Document:

<PAGE>

                                                                     Exhibit 4.1

                                                                  EXECUTION COPY

================================================================================

                            SERIES 2001-7 SUPPLEMENT
                          Dated as of October 18, 2001

                                       to

                         POOLING AND SERVICING AGREEMENT
                         Dated as of September 30, 1993,
                    As amended and restated on April 9, 2001

                                 $1,000,000,000

                            CAPITAL ONE MASTER TRUST

                                  SERIES 2001-7

                                      among

                                CAPITAL ONE BANK
                               Seller and Servicer

                               CAPITAL ONE, F.S.B.
                                     Seller

                                       and

                              THE BANK OF NEW YORK
                                     Trustee
                on behalf of the Series 2001-7 Certificateholders

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                    Page
                                                                                                    ----
<S>                                                                                                 <C>
                                    ARTICLE I
                   Creation of the Series 2001-7 Certificates

Section 1.01.  Designation ......................................................................    1

                                   ARTICLE II
                                   Definitions

Section 2.01.  Definitions ......................................................................    2

Section 2.02.  Amendment to Section 2.08 of the Agreement .......................................   16

                                   ARTICLE III
                              Servicer and Trustee

Section 3.01.  Servicing Compensation ...........................................................   17

                                   ARTICLE IV
    Rights of Series 2001-7 Certificateholders and Collateral Interest Holder
                  and Allocation and Application of Collections

Section 4.01.  Collections and Allocations ......................................................   18

Section 4.02.  Determination of Monthly Interest ................................................   18

Section 4.03.  Determination of Monthly Principal; Series 2001-7 Accounts .......................   20

Section 4.04.  Required Amount ..................................................................   22

Section 4.05.  Application of Class A Available Funds, Class B Available Funds, Collateral
               Available Funds and Available Investor Principal Collections .....................   23

Section 4.06.  Defaulted Amounts; Investor Charge-Offs ..........................................   25

Section 4.07.  Excess Spread; Excess Finance Charges ............................................   26

Section 4.08.  Reallocated Principal Collections ................................................   28

Section 4.09.  Excess Finance Charges ...........................................................   29

Section 4.10.  Shared Principal Collections .....................................................   29

Section 4.11.  Reserve Account ..................................................................   29

                                    ARTICLE V
          Distributions and Reports to Series 2001-7 Certificateholders

Section 5.01.  Distributions ....................................................................   32

Section 5.02.  Reports and Statements to Series 2001-7 Certificateholders .......................   33
</TABLE>

<PAGE>

                               TABLE OF CONTENTS
                                  (continued)

<TABLE>
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<S>                                                                                                 <C>
                                   ARTICLE VI
                            Additional Pay Out Events

Section 6.01.   Additional Pay Out Events .......................................................    34

                                   ARTICLE VII
                     Optional Repurchase; Series Termination

Section 7.01.   Optional Repurchase .............................................................    35

Section 7.02.   Series Termination ..............................................................    35

                                  ARTICLE VIII
                               Final Distributions

Section 8.01.   Sale of Receivables or Certificateholders' Interest pursuant to Section 2.06
                or 10.01 of the Agreement .......................................................    36

Section 8.02.   Distribution of Proceeds of Sale, Disposition or Liquidation of the
                Receivables pursuant to Section 9.02 of the Agreement ...........................    37

                                   ARTICLE IX
                                  New Issuances

Section 9.01.   New Issuances ...................................................................    39

                                    ARTICLE X
                            Miscellaneous Provisions

Section 10.01.  Ratification of Agreement .......................................................    39

Section 10.02.  Counterparts ....................................................................    39

Section 10.03.  Governing Law ...................................................................    39

Section 10.04.  Determination of Material Adverse Effect ........................................    39

Section 10.05.  Book-Entry Certificates .........................................................    39

Section 10.06.  Uncertificated Securities .......................................................    40

Section 10.07.  Transfers of the Collateral Interest ............................................    40

Section 10.08.  Certain Accounting Related Amendments ...........................................    41

Section 10.09.  Additional Representations and Warranties of the Sellers ........................    41
</TABLE>

                                       ii

<PAGE>

EXHIBITS
--------

EXHIBIT A-1     Form of Class A Certificate
EXHIBIT A-2     Form of Class B Certificate
EXHIBIT B       Form of Monthly Certificateholders' Statement
EXHIBIT C       Form of Monthly Servicing Officer's Certificate
EXHIBIT D       Form of Investment Letter

                                      iii

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                               TABLE OF CONTENTS
                                  (continued)

                                                                            Page
                                                                            ----

An extra section break has been inserted above this paragraph. Do not delete
this section break if you plan to add text after the Table of
Contents/Authorities. Deleting this break will cause Table of
Contents/Authorities headers and footers to appear on any pages following the
Table of Contents/Authorities.

                                       iv

<PAGE>

          SERIES 2001-7 SUPPLEMENT, dated as of October 18, 2001 (the
"Supplement"), among CAPITAL ONE BANK, a Virginia banking corporation, as a
Seller and the Servicer, CAPITAL ONE, F.S.B., a federal savings bank, as a
Seller, and THE BANK OF NEW YORK, a New York banking corporation, as the
Trustee.

          Pursuant to the Pooling and Servicing Agreement, dated as of September
30, 1993, as amended and restated as of April 9, 2001 (as amended and restated
and as amended and supplemented, the "Agreement"), among the Sellers, the
Servicer and the Trustee, the Sellers have created Capital One Master Trust (the
"Trust"). Section 6.03 of the Agreement provides that the Sellers may from time
to time direct the Trustee to authenticate one or more new Series of Investor
Certificates representing fractional undivided interests in the Trust. The
Principal Terms of any new Series are to be set forth in a Supplement to the
Agreement.

          Pursuant to this Supplement, the Sellers and the Trustee shall create
a new Series of Investor Certificates and specify the Principal Terms thereof.

                                   ARTICLE I

                   Creation of the Series 2001-7 Certificates
                   ------------------------------------------

          Section 1.01.  Designation.
                         -----------

          (a)  There is hereby created a Series of Investor Certificates to be
issued pursuant to the Agreement and this Supplement to be known as "Capital One
Master Trust, Series 2001-7." The Series 2001-7 Certificates shall be issued in
two Classes, the first of which shall be known as the "Class A 3.85% Asset
Backed Certificates, Series 2001-7" and the second of which shall be known as
the "Class B Floating Rate Asset Backed Certificates, Series 2001-7." In
addition, there is hereby created a third Class of uncertificated interests in
the Trust which, except as expressly provided herein, shall be deemed to be
"Investor Certificates" (and the Collateral Interest Holder shall be deemed to
be an "Investor Certificateholder") for all purposes under the Agreement and
this Supplement and which shall be known as the "Collateral Interest, Series
2001-7."

          (b)  Series 2001-7 shall be included in Group One and shall be a
Principal Sharing Series. Series 2001-7 shall not be subordinated to any other
Series. Notwithstanding any provision in the Agreement or in this Supplement to
the contrary, the first Distribution Date with respect to Series 2001-7 shall be
the November 2001 Distribution Date.

          (c)  In the event that any term or provision contained herein shall
conflict with or be inconsistent with any term or provision contained in the
Agreement, the terms and provisions of this Supplement shall govern.

          (d)  The Collateral Interest Holder, as holder of an "Investor
Certificate" shall be entitled to the benefits of the Agreement and this
Supplement. Notwithstanding the foregoing, except as expressly provided herein,
(i) the provisions of Article VI and Article XII of the Agreement relating to
the registration, authentication, delivery, presentation, cancellation and
surrender of Registered Certificates and clauses (a) and (c) of the definition
of "Tax Opinion" in Section 1.01 of the Agreement

<PAGE>

shall not be applicable to the Collateral Interest, and (ii) the provisions of
Section 3.07 of the Agreement shall not apply to cause the Collateral Interest
to be treated as debt for federal, state and local income and franchise tax
purposes, but rather the Sellers intend and, together with the Collateral
Interest Holder, agree to treat the Collateral Interest for federal, state and
local income and franchise tax purposes as representing an equity interest in
the assets of the Trust.

                                   ARTICLE II

                                   Definitions
                                   -----------

          Section 2.01.  Definitions.
                         -----------

          (a)  Whenever used in this Supplement, the following words and phrases
shall have the following meanings, and the definitions of such terms are
applicable to the singular as well as the plural forms of such terms and the
masculine as well as the feminine and neuter genders of such terms.

          "Accumulation Period" shall mean, unless a Pay Out Event shall have
           -------------------
occurred prior thereto, the period commencing at the close of business on the
last day of the September 2003 Monthly Period or such later date as is
determined in accordance with Section 4.03(f) and ending on the first to occur
of (a) the commencement of the Early Amortization Period, (b) the payment in
full to Series 2001-7 Holders of the Invested Amount or (c) the Termination
Date.

          "Accumulation Period Amount" shall mean for each Monthly Period, an
           --------------------------
amount equal to the product of (i) Available Expected Principal for such Monthly
Period and (ii) a fraction, the numerator of which is the Initial Invested
Amount and the denominator of which is the sum of (a) the Initial Invested
Amount and (b) the invested amounts of all other Variable Accumulation Series
which are not scheduled to be in their revolving periods as of such Monthly
Period; provided that, for purposes of this definition, the commencement date of
the accumulation period of each such Variable Accumulation Series shall be
deemed to have been postponed to the latest permissible date, determined as if
the provisions of Section 4.03(f) applied to each such Series with such changes
as may be specified with respect to such Series (applying such provisions first
to the Variable Accumulation Series with the latest expected final payment date
and next to each Series with the next preceding expected final payment date).

          "Accumulation Period Length" shall have the meaning specified in
           --------------------------
Section 4.03(f).

          "Additional Interest" shall mean, at any time of determination, the
           -------------------
Class A Additional Interest, the Class B Additional Interest and the Collateral
Additional Interest.

          "Adjusted Invested Amount" shall mean, with respect to any date of
           ------------------------
determination, an amount equal to the Invested Amount less the Principal Funding
Account Balance on such date of determination.

          "Assignee" shall have the meaning specified in subsection 10.07(a).
           --------

          "Available Expected Principal" for any date of determination with
           ----------------------------
respect to each Monthly Period shall be equal to the excess of (a) the Expected
Monthly Principal for such Monthly

                                       2

<PAGE>

Period over (b) the sum of, without duplication, all scheduled amortizations or
accumulations of principal, including past due shortfalls as of such date of
determination, for all Nonvariable Accumulation Series which are not scheduled
to be in their revolving periods as of such Monthly Period.

          "Available Investor Principal Collections" shall mean, with respect to
           ----------------------------------------
any Monthly Period, an amount equal to the sum of (a) (i) an amount equal to the
Principal Allocation Percentage of all Collections of Principal Receivables
received during such Monthly Period, minus (ii) the amount of Reallocated
                                     -----
Principal Collections with respect to such Monthly Period which pursuant to
Section 4.08(a) or 4.08 (b) are required to fund any deficiency in the amount to
be distributed pursuant to Sections 4.05(a)(i), (ii) and (iii), 4.05(b)(i) and
(ii) and 4.07(c)(II) for the related Distribution Date, plus (b) the amount of
                                                        ----
Miscellaneous Payments, if any, for such Monthly Period that are allocated to
Series 2001-7 pursuant to Section 4.03 of the Agreement, plus (c) any Shared
                                                         ----
Principal Collections with respect to other Series that are allocated to Series
2001-7 in accordance with Section 4.04 of the Agreement and Section 4.10 hereof,
plus (d) the amount of funds to be distributed pursuant to Section 4.05(a)(iii)
----
with respect to the related Distribution Date, plus (e) any other amounts which
                                               ----
pursuant to Section 4.07 hereof are to be treated as Available Investor
Principal Collections with respect to the related Distribution Date.

          "Available Reserve Account Amount" shall mean, with respect to any
           --------------------------------
Distribution Date, the lesser of (a) the amount on deposit in the Reserve
Account on such date (before giving effect to any deposit to be made to the
Reserve Account on such Distribution Date) and (b) the Required Reserve Account
Amount for such Distribution Date.

          "Base Rate" shall mean, with respect to any Monthly Period, the
           ---------
annualized percentage equivalent of a fraction, the numerator of which is equal
to the sum of the Class A Monthly Interest, the Class B Monthly Interest, the
Collateral Minimum Monthly Interest and the Monthly Servicing Fee, each with
respect to the related Distribution Date, and the denominator of which is the
Invested Amount as of the last day of the preceding Monthly Period; provided,
                                                                    --------
however, that for the first Monthly Period, the denominator is the Initial
-------
Invested Amount.

          "Class A Account Percentage" shall mean, with respect to any date of
           --------------------------
determination, the percentage equivalent of a fraction, the numerator of which
is the aggregate amount with respect to Class A Monthly Principal on deposit in
the Principal Funding Account on such date (before giving effect to any deposit
to be made to the Principal Funding Account on such date) and the denominator of
which is the Principal Funding Account Balance on such date (before giving
effect to any deposit to be made to the Principal Funding Account on such date).

          "Class A Additional Interest" shall have the meaning specified in
           ---------------------------
Section 4.02(a).

          "Class A Adjusted Invested Amount" shall mean, with respect to any
           --------------------------------
date of determination, an amount not less than zero equal to the Class A
Invested Amount less the Principal Funding Account Balance on such date.

          "Class A Available Funds" shall mean, with respect to any Monthly
           -----------------------
Period, an amount equal to the sum of (a) an amount equal to the product of (i)
the Class A Account Percentage and (ii) the amount of Principal Funding
Investment Proceeds, if any, with respect to the related Distribution Date, (b)
the Class A Floating Percentage of the Collections of Finance Charge

                                       3

<PAGE>
Receivables (other than Finance Charge Receivables allocated to Servicer
Interchange with respect to such Monthly Period) allocated to the Series 2001-7
Certificates (including any investment earnings that are to be treated as
Collections of Finance Charge Receivables in accordance with the Agreement and
this Supplement) and (c) the amount of funds, if any, to be withdrawn from the
Reserve Account which, pursuant to Section 4.11(d), are required to be included
in Class A Available Funds with respect to the related Distribution Date.

          "Class A Certificate Rate" shall mean 3.85% per annum.
           ------------------------

          "Class A Certificateholder" shall mean the Person in whose name a
           -------------------------
Class A Certificate is registered in the Certificate Register.

          "Class A Certificates" shall mean any of Certificates executed by the
           --------------------
Banks and authenticated by or on behalf of the Trustee, substantially in the
form of Exhibit A-1.
        -----------

          "Class A Floating Percentage" shall mean, with respect to any Monthly
           ---------------------------
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is equal to the Class A Adjusted Invested
Amount as of the close of business on the last day of the preceding Monthly
Period and the denominator of which is equal to the Adjusted Invested Amount as
of such day; provided, however, that, with respect to the first Monthly Period,
             --------  -------
the Class A Floating Percentage shall mean the Class A Initial Percentage.

          "Class A Initial Invested Amount" shall mean the aggregate initial
           -------------------------------
principal amount of the Class A Certificates, which is $845,000,000.

          "Class A Initial Percentage" shall mean the percentage equivalent of a
           --------------------------
fraction, the numerator of which is the Class A Initial Invested Amount and the
denominator of which is the Initial Invested Amount.

          "Class A Interest Shortfall" shall have the meaning specified in
           --------------------------
Section 4.02(a).

          "Class A Invested Amount" shall mean, on any date of determination, an
           -----------------------
amount equal to (a) the Class A Initial Invested Amount, minus (b) the aggregate
                                                         -----
amount of principal payments made to the Class A Certificateholders on or prior
to such date, minus (c) the excess, if any, of the aggregate amount of Class A
              -----
Investor Charge-Offs for all prior Distribution Dates over the aggregate amount
                                                      ----
of Class A Investor Charge-Offs reimbursed pursuant to Section 4.06(a) prior to
such date; provided, however, that the Class A Invested Amount may not be
           --------  -------
reduced below zero.

          "Class A Investor Charge-Offs" shall have the meaning specified in
           ----------------------------
Section 4.06(a).

          "Class A Investor Default Amount" shall mean, with respect to each
           -------------------------------
Distribution Date, an amount equal to the product of (i) the Investor Default
Amount for the related Monthly Period and (ii) the Class A Floating Percentage
for such Monthly Period.

          "Class A Monthly Interest" shall have the meaning specified in Section
           ------------------------
4.02(a).

          "Class A Monthly Principal" shall have the meaning specified in
           -------------------------
Section 4.03(a).

                                       4

<PAGE>
          "Class A Outstanding Additional Interest" shall mean, with respect to
           ---------------------------------------
any Distribution Date, the amount of Class A Additional Interest previously due
but not paid to the Class A Certificateholders.

          "Class A Outstanding Monthly Interest" shall mean, with respect to any
           ------------------------------------
Distribution Date, the amount of Class A Monthly Interest previously due but not
paid to the Class A Certificateholders.

          "Class A Penalty Rate" shall mean the sum of the Class A Certificate
           --------------------
Rate and 2.00% per annum.

          "Class A Principal Percentage" shall mean, with respect to any Monthly
           ----------------------------
Period (i) during the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Class A Invested Amount as of the last day of the immediately preceding Monthly
Period (or, in the case of the first Monthly Period, the Closing Date) and the
denominator of which is the Invested Amount as of such day and (ii) during the
Accumulation Period or the Early Amortization Period, the percentage equivalent
(which percentage shall never exceed 100%) of a fraction, the numerator of which
is the Class A Invested Amount as of the last day of the Revolving Period, and
the denominator of which is the Invested Amount as of such last day; provided,
                                                                     --------
however, that, with respect to the first Monthly Period, the Class A Principal
-------
Percentage shall mean the Class A Initial Percentage.

          "Class A Required Amount" shall have the meaning specified in Section
           -----------------------
4.04(a).

          "Class A Servicing Fee" shall have the meaning specified in Section
           ---------------------
3.01.

          "Class B Account Percentage" shall mean, with respect to any date of
           --------------------------
determination, the percentage equivalent of a fraction, the numerator of which
is the aggregate amount with respect to Class B Monthly Principal on deposit in
the Principal Funding Account on such date (before giving effect to any deposit
to be made to the Principal Funding Account on such date) and the denominator of
which is the Principal Funding Account Balance on such date (before giving
effect to any deposit to be made to the Principal Funding Account on such date).

          "Class B Additional Interest" shall have the meaning specified in
           ---------------------------
Section 4.02(b).

          "Class B Adjusted Invested Amount" shall mean, with respect to any
           --------------------------------
date of determination, an amount not less than zero equal to the Class B
Invested Amount less the excess, if any, of the Principal Funding Account
Balance over the Class A Invested Amount on such date.

          "Class B Available Funds" shall mean, with respect to any Monthly
            ----------------------
Period, an amount equal to the sum of (a) an amount equal to the product of (i)
the Class B Account Percentage and (ii) the amount of Principal Funding
Investment Proceeds, if any, with respect to the related Distribution Date, (b)
the Class B Floating Percentage of the Collections of Finance Charge Receivables
(other than Finance Charge Receivables allocated to Servicer Interchange with
respect to such Monthly Period) allocated to the Series 2001-7 Certificates
(including any investment earnings that are to be treated as Collections of
Finance Receivables in accordance with the Agreement) and (c) the amount of
funds, if any, to be withdrawn from the Reserve Account which,

                                       5

<PAGE>

pursuant to Section 4.11(d), are required to be included in Class B Available
Funds with respect to the related Distribution Date.

          "Class B Certificate Rate" shall mean, for any Interest Period, a per
           ------------------------
annum rate equal to LIBOR for such Interest Period plus 0.45%.

          "Class B Certificateholder" shall mean the Person in whose name a
           -------------------------
Class B Certificate is registered in the Certificate Register.

          "Class B Certificates" shall mean any one of the Certificates executed
           --------------------
by the Banks and authenticated by or on behalf of the Trustee, substantially in
the form of Exhibit A-2.
            -----------

          "Class B Floating Percentage" shall mean, with respect to any Monthly
           ---------------------------
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is equal to the Class B Adjusted Invested
Amount as of the close of business on the last day of the preceding Monthly
Period and the denominator of which is equal to the Adjusted Invested Amount as
of the close of business on such day; provided, however, that, with respect to
                                      --------  -------
the first Monthly Period, the Class B Floating Percentage shall mean the Class B
Initial Percentage.

          "Class B Initial Invested Amount" shall mean the aggregate initial
           -------------------------------
principal amount of the Class B Certificates, which is $77,500,000.

          "Class B Initial Percentage" shall mean the percentage equivalent of a
           --------------------------
fraction, the numerator of which is the Class B Initial Invested Amount and the
denominator of which is the Initial Invested Amount.

          "Class B Interest Shortfall" shall have the meaning specified in
           --------------------------
Section 4.02(b).

          "Class B Invested Amount" shall mean, on any date of determination, an
           -----------------------
amount equal to (a) the Class B Initial Invested Amount, minus (b) the aggregate
                                                         -----
amount of principal payments made to the Class B Certificateholders prior to
such date, minus (c) the aggregate amount of Class B Investor Charge-Offs for
           -----
all prior Distribution Dates, minus (d) the aggregate amount of Reallocated
                              -----
Principal Collections allocated on all prior Distribution Dates pursuant to
Section 4.08(a) (excluding any Reallocated Principal Collections that have
resulted in a reduction in the Collateral Invested Amount pursuant to Section
4.06(c)), minus (e) an amount equal to the amount by which the Class B Invested
          -----
Amount has been reduced on all prior Distribution Dates pursuant to Section
4.06(a), plus (f) the amount of Excess Spread and Excess Finance Charges
         ----
allocated and available on all prior Distribution Dates pursuant to Section
4.07(d) for the purpose of reimbursing amounts deducted pursuant to the
foregoing clauses (c), (d) and (e); provided, however, that the Class B Invested
                                    --------  -------
Amount may not reduced below zero.

          "Class B Investor Charge-Offs" shall have the meaning specified in
           ----------------------------
Section 4.06(b).

          "Class B Investor Default Amount" shall mean, with respect to each
           -------------------------------
Distribution Date, an amount equal to the product of (i) the Investor Default
Amount for the related Monthly Period and (ii) the Class B Floating Percentage
for such Monthly Period.

          "Class B Monthly Interest" shall have the meaning specified in Section
           ------------------------
4.02(b).

                                       6

<PAGE>
          "Class B Monthly Principal" shall have the meaning specified in
           -------------------------
Section 4.03(b).

          "Class B Outstanding Additional Interest" shall mean, with respect to
           ---------------------------------------
any Distribution Date, the amount of Class B Additional Interest previously due
but not paid to the Class B Certificateholders.

          "Class B Outstanding Monthly Interest" shall mean, with respect to any
           ------------------------------------
Distribution Date, the amount of Class B Monthly Interest previously due but not
paid to the Class B Certificateholders.

          "Class B Penalty Rate" shall mean, for any Interest Period, the sum of
           --------------------
the Class B Certificate Rate for such Interest Period and 2.00% per annum.

