MA 02111-1724
       Attention: Ralph Jones                   New York (as DROP AGENT ONLY):
                                          State Street Bank and Trust Company, N.A.
                                                  Corporate Trust Department
                                                  61 Broadway, 15/th/ Floor
                                                      New York, NY 10006
</TABLE>

     Any questions or requests for assistance or additional copies of this
Statement or the Consent and Letter of Transmittal may be directed to the
Tabulation Agent or the Company, each at its respective address and telephone
number set forth on this page. Holders may also contact their broker, dealer,
commercial bank, trust company or other nominee for assistance concerning the
Solicitation.

Inquiries should be addressed to the Company or the Renco Group, Inc., each at
         its respective address and telephone number set forth below.

          AM General Corporation          The Renco Group, Inc.
          105 North Niles Avenue          30 Rockefeller Plaza, 42/nd/ Floor
          South Bend, IN 46617            New York, NY 10112
          Attention: Paul J. Cafiero      Attention: James N. Chapman

          Telephone: (219) 285 - 2907     Telephone: (212) 541-6000

                                      -13-
<PAGE>

                                    ANNEX A

                     Proposed Amendments to the Indenture
                     ------------------------------------

The definition of "Asset Sale" in Section 1.1 of the Indenture is hereby amended
--------------------------------------------------------------------------------
by adding the following to the end thereof:
-------------------------------------------

Notwithstanding the foregoing, any assignment or licensing of the HUMMER
trademark and/or tradename or assignment of any rights to the HUMVEE trademark
and/or tradename made by the Company in favor of GM in connection with the GM
Transaction shall not be deemed an Asset Sale.

The definition of "Fixed Charges" in Section 1.1 of the Indenture is hereby
---------------------------------------------------------------------------
amended by adding the following to the end thereof:
---------------------------------------------------

Notwithstanding the foregoing, Fixed Charges shall not include the amortization
of debt discount, if any, associated with the GM Loan.

The definition of "Permitted Liens" in Section 1.1 of the Indenture is hereby
-----------------------------------------------------------------------------
amended by adding the following to the end thereof:
---------------------------------------------------

Notwithstanding the foregoing, the definition of Permitted Liens shall include
the GM Lien.

Section 1.1 is hereby further amended by adding the following new definitions:
------------------------------------------------------------------------------

"GM" means General Motors Corporation, a Delaware corporation.

"GM Lien" means the Lien which secures the GM Loan.

"GM Loan" means a non interest bearing loan or loan facility  made in connection
with the GM Transaction pursuant to which GM will lend the Company up to $235
million and such additional amounts as GM and the Company may mutually agree in
order to finance the construction and preparation of the New Facility.

"GM Transaction" means a series of agreements that shall include but not be
limited to (i) an assignment agreement through which the Company shall
irrevocably assign to GM all rights, title and interest to the HUMMER trademark
and trade name, (ii) an agreement pursuant to which GM shall agree to pay the
Company a pre-agreed fee for the assembly of New Vehicles ordered by GM, (iii)
an agreement or provisions of an agreement which will obligate GM to finance the
construction and preparation of the New Facility, (iv) a security agreement
which shall grant GM a purchase money security interest in the real and personal
property acquired or otherwise produced with the proceeds of the GM Loan and (v)
a master agreement integrating the agreements related to the Transaction.

"New Facility" means, in connection with the assembly of the New Vehicle, (i)
certain engineering and/or construction of facilities and improvements on
existing facilities and/or (ii) other related capital investments and (iii)
other expenditures (with the exception of compensating employees) necessary to
enable the Company to assemble the New Vehicle.

"New Vehicle" means a new generation motor vehicle bearing the HUMMER name which
will be engineered and designed by GM and with respect to which the Company
shall have certain rights to assemble such vehicle for a fee.

                                      A-1
<PAGE>

Section 4.9 is hereby amended by adding the following new clause (c) at the end
-------------------------------------------------------------------------------
thereof:
-------

Notwithstanding the foregoing, the provisions of this Section 4.9 shall not
apply to the GM Loan.

                                     A-2
<PAGE>

                                    ANNEX B

                  Agreements Associated With the Transaction

1.   Master Agreement. An agreement which summarizes the main agreements (listed
     below) to be executed, contains certain general representations and
     warranties and specifies other general terms that apply to the Transaction.

2.   Assignment Agreement. An agreement through which the Company would
     irrevocably assign to GM all rights, title and interest to the Trademark.

3.   New Vehicle Assembly Agreement. An agreement for the assembly of New
     Vehicles through which GM would provide to the Company production rights
     for a seven and one half year period and pay the Company for the assembly
     of New Vehicles ordered by GM. The amount of the fee the Company would
     receive for the assembly of the New Vehicle would be determined by a pre-
     agreed schedule that would vary based on the volume of New Vehicles ordered
     and assembled during a twelve month period. Such fee schedule would govern
     fees during the entire term unless the volume of New Vehicles produced by
     the Company caused the GM Note (which would be repaid by offset of
     specified amortization against assembly fees otherwise payable by GM to the
     Company per each New Vehicle Assembled) to be repaid in full. The Company
     would be responsible for the construction of the New Facility to be
     financed by GM.