          "Class B Principal Percentage" shall mean, with respect to any Monthly
           ----------------------------
Period (i) during the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Class B Invested Amount as of the last day of the immediately preceding Monthly
Period (or, in the case of the first Monthly Period, the Closing Date) and the
denominator of which is the Invested Amount as of such day and (ii) during the
Accumulation Period or the Early Amortization Period, the percentage equivalent
(which percentage shall never exceed 100%) of a fraction, the numerator of which
is the Class B Invested Amount as of the last day of the Revolving Period, and
the denominator of which is the Invested Amount as of such last day; provided,
                                                                     --------
however, that, with respect to the first Monthly Period, the Class B Principal
-------
Percentage shall mean the Class B Initial Percentage.

          "Class B Required Amount" shall have the meaning specified in Section
           -----------------------
4.04(b).

          "Class B Servicing Fee" shall have the meaning specified in Section
           ---------------------
3.01.

          "Closing Date" shall mean October 18, 2001.
           ------------

          "Collateral Account Percentage" shall mean, with respect to any date
           -----------------------------
of determination, the percentage equivalent of a fraction, the numerator of
which is the aggregate amount with respect to Collateral Monthly Principal on
deposit in the Principal Funding Account on such date (before giving effect to
any deposit to be made to the Principal Funding Account on such date) and the
denominator of which is the Principal Funding Account Balance on such date
(before giving effect to any deposit to be made to the Principal Funding Account
on such date).

          "Collateral Additional Interest" shall have the meaning specified in
           ------------------------------
Section 4.02(c).

          "Collateral Adjusted Invested Amount" shall mean, with respect to any
           -----------------------------------
date of determination, an amount not less than zero equal to the Collateral
Invested Amount less the excess, if any, of the Principal Funding Account
Balance over the sum of the Class A Invested Amount and the Class B Invested
Amount on such date.

          "Collateral Available Funds" shall mean, with respect to any Monthly
           --------------------------
Period, an amount equal to the sum of (a) an amount equal to the product of (i)
the Collateral Account Percentage and (ii) the amount of Principal Funding
Investment Proceeds, if any, with respect to the

                                       7

<PAGE>

related Distribution Date and (b) the Collateral Floating Percentage of the
Collections of Finance Charge Receivables (other than Finance Charge Receivables
allocated to Servicer Interchange with respect to such Monthly Period) allocated
to the Series 2001-7 Certificates (including any investment earnings that are to
be treated as Collections of Finance Charge Receivables in accordance with the
Agreement).

          "Collateral Floating Percentage" shall mean, with respect to any
           ------------------------------
Monthly Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Collateral Adjusted Invested
Amount as of the close of business on the last day of the preceding Monthly
Period and the denominator of which is equal to the Adjusted Invested Amount as
of such day; provided, however, that with respect to the first Monthly Period,
             --------  -------
the Collateral Floating Percentage shall mean the percentage equivalent of a
fraction, the numerator of which is the Collateral Initial Invested Amount and
the denominator of which is the Initial Invested Amount.

          "Collateral Initial Invested Amount" shall mean $77,500,000.
           ----------------------------------

          "Collateral Interest" shall mean a fractional undivided interest in
           -------------------
the Trust which shall consist of the right to receive (i) to the extent
necessary to make the required payments to a Collateral Interest Holder under
this Supplement, the portion of Collections allocable thereto under the
Agreement and this Supplement and funds on deposit in the Collection Account
allocable thereto pursuant to the Agreement and this Supplement and (ii) amounts
available for payment to the Collateral Interest Holder pursuant to, without
duplication, Section 4.05 and subsections 4.07(j), 4.11(d)(iii), 4.11(e),
4.11(f), 8.01(b), 8.02(a) and 8.02(b).

          "Collateral Interest Holder" shall mean the entity so designated in
           --------------------------
the Transfer Agreement.

          "Collateral Interest Minimum Rate" shall mean a rate per annum
           --------------------------------
specified in the Transfer Agreement not to exceed LIBOR for one-month United
States dollar deposits, determined as of the related LIBOR Determination Date,
plus 1.30%.

          "Collateral Interest Shortfall" shall have the meaning specified in
           -----------------------------
subsection 4.02(c).

          "Collateral Invested Amount" shall mean, when used with respect to any
           --------------------------
date, an amount equal to (a) the Collateral Initial Invested Amount, minus (b)
                                                                     -----
the aggregate amount of principal payments made to the Collateral Interest
Holder prior to such date, minus (c) an amount equal to the aggregate amount by
                           -----
which the Collateral Invested Amount has been reduced on all prior Distribution
Dates pursuant to Section 4.06, plus (d) the aggregate amount of Excess Spread
                                ----
and Excess Finance Charges allocated and available on all prior Distribution
Dates pursuant to Section 4.07(h) for the purpose of reimbursing amounts
deducted pursuant to the foregoing clause (c); provided, however, that the
                                               --------  -------
Collateral Invested Amount may not be reduced below zero.

          "Collateral Investor Default Amount" shall mean, with respect to each
           ----------------------------------
Distribution Date, an amount equal to the product of (i) the Investor Default
Amount for the related Monthly Period and (ii) the Collateral Floating
Percentage for such Monthly Period.

          "Collateral Minimum Monthly Interest" shall have the meaning specified
           -----------------------------------
in Section 4.02(c).

                                       8

<PAGE>

          "Collateral Monthly Principal" shall have the meaning specified in
           ----------------------------
Section 4.03(c).

          "Collateral Outstanding Additional Interest" shall mean, with respect
           ------------------------------------------
to any Distribution Date, the amount of Collateral Additional Interest
previously due but not paid to the Collateral Interest Holder.

          "Collateral Outstanding Monthly Interest" shall mean, with respect to
           ---------------------------------------
any Distribution Date, the amount of Collateral Minimum Monthly Interest
previously due but not paid to the Collateral Interest Holder.

          "Collateral Servicing Fee" shall have the meaning specified in Section
           ------------------------
3.01.

          "Controlled Accumulation Amount" shall mean for any Distribution Date
           ------------------------------
with respect to the Accumulation Period, $83,333,333.34; provided, however,
                                                         --------  -------
that, if the Accumulation Period is modified pursuant to Section 4.03(f), (i)
the Controlled Accumulation Amount for each Distribution Date with respect to
the Accumulation Period shall mean the amount specified in accordance with such
Section on the date on which the Accumulation Period has most recently been
modified, (ii) the Controlled Accumulation Amount for each related Monthly
Period shall be no greater than the Accumulation Period Amount for such Monthly
Period and (iii) the sum of the Controlled Accumulation Amounts for all
Distribution Dates with respect to the modified Accumulation Period shall not be
less than the Initial Invested Amount.

          "Controlled Deposit Amount" shall mean, for any Distribution
           -------------------------
Date with respect to the Accumulation Period, an amount equal to the sum of the
Controlled Accumulation Amount for such Distribution Date and any Deficit
Controlled Accumulation Amount for the immediately preceding Distribution Date.

          "Covered Amount" shall mean for any Distribution Date with respect to
           --------------
the Accumulation Period or the first Special Payment Date, an amount equal to
the sum of (a) one-twelfth of the product of (i) the Class A Certificate Rate
and (ii) the aggregate amount on deposit in the Principal Funding Account with
respect to Class A Monthly Principal, if any, as of the preceding Distribution
Date, plus (b) the product of (i) the Class B Certificate Rate in effect for the
      ----
related Interest Period, (ii) a fraction, the numerator of which is the actual
number of days from and including the preceding Distribution Date to but
excluding such Distribution Date and the denominator of which is 360 and (iii)
the aggregate amount on deposit in the Principal Funding Account with respect to
Class B Monthly Principal, if any, as of the preceding Distribution Date, plus
                                                                          ----
(c) the product of (i) the Collateral Interest Minimum Rate in effect for the
related Interest Period, (ii) a fraction, the numerator of which is the actual
number of days from and including the preceding Distribution Date to but
excluding such Distribution Date and the denominator of which is 360 and (iii)
the aggregate amount on deposit in the Principal Funding Account with respect to
Collateral Monthly Principal, if any, as of the preceding Distribution Date.

          "Cut-Off Date" shall mean October 1, 2001.
           ------------

          "Deficit Controlled Accumulation Amount" shall mean (a) on the first
           --------------------------------------
Distribution Date with respect to the Accumulation Period, the excess, if any,
of the Controlled Accumulation Amount for such Distribution Date over the amount
distributed from the Collection Account as

                                        9

<PAGE>

Class A Monthly Principal, Class B Monthly Principal and Collateral Monthly
Principal for such Distribution Date and (b) on each subsequent Distribution
Date with respect to the Accumulation Period, the excess, if any, of the
Controlled Deposit Amount for such subsequent Distribution Date plus any Deficit
Controlled Accumulation Amount for the prior Distribution Date over the amount
distributed from the Collection Account as Class A Monthly Principal, Class B
Monthly Principal and Collateral Monthly Principal for such subsequent
Distribution Date.

          "Early Amortization Period" shall mean the period commencing at the
           -------------------------
close of business on the Business Day immediately preceding the day on which a
Pay Out Event with respect to Series 2001-7 is deemed to have occurred and
ending on the first to occur of (i) the payment in full to the Class A
Certificateholders and the Class B Certificateholders of the Class A Invested
Amount and the Class B Invested Amount, respectively, and the payment in full to
the Collateral Interest Holder of the Collateral Invested Amount, if any, or
(ii) the Termination Date.

          "Excess Shared Principal Collections" shall mean the excess of the
           -----------------------------------
Shared Principal Collections over the aggregate amount of Principal Shortfalls
for all Series, as defined in each related Supplement, which are Principal
Sharing Series for such Distribution Date.

          "Excess Spread" shall mean, with respect to any Distribution Date, the
           -------------
sum of the amounts, if any, specified pursuant to Sections 4.05(a)(iv),
4.05(b)(iii) and 4.05(c)(ii) with respect to such Distribution Date.

          "Expected Final Payment Date" shall mean the October 2004 Distribution
           ---------------------------
Date.

          "Expected Monthly Principal" shall be equal to the product of (i) the
           --------------------------
lowest of the monthly principal payment rates (determined by dividing
Collections of Principal Receivables during a calendar month by the amount of
Principal Receivables in the Trust as of the last day of the preceding month,
adjusted for additions and removals occurring after such last day), expressed as
a decimal for the 12 calendar months preceding the date of such calculation (or
such lower principal payment rate as the Servicer may select) and (ii) the sum
of the Initial Invested Amounts (as defined in the related Supplement) of all
outstanding Series, other than Variable Funding Series.

          "Finance Charge Shortfall" shall have the meaning specified in Section
           ------------------------
4.09.

          "Floating Allocation Percentage" shall mean, with respect to any
           ------------------------------
Monthly Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Adjusted Invested Amount as
of the last day of the preceding Monthly Period (or, with respect to the first
Monthly Period, the Initial Invested Amount) and the denominator of which is the
sum of (i) the total amount of Principal Receivables in the Trust as of such day
(or, with respect to the first Monthly Period, the Cut-Off Date) and (ii) the
principal amount on deposit in the Excess Funding Account as of such last day;
provided, however, that the amount calculated above pursuant to clause (i) of
--------  -------
the denominator shall be increased by the aggregate amount of Principal
Receivables in Additional Accounts added to the Trust during such Monthly Period
as though such Receivables had been added to the Trust as of the first day of
such Monthly Period and decreased by the aggregate amount of Principal
Receivables removed from the Trust during such Monthly Period as though such
Receivables had been removed from the Trust as of the first day of such Monthly
Period.

                                       10

<PAGE>

          "Group One" shall mean Series 2001-7 and each other series specified
           ---------
in the related Supplement to be included in Group One.

          "Initial Invested Amount" shall mean the sum of the Class A Initial
           -----------------------
Invested Amount, the Class B Initial Invested Amount and the Collateral Initial
Invested Amount.

          "Initial Servicing Fee" shall have the meaning specified in Section
           ---------------------
3.01.

          "Interest Payment Date" shall mean, with respect to the Class A
           ---------------------
Certificates, the Class B Certificates and the Collateral Interest, the 15th day
of each month (or, if such day is not a Business Day, the next succeeding
Business Day), commencing on the November 2001 Distribution Date.

          "Interest Period" shall mean with respect to any Payment Date, the
           ---------------
period from and including the Payment Date immediately preceding such Payment
Date (or, in the case of the first Payment Date, from and including the Closing
Date) to but excluding such Payment Date.

          "Invested Amount" shall mean, as of any date of determination, an
           ---------------
amount equal to the sum of (a) the Class A Invested Amount as of such date, (b)
the Class B Invested Amount as of such date and (c) the Collateral Invested
Amount as of such date.

          "Investment Letter" shall have the meaning specified in subsection
           -----------------
10.07(a).

          "Investor Charge-Offs" shall mean Class A Investor Charge-Offs and
           --------------------
Class B Investor Charge-Offs.

          "Investor Default Amount" shall mean, with respect to any Distribution
           -----------------------
Date, an amount equal to the product of (a) the Defaulted Amount for the related
Monthly Period and (b) the Floating Allocation Percentage for such Monthly
Period.

          "LIBOR" shall mean, as of any LIBOR Determination Date, the rate for
           -----
deposits in United States dollars for a one-month period which appears on
Telerate Page 3750 as of 11:00 a.m., London time, on such date. If such rate
does not appear on Telerate Page 3750, the rate for that LIBOR Determination
Date shall be determined on the basis of the rates at which deposits in United
States dollars are offered by the Reference Banks at approximately 11:00 a.m.,
London time, on that day to prime banks in the London interbank market for a
one-month period. The Servicer shall request the principal London office of each
of the Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate for that LIBOR Determination Date shall be the
arithmetic mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that LIBOR Determination Date shall be the arithmetic
mean of the rates quoted by major banks in New York City, selected by the
Servicer, at approximately 11:00 a.m., New York City time, on that day for loans
in United States dollars to leading European banks for a one-month period;
provided, however, that if the banks selected as aforesaid by the Servicer are
--------  -------
not quoting as mentioned, the rate for that day shall be the rate then in effect
on such LIBOR Determination Date.

                                       11

<PAGE>

          "LIBOR Determination Date" shall mean, for any Interest Period, the
           ------------------------
second London Business Day prior to the commencement of such Interest Period
(or, in the case of the initial Interest Period, the second London Business Day
prior to the Closing Date).

          "London Business Day" shall mean a day on which dealings in deposits
           -------------------
in United States dollars are transacted in the London interbank market.

          "Monthly Interest" means, with respect to any Distribution Date, the
           ----------------
Class A Monthly Interest, the Class B Monthly Interest and Collateral Minimum
Monthly Interest, each for such Distribution Date.

          "Monthly Servicing Fee" shall have the meaning specified in Section
           ---------------------
3.01.

          "Net Servicing Fee Rate" shall mean (i) so long as a Seller or The
           ----------------------
Bank of New York is the Servicer, 1.25% per annum and (ii) if a Seller or The
Bank of New York is no longer the Servicer, 2.00% per annum.

          "Nonvariable Accumulation Series" shall mean each outstanding Series
           -------------------------------
that is not a Variable Funding Series or a Variable Accumulation Series.

          "Payment Date" shall mean any Interest Payment Date and any Special
           ------------
Payment Date.

          "Permitted Assignee" shall mean any Person who, if it were the
           ------------------
Collateral Interest Holder or holder of an interest in the Trust, as applicable,
would not cause the Trust to be taxable as a publicly traded partnership for
federal income tax purposes.

          "Portfolio Adjusted Yield" shall mean, with respect to any
           ------------------------
Distribution Date, the average of the percentages obtained for each of the three
preceding Monthly Periods by subtracting the Base Rate for each such Monthly
Period from the Portfolio Yield for each such Monthly Period, and deducting
0.50% from the result for each such Monthly Period.

          "Portfolio Yield" shall mean, with respect to any Monthly Period, the
           ---------------
annualized percentage equivalent of a fraction, the numerator of which is equal
to (a) an amount equal to the product obtained by multiplying the Floating
Allocation Percentage with respect to such Monthly Period and the amount of
Collections of Finance Charge Receivables with respect to such Monthly Period
(including any investment earnings and certain other amounts that are to be
treated as Collections of Finance Charge Receivables in accordance with the
Agreement) calculated on a billed basis, or, in the case of any such Collections
consisting of annual membership fees, on an amortized (rather than billed)
basis, plus (b) the amount of any Principal Funding Investment Proceeds for the
       ----
related Distribution Date, plus (c) any Excess Finance Charges that are
                           ----
allocated to Series 2001-7 with respect to such Monthly Period, plus (d) the
                                                                ----
amount of funds, if any, withdrawn from the Reserve Account which, pursuant to
Section 4.11(d), are required to be included as Class A Available Funds or Class
B Available Funds or paid to the Collateral Interest Holder for the Distribution
Date with respect to such Monthly Period, minus (e) the Investor Default Amount
                                          -----
for the Distribution Date with respect to such Monthly Period, and the
denominator of which is the Invested Amount as of the last day of the preceding
Monthly Period; provided, however, that for the first Monthly Period, the
                --------  -------
denominator is the Initial Invested Amount.

                                       12

<PAGE>

          "Principal Allocation Percentage" shall mean, with respect to any day
           -------------------------------
during a Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is (a) during the Revolving
Period, the Invested Amount as of the last day of the immediately preceding
Monthly Period (or, in the case of the first Monthly Period, the Cut-Off Date)
and (b) after the end of the Revolving Period, the Invested Amount as of the
last day of the Revolving Period and the denominator of which is the greater of
(i) the sum of the total amount of Principal Receivables in the Trust as of the
last day of the immediately preceding Monthly Period and the principal amount on
deposit in the Excess Funding Account as of such last day (or, in the case of
the first Monthly Period, the Cut-Off Date) and (ii) the sum of the numerators
used to calculate the principal allocation percentages for all Series
outstanding as of the date as to which such determination is being made;
provided, however, that the amount calculated above pursuant to clause (i) of
--------  -------
the denominator shall be increased by the aggregate amount of Principal
Receivables in Additional Accounts added to the Trust during such Monthly Period
as though such Receivables had been added to the Trust as of the first day of
such Monthly Period; provided further, however, that if after the commencement
                     ----------------  -------
of the Accumulation Period or the Early Amortization Period a Pay Out Event
occurs with respect to another Series that was designated in the Supplement
therefor as a Series that is a "Paired Series" with respect to Series 2001-7,
the Sellers may, by written notice delivered to the Trustee and the Servicer,
designate a different numerator for the foregoing fraction, provided that (x)
such numerator is not less than the Adjusted Invested Amount as of the last day
of the revolving period for such Paired Series and (y) the Sellers shall have
received written notice from each Rating Agency that such designation will not
have a Ratings Effect and shall have delivered copies of each such written
notice to the Servicer and the Trustee and the Sellers shall have delivered to
the Trustee an Officer's Certificate to the effect that, based on the facts
known to such officer at that time, in the reasonable belief of the Sellers,
such designation will not cause a Pay Out Event or an event that, after the
giving of notice or the lapse of time, would constitute a Pay Out Event, to
occur with respect to Series 2001-7.

          "Principal Funding Account" shall have the meaning set forth in
           -------------------------
Section 4.03(d)(i).

          "Principal Funding Account Balance" shall mean, with respect to any
           ---------------------------------
date of determination during the Accumulation Period, the principal amount, if
any, on deposit in the Principal Funding Account on such date of determination.

          "Principal Funding Investment Proceeds" shall have the meaning
           -------------------------------------
specified in Section 4.03(d)(ii).

          "Principal Shortfall" shall have the meaning specified in Section
           -------------------
4.10.

          "Prospectus" shall mean the prospectus and the prospectus supplement
           ----------
as filed with the Securities and Exchange Commission under Rule 424(b) of the
Securities Act relating to the Series 2001-7 Certificates.

          "Reallocated Principal Collections" shall mean, with respect to any
           ---------------------------------
Monthly Period, the product of (a) the Principal Allocation Percentage with
respect to such Monthly Period, (b) the aggregate amount of Collections in
respect of Principal Receivables deposited in the Collection Account for such
Monthly Period and (c) the sum of the Class B Floating Percentage and the
Collateral Floating Percentage with respect to such Monthly Period.

                                       13

<PAGE>

          "Reassignment Amount" shall mean, with respect to any Distribution
           -------------------
Date, after giving effect to any deposits and distributions otherwise to be made
on such Distribution Date, the sum of (i) the Adjusted Invested Amount on such
Distribution Date, plus (ii) Monthly Interest for such Distribution Date and any
                   ----
Monthly Interest previously due but not distributed to the Series 2001-7
Certificateholders and the Collateral Interest Holder on a prior Distribution
Date, plus (iii) the amount of Additional Interest, if any, for such
      ----
Distribution Date and any Additional Interest previously due but not distributed
to the Series 2001-7 Certificateholders and the Collateral Interest Holder on a
prior Distribution Date.

          "Reference Banks" shall mean four major banks in the London interbank
           ---------------
market selected by the Servicer.

          "Required Reserve Account Amount" shall mean, with respect to any
           -------------------------------
Distribution Date prior to the Reserve Account Funding Date, $0, and on or after
the Reserve Account Funding Date, an amount equal to (a) 0.50% of the Invested
Amount as of the preceding Distribution Date (after giving effect to all changes
therein on such date), or (b) any other amount designated by the Sellers,
provided that, if such designation is of a lesser amount, the Sellers (i) shall
have received written notice from each Rating Agency that such designation will
not have a Ratings Effect and shall have delivered copies of each such written
notice to the Servicer and the Trustee, and (ii) shall have delivered to the
Trustee a certificate of an authorized officer to the effect that, based on the
facts known to such officer at such time, in the reasonable belief of the
Sellers, such designation will not cause a Pay Out Event or an event that, after
the giving of notice or the lapse of time, would cause a Pay Out Event, to occur
with respect to Series 2001-7.

          "Reserve Account" shall have the meaning specified in Section 4.11(a).
           ---------------

          "Reserve Account Funding Date" shall mean the Distribution Date with
           ----------------------------
respect to the Monthly Period which commences 12 months prior to the Monthly
Period which as of the related Determination Date is scheduled to commence the
Accumulation Period in accordance with Section 4.03(f) provided that the Sellers
may delay the Reserve Account Funding Date to the Distribution Date with respect
to the Monthly Period which occurs not later than the number of months prior to
the scheduled commencement date of the Accumulation Period determined in
accordance with the following schedule:

<TABLE>
<CAPTION>
========================================================================================
Portfolio Adjusted Yield                                      Number of Months
------------------------                           (rounded up to nearest whole number)
                                                    ----------------------------------
----------------------------------------------------------------------------------------
<S>                                                <C>
Less than 2%                                          12
----------------------------------------------------------------------------------------
2% or more, but less than 3%                           6
----------------------------------------------------------------------------------------
3% or more, but less than 4%                           4
----------------------------------------------------------------------------------------
4% or more                                             3
========================================================================================
</TABLE>

          "Reserve Account Surplus" shall mean, as of any date of determination,
           -----------------------
the amount, if any, by which the amount on deposit in the Reserve Account
exceeds the Required Reserve Account Amount.

          "Reserve Draw Amount" shall have the meaning specified in Section
           -------------------
4.11(c).

                                       14

<PAGE>

          "Revolving Period" shall mean the period beginning at the close of
           ----------------
business on the Cut-Off Date and ending on the earlier of (a) the close of
business on the day the Accumulation Period commences and (b) the close of
business on the day the Early Amortization Period commences.

          "Series 2001-7" shall mean the Series of Investor Certificates, the
           -------------
terms of which are specified in this Supplement, and shall include the Class A
Certificates, the Class B Certificates and the Collateral Interest.

          "Series 2001-7 Certificateholder" shall mean a Class A
           -------------------------------
Certificateholder or a Class B Certificateholder.

          "Series 2001-7 Certificate" shall mean a Class A Certificate or a
           -------------------------
Class B Certificate.

          "Series 2001-7 Holder" shall mean a Class A Certificateholder, a Class
           --------------------
B Certificateholder or a Collateral Interest Holder.

          "Series 2001-7 Interests" shall mean the Class A Certificates, the
           -----------------------
Class B Certificates and the Collateral Interest.

          "Servicer Interchange" shall mean, for any Monthly Period, the product
           --------------------
of (a) the Floating Allocation Percentage for such Monthly Period and (b) the
portion of Collections of Finance Charge Receivables allocated to the Series
2001-7 Certificates and the Collateral Interest with respect to such Monthly
Period that is attributable to Interchange; provided, however, that Servicer
                                            --------  -------
Interchange for a Monthly Period shall not exceed one-twelfth of the product of
(i) the Servicing Base Amount as of the last day of such Monthly Period and (ii)
0.75%.

          "Servicing Base Amount" shall have the meaning specified in Section
           ---------------------
3.01.

          "Servicing Fee Rate" shall mean 2.00%.
           ------------------

          "Special Payment Date" shall mean each Distribution Date with respect
           --------------------
to the Early Amortization Period.

          "Telerate Page 3750" shall mean the display page currently so
           ------------------
designated on the Bridge Telerate Market Report (or such other page as may
replace that page on that service for the purpose of displaying comparable rates
or prices).

          "Termination Date" shall mean the August 2007 Distribution Date.
           ----------------

          "Transfer" shall have the meaning specified in subsection 10.07(a).
           --------

          "Transfer Agreement" shall mean the Transfer and Administration
           ------------------
Agreement, dated as of October 18, 2001, among Capital One Bank, as transferor
and administrator, Capital One, F.S.B., as transferor, and Capital One Secured
Note Trust 2001-7, as amended or modified from time to time, relating to the
transfer of the Collateral Interest.

                                       15

<PAGE>

          "Variable Accumulation Series" shall mean each outstanding Series,
           ----------------------------
other than any Variable Funding Series, for which, pursuant to the terms of the
related Supplement, at the time a determination is made pursuant to Section
4.03(f), the commencement date of the Accumulation Period may be changed.

          "Variable Funding Series" shall mean any Series designated in the
           -----------------------
related Supplement as a Variable Funding Series.

          (b) Notwithstanding anything to the contrary in this Supplement or the
Agreement, the term "Rating Agency" shall mean, whenever used in this Supplement
or the Agreement with respect to Series 2001-7, Moody's and Standard & Poor's
and Fitch. As used in this Supplement and in the Agreement with respect to
Series 2001-7, "highest investment ratings category" shall mean (i) in the case
of Standard & Poor's, A-1+, AAA, AAAm or AAAm-G, as applicable, (ii) in the case
of Moody's, P-1 or Aaa, as applicable and (iii) in the case of Fitch, if rated
by Fitch, F1+ or AAA, as applicable.

          (c) Notwithstanding any provision of the Agreement or this Supplement,
the term "Paying Agent" when used in the Agreement or this Supplement with
respect to Series 2001-7, shall mean, the Paying Agent specified pursuant to the
Agreement, and any successor paying agents with respect to the Class A
Certificates, the Class B Certificates and the Collateral Interest as the
Sellers may appoint from time to time in accordance with the provisions of the
Pooling and Servicing Agreement.

          (d) All capitalized terms used herein and not otherwise defined herein
have the meanings ascribed to them in the Agreement.

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

          Section 2.02. Amendment to Section 2.08 of the Agreement. Section
                        ------------------------------------------
2.08(c)(i) of the Agreement is hereby amended and restated in its entirety to
read as follows:

          (c) Automatic Additional Accounts. (i) Each Seller may from time to
              -----------------------------
     time, at its sole discretion, subject to and in compliance with the
     limitations specified in clause (ii) below and the applicable conditions
     specified in paragraph (d) below, designate Eligible Accounts to be
     included as Accounts as of the applicable Additional Cut-Off Date. For
     purposes of this paragraph, Eligible Accounts shall be deemed to include
     only consumer revolving credit card accounts or other consumer revolving
     credit accounts which (x) are originated by such Seller or any Affiliate of
     such Seller, (y) are of a type included as Initial Accounts or which have
     previously been included in any Addition which has been effected in
     accordance with all of the conditions specified in paragraph (d) below and
     (z) have a designation other than "Associate 20," "Associate 21,"
     "Associate 42," "Associate 45," "Associate 46," "Associate 54," "Associate
     55," "Associate 77," "Associate 79," "Associate 87," "Associate 91,"
     "Associate 100," "Associate 101," "Associate 102," "Associate 103,"
     "Associate 104," "Associate 105," "Associate 106," "Associate 107,"
     "Associate 108,"

                                       16

<PAGE>

     "Associate 109," "Associate 120" "Associate 121," "Associate 122,"
     "Associate 123," "Associate 195," "Associate 196," "Associate 197,"
     "Associate 198," "Associate 199," "Associate 289," "Associate 290,"
     "Associate 291," "Associate 292," "Associate 293," "Associate 294,"
     "Associate 295," "Associate 296," "Associate 297," "Associate 298,"
     "Associate 299," "Associate 302," "Associate 303," "Associate 308,"
     "Associate 309," "Associate 310," "Associate 311" "Associate 312,"
     "Associate 313," "Associate 314," "Associate 332," "Associate 333,"
     "Associate 336," "Associate 337," "Associate 407," "Associate 408,"
     "Associate 409," "Associate 410," "Associate 411," "Associate 412,"
     "Associate 413," "Associate 414," "Associate 415," "Associate 416,"
     "Associate 417," "Associate 432," "Associate 433," "Associate 439,"
     "Associate 440," "Associate 570," "Associate 571," "Associate 572,"
     "Associate 573," "Associate 574," "Associate 575," "Associate 576,"
     "Associate 577," "Associate 578," "Associate 579," "Associate 770,"
     "Associate 771," "Associate 772," "Associate 773," "Associate 774,"
     "Associate 775," "Associate 776," "Associate 777," "Associate 778" or
     "Associate 779" marketing programs in such Seller's credit card master
     file.

                                  ARTICLE III

                              Servicer and Trustee
                              --------------------

          Section 3.01. Servicing Compensation. The share of the Servicing Fee
                        ----------------------
allocable to the Series 2001-7 Certificateholders and the Collateral Interest
Holder with respect to any Distribution Date (the "Monthly Servicing Fee") shall
be equal to one-twelfth of the product of (a) the Servicing Fee Rate and (b) the
Adjusted Invested Amount, if any, as of the last day of the Monthly Period
preceding such Distribution Date (the amount calculated pursuant to this clause
(b) is referred to as the "Servicing Base Amount"); provided, however, with
                                                    --------  -------
respect to the first Distribution Date, the Monthly Servicing Fee (the "Initial
Servicing Fee") shall be equal to $722,222.22. On each Distribution Date, but
only if a Seller or The Bank of New York is the Servicer, Servicer Interchange
with respect to the related Monthly Period that is on deposit in the Collection
Account shall be withdrawn from the Collection Account and paid to the Servicer
in payment of a portion of the Monthly Servicing Fee with respect to such
Monthly Period. In the case of any insufficiency of Servicer Interchange on
deposit in the Collection Account, a portion of the Monthly Servicing Fee with
respect to such Monthly Period will not be paid to the extent of such
insufficiency of Servicer Interchange. The share of the Monthly Servicing Fee
allocable to the Class A Certificateholders (after giving effect to the
distribution of Servicer Interchange, if any, to the Servicer) with respect to
any Distribution Date (the "Class A Servicing Fee") shall be equal to
one-twelfth of the product of (a) the Class A Floating Percentage, (b) the Net
Servicing Fee Rate and (c) the Servicing Base Amount; provided, however, that
                                                      --------  -------
with respect to the first Distribution Date, the Class A Servicing Fee shall be
equal to $381,423.61. The share of the Monthly Servicing Fee allocable to the
Class B Certificateholders (after giving effect to the distribution of Servicer
Interchange, if any, to the Servicer) with respect to any Distribution Date (the
"Class B Servicing Fee") shall be equal to one-twelfth of the product of (a) the
Class B Floating Percentage, (b) the Net Servicing Fee Rate and (c) the
Servicing Base Amount; provided, however, that with respect to the first
                       --------  -------
Distribution Date, the Class B Servicing Fee shall be equal to $34,982.64. The
share of the Monthly Servicing Fee allocable to the Collateral Interest Holder
(after giving effect to the distribution of Servicer Interchange, if any, to the
Servicer) with respect to such Distribution Date (the "Collateral Servicing
Fee") shall be equal to

                                       17

<PAGE>

one-twelfth of the product of (c) the Collateral Floating Percentage, (b) the
Net Servicing Fee Rate and (c) the Servicing Base Amount; provided, however,
                                                          --------  -------
that with respect to the first Distribution Date, the Collateral Servicing Fee
shall be equal to $34,982.64. The remainder of the Servicing Fee shall be paid
by the Sellers or the Certificateholders of other Series (as provided in the
related Supplements) and in no event shall the Trust, the Trustee, the Series
2001-7 Certificateholders or the Collateral Interest Holder be liable for the
share of the Servicing Fee to be paid by the Sellers or the Certificateholders
of any other Series. The (i) Class A Servicing Fee shall be payable to the
Servicer solely to the extent amounts are available for distribution in respect
thereof pursuant to Section 4.05(a)(ii), 4.07(a) or 4.08(a); (ii) Class B
Servicing Fee shall be payable solely to the extent amounts are available for
distribution in respect thereof pursuant to Section 4.05(b)(iii), 4.07(c) or
4.08(b); and (iii) Collateral Servicing Fee shall be payable solely to the
extent amounts are available for distribution in respect thereof pursuant to
Section 4.05(c)(i) or 4.07(f).

                                   ARTICLE IV

                 Rights of Series 2001-7 Certificateholders and
                         Collateral Interest Holder and
                    Allocation and Application of Collections
                    -----------------------------------------

          Section 4.01. Collections and Allocations. The Servicer will apply, or
                        ---------------------------
will instruct the Trustee to apply, all Collections and other funds on deposit
in the Collection Account that are allocated to the Series 2001-7 Certificates
and the Collateral Interest as described in this Article IV.

          Section 4.02. Determination of Monthly Interest.
                        ---------------------------------

          (a) The amount of monthly interest ("Class A Monthly Interest")
distributable from the Collection Account with respect to the Class A
Certificates on any Distribution Date shall be an amount equal to one-twelfth of
the product of (i) the Class A Certificate Rate and (ii) the outstanding
principal balance of the Class A Certificates as of the preceding Record Date;
provided, however, that, with respect to the first Distribution Date, Class A
--------  -------
Monthly Interest shall be $2,439,937.50.

          On the Determination Date preceding each Payment Date, the Servicer
shall determine the excess, if any (the "Class A Interest Shortfall"), of (x)
the Class A Monthly Interest for the Interest Period applicable to such Payment
Date over (y) the aggregate amount of funds allocated and available to pay such
     ----
Class A Monthly Interest on such Payment Date. If the Class A Interest Shortfall
with respect to any Payment Date is greater than zero, an additional amount
("Class A Additional Interest") equal to one-twelfth of the product of (i) the
Class A Penalty Rate and (ii) such Class A Interest Shortfall (or the portion
thereof which has not been paid to Class A Certificateholders) shall be payable
as provided herein with respect to the Class A Certificates on each Distribution
Date following such Payment Date to and including the Payment Date on which such
Class A Interest Shortfall is paid to Class A Certificateholders.
Notwithstanding anything to the contrary herein, Class A Additional Interest
shall be payable or distributed to Class A Certificateholders only to the extent
permitted by applicable law.

                                       18

<PAGE>

          (b) The amount of monthly interest ("Class B Monthly Interest")
distributable from the Collection Account with respect to the Class B
Certificates on any Distribution Date shall be an amount equal to the product of
(i) a fraction, the numerator of which is the actual number of days in the
period from and including the preceding Distribution Date to but excluding such
Distribution Date and the denominator of which is 360, (ii) the Class B
Certificate Rate for the related Interest Period and (iii) the outstanding
principal balance of the Class B Certificates as of the preceding Record Date;
provided, however, that, with respect to the first Distribution Date, Class B
--------  -------
Monthly Interest shall be $178,422.22.

          On the Determination Date preceding each Payment Date, the Servicer
shall determine the excess, if any (the "Class B Interest Shortfall"), of (x)
the Class B Monthly Interest for the Interest Period applicable to such Payment
Date over (y) the aggregate amount of funds allocated and available to pay such
     ----
Class B Monthly Interest on such Payment Date. If the Class B Interest Shortfall
with respect to any Payment Date is greater than zero, an additional amount
("Class B Additional Interest") equal to the product of (i) a fraction, the
numerator of which is the actual number of days from and including the preceding
Distribution Date to but excluding such Distribution Date and the denominator of
which is 360, (ii) the Class B Penalty Rate and (iii) such Class B Interest
Shortfall (or the portion thereof which has not been paid to Class B
Certificateholders) shall be payable as provided herein with respect to the
Class B Certificates on each Distribution Date following such Payment Date to
and including the Payment Date on which such Class B Interest Shortfall is paid
to Class B Certificateholders. Notwithstanding anything to the contrary herein,
Class B Additional Interest shall be payable or distributed to Class B
Certificateholders only to the extent permitted by applicable law.

          (c) The amount of monthly interest ("Collateral Minimum Monthly
Interest") distributable from the Collection Account with respect to the
Collateral Interest on any Distribution Date shall be an amount equal to the
product of (i) the Collateral Interest Minimum Rate in effect for the related
Interest Period, (ii) a fraction, the numerator of which is the actual number of
days from and including the preceding Distribution Date to but excluding such
Distribution Date and the denominator of which is 360 and (iii) the outstanding
principal balance of the Collateral Interest as of the preceding Record Date;
provided, however, that, with respect to the first Distribution Date, Collateral
--------  -------
Minimum Monthly Interest shall be equal to the interest accrued on the
Collateral Initial Invested Amount at the Collateral Interest Minimum Rate for
the period from the Closing Date to but excluding the initial Distribution Date.

          On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Collateral Interest
Shortfall"), of (x) the Collateral Minimum Monthly Interest for such
Distribution Date over (y) the aggregate amount of funds allocated and available
                  ----
to pay such Collateral Minimum Monthly Interest on such Distribution Date. If
the Collateral Interest Shortfall for any Distribution Date is greater than
zero, an additional amount ("Collateral Additional Interest") equal to the
product of (i) a fraction, the numerator of which is the actual number of days
from and including the preceding Distribution Date to but excluding such
Distribution Date and the denominator of which is 360, (ii) the Collateral
Interest Minimum Rate in effect for the related Interest Period and (iii) such
Collateral Interest Shortfall (or the portion thereof which has not been paid to
the Collateral Interest Holder) shall be payable as provided herein with respect
to the Collateral Interest on each Distribution Date following such Distribution
Date to and including the Distribution Date on which such Collateral Interest
Shortfall is paid to the Collateral Interest Holder. Notwithstanding anything to
the contrary herein, Collateral Additional Interest

                                       19

<PAGE>

shall be payable or distributed to the Collateral Interest Holder only to the
extent permitted by applicable law.

          Section 4.03. Determination of Monthly Principal; Series 2001-7
                        -------------------------------------------------
Accounts.
--------

          (a) The amount of monthly principal ("Class A Monthly Principal")
distributable from the Collection Account with respect to the Class A
Certificates on each Distribution Date, beginning with the first to occur of (i)
the first Special Payment Date, if any, and (ii) the first Distribution Date
with respect to the Accumulation Period, shall be equal to the least of (x) the
Available Investor Principal Collections on deposit in the Collection Account
with respect to such Distribution Date, (y) for each Distribution Date with
respect to the Accumulation Period (and on or prior to the Expected Final
Payment Date), the Controlled Deposit Amount for such Distribution Date and (z)
the Class A Adjusted Invested Amount on such Distribution Date.

          (b) The amount of monthly principal ("Class B Monthly Principal")
distributable from the Collection Account with respect to the Class B
Certificates on each Distribution Date, beginning with the first to occur of (i)
the first Special Payment Date, if any, on which the Class A Invested Amount is
paid in full, and (ii) the first Distribution Date with respect to the
Accumulation Period on which the Principal Funding Account Balance is at least
equal to the Class A Invested Amount, shall be equal to the least of (x) the
Available Investor Principal Collections on deposit in the Collection Account
with respect to such Distribution Date (minus the portion of such Available
Investor Principal Collections applied to Class A Monthly Principal with respect
to such Distribution Date), (y) for each Distribution Date with respect to the
Accumulation Period, the Controlled Deposit Amount for such Distribution Date
(minus the Class A Monthly Principal with respect to such Distribution Date) and
(z) the Class B Adjusted Invested Amount on such Distribution Date.

          (c) The amount of monthly principal ("Collateral Monthly Principal")
distributable from the Collection Account with respect to the Collateral
Interest on each Distribution Date, beginning with the first to occur of (i) the
first Special Payment Date, if any, on which the Class B Invested Amount is paid
in full, and (ii) the first Distribution Date with respect to the Accumulation
Period on which the Principal Funding Account Balance is at least equal to the
sum of the Class A Invested Amount and the Class B Invested Amount, shall be
equal to the least of (x) the Available Investor Principal Collections on
deposit in the Collection Account with respect to such Distribution Date (minus
the portion of such Available Investor Principal Collections applied to Class A
Monthly Principal and Class B Monthly Principal with respect to such
Distribution Date), (y) for each Distribution Date with respect to the
Accumulation Period, the Controlled Deposit Amount for such Distribution Date
(minus the Class A Monthly Principal and Class B Monthly Principal with respect
to such Distribution Date) and (z) the Collateral Adjusted Invested Amount on
such Distribution Date.

          (d) (i) The Servicer, for the benefit of the Series 2001-7 Holders,
     shall establish and maintain in the name of the Trustee, on behalf of the
     Trust, an Eligible Deposit Account (the "Principal Funding Account"),
     bearing a designation clearly indicating that the funds deposited therein
     are held for the benefit of Series 2001-7 Holders. The Principal Funding
     Account shall initially be established with The Bank of New York.

                                       20

<PAGE>
               (ii) At the direction of the Servicer, funds on deposit in the
          Principal Funding Account shall be invested by the Trustee in Eligible
          Investments selected by the Servicer. All such Eligible Investments
          shall be held by the Trustee for the benefit of the Series 2001-7
          Holders; provided that on each Distribution Date all interest and
                   --------
          other investment income (net of losses and investment expenses)
          ("Principal Funding Investment Proceeds") on funds on deposit therein
          shall be applied as set forth in paragraph (iii) below. Funds on
          deposit in the Principal Funding Account shall be invested in Eligible
          Investments that will mature so that such funds will be available at
          the close of business on the Transfer Date preceding the following
          Distribution Date. The Trustee shall (i) hold each Eligible Investment
          that constitutes investment property through a securities
          intermediary, which securities intermediary shall agree with the
          Trustee that (A) such investment property shall at all times be
          credited to a securities account of the Trustee, (B) such securities
          intermediary shall treat the Trustee as entitled to exercise the
          rights that comprise each financial asset credited to such securities
          account, (C) all property credited to such securities account shall be
          treated as a financial asset, (D) such securities intermediary shall
          comply with entitlement orders originated by the Trustee without the
          further consent of any other person or entity, (E) such securities
          intermediary shall not agree with any person or entity other than the
          Trustee to comply with entitlement orders originated by such other
          person or entity, (F) such securities intermediary waives any lien on,
          security interest in, or right of set-off with respect to any property
          credited to such securities account, and (G) such agreement shall be
          governed by the laws of the State of New York; and (ii) maintain
          possession of each other Eligible Investment not described in clause
          (i) above in the State of New York. Terms used in clause (i) above
          that are defined in the New York UCC and not otherwise defined herein
          shall have the meaning set forth in the New York UCC. No Eligible
          Investment shall be disposed of prior to its maturity. Unless the
          Servicer directs otherwise, funds deposited in the Principal Funding
          Account on a Transfer Date (which immediately precedes a Payment Date)
          upon the maturity of any Eligible Investments are not required to be
          invested overnight.

               (iii) On each Distribution Date with respect to the Accumulation
          Period, the Servicer shall direct the Trustee to withdraw from the
          Principal Funding Account and deposit into the Collection Account all
          Principal Funding Investment Proceeds then on deposit in the Principal
          Funding Account and such Principal Funding Investment Proceeds shall
          be treated as a portion of Class A Available Funds, Class B Available
          Funds and Collateral Available Funds.

               (iv) Reinvested interest and other investment income on funds
          deposited in the Principal Funding Account shall not be considered to
          be principal amounts on deposit therein for purposes of this
          Supplement.

         (e) (i) The Trustee shall possess all right, title and interest in all
     funds on deposit from time to time in the Principal Funding Account and in
     all proceeds thereof. The Principal Funding Account shall be under the sole
     dominion and control of the Trustee for the benefit of the Series 2001-7
     Holders. If, at any time, the Principal Funding Account ceases to be an
     Eligible Deposit Account, the Trustee (or the Servicer on its behalf) shall
     within 10 Business Days (or such longer period, not to exceed 30 calendar
     days, as to which each Rating Agency may consent) establish a new Principal
     Funding Account meeting the conditions specified in

                                       21

<PAGE>

paragraph (d)(i) above as an Eligible Deposit Account and shall transfer any
cash and/or any investments to such new Principal Funding Account.

          (ii) Pursuant to the authority granted to the Servicer in Section
     3.01(b) of the Agreement, the Servicer shall have the power, revocable by
     the Trustee, to make withdrawals and payments or to instruct the Trustee to
     make withdrawals and payments from the Principal Funding Account for the
     purposes of carrying out the Servicer's or Trustee's duties hereunder.
     Pursuant to the authority granted to the Paying Agent in Section 5.01 of
     this Supplement and Section 6.07 of the Agreement, the Paying Agent shall
     have the power, revocable by the Trustee, to withdraw funds from the
     Principal Funding Account for the purpose of making distributions to the
     Series 2001-7 Holders.