4.   Management Services Agreement. A marketing and distribution support
     agreement through which GM would be the exclusive provider of global
     marketing and distribution support services for the Current Vehicle.

5.   License Agreement. A license agreement through which GM would grant to the
     Company a limited license to utilize the HUMMER trademark in connection
     with the Current Vehicle for the duration of the New Vehicle Assembly
     Agreement. After such period, GM would consider, upon the Company's
     request, extending the term of such license or granting the Company an
     equivalent license, provided however, that the granting of such license
     would be at GM's sole discretion.

6.   GM Note. An interest-free promissory note (or series of interest-free
     promissory notes) in the aggregate amount of up to $235 million, subject to
     any mutually agreed upon changes, representing amounts loaned to the
     Company pursuant to GM's obligation to finance the New Facility.

7.   Security Agreement. A security agreement through which the Company would
     grant to GM a purchase money security interest in the real and personal
     property acquired with the proceeds of the GM Loan. The agreement would
     require the Company to take certain steps to preserve such collateral, and
     would require the Company to maintain specified types of insurance.

8.   Right of Access Agreement. A right of access agreement through which the
     Company would grant to GM, in the event of certain specified events of
     default, the right to enter, occupy and utilize certain real and personal
     property for the production of the New Vehicle, pursuant to terms of that
     agreement. An event of default would be deemed to occurs if (1) the Company
     failed to meet a delivery schedule over a specified period and did not cure
     such failure within a specified period, (2) the President and CEO of the
     Company would acknowledge in writing that the Company is unable to timely
     satisfy its delivery requirements, (3) the Company would refuse for any
     reason to deliver or assemble the required volume of New Vehicles ordered
     by GM, (4) if a voluntary or involuntary bankruptcy petition under the
     Bankruptcy Code were filed by or against the Company and a final order of
     relief under Chapter 7 were entered, or any proceedings under

                                      A-3
<PAGE>

     Chapter 11 of the Bankruptcy Code were converted to proceedings under
     Chapter 7 of the Bankruptcy Code pursuant to a final order of relief, (5)
     the Company made a general assignment for the benefit of creditors or a
     similar transfer or took action involving a material portion of certain
     assets of the Company for purposes of liquidating such assets, (6) any
     secured or lien creditor of the Company commenced foreclosure action on the
     property its lien encumbers and obtained the right to possess or control a
     material portion of the Company's assets, (7) bankruptcy proceedings were
     filed by or against the Company, an order authorizing the use of cash
     collateral or post-petition financing by the Company were not approved by
     the Bankruptcy Court prior to termination or expiration of the major
     portion of the Company's working capital financing arrangements and no
     alternative arrangements were then in place, (8) the Company became
     financially unable to perform its obligations under the New Vehicle
     Assembly Agreement or any purchase order thereunder and such inability to
     perform were not timely cured, (9) any of the Company's lenders terminated
     or failed to extend their working capital or other financing arrangements
     with the Company and the Company did not timely secure comparable
     alternative financing, or (10) in the event of any material action or
     inaction by the Company which can reasonably be expected to directly result
     in the imminent interruption of GM's ability to supply New Vehicles to its
     dealers and/or authorized distributors, provided the Company did not timely
     cure.

9.   HUMVEE Trademark Agreement. An agreement through which the Company would
     commit for the duration of the New Vehicle Assembly Agreement to limit the
     use of the HUMVEE trademark to its present use in connection with military-
     related vehicles, goods and services.

10.  Royalty Sharing Agreement. An agreement that would provide that the Company
     and GM share royalties and licensing fees derived from the non-automotive
     licensed merchandise that utilize the Trademark and/or the HUMVEE trademark
     during the calendar years 2000 through 2009 (the "Royalties"). The
     Company's share of the Royalties would be reduced yearly on a decreasing
     sliding scale.

11.  Joint Review Board Agreement. An agreement through which the Company and GM
     would establish one or more Joint Review Boards for the purposes of
     managing this Agreement and other business relationships and possible
     collaborations between the parties.

12.  Equity Rights Agreement. An agreement giving GM the option, exercisable at
     certain times, to convert unpaid portions of the GM Note into equity in the
     Company. In no case would GM be able to obtain more than 40% of the
     Company's voting stock. The Company has the right to repay at par value the
     outstanding balance or any part thereof at any time. Notwithstanding the
     foregoing, in the event GM provides notice of GM's intention to convert all
     or part of the GM Note and the Company wishes to prepay all or a portion of
     such amount, the Company may do so only if the Company also pays a premium
     of 20% of the amount actually prepaid.

                                      A-4

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