          (f) The Accumulation Period is scheduled to commence at the close of
business on the last day of the September 2003 Monthly Period; provided,
                                                               --------
however, that if the Accumulation Period Length on any Determination Date
-------
(determined as described below) is less than twelve (12) months, upon notice to
the Trustee, the Sellers and each Rating Agency, the Servicer, at its option,
may elect to modify the date on which the Accumulation Period actually commences
to the last Business Day of any month that precedes the month that is the number
of months prior to the Expected Final Payment Date equal to the Accumulation
Period Length; provided, however, that (i) the length of the Accumulation Period
               --------  -------
will not be less than one month; and (ii) notwithstanding any other provision of
this Supplement to the contrary, no election to postpone the commencement of the
Accumulation Period shall be made after a Pay Out Event (as defined in the
related Supplement) shall have occurred and is continuing with respect to any
other Series. On each Determination Date, the Servicer will determine the
"Accumulation Period Length" which will equal the number of months such that the
Accumulation Period Amount for the Monthly Period immediately preceding the
Expected Final Payment Date, when aggregated with the Accumulation Period
Amounts for each preceding Monthly Period, will equal or exceed the Initial
Invested Amount. Any notice by the Servicer electing to modify the commencement
of the Accumulation Period pursuant to this subsection (f) shall specify (i) the
Accumulation Period Length, (ii) the commencement date of the Accumulation
Period and (iii) the Controlled Accumulation Amount with respect to each Monthly
Period during the Accumulation Period.

          Section 4.04. Required Amount.
                        ---------------

          (a) With respect to each Distribution Date, on the related
Determination Date, the Servicer shall determine the amount (the "Class A
Required Amount"), if any, by which (x) the sum of (i) Class A Monthly Interest
for such Distribution Date, (ii) any Class A Outstanding Monthly Interest, (iii)
any Class A Additional Interest for such Distribution Date and any Class A
Outstanding Additional Interest, (iv) the Class A Servicing Fee for such
Distribution Date, (v) any Class A Servicing Fee previously due but not paid to
the Servicer and (vi) the Class A Investor Default Amount, if any, for such
Distribution Date exceeds (y) the Class A Available Funds. In the event that the
Class A Required Amount for such Distribution Date is greater than zero, the
Servicer shall give written notice to the Trustee of such positive Class A
Required Amount on the date of computation and all or a portion of the Excess
Spread and the Excess Finance Charges allocable to Series 2001-7 with respect to
the related Monthly Period in an amount equal to the Class A Required Amount for
such Distribution Date shall be distributed from the Collection Account on such
Distribution Date pursuant to Section 4.07(a). In the event that the Class A
Required Amount for such Distribution Date exceeds the amount of Excess Spread
and the amount of Excess Finance

                                       22

<PAGE>

Charges allocable to Series 2001-7 with respect to the related Monthly Period,
all or a portion of the Reallocated Principal Collections with respect to such
Monthly Period in an amount equal to such excess shall be distributed from the
Collection Account on such Distribution Date pursuant to Section 4.08(a).

          (b) With respect to each Distribution Date, on the related
Determination Date, the Servicer shall determine the amount (the "Class B
Required Amount") equal to the sum of (x) the amount, if any, by which (A) the
sum of (i) Class B Monthly Interest for such Distribution Date, (ii) any Class B
Outstanding Monthly Interest, (iii) any Class B Additional Interest for such
Distribution Date and any Class B Outstanding Additional Interest, (iv) the
Class B Servicing Fee for such Distribution Date and (v) any Class B Servicing
Fee previously due but not paid to the Servicer exceeds (B) the Class B
Available Funds and (y) the Class B Investor Default Amount for such
Distribution Date. In the event that the Class B Required Amount for such
Distribution Date exceeds the portion of Excess Spread and Excess Finance
Charges allocated to Series 2001-7 with respect to such Monthly Period and not
used to fund the Class A Required Amount, then a portion of the Reallocated
Principal Collections with respect to such Monthly Period shall be distributed
from the Collection Account on such Distribution Date pursuant to Section
4.08(b).

          Section 4.05. Application of Class A Available Funds, Class B
                        ------------------------------------------------
Available Funds, Collateral Available Funds and Available Investor Principal
----------------------------------------------------------------------------
Collections. The Servicer shall apply (if a Seller is the Servicer and the
-----------
Collection Account is maintained with such Seller) or shall cause the Trustee to
apply, on each Distribution Date, Class A Available Funds, Class B Available
Funds, Collateral Available Funds, and Available Investor Principal Collections
on deposit in the Collection Account with respect to such Distribution Date to
make the following distributions:

          (a) On each Distribution Date, an amount equal to the Class A
     Available Funds with respect to such Distribution Date will be distributed
     in the following priority:

               (i)   an amount equal to Class A Monthly Interest for such
          Distribution Date, plus the amount of any Class A Outstanding Monthly
                             ----
          Interest, plus the amount of any Class A Additional Interest for such
                    ----
          Distribution Date and any Class A Outstanding Additional Interest,
          shall be distributed to the Paying Agent with respect to the Class A
          Certificates for payment to the Class A Certificateholders;

               (ii)  an amount equal to the Class A Servicing Fee for such
          Distribution Date, plus the amount of any Class A Servicing Fee
                             ----
          previously due but not distributed to the Servicer on a prior
          Distribution Date, shall be distributed to the Servicer (unless such
          amount has been netted against deposits to the Collection Account in
          accordance with Section 4.03 of the Agreement);

               (iii) an amount equal to the Class A Investor Default Amount for
          such Distribution Date shall be treated as a portion of Available
          Investor Principal Collections for such Distribution Date; and

               (iv)  the balance, if any, shall constitute Excess Spread and
          shall be allocated and distributed as set forth in Section 4.07.

                                       23

<PAGE>

          (b) On each Distribution Date, an amount equal to the Class B
     Available Funds with respect to such Distribution Date will be distributed
     in the following priority:

               (i)   an amount equal to Class B Monthly Interest for such
          Distribution Date, plus the amount of any Class B Outstanding Monthly
                             ----
          Interest, plus the amount of any Class B Additional Interest for such
                    ----
          Distribution Date and any Class B Outstanding Additional Interest,
          shall be distributed to the Paying Agent with respect to the Class B
          Certificates for payment to the Class B Certificateholders;

               (ii)  an amount equal to the Class B Servicing Fee for such
          Distribution Date, plus the amount of any Class B Servicing Fee
                             ----
          previously due but not distributed to the Servicer on a prior
          Distribution Date, shall be distributed to the Servicer (unless such
          amount has been netted against deposits to the Collection Account in
          accordance with Section 4.03 of the Agreement); and

               (iii) the balance, if any, shall constitute Excess Spread and
          shall be allocated and distributed as set forth in Section 4.07.

          (c) On each Distribution Date, an amount equal to the Collateral
     Available Funds with respect to such Distribution Date will be distributed
     in the following priority:

               (i)   an amount equal to the Collateral Servicing Fee for such
          Distribution Date, plus the amount of any Collateral Servicing Fee
                             ----
          previously due but not distributed to the Servicer on a prior
          Distribution Date, shall be distributed to the Servicer (unless such
          amount has been netted against deposits to the Collection Account in
          accordance with Section 4.03 of the Agreement); and

               (ii)  the balance, if any, shall constitute Excess Spread and
          shall be allocated and distributed as set forth in Section 4.07.

          (d) On each Distribution Date with respect to the Revolving Period, an
     amount equal to the Available Investor Principal Collections deposited in
     the Collection Account for the related Monthly Period shall be treated as
     Shared Principal Collections and applied in accordance with Section 4.04 of
     the Agreement.

          (e) On each Distribution Date with respect to the Accumulation Period
     or the Early Amortization Period, an amount equal to the Available Investor
     Principal Collections deposited in the Collection Account for the related
     Monthly Period will be distributed in the following priority:

               (i)   an amount equal to Class A Monthly Principal for such
          Distribution Date, up to the Class A Adjusted Invested Amount on such
          Distribution Date, shall be deposited in the Principal Funding Account
          or, if such Distribution Date is a Special Payment Date on which the
          Principal Funding Account Balance is zero, shall be distributed to the
          Paying Agent for payment to the Class A Certificateholders;

                                       24

<PAGE>
               (ii)  after giving effect to paragraph (i) above, an amount equal
          to Class B Monthly Principal for such Distribution Date, up to the
          Class B Adjusted Invested Amount on such Distribution Date, shall be
          deposited in the Principal Funding Account or, if such Distribution
          Date is a Special Payment Date on which the Principal Funding Account
          Balance is zero, shall be distributed to the Paying Agent for payment
          to the Class B Certificateholders;

               (iii) after giving effect to paragraphs (i) and (ii) above, an
          amount equal to Collateral Monthly Principal for such Distribution
          Date, up to the Collateral Adjusted Invested Amount on such
          Distribution Date, shall be deposited in the Principal Funding Account
          or, if such Distribution Date is a Special Payment Date on which the
          Principal Funding Account Balance is zero, shall be distributed to the
          Paying Agent for payment to the Collateral Interest Holder; and

               (iv)  for each Distribution Date, after giving effect to
          paragraphs (i), (ii) and (iii) above, an amount equal to the balance,
          if any, of such Available Investor Principal Collections then on
          deposit in the Collection Account shall be treated as Shared Principal
          Collections and applied in accordance with Section 4.04 of the
          Agreement.

          Section 4.06. Defaulted Amounts; Investor Charge-Offs.
                        ---------------------------------------

          (a) On each Determination Date, the Servicer shall calculate the Class
A Investor Default Amount, if any, for the related Distribution Date. If, on any
Distribution Date, the Class A Required Amount for such Distribution Date
exceeds the sum of (x) the amount of Reallocated Principal Collections with
respect to the related Monthly Period and (y) the amount of Excess Spread and
Excess Finance Charges allocable to Series 2001-7 with respect to such Monthly
Period, the Collateral Invested Amount will be reduced by the amount of such
excess, but not by more than the excess of the Class A Investor Default Amount
for the related Distribution Date over the amount of Reallocated Principal
                                  ----
Collections and the amount of Excess Spread and Excess Finance Charges used to
fund the Class A Investor Default Amount for such Distribution Date. In the
event that such reduction would cause the Collateral Invested Amount to be a
negative number, the Collateral Invested Amount will be reduced to zero and the
Class B Invested Amount shall be reduced by the amount by which the Collateral
Invested Amount would have been reduced below zero, but not by more than the
excess, if any, of the Class A Investor Default Amount for such Distribution
Date over the amount of such reduction, if any, of the Collateral Invested
     ----
Amount with respect to such Distribution Date and the amount of Reallocated
Principal Collections and the amount of Excess Spread and Excess Finance Charges
used to fund the Class A Investor Default Amount for such Distribution Date. In
the event that such reduction would cause the Class B Invested Amount to be a
negative number, the Class B Invested Amount shall be reduced to zero, and the
Class A Invested Amount shall be reduced by the amount by which the Class B
Invested Amount would have been reduced below zero, but not by more than the
excess, if any, of the Class A Investor Default Amount for such Distribution
Date over the aggregate amount of the reductions, if any, of the Collateral
     ----
Invested Amount and the Class B Invested Amount for such Distribution Date and
the amount of Reallocated Principal Collections and the amount of Excess Spread
and Excess Finance Charges used to fund the Class A Investor Default Amount for
such Distribution Date (a "Class A Investor Charge-Off"). Class A Investor
Charge-Offs shall thereafter be reimbursed and the Class A Invested Amount
increased (but not by an amount in excess of the aggregate unreimbursed Class A
Investor Charge-Offs) on any Distribution Date by the amount of

                                       25

<PAGE>

Excess Spread and Excess Finance Charges allocated and available for that
purpose pursuant to Section 4.07(b).

          (b) On each Determination Date, the Servicer shall calculate the Class
B Required Amount, if any, for the related Distribution Date. If, on any
Distribution Date, the Class B Required Amount for such Distribution Date
exceeds the sum of (x) the amount of Excess Spread and Excess Finance Charges
allocated to Series 2001-7 with respect to the related Monthly Period which are
not used to fund the Class A Required Amount and Class A Investor Charge-Offs on
the related Distribution Date and (y) the amount of Reallocated Principal
Collections which are available to fund the Class B Required Amount on such
Distribution Date pursuant to Section 4.08(b), then the Collateral Invested
Amount shall be reduced by the amount of such excess, but not by more than the
excess of the Class B Investor Default Amount for such Distribution Date over
                                                                         ----
the amount of Reallocated Principal Collections and the amount of Excess Spread
and Excess Finance Charges used to fund the Class B Investor Default Amount for
such Distribution Date. In the event that such reduction would cause the
Collateral Invested Amount to be a negative number, the Collateral Invested
Amount shall be reduced to zero, and the Class B Invested Amount shall be
reduced by the amount by which the Collateral Invested Amount would have been
reduced below zero, but not by more than the excess, if any, of the Class B
Investor Default Amount for such Distribution Date over the amount of such
                                                   ----
reduction, if any, of the Collateral Invested Amount with respect to such
Distribution Date and the amount of Reallocated Principal Collections and the
amount of Excess Spread and Excess Finance Charges used to fund the Class B
Investor Default Amount for such Distribution Date (a "Class B Investor
Charge-Off"). Class B Investor Charge-Offs shall thereafter be reimbursed and
the Class B Invested Amount increased (but not by an amount in excess of the
aggregate unreimbursed Class B Investor Charge-Offs) on any Distribution Date by
the amount of Excess Spread and Excess Finance Charges allocated and available
for that purpose pursuant to Section 4.07(d).

          (c) If, on any Distribution Date, Reallocated Principal Collections
for the related Monthly Period are applied pursuant to Section 4.08(a) or (b),
the Collateral Invested Amount shall be reduced by the amount of such
Reallocated Principal Collections. In the event that such reduction would cause
the Collateral Invested Amount to be a negative number, the Collateral Invested
Amount shall be reduced to zero, and the Class B Invested Amount shall be
reduced by the amount by which the Collateral Invested Amount would have been
reduced below zero.

          (d) If, on any Distribution Date, the Collateral Investor Default
Amount exceeds the amount of Excess Spread and Excess Finance Charges available
to fund the Collateral Investor Default Amount pursuant to Section 4.07(g) on
such Distribution Date, then the Collateral Invested Amount shall be reduced by
the amount of such excess; provided, however, that the Collateral Invested
                           --------  -------
Amount shall not be reduced below zero.

          Section 4.07. Excess Spread; Excess Finance Charges. The Servicer
                        -------------------------------------
shall apply (if the Seller is the Servicer and the Collection Account is
maintained with the Seller) or shall cause the Trustee to apply, on each
Distribution Date, Excess Spread and Excess Finance Charges allocated to Series
2001-7 with respect to the related Monthly Period, to make the following
distributions in the following priority:

          (a) an amount equal to the Class A Required Amount, if any, with
respect to such Distribution Date shall be distributed by the Trustee to fund
any deficiency pursuant to

                                       26

<PAGE>
         Sections 4.05(a)(i), (ii) and (iii); provided that in the
                                              --------
         event the Class A Required Amount for such Distribution Date exceeds
         the amount of Excess Spread and Excess Finance Charges allocated to
         Series 2001-7, such Excess Spread and Excess Finance Charges shall be
         applied first to pay amounts due with respect to such Distribution Date
         pursuant to Section 4.05(a)(i), second to pay the Class A Servicing Fee
         pursuant to Section 4.05(a)(ii) and third to pay the Class A Investor
         Default Amount for such Distribution Date pursuant to Section
         4.05(a)(iii);

             (b) an amount equal to the aggregate amount of Class A Investor
         Charge-Offs which have not been previously reimbursed as provided in
         Section 4.06(a) (after giving effect to the allocation on such
         Distribution Date of any amount for that purpose pursuant to
         Section 4.06(a)) shall be treated as a portion of Available Investor
         Principal Collections for such Distribution Date;

             (c) an amount equal to the Class B Required Amount, if any, with
         respect to such Distribution Date shall be distributed by the
         Trustee (I) to fund any deficiency pursuant to Sections 4.05(b)(i) and
         (ii) and (II) for application, up to the Class B Investor Default
         Amount, as a portion of Available Investor Principal Collections for
         such Distribution Date; provided that in the event the Class B Required
                                 --------
         Amount for such Distribution Date exceeds the amount of Excess Spread
         and Excess Finance Charges allocated to Series 2001-7 and available to
         pay such amount pursuant to this clause (c), such Excess Spread and
         Excess Finance Charges shall be applied first to pay amounts due with
         respect to such Distribution Date pursuant to Section 4.05(b)(i),
         second to pay the Class B Servicing Fee pursuant to Section 4.05(b)(ii)
         and third as a portion of Available Investor Principal Collections for
         such Distribution Date pursuant to clause (II) above;

             (d) an amount equal to the aggregate amount by which the Class B
         Invested Amount has been reduced pursuant to clauses (c), (d) and (e)
         of the definition of "Class B Invested Amount" in Section 2.01 of this
         Supplement (but not in excess of the aggregate amount of such
         reductions which have not been previously reimbursed) shall be treated
         as a portion of Available Investor Principal Collections for such
         Distribution Date;

             (e) an amount equal to the sum of Collateral Minimum Monthly
         Interest for such Distribution Date, plus the amount of any Collateral
                                              ----
         Outstanding Monthly Interest, plus the amount of any Collateral
                                       ----
         Additional Interest for such Distribution Date and any Collateral
         Outstanding Additional Interest shall be distributed to the Collateral
         Interest Holder;

             (f) an amount equal to the Collateral Servicing Fee due but not
          paid to the Servicer either on such Distribution Date or a prior
          Distribution Date shall be paid to the Servicer;

             (g) an amount equal to the Collateral Investor Default Amount for
         such Distribution Date shall be treated as a portion of Available
         Investor Principal Collections with respect to such Distribution Date;

             (h) an amount equal to the aggregate amount by which the Collateral
         Invested Amount has been reduced pursuant to clause (c) of the
         definition of "Collateral Invested

                                       27

<PAGE>

         Amount" (but not in excess of the aggregate amount of such reductions
         which have not been previously reimbursed) shall be treated as a
         portion of Available Investor Principal Collections with respect to
         such Distribution Date;

             (i) on each Distribution Date from and after the Reserve Account
         Funding Date, but prior to the date on which the Reserve Account
         terminates as described in Section 4.11(f), an amount up to the excess,
         if any, of the Required Reserve Account Amount over the Available
         Reserve Account Amount shall be deposited into the Reserve Account; and

             (j) the balance, if any, will be distributed to the Collateral
                 Interest Holder.

             Section 4.08. Reallocated Principal Collections. The Servicer shall
`                          ---------------------------------
apply (if a Seller is the Servicer and the Collection Account is maintained with
such Seller) or shall cause the Trustee to apply on each Distribution Date
Reallocated Principal Collections (applying all such Collections with respect to
the Collateral Invested Amount prior to applying any such Collections with
respect to the Class B Invested Amount and applying no such Collections with
respect to the Class B Invested Amount pursuant to clause (b) below) with
respect to such Distribution Date, to make the following distributions in the
following priority:

             (a) an amount equal to the excess, if any, of (i) the Class A
         Required Amount, if any, with respect to such Distribution Date over
                                                                         ----
         (ii) the amount of Excess Spread and Excess Finance Charges allocated
         to Series 2001-7 with respect to the related Monthly Period, shall be
         distributed by the Trustee to fund any deficiency pursuant to Sections
         4.05(a)(i), (ii), (iii) and (iv); provided that, in the event the Class
                                           --------
         A Required Amount for such Distribution Date exceeds the sum of the
         amount of Excess Spread and Excess Finance Charges allocated to Series
         2001-7 and the amount of Reallocated Principal Collections for the
         related Monthly Period, such Excess Spread and Excess Finance Charges
         allocated to Series 2001-7 and Reallocated Principal Collections shall
         be applied first to pay amounts due with respect to such Distribution
         Date pursuant to Section 4.05(a)(i), second to pay the Class A
         Servicing Fee pursuant to Section 4.05(a)(ii) and third to pay the
         Class A Investor Default Amount for such Distribution Date pursuant to
         Section 4.05(a)(iii);

             (b) an amount equal to the excess, if any, of (i) the Class B
         Required Amount, if any, with respect to such Distribution Date over
                                                                         ----
         (ii) the amount of Excess Spread and Excess Finance Charges to be
         allocated and available to the holders of the Class B Certificates
         pursuant to Section 4.07(c) on such Distribution Date, shall be
         distributed by the Trustee to fund any deficiency pursuant to Sections
         4.05(b)(i) and (ii) and Section 4.07(c)(II); provided that, in the
                                                      --------
         event the Class B Required Amount for such Distribution Date exceeds
         the sum of the amount of Excess Spread and Excess Finance Charges to be
         allocated to the holders of the Class B Certificates on such
         Distribution Date and the amount of Reallocated Principal Collections
         (other than Reallocated Principal Collections distributed pursuant to
         clause (a) above) for the related Monthly Period, such Excess Spread
         and Excess Finance Charges and such Reallocated Principal Collections
         shall be applied first to pay the amounts due with respect to such
         Distribution Date pursuant to Section 4.05(b)(i), second to pay the
         Class B Servicing Fee pursuant to Section 4.05(b)(ii) and third to
         apply any remaining amount as a portion of Available Investor Principal
         Collections for such Distribution Date pursuant to Section 4.07(c)(II);
         and

                                       28

<PAGE>

               (c) the balance, if any, of such Reallocated Principal
          Collections shall be treated as a portion of Available Investor
          Principal Collections to be applied in accordance with Sections
          4.05(d) and (e).

               Section 4.09.  Excess Finance Charges. Series 2001-7 shall be
                              ----------------------
included in Group One. Subject to Section 4.05 of the Agreement, Excess Finance
Charges with respect to the Series in Group One for any Distribution Date will
be allocated to Series 2001-7 in anamount equal to the product of (x) the
aggregate amount of Excess Finance Charges with respect to all the Series in
Group One for such Distribution Date and (y) a fraction, the numerator of which
is the Finance Charge Shortfall for Series 2001-7 for such Distribution Date and
the denominator of which is the aggregate amount of Finance Charge Shortfalls
for all the Series in Group One for such Distribution Date. The amount of Excess
Finance Charges for Series 2001-7 for any Distribution Date shall be specified
in subsection 3.02(a)(v) of the Transfer Agreement. On each Distribution Date,
the Trustee shall deposit into the Collection Account for application in
accordance with Section 4.05 of the Agreement the aggregate amount of "Excess
Finance Charges" received by the Trustee pursuant to the Transfer Agreement on
such date. The "Finance Charge Shortfall" for Series 2001-7 for any Distribution
Date will be equal to the excess, if any, of (a) the full amount required to be
paid, without duplication, pursuant to Sections 4.05(a), 4.05(b) and 4.05(c) and
Sections 4.07(a) through (i) on such Distribution Date over (b) the sum of (i)
Class A Available Funds, (ii) Class B Available Funds and (iii) Collateral
Available Funds, each with respect to the related Monthly Period.

               Section 4.10.  Shared Principal Collections. Subject to Section
                              ----------------------------
4.04 of the Agreement, Shared Principal Collections for any Distribution Date
will be allocated to Series 2001-7 in an amount equal to the product of (x) the
aggregate amount of Shared Principal Collections with respect to all Series for
such Distribution Date and (y) a fraction, the numerator of which is the
Principal Shortfall for Series 2001-7 for such Distribution Date and the
denominator of which is the aggregate amount of Principal Shortfalls for all the
Series which are Principal Sharing Series for such Distribution Date. The
"Principal Shortfall" for Series 2001-7 will be equal to (a) for any
Distribution Date with respect to the Revolving Period, zero, (b) for any
Distribution Date with respect to the Accumulation Period, the excess, if any,
of the Controlled Deposit Amount with respect to such Distribution Date, over
---- the amount of Available Investor Principal Collections for such
Distribution Date (excluding any portion thereof attributable to Shared
Principal Collections) and (c) for any Distribution Date with respect to the
Early Amortization Period, the excess, if any, of the Invested Amount over the
amount of Available Investor Principal Collections for such Distribution Date
(excluding any portion thereof attributable to Shared Principal Collections).

               Section 4.11.  Reserve Account.
                              ---------------

               (a)    The Servicer shall establish and maintain, in the name of
the Trustee, on behalf of the Trust, for the benefit of the Series 2001-7
Holders, an Eligible Deposit Account (the "Reserve Account") bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Series 2001-7 Holders. The Reserve Account shall initially be
established with The Bank of New York. The Trustee shall possess all right,
title and interest in all funds on deposit from time to time in the Reserve
Account and in all proceeds thereof. The Reserve Account shall be under the sole
dominion and control of the Trustee for the benefit of the Series 2001-7
Holders.

                                       29

<PAGE>
If at any time the Reserve Account ceases to be an Eligible Deposit Account, the
Trustee (or the Servicer on its behalf) shall within 10 Business Days (or such
longer period, not to exceed 30 calendar days, as to which each Rating Agency
may consent) establish a new Reserve Account meeting the conditions specified
above as an Eligible Deposit Account, and shall transfer any cash and/or any
investments to such new Reserve Account. The Trustee, at the direction of the
Servicer, shall (i) make withdrawals from the Reserve Account from time to time
in an amount up to the Available Reserve Account Amount at such time, for the
purposes set forth in this Supplement, and (ii) on each Distribution Date (from
and after the Reserve Account Funding Date) prior to the termination of the
Reserve Account make a deposit into the Reserve Account in the amount specified
in, and otherwise in accordance with, Section 4.07(i).

               b)   Funds on deposit in the Reserve Account shall be invested at
the direction of the Servicer by the Trustee in Eligible Investments. Funds on
deposit in the Reserve Account on any Transfer Date, after giving effect to any
withdrawals from the Reserve Account on such Transfer Date, shall be invested in
such investments that will mature so that such funds will be available for
withdrawal on or prior to the following Transfer Date. The Trustee shall (i)
hold each Eligible Investment that constitutes investment property through a
securities intermediary, which securities intermediary shall agree with the
Trustee that (A) such investment property shall at all times be credited to a
securities account of the Trustee, (B) such securities intermediary shall treat
the Trustee as entitled to exercise the rights that comprise each financial
asset credited to such securities account, (C) all property credited to such
securities account shall be treated as a financial asset, (D) such securities
intermediary shall comply with entitlement orders originated by the Trustee
without the further consent of any other person or entity, (E) such securities
intermediary shall not agree with any person or entity other than the Trustee to
comply with entitlement orders originated by such other person or entity, (F)
such securities intermediary waives any lien on, security interest in, or right
of set-off with respect to any property credited to such securities account, and
(G) such agreement shall be governed by the laws of the State of New York; and
(ii) maintain possession of each other Eligible Investment not described in
clause (i) above in the State of New York. Terms used in clause (i) above that
are defined in the New York UCC and not otherwise defined herein shall have the
meaning set forth in the New York UCC. No Eligible Investment shall be disposed
of prior to its maturity. On each Distribution Date, all interest and earnings
(net of losses and investment expenses) accrued since the preceding Distribution
Date on funds on deposit in the Reserve Account shall be retained in the Reserve
Account (to the extent that the Available Reserve Account Amount is less than
the Required Reserve Account Amount) and the balance, if any, shall be deposited
in the Collection Account and treated as Collections of Finance Charge
Receivables allocable to Series 2001-7. For purposes of determining the
availability of funds or the balance in the Reserve Account for any reason under
this Supplement, except as otherwise provided in the preceding sentence,
investment earnings on such funds shall be deemed not to be available or on
deposit.

               (c)  On the Determination Date preceding each Distribution Date
with respect to the Accumulation Period and the first Special Payment Date, the
Servicer shall calculate the "Reserve Draw Amount" which shall be equal to the
sum of the excesses, if any, identified in subsections 4.11(d)(i), (ii) and
(iii); provided that such amount will be reduced to the extent that funds
       --------
otherwise would be available for deposit in the Reserve Account under Section
4.07(i) with respect to such Distribution Date or Special Payment Date.

                                       30

<PAGE>
               (d)   In the event that for any Distribution Date the Reserve
Draw Amount is greater than zero, the Reserve Draw Amount, up to the Available
Reserve Account Amount, shall be withdrawn from the Reserve Account on the
related Distribution Date by the Trustee (acting in accordance with the
instructions of the Servicer), deposited into the Collection Account and applied
in the following priority:

               (i)   an amount up to the excess, if any, of (x) an amount equal
          to that portion of the Covered Amount computed pursuant to clause (a)
          of the definition of Covered Amount over (y) an amount equal to that
          portion of the Class A Available Funds computed pursuant to clause (a)
          of the definition of Class A Available Funds shall be included as
          Class A Available Funds; and

               (ii)  an amount up to the excess, if any, of (x) an amount equal
          to that portion of the Covered Amount computed pursuant to clause (b)
          of the definition of Covered Amount over (y) an amount equal to that
          portion of the Class B Available Funds computed pursuant to clause (a)
          of the definition of Class B Available Funds shall be treated as Class
          B Available Funds; and

               (iii) on and after the Distribution Date on which the Principal
          Funding Account Balance equals the sum of the Class A Invested Amount
          and the Class B Invested Amount, an amount up to the excess, if any,
          of (x) an amount equal to that portion of the Covered Amount computed
          pursuant to clause (c) of the definition of Covered Amount over (y) an
          amount equal to the aggregate amount of Excess Spread and Excess
          Finance Charge Collections allocated to Series 2001-7 with respect to
          such Distribution Date or Special Payment Date available after
          application in accordance with subsections 4.07(a) through (d) shall
          be distributed to the Collateral Interest Holder.

              (e)    In the event that the Reserve Account Surplus on any
Distribution Date, after giving effect to all deposits to and withdrawals from
the Reserve Account with respect to such Distribution Date, is greater than
zero, the Trustee, acting in accordance with the instructions of the Servicer,
shall withdraw from the Reserve Account, and distribute to the Collateral
Interest Holder, an amount equal to such Reserve Account Surplus.

               (f)   Upon the earliest to occur of (i) the termination of the
Trust pursuant to Article XII of the Agreement, (ii) the day on which the
Invested Amount is paid in full to the Class A Certificateholders, the Class B
Certificateholders and the Collateral Interest Holder, (iii) if the Accumulation
Period has not commenced, the occurrence of a Pay Out Event with respect to
Series 2001-7 and (iv) if the Accumulation Period has commenced, the earlier of
the first Special Payment Date and the Expected Final Payment Date, the Trustee,
acting in accordance with the instructions of the Servicer, after the prior
payment of all amounts owing to the Series 2001-7 Certificateholders which are
payable from the Reserve Account as provided herein, shall withdraw from the
Reserve Account and distribute to the Collateral Interest Holder all amounts, if
any, on deposit in the Reserve Account and the Reserve Account shall be deemed
to have terminated for purposes of this Supplement.

                                       31

<PAGE>

                                    ARTICLE V

          Distributions and Reports to Series 2001-7 Certificateholders
          -------------------------------------------------------------

               Section 5.01.  Distributions.
                              -------------

               (a)   On each Payment Date, the Paying Agent shall distribute to
each Class A Certificateholder of record on the related Record Date (other than
as provided in Section 12.02 of the Agreement) such Class A Certificateholder's
pro rata share of the amounts that are allocated and available on such Payment
--------
Date to pay interest on the Class A Certificates pursuant to this Supplement.

               (b)   On each Special Payment Date and on the Expected Final
Payment Date, the Paying Agent shall distribute to each Class A
Certificateholder of record on the related Record Date (other than as provided
in Section 12.02 of the Agreement) such Class A Certificateholder's pro rata
share of the amounts on deposit in the Principal Funding Account (in an amount
not to exceed the Class A Invested Amount) or otherwise held by the Paying Agent
and which are allocated and available on such date to pay principal of the Class
A Certificates pursuant to this Supplement up to a maximum amount on any such
date equal to the Class A Invested Amount on such date (unless there has been an
optional repurchase of the Certificateholders' Interest with respect to Series
2001-7 pursuant to Section 10.01 of the Agreement, in which event the foregoing
limitation will not apply).

               (c)   On each Payment Date, the Paying Agent shall distribute to
each Class B Certificateholder of record on the related Record Date (other than
as provided in Section 12.02 of the Agreement) such Class B Certificateholder's
pro rata share of the amounts that are allocated and available on such Payment
--------
Date to pay interest on the Class B Certificates pursuant to this Supplement.

               (d)   On each Special Payment Date, if any, commencing on the
first Special Payment Date on which the Class A Invested Amount is paid in full
and on the Expected Final Payment Date, the Paying Agent shall distribute to
each Class B Certificateholder of record on the related Record Date (other than
as provided in Section 12.02 of the Agreement) such Class B Certificateholder's
pro rata share of the amounts on deposit in the Principal Funding Account in
--------
excess of the Class A Invested Amount (in an amount not to exceed the Class B
Invested Amount) or otherwise held by the Paying Agent and which are allocated
and available on such date to pay principal of the Class B Certificates pursuant
to this Supplement up to a maximum amount on any such date equal to the Class B
Invested Amount on such date (unless there has been an optional repurchase of
the Certificateholders' Interest with respect to Series 2001-7 pursuant to
Section 10.01 of the Agreement, in which event the foregoing limitation will not
apply).

               (e)   On each Payment Date, the Paying Agent shall distribute to
each Collateral Interest Holder of record on the related Record Date (other than
as provided in Section 12.02 of the Agreement) such Collateral Interest Holder's
pro rata share of the amounts that are allocated and available on such Payment
--------
Date to pay interest on the Collateral Interest pursuant to this Supplement.

                                       32

<PAGE>
               (f)   On each Special Payment Date, if any, commencing on the

first Special Payment Date on which the Class B Invested Amount is paid in full
and on the Expected Final Payment Date, the Paying Agent shall distribute to
each Collateral Interest Holder of record on the related Record Date such
Collateral Interest Holder's pro rata share of the amounts on deposit in the
Principal Funding Account in excess of the sum of the Class A Invested Amount
and the Class B Invested Amount (in an amount not to exceed the Collateral
Invested Amount), held by the Paying Agent or otherwise allocated and available
on such date to pay principal of the Collateral Interest pursuant to this
Supplement up to a maximum amount on any such date equal to the Collateral
Invested Amount (unless there has been an optional repurchase of the
Certificateholders' Interest with respect to Series 2001-7 pursuant to Section
10.01 of the Agreement, in which event the foregoing limitation will not apply).

               (g)   The distributions to be made pursuant to this Section 5.01
are subject to the provisions of Sections 2.06, 9.02, 10.01 and 12.02 of the
Agreement and Sections 8.01 and 8.02 of this Supplement.

               (h)   Except as provided in Section 12.02 of the Agreement with

respect to a final distribution, distributions to each Series 2001-7
Certificateholder hereunder shall be made by check mailed to each Series 2001-7
Certificateholder at such Series 2001-7 Certificateholder's address appearing in
the Certificate Register without presentation or surrender of any Series 2001-7
Certificate or the making of any notation thereon; provided, however, that with
                                                   --------  -------
respect to the Series 2001-7 Certificates registered in the name of a Clearing
Agency, such distributions shall be made to such Clearing Agency in immediately
available funds. Distributions to each Collateral Interest Holder hereunder
shall be made (i) by wire transfer in same day funds to an account at a bank or
other depository institution located within the United States as shall have been
designated by such Collateral Interest Holder by notice in writing on or before
the related Payment Date or (ii) in the absence of such designation, by check
mailed to each Collateral Interest Holder at the address appearing in the
Transfer Agreement.

               Section 5.02.  Reports and Statements to Series 2001-7
                              ---------------------------------------
                              Certificateholders.
                              ------------------

               (a)   On each Distribution Date, the Paying Agent, on behalf of
the Trustee, shall make available for inspection upon request to each Series
2001-7 Holder free of charge at the office of such Paying Agent a statement
substantially in the form of Exhibit C prepared by the Servicer for a period of
six months commencing on such Distribution Date.

               (b)   Not later than each Determination Date, the Servicer shall
deliver to the Trustee, the Paying Agent and each Rating Agency (i) a statement
substantially in the form of Exhibit B prepared by the Servicer and (ii) a
certificate of a Servicing Officer substantially in the form of Exhibit C.

               (c)   On or before January 31 of each calendar year, beginning
with the calendar year next succeeding the Closing Date, the Paying Agent, on
behalf of the Trustee, shall make available for inspection upon request to each
Person who at any time during the preceding calendar year was a Series 2001-7
Holder free of charge at the office of such Paying Agents, a statement prepared
by the Servicer containing the information which is required to be contained in
the statement to Series 2001-7 Holders, as set forth in paragraph (a) or (b)
above, as applicable, aggregated for such calendar year or the applicable
portion thereof during which such Person was a

                                       33

<PAGE>
Series 2001-7 Holder, together with other information as is required to be
provided by an issuer of indebtedness under the Internal Revenue Code for a
period of eighteen months commencing on February 1 of such calendar year. Such
obligation of the Servicer shall be deemed to have been satisfied to the extent
that substantially comparable information shall be made available for inspection
by the Paying Agent pursuant to any requirements of the Internal Revenue Code as
from time to time in effect.

                                   ARTICLE VI

                            Additional Pay Out Events
                            -------------------------

               Section 6.01.  Additional Pay Out Events.  If any one of the
                              -------------------------
following events shall occur with respect to the Series 2001-7 Certificates:

               (a)  failure on the part of a Seller (i) to make any payment or
deposit required by the terms of the Agreement or this Supplement on or before
the date occurring five Business Days after the date such payment or deposit is
required to be made therein or herein or (ii) duly to observe or perform any
other covenants or agreements of such Seller set forth in the Agreement or this
Supplement (including the covenants of the Seller contained in Article IX of
this Supplement), which failure has a material adverse effect on the Series
2001-7 Holders and which continues unremedied for a period of 60 days after the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Sellers by the Trustee, or to the Sellers and the
Trustee by any Series 2001-7 Holder;

               (b)   any representation or warranty made by a Seller in the
Agreement or this Supplement, or any information contained in a computer file or
microfiche list required to be delivered by a Seller pursuant to Section 2.01 or
2.08(g) of the Agreement shall prove to have been incorrect in any material
respect when made or when delivered, which continues to be incorrect in any
material respect for a period of 60 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given to the
Sellers by the Trustee, or to the Sellers and the Trustee by any Holder of the
Series 2001-7 Interests and as a result of which the interests of the Series
2001-7 Holders are materially and adversely affected and continue to be
materially and adversely affected for such period; provided, however, that a Pay
                                                   -------- --------
Out Event pursuant to this Section 6.01(b) shall not be deemed to have occurred
hereunder if the Seller has accepted reassignment of the related Receivable, or
all of such Receivables, if applicable, during such period in accordance with
the provisions of the Agreement;

               (c)   a failure by a Seller to convey Receivables in Additional
Accounts or Participation Interests to the Trust within five Business Days after
the day on which it is required to convey such Receivables or Participation
Interests pursuant to Section 2.08(a) of the Agreement or Section 9.02 of this
Supplement;

               (d)   any Servicer Default shall occur;

               (e)   a Transfer Restriction Event shall occur;

                                       34

<PAGE>

               (f)   the average Portfolio Yield for any three consecutive
Monthly Periods is educed to a rate which is less than the average Base Rate for
such three Monthly Periods; or

               (g)   the Invested Amount shall not be paid in full on the

Expected Final Payment Date; then, in the case of any event described in
subparagraph (a), (b) or (d), after the applicable grace period, if any, set
forth in such subparagraphs, either the Trustee or the holders of Investor
Certificates (including the Collateral Interest Holder) of Series 2001-7
evidencing more than 50% of the aggregate unpaid principal amount of Investor
Certificates (including the Collateral Interest ) by notice then given in
writing to the Sellers and the Servicer (and to the Trustee if given by the
holders of Investor Certificates (including the Collateral Interest Holder) of
Series 2001-7) may declare that a Pay Out Event has occurred with respect to
Series 2001-7 as of the date of such notice, and, in the case of any event
described in subparagraph (c), (e), (f) or (g) a Pay Out Event shall occur with
respect to Series 2001-7 without any notice or other action on the part of the
Trustee or holders of Investor Certificates (including the Collateral Interest
Holder) of Series 2001-7 immediately upon the occurrence of such event.

                                  ARTICLE VII

                     Optional Repurchase; Series Termination
                     ---------------------------------------

               Section 7.01.  Optional Repurchase.
                              -------------------

               (a)   On any day occurring on or after the date on which the
Invested Amount is reduced to 5% or less of the Initial Invested Amount, a
Seller (so long as such Seller is the Servicer or an Affiliate thereof) shall
have the option to purchase the interest of the Series 2001-7 Holders, at a
purchase price equal to (i) if such day is a Distribution Date, the Reassignment
Amount for such Distribution Date or (ii) if such day is not a Distribution
Date, the Reassignment Amount for the Distribution Date following such day.

               (b)   Such Seller shall give the Servicer and the Trustee at
least 30 days prior written notice of the date on which such Seller intends to
exercise such purchase option. Not later than 12:00 noon, Richmond time, on such
day that Seller shall deposit the Reassignment Amount into the Collection
Account in immediately available funds. Such purchase option is subject to
payment in full of the Reassignment Amount. Following the deposit of the
Reassignment Amount into the Collection Account in accordance with the
foregoing, the Invested Amount for Series 2001-7 shall be reduced to zero and
the Series 2001-7 Certificateholders and the Collateral Interest Holder shall
have no further interest in the Receivables. The Reassignment Amount shall be
distributed as set forth in Section 8.01(b).

               Section 7.02.  Series Termination.
                              ------------------

               (a)   If, on the June 2007 Distribution Date, the Invested
Amount (after giving effect to all changes therein on such Distribution Date)
would be greater than zero, the Servicer, on behalf of the Trustee, shall,
within the 40-day period which begins on such Distribution Date, solicit bids
for the sale of Principal Receivables and the related Finance Charge Receivables
(or interests therein) in an amount equal to the Invested Amount at the close of
business on the last day of the

                                       35

<PAGE>

Monthly Period preceding the Termination Date (after giving effect to all
distributions required to be made on the Termination Date, except pursuant to
this Section 7.02). Such bids shall require that such sale shall (subject to
Section 7.02(b)) occur on the Termination Date.

          (b) The Servicer, on behalf of the Trustee, shall sell such
Receivables (or interests therein) on the Termination Date to the bidder who
made the highest cash purchase offer. The proceeds of any such sale shall be
deposited in the Collection Account and treated as Collections on the
Receivables allocated to the Series 2001-7 Holders pursuant to the Agreement and
this Supplement; provided, however, that the Servicer shall determine
                 --------  -------
conclusively the amount of such proceeds which are allocable to Finance Charge
Receivables and the amount of such proceeds which are allocable to Principal
Receivables. During the period from the June 2007 Distribution Date to the
Termination Date, the Servicer shall continue to collect payments on the
Receivables and allocate and deposit such collections in accordance with the
provisions of the Agreement and the Supplements.

                                  ARTICLE VIII

                               Final Distributions
                               -------------------

          Section 8.01. Sale of Receivables or Certificateholders' Interest
                        ---------------------------------------------------
pursuant to Section 2.06 or 10.01 of the Agreement.
--------------------------------------------------

          (a) Purchase Price. (i) The amount to be paid by a Seller with respect
              --------------
     to Series 2001-7 in connection with a reassignment of Receivables to such
     Seller pursuant to Section 2.06 of the Agreement shall equal the
     Reassignment Amount for the first Distribution Date following the Monthly
     Period in which the reassignment obligation arises under the Agreement.

          (ii) The amount to be paid by a Seller with respect to Series 2001-7
     in connection with a repurchase of the Certificateholders' Interest
     pursuant to Section 10.01 of the Agreement shall equal the sum of (x) the
     Reassignment Amount for the Distribution Date of such repurchase and (y)
     the sum of (A) the excess, if any, of (I) a price equivalent to the average
     of bids quoted on the Record Date preceding the date of repurchase (or, if
     not a Business Day, on the next succeeding Business Day) by at least two
     recognized dealers selected by the Trustee at the written direction of the
     Servicer, for the purchase by such dealers of a security which is similar
     to the Class A Certificates with a remaining maturity approximately equal
     to the remaining maturity of the Class A Certificates and rated by each
     Rating Agency in the rating category originally assigned to the Class A
     Certificates over (II) the portion of the Reassignment Amount attributable
     to the Class A Certificates, (B) the excess, if any, of (I) a price
     equivalent to the average of bids quoted on such Record Date or, if not a
     Business Day, on the next succeeding Business Day by at least two
     recognized dealers selected by the Trustee at the written direction of the
     Servicer, for the purchase by such dealers of a security which is similar
     to the Class B Certificates with a remaining maturity approximately equal
     to the remaining maturity of the Class B Certificates and rated by each
     Rating Agency in the rating category originally assigned to the Class B
     Certificates over (II) the portion of the Reassignment Amount attributable
     to the Class B Certificates and (C) the excess, if any, of (I) a price
     equivalent to the average of bids quoted on such Record Date or, if not a
     Business Day, on the next succeeding Business Day by at least two

                                       36

<PAGE>

     recognized dealers selected by the Trustee at the written direction of the
     Servicer, for the purchase by such dealers of a security which is similar
     to the Notes (as defined in the Transfer Agreement) with a remaining
     maturity approximately equal to the remaining maturity of the Notes and
     rated by each rating agency selected to rate the Notes in the rating
     category originally assigned to the Notes over (II) the portion of the
     Reassignment Amount attributable to the Collateral Interest.

          (b) Distributions Pursuant to Section 7.01 or 7.02 of this Supplement
              -----------------------------------------------------------------
and Section 10.01 of the Agreement. With respect to the Reassignment Amount
----------------------------------
deposited into the Collection Account pursuant to Section 7.01 or 8.01(a)(ii) or
any amounts allocable to the Series 2001-7 Certificateholders' Interest
deposited into the Collection Account pursuant to Section 7.02, the Trustee
shall, not later than 12:00 noon, Richmond time, on the related Distribution
Date, make deposits or distributions of the following amounts (in the priority
set forth below and, in each case, after giving effect to any deposits and
distributions otherwise to be made on such date) in immediately available funds:
(i) (x) the Class A Invested Amount on such Distribution Date will be
distributed to the Paying Agent for payment to the Class A Certificateholders
and (y) an amount equal to the sum of (A) Class A Monthly Interest for such
Distribution Date, (B) any Class A Outstanding Monthly Interest and (C) the
amount of Class A Additional Interest, if any, for such Distribution Date and
any Class A Outstanding Additional Interest, will be distributed to the Paying
Agent for payment to the Class A Certificateholders, (ii) (x) the Class B
Invested Amount on such Distribution Date will be distributed to the Paying
Agent for payment to the Class B Certificateholders and (y) an amount equal to
the sum of (A) Class B Monthly Interest for such Distribution Date, (B) any
Class B Outstanding Monthly Interest and (C) the amount of Class B Additional
Interest, if any, for such Distribution Date and any Class B Outstanding
Additional Interest, will be distributed to the Paying Agent for payment to the
Class B Certificateholders and (iii) any remaining amounts will be distributed
to the Paying Agent for payment to the Collateral Interest Holder.
Notwithstanding anything to the contrary contained in this Supplement or the
Agreement, the amount of any excess determined pursuant to paragraph (a)(ii)(y)
shall be distributed to the Series 2001-7 Certificateholders.

          (c) Distributions Pursuant to Section 2.06 of the Agreement. With
              -------------------------------------------------------
respect to any amounts deposited into the Collection Account pursuant to Section
8.01(a)(i), the Trustee shall, not later than 12:00 noon, Richmond time, on the
related Distribution Date, deposit the principal portion of such amounts that
are allocable to the Series 2001-7 Holders into the Principal Funding Account.

          (d) Notwithstanding anything to the contrary in this Supplement or the
Agreement, all amounts distributed to the Paying Agent pursuant to Section
8.01(b) for payment to the Series 2001-7 Holders shall be deemed distributed in
full to the Series 2001-7 Holders on the date on which such funds are
distributed to the Paying Agent pursuant to this Section and shall be deemed to
be a final distribution pursuant to Section 12.02 of the Agreement.

          Section 8.02. Distribution of Proceeds of Sale, Disposition or
                        ------------------------------------------------
Liquidation of the Receivables pursuant to Section 9.02 of the Agreement.
------------------------------------------------------------------------

          (a) Not later than 12:00 noon, Richmond time, on the Distribution Date
following the date on which the Insolvency Proceeds are deposited into the
Collection Account pursuant to Section 9.02(b) of the Agreement, the Trustee
shall (in the following priority and, in

                                       37

<PAGE>

each case, after giving effect to any deposits and distributions otherwise to be
made on such Distribution Date) (i) deduct an amount equal to the Class A
Invested Amount on such Distribution Date from the portion of the Insolvency
Proceeds allocated to Collections of Principal Receivables and distribute such
amount to the Paying Agent for payment to the Class A Certificateholders,
provided that the amount of such distribution shall not exceed the product of
(x) the portion of the Insolvency Proceeds allocated to Collections of Principal
Receivables and (y) the Principal Allocation Percentage with respect to the
related Monthly Period and (ii) deduct an amount equal to the Class B Invested
Amount on such Distribution Date from the portion of the Insolvency Proceeds
allocated to Collections of Principal Receivables and distribute such amount to
the Paying Agent for payment to the Class B Certificateholders, provided that
the amount of such distribution shall not exceed (x) the product of (A) the
portion of such Insolvency Proceeds allocated to Collections of Principal
Receivables and (B) the Principal Allocation Percentage with respect to the
related Monthly Period minus (y) the amount distributed to the Paying Agent
                       -----
pursuant to clause (i) of this sentence. To the extent that the product of (A)
the portion of the Insolvency Proceeds allocated to Collections of Principal
Receivables and (B) the Principal Allocation Percentage with respect to the
related Monthly Period exceeds the aggregate amounts distributed to the Paying
Agent pursuant to the preceding sentence, the excess shall be distributed to the
Paying Agent for payment to the Collateral Interest Holder on such Distribution
Date.

          (b) Not later than 12:00 noon, Richmond time, on such Distribution
Date, the Trustee shall (in the following priority and, in each case, after
giving effect to any deposits and distributions otherwise to be made on such
Distribution Date) (i) deduct an amount equal to the sum of (w) Class A Monthly
Interest for such Distribution Date, (x) any Class A Outstanding Monthly
Interest and (y) the amount of Class A Additional Interest, if any, for such
Distribution Date and any Class A Outstanding Additional Interest, from the
portion of the Insolvency Proceeds allocated to Collections of Finance Charge
Receivables and distribute such amount to the Paying Agent for payment to the
Class A Certificateholders, provided that the amount of such distribution shall
not exceed the product of (A) the portion of the Insolvency Proceeds allocated
to Collections of Finance Charge Receivables, (B) the Floating Allocation
Percentage with respect to the related Monthly Period and (C) the Class A
Floating Percentage with respect to such Monthly Period and (ii) deduct an
amount equal to the sum of (w) Class B Monthly Interest for such Distribution
Date, (x) Class B Outstanding Monthly Interest and (y) the amount of Class B
Additional Interest, if any, for such Distribution Date and any Class B
Outstanding Additional Interest, from the portion of the Insolvency Proceeds
allocated to Collections of Finance Charge Receivables and distribute such
amount to the Paying Agent for payment to the Class B Certificateholders,
provided that the amount of such distribution shall not exceed the product of
(A) the portion of the Insolvency Proceeds allocated to Collections of Finance
Charge Receivables, (B) the Floating Allocation Percentage with respect to the
related Monthly Period and (C) the Class B Floating Percentage with respect to
such Monthly Period. To the extent that the product of (x) the portion of the
Insolvency Proceeds allocated to Collections of Finance Charge Receivables and
(y) the Floating Allocation Percentage with respect to the related Monthly
Period exceeds the aggregate amount distributed to the Paying Agent pursuant to
the preceding sentence, the excess shall be distributed to the Paying Agent for
payment to the Collateral Interest Holder on such Distribution Date.

          (c) Notwithstanding anything to the contrary in this Supplement or the
Agreement, all amounts distributed to the Paying Agent pursuant to this Section
for payment to the Series 2001-7 Holders shall be distributed in full to the
Series 2001-7 Holders on the date on which

                                       38

<PAGE>

funds are distributed to the applicable Paying Agents pursuant to this Section
and shall be deemed to be a final distribution pursuant to Section 12.02 of the
Agreement.

          (d) Notwithstanding any provision of the Agreement or this Supplement,
for purposes of Section 9.02(a) of the Agreement, the Holders of the Series
2001-7 Certificates shall not be deemed to have disapproved a liquidation of the
Receivables following an Insolvency Event with respect to the Seller unless (i)
holders of more than 50% of the aggregate unpaid principal amount of each of the
Class A Certificates and the Class B Certificates and (ii) beneficial owners of
more than 50% of the Collateral Interest shall have disapproved of such
liquidation.

                                   ARTICLE IX

                                  New Issuances
                                  -------------

          Section 9.01. New Issuances. The obligation of the Trustee to
                        -------------
authenticate the Investor Certificates of a new Series and to execute and
deliver the related Supplement shall be subject to the conditions set forth in
Section 6.03(b) of the Agreement and to the additional condition that, as of the
Series Issuance Date and after giving effect to such issuance, the aggregate
amount of Principal Receivables equals or exceeds the Required Principal
Balance.

                                   ARTICLE X

                            Miscellaneous Provisions
                            ------------------------

          Section 10.01. Ratification of Agreement. As supplemented by this
                         -------------------------
Supplement, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Supplement shall be read, taken and
construed as one and the same instrument.

          Section 10.02. Counterparts. This Supplement may be executed in two or
                         ------------
more counterparts, and by different parties on separate counterparts, each of
which shall be an original, but all of which shall constitute one and the same
instrument.

          Section 10.03. GOVERNING LAW. THIS SUPPLEMENT SHALL BE CONSTRUED IN
                         -------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

          Section 10.04. Determination of Material Adverse Effect. Any
                         ----------------------------------------
determination of material adverse effect on the Series 2001-7 Certificateholders
under the Agreement or this Supplement shall be made assuming the Collateral
Invested Amount is zero (including, without limitation, any determination of
whether a representation or warranty made therein is correct or whether a Seller
or the Servicer has duly performed a covenant contained therein or herein).

          Section 10.05. Book-Entry Certificates. The Class A Certificates and
                         -----------------------
the Class B Certificates shall be delivered as Book-Entry Certificates. The
Clearing Agency for the Class A Certificates and the Class B Certificates shall
be The Depository Trust Company, and the Class

                                       39

<PAGE>

A Certificates and the Class B Certificates shall be initially registered in the
name of Cede & Co., its nominee. The Series 2001-7 Certificates are issuable
only in minimum denominations of $1,000 and integral multiples of $1,000.

          Section 10.06. Uncertificated Securities. The Collateral Interest
                         -------------------------
shall be delivered in uncertificated form.

          Section 10.07. Transfers of the Collateral Interest.
                         ------------------------------------

          (a) Unless otherwise consented to by the Sellers, no portion of the
Collateral Interest or any interest therein may be sold, conveyed, assigned,
hypothecated, pledged, participated, exchanged or otherwise transferred (each, a
"Transfer") except in accordance with this Section 10.07 and only to a Permitted
Assignee. Any attempted or purported transfer, assignment, exchange, conveyance,
pledge, hypothecation or grant other than to a Permitted Assignee shall be void.
Unless otherwise consented to by the Sellers, no portion of the Collateral
Interest or any interest therein may be Transferred to any Person (each such
Person acquiring the Collateral Interest or any interest therein, an "Assignee")
unless such Assignee shall have executed and delivered to the Sellers on or
before the effective date of any Transfer a letter substantially in the form
attached hereto as Exhibit D (an "Investment Letter"), executed by such
Assignee, with respect to the related Transfer to such Assignee of all or a
portion of the Collateral Interest.

          (b) Each Assignee will certify that the Collateral Interest or the
interest therein purchased by such Assignee will be acquired for investment only
and not with a view to any public distribution thereof, and that such Assignee
will not offer to sell or otherwise dispose of the Collateral Interest or any
interest therein so acquired by it in violation of any of the registration
requirements of the Act, or any applicable state or other securities laws. Each
Assignee will acknowledge and agree that (i) it has no right to require the
Seller to register under the Act or any other securities law the Collateral
Interest or the interest therein to be acquired by the Assignee and (ii) the
sale of the Collateral Interest is not being made by means of the Prospectus.
Each Assignee will agree with the Seller that: (a) such Assignee will deliver to
the Seller on or before the effective date of any Transfer an Investment Letter,
executed by such Assignee with respect to the purchase by such Assignee of all
or a portion of the Collateral Interest and (b) all of the statements made by
such Assignee in its Investment Letter shall be true and correct as of the date
made.

          (c) No portion of the Collateral Interest or any interest therein may
be Transferred, and each Assignee will certify that it is not, (a) an "employee
benefit plan" (as defined in Section 3(3) of ERISA), including governmental
plans and church plans, (b) any "plan" (as defined in Section 4975(e)(1) of the
Code) including individual retirement accounts and Keogh plans, or (c) any other
entity whose underlying assets include "plan assets" (within the meaning of
Department of Labor Regulation Section 2510.3-101, 29 C.F.R. (S) 2510.3-101 or
otherwise under ERISA) by reason of a plan's investment in the entity,
including, without limitation, an insurance company general account.

          (d) This Section 10.07 shall not apply to the transfer and pledge of
the Collateral Interest on the Closing Date by the Sellers pursuant to the
Transfer Agreement or by the Capital One Secured Note Trust 2001-7 to the
Indenture Trustee (as defined in the Transfer Agreement) pursuant to the
Indenture (as defined in the Transfer Agreement).

                                       40

<PAGE>

          Section 10.08. Certain Accounting Related Amendments. Notwithstanding
                         -------------------------------------
any other provision of this Agreement to the contrary, the consent of the
Servicer, the Trustee and any Investor Certificateholder is hereby deemed to be
given in connection with the amendment of the Agreement or this Supplement to
account for the transfer of assets as sales in accordance with FASB Statement
No. 140, including providing for the transfer of receivables from the Sellers to
a bankruptcy-remote special purpose entity and from that entity to the trust;
provided that the Sellers shall have delivered a Tax Opinion on the date of such
--------
amendment. Promptly after the effectiveness of any amendment pursuant to this
Section 10.08, the Sellers shall deliver a copy of such amendment to each of the
Servicer, the Trustee, each Rating Agency.

          Section 10.09. Additional Representations and Warranties of the
                         ------------------------------------------------
Sellers. Each Seller hereby makes the following representations and warranties.
-------
Such representations and warranties shall survive until the termination of this
Series Supplement. Such representations and warranties speak of the date that
the Collateral (as defined below) is transferred to the Trustee but shall not be
waived by any of the parties to this Series Supplement unless each Rating Agency
shall have notified the Sellers, the Servicer and the Trustee in writing that
such waiver will not result in a reduction or withdrawal of the rating of any
outstanding Series or Class to which it is a Rating Agency.

          (a) The Agreement creates a valid and continuing security interest (as
     defined in the applicable UCC) in favor of the Trustee in the Receivables
     described in Section 2.01 of the Agreement (the "Collateral"), which
     security interest is prior to all other liens, and is enforceable as such
     against creditors of and purchasers from such Seller.

          (b) The Collateral constitutes "accounts" within the meaning of the
     applicable UCC.

          (c) At the time of its transfer of any item of collateral to the
     Trustee pursuant to the Agreement, such Seller owned and had good and
     marketable title to such item of collateral free and clear of any lien,
     claim or encumbrance of any Person.

          (d) Such Seller has caused or will have caused, within ten (10) days
     of the initial execution of the Agreement, the filing of all appropriate
     financing statements in the proper filing office in the appropriate
     jurisdictions under applicable law in order to perfect the security
     interest in the Collateral granted to the Trustee pursuant to the
     Agreement.

          (e) Other than the security interest granted to the Trustee pursuant
     to the Agreement or an Assignment, such Seller has not pledged, assigned,
     sold, granted a security interest in, or otherwise conveyed the Collateral.
     Such Seller has not authorized the filing of and is not aware of any
     financing statements against such Seller that include a description of the
     Collateral other than any financing statement relating to the security
     interest granted to the Trustee pursuant to the Agreement or an Assignment
     or that has been terminated. Such Seller is not aware of any judgment or
     tax lien filings against such Seller.

                                       41

<PAGE>

                  IN WITNESS WHEREOF, the undersigned have caused this
Supplement to be duly executed and delivered by their respective duly authorized
officers on the day and year first above written.

                                   CAPITAL ONE BANK,
                                     Seller and Servicer

                                   By:___________________________________
                                      Name:  Bonnie A. Seideman
                                      Title: Manager of Securitization

                                   CAPITAL ONE, F.S.B.,
                                     Seller

                                   By:___________________________________
                                      Name:  Bonnie A. Seideman
                                      Title: Manager of Securitization

                                   THE BANK OF NEW YORK,
                                     Trustee

                                   By:___________________________________
                                      Name:
                                      Title:

                                       42

<PAGE>

                                                                     EXHIBIT A-1

REGISTERED                                                       $845,000,000/1/

No. R-1                                                      CUSIP No. 14040PAP2

          Unless this Class A Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.

                            CAPITAL ONE MASTER TRUST

                                  Series 2001-7

                     CLASS A 3.85% ASSET BACKED CERTIFICATE

                          Expected Final Payment Date:
                         October 2004 Distribution Date

                  Each $1,000 minimum denomination represents a
                          1/845,000 undivided interest
                            in certain assets of the

                            CAPITAL ONE MASTER TRUST

Evidencing an undivided interest in a trust, the corpus of which consists
primarily of receivables generated from time to time in the ordinary course of
business in a portfolio of consumer revolving credit card accounts by

                                CAPITAL ONE BANK
                                       and
                               CAPITAL ONE, F.S.B.

and, in certain circumstances, certain Additional Sellers (as defined in the
Pooling and Servicing Agreement referred to below).

             (Not an interest in or obligation of Capital One Bank,
      Capital One, F.S.B., any Additional Seller or any affiliate thereof)

          This certifies that CEDE & CO. (the "Class A Certificateholder") is
the registered owner of a fractional undivided interest in certain assets of a
trust (the "Trust") created pursuant to

__________________
/1/ Denominations of $1,000 and integral multiples of $1,000 in excess thereof.

                                     A-1-1

<PAGE>

the Pooling and Servicing Agreement, dated as of September 30, 1993, as amended
and restated as of April 9, 2001 (as amended and restated and as amended and
supplemented, the "Agreement"), as supplemented by the Series 2001-7 Supplement,
dated as of October 18, 2001 (as amended and supplemented, the "Series
Supplement"), among Capital One Bank, as Seller and Servicer, Capital One,
F.S.B., as Seller, and The Bank of New York, a New York banking corporation, as
trustee (the "Trustee"). The corpus of the Trust consists of (i) a portfolio of
all receivables (the "Receivables") existing in the consumer revolving credit
card accounts and other consumer revolving credit accounts identified under the
Agreement from time to time (the "Accounts"), (ii) all Receivables generated
under the Accounts from time to time thereafter, (iii) funds collected or to be
collected from accountholders in respect of the Receivables, (iv) all funds
which are from time to time on deposit in the Collection Account and in the
Series Accounts, (v) an interest in any Funds Collateral (as defined in the
Agreement) relating to secured accounts, (vi) the benefits of any Series
Enhancement and (vii) all other assets and interests constituting the Trust. The
Holder of this Class A Certificate is entitled to the benefit of any Series
Enhancement to the extent provided in the Series Supplement. Although a summary
of certain provisions of the Agreement and the Series Supplement is set forth
below and on the Summary of Terms and Conditions attached hereto and made a part
hereof, this Class A Certificate does not purport to summarize the Agreement and
the Series Supplement and reference is made to the Agreement and the Series
Supplement for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Trustee. In the event of any conflict between this Class A
Certificate and the Series Supplement or the Agreement, the Series Supplement or
the Agreement, as the case may be, shall control. A copy of the Agreement and
the Series Supplement (without schedules) may be requested from the Trustee by
writing to the Trustee at the Corporate Trust Office. To the extent not defined
herein, the capitalized terms used herein have the meanings ascribed to them in
the Agreement or the Series Supplement, as applicable.

          This Class A Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement and the Series Supplement, to which
Agreement and Series Supplement, each as amended and supplemented from time to
time, the Class A Certificateholder by virtue of the acceptance hereof assents
and is bound.

          It is the intent of the Sellers and the Investor Certificateholders
that, for federal, state and local income and franchise tax purposes only, the
Investor Certificates will qualify as indebtedness of the Sellers secured by the
Receivables. The Class A Certificateholder, by the acceptance of this Class A
Certificate, agrees to treat this Class A Certificate for federal, state and
local income and franchise tax purposes as indebtedness of the Sellers.

          In general, payments of principal with respect to the Class A
Certificates are limited to the Class A Invested Amount, which may be less than
the unpaid principal balance of the Class A Certificates. The Expected Final
Payment Date is the October 2004 Distribution Date, but principal with respect
to the Class A Certificates may be paid earlier or later under certain
circumstances described in the Agreement and the Series Supplement. If for one
or more months during the Accumulation Period there are not sufficient funds to
pay the Controlled Deposit Amount, then to the extent that excess funds are not
available on subsequent Distribution Dates with respect to the Accumulation
Period to make up for such shortfalls, the final payment of principal of the
Class A Certificates will occur later than the Expected Final Payment Date.

                                     A-1-2

<PAGE>

          Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Class A Certificate shall
not be entitled to any benefit under the Agreement or the Series Supplement or
be valid for any purpose.

                                     A-1-3

<PAGE>

          IN WITNESS WHEREOF, the Sellers have caused this Class A Certificate
to be duly executed.

                                         CAPITAL ONE BANK

                                         By:________________________________
                                            Name:
                                            Title:

                                         CAPITAL ONE, F.S.B.

                                         By:_______________________________
                                            Name:
                                            Title:

Dated:  October 18, 2001

                                     A-1-4

<PAGE>

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

          This is one of the Class A Certificates described in the
within-mentioned Agreement and Series Supplement.

                                      THE BANK OF NEW YORK,
                                        as Trustee

                                      By:_________________________________
                                         Authorized Officer

                                      or

                                      By:_________________________________
                                         as Authenticating Agent
                                         for the Trustee

                                      By:_________________________________
                                         Authorized Officer

                                     A-1-5

<PAGE>

                            CAPITAL ONE MASTER TRUST

                                  SERIES 2001-7

                     CLASS A 3.85% ASSET BACKED CERTIFICATE

                         Summary of Terms and Conditions

          The Receivables consist of Principal Receivables which arise generally
from the purchase of goods and services and amounts advanced to accountholders
as cash advances and Finance Charge Receivables. This Class A Certificate is one
of a Series of Investor Certificates entitled "Capital One Master Trust, Series
2001-7." The Series 2001-7 Certificates are being issued in two Classes, the
first of which is known as the "Class A 3.85% Asset Backed Certificates, Series
2001-7" (the "Class A Certificates") and the second Class is known as the "Class
B Floating Rate Asset Backed Certificates, Series 2001-7" (the "Class B
Certificates"). In addition, as part of Series 2001-7, the Trust is creating a
third Class of uncertificated interest in the Trust which uncertificated
interest, except as expressly provided in the Series Supplement, is deemed to be
an "Investor Certificate" and is known as the "Collateral Interest, Series
2001-7" (the "Collateral Interest"). This Class A Certificate represents a
fractional undivided interest in certain assets of the Trust. The Trust Assets
are allocated in part to the certificateholders of all outstanding Series (the
"Certificateholders' Interest") with the remainder allocated to the Sellers'
Interest. The aggregate interest represented by the Class A Certificates at any
time in the Principal Receivables in the Trust shall not exceed an amount equal
to the Class A Invested Amount at such time. The Class A Initial Invested Amount
is $845,000,000. The Class A Invested Amount on any date of determination will
be an amount equal to (a) the Class A Initial Invested Amount, minus (b) the
                                                               -----
aggregate amount of principal payments made to the Class A Certificateholders on
or prior to such date, minus (c) the excess, if any, of the aggregate amount of
                       -----
Class A Investor Charge-Offs for all prior Distribution Dates over the aggregate
                                                              ----
amount of Class A Investor Charge-Offs reimbursed pursuant to subsection 4.06(a)
of the Series Supplement prior to such date. Also, Capital One Bank and Capital
One, F.S.B. have received an adjustment to the Sellers' Interest on the date
hereof.

          Subject to the terms and conditions of the Agreement, the Seller may
from time to time direct the Trustee, on behalf of the Trust, to issue one or
more new Series of Investor Certificates, which will represent fractional
undivided interests in certain of the Trust Assets.

          On each Payment Date, the Paying Agent shall distribute to each Class
A Certificateholder of record on the last day of the preceding calendar month
(each, a "Record Date") such Class A Certificateholder's pro rata share of such
amounts (including amounts on deposit in the Collection Account and the
Principal Funding Account) as are payable to the Class A Certificateholders
pursuant to the Agreement and the Series Supplement. Distributions with respect
to this Class A Certificate will be made by the Paying Agent by check mailed to
the address of the Class A Certificateholder of record appearing in the
Certificate Register without the presentation or surrender of this Class A
Certificate or the making of any notation thereon (except for the final
distribution in respect of this Class A Certificate), except that with respect
to Class A Certificates registered in the name of Cede & Co., the nominee for
The Depository Trust Company, distributions will be made in the form of
immediately available funds. Final payment of this Class A Certificate will be
made only upon presentation and surrender of this Class A Certificate at the
office

                                     A-1-6

<PAGE>

or agency specified in the notice of final distribution delivered by the Trustee
to the Class A Certificateholders in accordance with the Agreement and the
Series Supplement.

          On any day occurring on or after the day on which the Invested Amount
is reduced to 5% or less of the Initial Invested Amount, a Seller (so long as
such Seller is the Servicer or an Affiliate thereof) has the option to
repurchase the Certificateholders' Interest in the Trust. The repurchase price
will be equal to (a) if such day is a Distribution Date, the Reassignment Amount
for such Distribution Date or (b) if such day is not a Distribution Date, the
Reassignment Amount for the Distribution Date following such day. Following the
deposit of the Reassignment Amount in the Collection Account, Class A
Certificateholders, the Class B Certificateholders and the Collateral Interest
Holder will not have any interest in the Receivables and the Class A
Certificates will represent only the right to receive such Reassignment Amount.

          This Class A Certificate does not represent an obligation of, or an
interest in, the Sellers, the Servicer or any affiliate of any of them and is
not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other governmental agency or instrumentality. This Class A Certificate is
limited in right of payment to certain Collections with respect to the
Receivables (and certain other amounts), all as more specifically set forth
herein above and in the Agreement and the Series Supplement.

          The Agreement or any Supplement may, subject to certain conditions, be
amended by the Sellers, the Servicer and the Trustee without Certificateholder
consent. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's rights, duties or immunities under the
Agreement or otherwise.

          The Agreement or any Supplement may also be amended from time to time
by the Servicer, the Sellers and the Trustee, with the consent of the Holders of
Investor Certificates evidencing not less than 662/3% of the aggregate unpaid
principal amount of the Investor Certificates of all adversely affected Series,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Agreement or any Supplement or of
modifying in any manner the rights of the Investor Certificateholders; provided,
                                                                       --------
however, that no such amendment shall (i) reduce in any manner the amount of or
-------
delay the timing of any distributions to be made to Investor Certificateholders
or deposits of amounts to be so distributed or the amount available under any
Series Enhancement without the consent of each affected Investor
Certificateholder, (ii) change the definition of or the manner of calculating
the interest of any Investor Certificateholder without the consent of each
affected Investor Certificateholder, (iii) reduce the aforesaid percentage
required to consent to any such amendment without the consent of each Investor
Certificateholder or (iv) adversely affect the rating of any Series or Class by
each Rating Agency without the consent of the Holders of Investor Certificates
of such Series or Class evidencing not less than 662/3% of the aggregate unpaid
principal amount of the Investor Certificates of such Series or Class. The
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Trustee's rights, duties or immunities under the Agreement or
otherwise.

          The Class A Certificates are issuable only in minimum denominations of
$1,000 and integral multiples of $1,000. The transfer of this Class A
Certificate shall be registered in the Certificate Register upon surrender of
this Class A Certificate for registration of transfer at any office or agency
maintained by the Transfer Agent and Registrar accompanied by a written

                                     A-1-7

<PAGE>

instrument of transfer, in a form satisfactory to the Trustee or the Transfer
Agent and Registrar, duly executed by the Class A Certificateholder or such
Class A Certificateholder's attorney, and duly authorized in writing with such
signature guaranteed, and thereupon one or more new Class A Certificates of
authorized denominations and for the same aggregate fractional undivided
interest will be issued to the designated transferee or transferees.

          As provided in the Agreement and subject to certain limitations
therein set forth, Class A Certificates are exchangeable for new Class A
Certificates evidencing like aggregate fractional undivided interests as
requested by the Class A Certificateholder surrendering such Class A
Certificates. No service charge may be imposed for any such exchange but the
Servicer or Transfer Agent and Registrar may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith.

          The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar and any agent of any of them, may treat the person in whose name this
Class A Certificate is registered as the owner hereof for all purposes, and
neither the Servicer nor the Trustee, the Paying Agent, the Transfer Agent and
Registrar, nor any agent of any of them, shall be affected by notice to the
contrary except in certain circumstances described in the Agreement.

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

                                     A-1-8

<PAGE>

                                   ASSIGNMENT

Social Security or other identifying number of assignee _____________________

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

-------------------------------------------------------------------------
                       (name and address of assignee)

the within certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer said
certificate on the books kept for registration thereof, with full power of
substitution in the premises.

Dated: _____________________*

Signature Guaranteed:

____________________________

____________________________
*NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Certificate in every
particular, without alteration, enlargement or any change whatsoever.

                                     A-1-9

<PAGE>
                                                                     EXHIBIT A-2

REGISTERED                                                          $77,500,000*

No. R-1                                                      CUSIP No. 14040PAQ0

          THIS CLASS B CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF
PERSONS INVESTING ASSETS OF A BENEFIT PLAN OR AN INDIVIDUAL RETIREMENT ACCOUNT
OTHER THAN AN INSURANCE COMPANY GENERAL ACCOUNT.

          Unless this Class B Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.

                            CAPITAL ONE MASTER TRUST

                                  Series 2001-7

                 CLASS B FLOATING RATE ASSET BACKED CERTIFICATE

                          Expected Final Payment Date:
                         October 2004 Distribution Date

                      Each $1,000 denomination represents a
                           1/77,500 undivided interest
                            in certain assets of the

                            CAPITAL ONE MASTER TRUST

Evidencing an undivided interest in a trust, the corpus of which consists
primarily of receivables generated from time to time in the ordinary course of
business in a portfolio of consumer revolving credit card accounts by CAPITAL
ONE BANK and CAPITAL ONE, F.S.B. and, in certain circumstances, certain
Additional Sellers (as defined in the Pooling and Servicing Agreement referred
to below).

             (Not an interest in or obligation of Capital One Bank,
      Capital One, F.S.B., any Additional Seller or any affiliate thereof)

          This certifies that CEDE & CO. (the "Class B Certificateholder") is
the registered owner of a fractional undivided interest in certain assets of a
trust (the "Trust") created pursuant to the Pooling and Servicing Agreement,
dated as of September 30, 1993, as amended and restated as

_____________________
* Denominations of $1,000 and integral multiples of $1,000 in excess thereof.

                                     A-2-1

<PAGE>
of April 9, 2001 (as amended and supplemented, the "Agreement"), as
supplemented by the Series 2001-7 Supplement, dated as of October 18, 2001 (as
amended and supplemented, the "Series Supplement"), among Capital One Bank, as
Seller and Servicer, Capital One, F.S.B., as Seller, and The Bank of New York, a
New York banking corporation, as trustee (the "Trustee"). The corpus of the
Trust consists of (i) a portfolio of all receivables (the "Receivables")
existing in the consumer revolving credit card accounts and other consumer
revolving credit accounts identified under the Agreement from time to time (the
"Accounts"), (ii) all Receivables generated under the Accounts from time to time
thereafter, (iii) funds collected or to be collected from accountholders in
respect of the Receivables, (iv) all funds which are from time to time on
deposit in the Collection Account and in the Series Accounts, (v) an interest in
any Funds Collateral (as defined in the Agreement) relating to secured accounts,
(vi) the benefits of any Series Enhancement and (vii) all other assets and
interests constituting the Trust. The Holder of this Class B Certificate is
entitled to the benefit of any Series Enhancement to the extent provided in the
Series Supplement. Although a summary of certain provisions of the Agreement and
the Series Supplement is set forth below and on the Summary of Terms and
Conditions attached hereto and made a part hereof, this Class B Certificate does
not purport to summarize the Agreement and the Series Supplement and reference
is made to the Agreement and the Series Supplement for information with respect
to the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and obligations of the Trustee. In the event of
any conflict between this Class B Certificate and the Series Supplement or the
Agreement, the Series Supplement or the Agreement, as the case may be, shall
control. A copy of the Agreement and the Series Supplement (without schedules)
may be requested from the Trustee by writing to the Trustee at the Corporate
Trust Office. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to them in the Agreement or the Series
Supplement, as applicable.

                  This Class B Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement and the Series Supplement, to
which Agreement and Series Supplement, each as amended and supplemented from
time to time, the Class B Certificateholder by virtue of the acceptance hereof
assents and is bound.

                  It is the intent of the Sellers and the Investor
Certificateholders that, for federal, state and local income and franchise tax
purposes only, the Investor Certificates will qualify as indebtedness of the
Seller secured by the Receivables. The Class B Certificateholder, by the
acceptance of this Class B Certificate, agrees to treat this Class B Certificate
for federal, state and local income and franchise tax purposes as indebtedness
of the Sellers.

                  In general, payments of principal with respect to the Class B
Certificates are limited to the Class B Invested Amount, which may be less than
the unpaid principal balance of the Class B Certificates. The Expected Final
Payment Date is the October 2004 Distribution Date, but principal with respect
to the Class B Certificates may be paid earlier or later under certain
circumstances described in the Agreement and the Series Supplement. Principal
payments with respect to the Class B Certificates will not commence until the
Class A Invested Amount is paid in full. In addition, if for one or more months
during the Accumulation Period there are not sufficient funds to pay the
Controlled Deposit Amount, then to the extent that excess funds are not
available on subsequent Distribution Dates with respect to the Accumulation
Period to make up for such shortfalls, the final payment of principal of the
Class B Certificates will occur later than the Expected Final Payment Date.

                  No Class B Certificate (or any interest therein) may be
acquired or held by any employee benefit or other plan (including an individual
retirement account) that is subject to the

                                     A-2-2

<PAGE>

Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of
the Internal Revenue Code of 1986, as amended (each, a "Plan"), any trustee or
other person acting on behalf of any Plan, or any other person using "Plan
Assets" to effect such acquisition or holding (each, a "Plan Investor") unless
(i) such acquirer or holder is an insurance company, (ii) the source of funds
used to acquire or hold such Certificate (or interest therein) is an "insurance
company general account" (as defined in U.S. Department of Labor Prohibited
Transaction Class Exemption ("PTCE") 95-60), and (iii) the conditions set forth
in Sections I and III of PTCE 95-60 have been satisfied. By acquiring an
interest in this Class B Certificate, each Class B Certificateholder or
Certificate Owner shall be deemed to have represented, either (i) that it is not
a Plan Investor or (ii) that (1) it is an insurance company, (2) the source of
funds used to acquire or hold an interest in such Certificate is an "insurance
company general account" (as such term is defined in PTCE 95-60), and (3) the
conditions set forth in Sections I and III of PTCE 95-60 have been satisfied.

                  Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this Class B
Certificate shall not be entitled to any benefit under the Agreement or the
Series Supplement or be valid for any purpose.

                                     A-2-3

<PAGE>
                  IN WITNESS WHEREOF, the Sellers have caused this Class B
Certificate to be duly executed.

                                                CAPITAL ONE BANK

                                                By: __________________________
                                                    Name:
                                                    Title:

                                                CAPITAL ONE, F.S.B.

                                                By: __________________________
                                                    Name:
                                                    Title:

Dated: October 18, 2001

                                     A-2-4

<PAGE>

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                  This is one of the Class B Certificates described in the
within-mentioned Agreement and Series Supplement.

                                       THE BANK OF NEW YORK,
                                          as Trustee

                                       By: _________________________
                                           Authorized Officer

                                       or

                                       By: ________________________
                                           as Authenticating Agent
                                           for the Trustee

                                       By: ________________________
                                           Authorized Officer

                                     A-2-5

<PAGE>

                            CAPITAL ONE MASTER TRUST

                                  SERIES 2001-7

                 CLASS B FLOATING RATE ASSET BACKED CERTIFICATE

                         Summary of Terms and Conditions

                  The Receivables consist of Principal Receivables which arise
generally from the purchase of goods and services and amounts advanced to
accountholders as cash advances and Finance Charge Receivables. This Class B
Certificate is one of a Series of Certificates entitled "Capital One Master
Trust, Series 2001-7." The Series 2001-7 Certificates are being issued in two
Classes, the first of which is known as the "Class A 3.85% Asset Backed
Certificates, Series 2001-7" (the "Class A Certificates") and the second Class
is known as the "Class B Floating Rate Asset Backed Certificates, Series 2001-7"
(the "Class B Certificates"). In addition, as part of Series 2001-7, the Trust
is creating a third Class of uncertificated interest in the Trust which
uncertificated interest, except as expressly provided in the Series Supplement,
is deemed to be an "Investor Certificate" and is known as the "Collateral
Interest, Series 2001-7" (the "Collateral Interest"). This Class B Certificate
represents a fractional undivided interest in certain assets of the Trust. The
Trust Assets are allocated in part to the certificateholders of all outstanding
Series (the "Certificateholders' Interest") with the remainder allocated to the
Sellers' Interest. The aggregate interest represented by the Class B
Certificates at any time in the Principal Receivables in the Trust shall not
exceed an amount equal to the Class B Invested Amount at such time. The Class B
Initial Invested Amount is $77,500,000. The Class B Invested Amount on any date
of determination will be an amount equal to (a) the Class B Initial Invested
Amount, minus (b) the aggregate amount of principal payments made to the Class B
        -----
Certificateholders on or prior to such date, minus (c) the aggregate amount of
                                             -----
Class B Investor Charge-Offs for all prior Distribution Dates, minus (d) the
                                                               -----
aggregate amount of Reallocated Principal Collections allocated on all prior
Distribution Dates pursuant to subsection 4.08(a) of the Series Supplement
(excluding any Reallocated Principal Collections that have resulted in a
reduction in the Collateral Invested Amount pursuant to subsection 4.06(c) of
the Series Supplement), minus (e) an amount equal to the amount by which the
                        -----
Class B Invested Amount has been reduced on all prior Distribution Dates
pursuant to subsection 4.06(a) of the Series Supplement and plus (f) the amount
                                                            ----
of Excess Spread and Excess Finance Charges allocated and available on all prior
Distribution Dates pursuant to Section 4.07(d) of the Series Supplement for the
purpose of reimbursing amounts deducted pursuant to the foregoing clauses (c),
(d) and (e). Also, Capital One Bank and Capital One, F.S.B. have received an
adjustment to the Sellers' Interest on the date hereof.

                  Subject to the terms and conditions of the Agreement, the
Sellers may from time to time direct the Trustee, on behalf of the Trust, to
issue one or more new Series of Investor Certificates, which will represent
fractional undivided interests in certain of the Trust Assets.

                  On each Payment Date, the Paying Agent shall distribute to
each Class B Certificateholder of record on the last day of the preceding
calendar month (each, a "Record Date") such Class B Certificateholder's pro rata
share of such amounts (including amounts on deposit in the Collection Account
and the Principal Funding Account) as are payable to the Class B
Certificateholders pursuant to the Agreement and the Series Supplement.
Distributions with respect to this Class B Certificate will be made by check
mailed to the address of the Class B

                                     A-2-6

<PAGE>

Certificateholder of record appearing in the Certificate Register without the
presentation or surrender of this Class B Certificate or the making of any
notation thereon (except for the final distribution in respect of this Class B
Certificate) except that with respect to Class B Certificates registered in the
name of Cede & Co., the nominee for The Depository Trust Company, distributions
will be made in the form of immediately available funds. Final payment of this
Class B Certificate will be made only upon presentation and surrender of this
Class B Certificate at the office or agency specified in the notice of final
distribution delivered by the Trustee to the Class B Certificateholders in
accordance with the Agreement and the Series Supplement.

                  On any day occurring on or after the day on which the Invested
Amount is reduced to 5% or less of the Initial Invested Amount, a Seller (so
long as such Seller is the Servicer or an Affiliate thereof) has the option to
repurchase the Certificateholders' Interest in the Trust. The repurchase price
will be equal to (a) if such day is a Distribution Date, the Reassignment Amount
for such Distribution Date or (b) if such day is not a Distribution Date, the
Reassignment Amount for the Distribution Date following such day. Following the
deposit of the Reassignment Amount in the Collection Account, the Class A
Certificateholders, the Class B Certificateholders and the Collateral Interest
Holder will not have any interest in the Receivables and the Class B
Certificates will represent only the right to receive such Reassignment Amount.

                  This Class B Certificate does not represent an obligation of,
or an interest in, the Sellers, the Servicer or any affiliate of any of them and
is not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other governmental agency or instrumentality. This Class B Certificate is
limited in right of payment to certain Collections with respect to the
Receivables (and certain other amounts), all as more specifically set forth
hereinabove and in the Agreement and the Series Supplement.

                  The Agreement or any Supplement may, subject to certain
conditions, be amended by the Sellers, the Servicer and the Trustee without
Certificateholder consent. The Trustee may, but shall not be obligated to, enter
into any such amendment which affects the Trustee's rights, duties or immunities
under the Agreement or otherwise.

                  The Agreement or any Supplement may also be amended from time
to time by the Servicer, the Sellers and the Trustee, with the consent of the
Holders of Investor Certificates evidencing not less than 662/3% of the
aggregate unpaid principal amount of the Investor Certificates of all adversely
affected Series, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Agreement or any Supplement
or of modifying in any manner the rights of the Investor Certificateholders;
provided, however, that no such amendment shall (i) reduce in any manner the
--------  -------
amount of or delay the timing of any distributions to be made to Investor
Certificateholders or deposits of amounts to be so distributed or the amount
available under any Series Enhancement without the consent of each affected
Investor Certificateholder, (ii) change the definition of or the manner of
calculating the interest of any Investor Certificateholder without the consent
of each affected Investor Certificateholder, (iii) reduce the aforesaid
percentage required to consent to any such amendment without the consent of each
Investor Certificateholder or (iv) adversely affect the rating of any Series or
Class by each Rating Agency without the consent of the Holders of Investor
Certificates of such Series or Class evidencing not less than 662/3% of the
aggregate unpaid principal amount of the Investor Certificates of such Series or
Class. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's rights, duties or immunities under the
Agreement or otherwise.

                                     A-2-7

<PAGE>
                  The Class B Certificates are issuable in minimum denominations
of $1,000 and integral multiples of $1,000. The transfer of this Class B
Certificate shall be registered in the Certificate Register upon surrender of
this Class B Certificate for registration of transfer at any office or agency
maintained by the Transfer Agent and Registrar accompanied by a written
instrument of transfer, in a form satisfactory to the Trustee or the Transfer
Agent and Registrar, duly executed by the Class B Certificateholder or such
Class B Certificateholder's attorney, and duly authorized in writing with such
signature guaranteed, and thereupon one or more new Class B Certificates of
authorized denominations and for the same aggregate fractional undivided
interest will be issued to the designated transferee or transferees.

                  As provided in the Agreement and subject to certain
limitations therein set forth, Class B Certificates are exchangeable for new
Class B Certificates evidencing like aggregate fractional undivided interests as
requested by the Class B Certificateholder surrendering such Class B
Certificates. No service charge may be imposed for any such exchange but the
Servicer or Transfer Agent and Registrar may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith.

                  The Servicer, the Trustee, the Paying Agent and the Transfer
Agent and Registrar and any agent of any of them, may treat the person in whose
name this Class B Certificate is registered as the owner hereof for all
purposes, and neither the Servicer nor the Trustee, the Paying Agent, the
Transfer Agent and Registrar, nor any agent of any of them, shall be affected by
notice to the contrary except in certain circumstances described in the
Agreement.

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

                                     A-2-8

<PAGE>
                                   ASSIGNMENT

Social Security or other identifying number of assignee ________________________

                  FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________________________________________________
                         (name and address of assignee)

the within certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer said
certificate on the books kept for registration thereof, with full power of
substitution in the premises.

Dated: _____________________

Signature Guaranteed:

_____________________*

_____________________

___________________________
(*) NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Certificate in every
particular, without alteration, enlargement or any change whatsoever.

                                     A-2-9

<PAGE>

                                                                       EXHIBIT C

                 FORM OF MONTHLY SERVICING OFFICER'S CERTIFICATE

                                CAPITAL ONE BANK

                            CAPITAL ONE MASTER TRUST
                                  SERIES 2001-7

                  The undersigned, a duly authorized representative of Capital
One Bank, as Servicer, pursuant to the Pooling and Servicing Agreement, dated as
of September 30, 1993, as amended and restated as of April 9, 2001 (as amended
and supplemented, the "Agreement"), as supplemented by the Series 2001-7
Supplement (as amended and supplemented, the "Series Supplement"), dated as of
October 18, 2001, each among Capital One Bank, Capital One, F.S.B., as a Seller,
and The Bank of New York, as Trustee, does hereby certify as follows:

                  1. Capitalized terms used in this Certificate have their
         respective meanings as set forth in the Agreement or Series Supplement,
         as applicable.

                  2. Capital One Bank is, as of the date hereof, the Servicer
         under the Agreement.

                  3. The undersigned is a Servicing Officer.

                  4. This Certificate relates to the Distribution Date occurring
         on _______.

                  5. As of the date hereof, to the best knowledge of the
         undersigned, the Servicer has performed in all material respects all
         its obligations under the Agreement through the Monthly Period
         preceding such Distribution Date [or, if there has been a default in
         the performance of any such obligation, set forth in detail the (i)
         nature of such default, (ii) the action taken by the Sellers and
         Servicer, if any, to remedy such default and (iii) the current status
         of each such default; if applicable, insert "None"].

                  6. As of the date hereof, to the best knowledge of the
         undersigned, no Pay Out Event occurred on or prior to such Distribution
         Date.

                  7. As of the date hereof, to the best knowledge of the
         undersigned, no Lien has been placed on any of the Receivables other
         than pursuant to the Agreement [or, if there is a Lien, such Lien
         consists of ________].

<PAGE>
                  IN WITNESS WHEREOF, the undersigned has duly executed and
delivered this Certificate this ______ day of __________, 20__.

                                                     CAPITAL ONE BANK,
                                                              as Servicer

                                                     By:________________________
                                                          Name:
                                                          Title:

                                      C-2

<PAGE>

                                                                       EXHIBIT D
                                                                       ---------

                            FORM OF INVESTMENT LETTER

                                     [Date]

         Re: Capital One Master Trust;
             Purchases of Series 2001-7 Collateral Interest
             ----------------------------------------------

Ladies and Gentlemen:

                  This letter (the "Investment Letter") is delivered by the
undersigned (the "Purchaser") pursuant to Section 10.07 of the Series 2001-7
Supplement, dated as of October 18, 2001 (the "Series Supplement") to the
Pooling and Servicing Agreement, dated as of September 30, 1993, as amended and
restated as of April 9, 2001 (as amended and supplemented, the "Agreement"),
each among The Bank of New York, as Trustee, Capital One, F.S.B., as Seller, and
Capital One Bank, as Seller and Servicer. Capitalized terms used herein without
definition shall have the meanings set forth in the Agreement. The Purchaser
represents to and agrees with the Seller as follows:

                  (a) The Purchaser has such knowledge and experience in
                         financial and business matters as to be capable of
                         evaluating the merits and risks of its investment in
                         the Collateral Interest and is able to bear the
                         economic risk of such investment.

                  (b) The Purchaser is an "accredited investor," as defined
                         in Rule 501, promulgated by the Securities and Exchange
                         Commission (the "Commission") under the Securities Act
                         of 1933, as amended (the "Securities Act"), or is a
                         sophisticated institutional investor. The Purchaser
                         understands that the offering and sale of the
                         Collateral Interest has not been and will not be
                         registered under the Securities Act and has not and
                         will not be registered or qualified under any
                         applicable "Blue Sky" law, and that the offering and
                         sale of the Collateral Interest has not been reviewed
                         by, passed on or submitted to any federal or state
                         agency or commission, securities exchange or other
                         regulatory body.

                  (c) The Purchaser is acquiring an interest in the Collateral
                         Interest without a view to any distribution, resale or
                         other transfer thereof except, with respect to any
                         Collateral Interest or any interest or participation
                         therein, as contemplated in the following sentence. The
                         Purchaser will not resell or otherwise transfer any
                         interest or participation in the Collateral Interest,
                         except in accordance with Section 10.07 of the Series
                         Supplement and (i) in a transaction exempt from the
                         registration requirements of the Securities Act and
                         applicable state securities or "blue sky" laws; (ii) to
                         a Seller or any affiliate of a Seller; or (iii) to a
                         person who the Purchaser reasonably believes is a
                         qualified institutional buyer (within the meaning
                         thereof in Rule 144A under the Securities Act) that is
                         aware that the resale or other transfer is being made
                         in reliance upon

<PAGE>

                         Rule 144A. In connection therewith, the Purchaser
                         hereby agrees that it will not resell or otherwise
                         transfer the Collateral Interest or any interest
                         therein unless the purchaser thereof provides to the
                         addressee hereof a letter substantially in the form
                         hereof.

                  (d) No portion of the Collateral Interest or any interest
                         therein may be Transferred, and each Assignee will
                         certify that it is not, (a) an "employee benefit plan"
                         (as defined in Section 3(3) of ERISA), including
                         governmental plans and church plans, (b) any "plan" (as
                         defined in Section 4975(e)(1) of the Code) including
                         individual retirement accounts and Keogh plans, or (c)
                         any other entity whose underlying assets include "plan
                         assets" (within the meaning of Department of Labor
                         Regulation Section 2510.3-101, 29 C.F.R.(S) 2510.3-101
                         or otherwise under ERISA) by reason of a plan's
                         investment in the entity, including, without
                         limitation, an insurance company general account.

                  (e) This Investment Letter has been duly executed and
                         delivered and constitutes the legal, valid and binding
                         obligation of the Purchaser, enforceable against the
                         Purchaser in accordance with its terms, except as such
                         enforceability may be limited by bankruptcy,
                         insolvency, reorganization, moratorium or similar laws
                         or equitable principles affecting the enforcement of
                         creditors' rights generally and general principles of
                         equity.

                                                 Very truly yours,

                                                 [NAME OF PURCHASER]

                                                 By: ___________________________
                                                     Name:
                                                     Title:
AGREED TO AS OF THE DATE FIRST ABOVE WRITTEN:

CAPITAL ONE BANK

By: _______________________
    Name:
    Title:

CAPITAL ONE, F.S.B.

By: _______________________
    Name:
    Title:

                                      D-2<PAGE>

                                                                     EXHIBIT 4.1

                                RIGHTS AGREEMENT

                                     between

                                 METASOLV, INC.

                                       and

                          MELLON INVESTOR SERVICES LLC

                                 as Rights Agent

                          Dated as of October 24, 2001

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                                TABLE OF CONTENTS

Section 1.   Certain Definitions............................................. 1
Section 2.   Appointment of Rights Agent.....................................10
Section 3.   Issue of Right Certificates.....................................10
Section 4.   Form of Right Certificates......................................12
Section 5.   Execution, Authentication and Delivery..........................15
Section 6.   Registration, Registration of Transfer and Exchange.............16
Section 7.   Mutilated, Destroyed, Lost and Stolen Right Certificates........17
Section 8.   Exercise of Rights; Purchase Price; Expiration Date of Rights...18
Section 9.   Cancellation and Destruction of Right Certificates..............21
Section 10.  Reservation and Availability of Shares..........................21
Section 11.  Record Date.....................................................22
Section 12.  Adjustment of Purchase Price, Number of Shares or Number of
                Rights.......................................................23
Section 13.  Certificate of Adjusted Purchase Price or Number of Shares......33
Section 14.  Consolidation, Merger or Sale or Transfer of Assets or Earning
                Power........................................................33
Section 15.  Fractional Rights and Fractional Shares.........................35
Section 16.  Rights of Action................................................37
Section 17.  Agreement of Right Holders......................................38
Section 18.  Right Certificate Holder Not Deemed a Stockholder...............39
Section 19.  Concerning the Rights Agent.....................................40
Section 20.  Duties of Rights Agent..........................................41
Section 21.  Merger or Consolidation or Change of Name of Rights Agent.......44
Section 22.  Change of Rights Agent..........................................44
Section 23.  Issuance of New Right Certificates..............................46

                                      -i-

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Section 24.  Redemption......................................................46
Section 25.  Mandatory Redemption and Exchange...............................47
Section 26.  Notice of Certain Events........................................49
Section 27.  Securities Laws Registrations...................................50
Section 28.  Notices.........................................................51
Section 29.  Supplements and Amendments......................................52
Section 30.  Successors......................................................53
Section 31.  Benefits of this Agreement......................................54
Section 32.  Severability....................................................54
Section 33.  Governing Law...................................................54
Section 34.  Counterparts....................................................54
Section 35.  Descriptive Headings............................................54
Section 36.  Board of Directors..............................................54

Exhibits
--------

Exhibit A    - Certificate of Designation of Series A
---------      Junior Participating Preferred Stock

Exhibit B    - Form of Right Certificate
---------

Exhibit C    - Summary of Rights to Purchase Preferred Shares
---------

                                      -ii-

<PAGE>

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

         This Rights Agreement (this "Agreement"), dated as of October 24, 2001,
is between MetaSolv, Inc., a Delaware corporation (the "Company"), and Mellon
Investor Services LLC, a New Jersey limited liability company, as Rights Agent.

         WHEREAS, the Board of Directors, having determined its actions to be in
the interests of the Company, has authorized the creation of Rights, has
authorized and directed the issuance to the holders of record of Common Shares
of the Company outstanding as of the Close of Business on November 5, 2001 (the
"Record Date"), of one Right with respect to each Common Share of the Company
outstanding on the Record Date, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date or the Final Expiration Date; and

         WHEREAS, the Board of Directors has authorized and directed that the
terms and conditions under which the Rights are to be distributed, including
without limitation those affecting the exercise thereof, the securities or other
property to be acquired thereby and the purchase price to be paid therefor,
shall be set forth in a written agreement between the Company and a rights
agent.

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

         Section 1.     Certain Definitions.  For purposes of this Agreement,
                        -------------------
the following terms shall have the meanings indicated:

                  (a) "Acquiring Person" shall mean any Person who or which,
         together with all Affiliates and Associates of such Person, shall be
         the Beneficial Owner of 15% or more of the Voting Shares then
         outstanding, but shall not include the Company, any Subsidiary of the
         Company, any employee benefit plan of the Company or of any Subsidiary
         of the Company or any trustee of or fiduciary with respect to any such
         plan when acting in such capacity.

                                      -1-

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         Notwithstanding the foregoing, no Person shall become an "Acquiring
         Person" solely as the result of an acquisition of Voting Shares by the
         Company which, by reducing the number of shares outstanding, increases
         the proportionate number of shares beneficially owned by such Person to
         the amount of Voting Shares necessary for such person to become an
         Acquiring Person; provided, however, that, if a Person shall become the
         Beneficial Owner of the amount of Voting Shares necessary for such
         person to become an Acquiring Person by reason of share purchases by
         the Company and shall, after such share purchases by the Company and at
         a time when such Person is the Beneficial Owner of the amount of Voting
         Shares necessary for such person to become an Acquiring Person, become
         the Beneficial Owner of any additional Voting Shares, then such Person
         shall be deemed to be an "Acquiring Person." Notwithstanding the
         foregoing, if the Board of Directors determines in good faith that a
         Person who would otherwise be an "Acquiring Person," as defined
         pursuant to the foregoing provisions of this paragraph (a), has become
         such inadvertently, and such Person divests as promptly as practicable,
         but in any event within the time period directed by the Board of
         Directors, a sufficient number of Common Shares so that such Person
         would no longer be an "Acquiring Person," as defined pursuant to the
         foregoing provisions of this paragraph (a), then such Person shall not
         be deemed to be an "Acquiring Person" for any purposes of this
         Agreement. Nothing in this Section 1(a) shall affect the effect or
         application of Section 8(e).

                  (b) "Agreement" shall mean this Rights Agreement as the same
         may be hereafter amended from time to time.

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

                  (d) A Person shall be deemed the "Beneficial Owner" of and
         shall be deemed to "own beneficially" any securities which (without
         duplication):

                                      -2-

<PAGE>

                           (1) such Person or any of such Person's Affiliates or
                  Associates has the right to acquire (whether such right is
                  exercisable immediately or only after the passage of time,
                  compliance with regulatory requirements, the fulfillment of a
                  condition or otherwise) pursuant to any oral or written
                  agreement, arrangement or understanding (other than customary
                  agreements with and between underwriters and selling group
                  members (A) with respect to a bona fide public offering of
                  securities or (B) in connection with a placement of securities
                  pursuant to Rule 144A under the Securities Act), or upon the
                  exercise of conversion rights, exchange rights, rights (other
                  than these Rights), warrants or options, or otherwise; or the
                  right to vote pursuant to any agreement, arrangement or
                  understanding; provided, however, that a Person shall not be
                  deemed the Beneficial Owner of, or to beneficially own, (i)
                  securities tendered pursuant to a tender or exchange offer
                  made by or on behalf of such Person or any of such Person's
                  Affiliates or Associates until such tendered securities are
                  accepted for purchase or exchange, or (ii) securities issuable
                  upon exercise of Rights at any time prior to any Person
                  becoming an Acquiring Person;

                           (2) such Person or any of such Person's Affiliates or
                  Associates, directly or indirectly, has the right to vote or
                  dispose of or has "beneficial ownership" of (as determined
                  pursuant to Rule 13d-3 of the Exchange Act) or has a
                  "pecuniary interest" or an "indirect pecuniary interest" in
                  (as determined pursuant to Rule 16a-1(a)(2) of the Exchange
                  Act), in either case including pursuant to any agreement,
                  arrangement or understanding, whether or not in writing;
                  provided, however, that a Person shall not be deemed the
                  Beneficial Owner of, or to "beneficially own," any security
                  under this subparagraph (2) as a result of an agreement,
                  arrangement or understanding to vote such security (A) which
                  arises solely from a revocable proxy or consent given to such
                  Person in response to a public proxy or consent solicitation
                  made pursuant to,

                                      -3-

<PAGE>

                  and in accordance with, the applicable rules and regulations
                  of the Exchange Act and (B) is not also then reportable on
                  Schedule 13D under the Exchange Act (or any comparable or
                  successor report); or

                           (3) are beneficially owned, directly or indirectly,
                  by any other Person with which such Person or any of such
                  Person's Affiliates or Associates has any oral or written
                  agreement, arrangement or understanding (other than customary
                  agreements with and between underwriters and selling group
                  members (A) with respect to a bona fide public offering of
                  securities or (B) in connection with a placement of securities
                  pursuant to Rule 144A under the Securities Act) for the
                  purpose of acquiring, holding, voting (other than voting
                  pursuant to a revocable proxy as contemplated by the proviso
                  to subparagraph (2) of this paragraph) or disposing of any
                  securities of the Company.

         Notwithstanding anything in this definition to the contrary, the phrase
"then outstanding," when used with reference to a Person's Beneficial Ownership
of securities of the Company (or to the number of such securities "beneficially
owned"), shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially hereunder.

                  (e) "Board of Directors" means the Board of Directors of the
         Company.

                  (f) "Business Day" shall mean any day other than a Saturday,
         Sunday or a day on which banking institutions in the State of Texas are
         authorized or obligated by law or executive order to close.

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

                                      -4-

<PAGE>

                  (h) "Closing Price", with respect to any security, shall mean
         the last sale price, regular way, on a specific Trading Day or, in case
         no such sale takes place on such Trading Day, the average of the
         closing bid and asked prices, regular way, in either case as reported
         in the principal consolidated transaction reporting system with respect
         to securities listed or admitted to trading on the New York Stock
         Exchange or, if such security is not then listed or admitted to trading
         on the New York Stock Exchange, as reported in the principal
         consolidated transaction reporting system with respect to securities
         listed on the principal national securities exchange on which such
         security is listed or admitted to trading or, if such security is not
         then listed or admitted to trading on any national securities exchange,
         the last quoted price or, if not so quoted, the average of the high bid
         and low asked prices in the over-the-counter market, as reported by the
         National Association of Securities Dealers, Inc. Automated Quotations
         System or such other system then in use, or, if on any such Trading Day
         such security is not quoted by any such organization, the average of
         the closing bid and asked prices as furnished by a professional market
         maker making a market in such security selected by the Board of
         Directors. If such security is not publicly held or so listed or
         traded, "Closing Price" shall mean the fair value per unit of such
         security as determined in good faith by the Board of Directors, whose
         determination shall be described and the Closing Price set forth in a
         statement filed with the Rights Agent.

                  (i) "Common Shares" when used with reference to the Company
         shall mean shares of capital stock of the Company which have no
         preference over any other class of stock with respect to dividends or
         assets, which are not redeemable at the option of the Company and with
         respect to which no sinking, purchase or similar fund is provided and
         shall initially mean the shares of Common Stock, par value $.005 per
         share, of the Company. "Common Shares" when used with reference to any
         Person other than the Company shall, if used with reference to a
         corporation, mean the capital stock (or equity interest) with the

                                      -5-

<PAGE>

         greatest voting power of such other Person or, if such other Person is
         a Subsidiary of another Person, the Person or Persons which ultimately
         control such first-mentioned Person and, if used with reference to any
         other Person, mean the equity interest in such Person (or, if the net
         worth determined in accordance with generally accepted accounting
         principles of another Person (other than an individual) which controls
         such first-mentioned Person is greater than such first-mentioned
         Person, then such other Person) with the greatest voting power or
         managerial power with respect to the business and affairs of such
         Person. Common Shares used without reference to the Company or any
         other Person shall be deemed to refer to Common Shares of the Company
         unless the context otherwise requires.

                  (j) "Company" shall mean MetaSolv, Inc., a Delaware
         corporation, and its successors.

                  (k) "Company Order" means a written request or order signed in
         the name of the Company by its Chairman of the Board, its President,
         its Chief Executive Officer or a Vice President, and by its Chief
         Financial Officer, its Treasurer, an Assistant Treasurer, its Secretary
         or an Assistant Secretary, and delivered to the Rights Agent.

                  (l) "Corporate Trust Office" means the office of the Rights
         Agent designated in Section 28 of this Agreement.

                  (m) "Distribution Date" shall mean the Close of Business on
         the earlier of (1) the tenth Business Day after the Shares Acquisition
         Date or (2) the tenth Business Day (or such later date as may be
         determined by action of the Board of Directors prior to such time as
         any Person becomes an Acquiring Person) after the date of commencement
         by any Person (other than the Company, any Subsidiary of the Company,
         any employee benefit plan of the Company or of any Subsidiary of the
         Company, or any trustee of or fiduciary with respect to any such plan
         when acting in such capacity) of, or after the date of the first public
         announcement of, the intent of any Person (other than the Company, any
         Subsidiary of the

                                      -6-

<PAGE>

         Company, any employee benefit plan of the Company or of any Subsidiary
         of the Company, or any trustee of or fiduciary with respect to any such
         plan when acting in such capacity) to commence a tender or exchange
         offer, the consummation of which would result in any Person becoming an
         Acquiring Person; provided, however, that an occurrence described in
         clause (2) of this definition above shall not cause the occurrence of
         the Distribution Date if the Board of Directors shall, prior to the
         Close of Business on such tenth Business Day (or such later date as
         described in clause (2) above), determine that such tender or exchange
         offer is spurious, unless, thereafter, the Board of Directors shall
         make a contrary determination, in which event the Distribution Date
         shall occur on the later to occur of the Close of Business on such
         tenth Business Day (or the Close of Business on such later date as
         described in clause (2) above) or the Close of Business on the date of
         such latter determination.

                  (n) "Exchange Act" shall mean the Securities Exchange Act of
         1934 and any successor statute thereto.

                  (o) "Final Expiration Date" shall mean the Close of Business
         on November 4, 2011.

                  (p) "Person" shall mean any individual, firm, corporation,
         partnership, limited partnership, limited liability company, joint
         venture, association, trust, unincorporated organization, group or
         other entity, and shall include any successor (by merger or otherwise)
         of such entity.

                  (q) "Preferred Shares" shall mean shares of Series A Junior
         Participating Preferred Stock, par value $.01 per share, of the Company
         having the rights and preferences set forth in the form of Certificate
         of Designation of Series A Junior Participating Preferred Stock
         attached hereto as Exhibit A, and, to the extent that there is not a
         sufficient number of shares of Series A Junior Participating Preferred
         Shares outstanding to permit the full exercise of the Rights, any other
         authorized shares of preferred stock, par value $.01 per

                                       -7-

<PAGE>

         share, of the Company having rights and preferences substantially
         identical to such Series A Preferred Shares.

                  (r) "Purchase Price" shall mean the initial price at which the
         holder of a Right may, subject to the terms and conditions of this
         Agreement, purchase one one-thousandth (1/1000) of a Preferred Share
         (which initial price is set forth in Section 8(b) hereof), as such
         price shall be adjusted pursuant to the terms of this Agreement.

                  (s) "Record Date" shall have the meaning provided in the
         recitals to this Agreement.

                  (t) "Redemption Date" shall mean the time at which the Rights
         are redeemed pursuant to Section 24 herein or the time at which all of
         the Rights are mandatorily redeemed and exchanged pursuant to
         Section 25 hereof.

                  (u) "Redemption Price" shall have the meaning specified in
         Section 24(b) herein.

                  (v) "Right" shall mean one preferred share purchase right
         which initially represents the right of the registered holder thereof
         to purchase one one-thousandth (1/1000) of a Preferred Share upon the
         terms and subject to the conditions set forth herein.

                  (w) "Right Certificate" shall mean a certificate, in
         substantially the form of Exhibit B attached to this Agreement,
                                   ---------
         evidencing the Rights registered in the name of the holder thereof.

                  (x) "Rights Agent" shall mean Mellon Investor Services LLC and
         any successor thereto appointed in accordance with the terms hereof, in
         its capacity as agent for the Company and the holders of the Rights
         pursuant to this Agreement.

                  (y) "Rights Register" and "Rights Registrar" shall have the
         meanings specified in Section 6.

                  (z) "Securities Act" shall mean the Securities Act of 1933 and
         any successor statute thereto.

                                       -8-

<PAGE>

                  (aa) "Shares Acquisition Date" shall mean the first date of
         public announcement (which for purposes of this definition shall
         include without limitation a report filed pursuant to Section 13(d) or
         Section 16(a) of the Exchange Act) by the Company or an Acquiring
         Person that an Acquiring Person has become such.

                  (bb) "Subsidiary" of any Person shall mean any corporation or
         other entity of which a majority of the outstanding capital stock or
         other equity interests having ordinary voting power in the election of
         directors or similar officials is owned, directly or indirectly, by
         such Person.

                  (cc) "Summary of Rights" shall mean a Summary of Rights to
         Purchase Preferred Shares in substantially the form attached as
         Exhibit C to this Agreement.
         ---------

                  (dd) "Trading Day" shall mean a day on which the principal
         national securities exchange on which any of the Voting Shares are
         listed or admitted to trading is open for the transaction of business
         or, if none of the Voting Shares is listed or admitted to trading on
         any national stock exchange, a Business Day.

                  (ee) "Voting Shares" shall mean (1) the Common Shares of the
         Company and (2) any other shares of capital stock of the Company
         entitled to vote generally in the election of directors or entitled to
         vote together with the Common Shares in respect of any merger or
         consolidation of the Company, any sale of all or substantially all of
         the Company's assets or any liquidation, dissolution or winding up of
         the Company. Whenever any provision of this Agreement requires a
         determination of whether a number of Voting Shares comprising a
         specified percentage of such Voting Shares is, was or will be
         beneficially owned or has been voted, tendered, acquired, sold or
         otherwise disposed of or a determination of whether a Person has
         offered or proposed to acquire a number of Voting Shares comprising
         such specified percentage, the number of Voting Shares comprising such
         specified percentage of

                                      -9-

<PAGE>

         Voting Shares shall in every such case be deemed to be the number of
         Voting Shares comprising the specified percentage of all the Company's
         then outstanding Voting Shares.

                   (ff) "Wholly-Owned Subsidiary" of a Person shall mean any
         corporation or other entity all the outstanding capital stock or other
         equity interests of which having ordinary voting power in the election
         of directors or similar officials (other than directors' qualifying
         shares or similar interests) are owned, directly or indirectly, by such
         Person.

         Section 2. Appointment of Rights Agent. The Company hereby appoints the
                    ---------------------------
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable. The Rights Agent shall have no duty to supervise, and
shall in no event be liable for, the acts or omissions of any co-Rights Agents.

         Section 3. Issue of Right Certificates. (a) Until the Distribution
                    ---------------------------
Date, (1) outstanding Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) (A) with respect to Common Shares that are held
in certificated form, by the certificates for outstanding Common Shares of the
Company and not by separate Right Certificates and (B) with respect to Common
Shares that are held in book-entry form, by a notation in the records of the
Rights Agent (and the records of the Company's transfer agent if different from
the Rights Agent), and (2) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares of the
Company. As soon as practicable after the Distribution Date, the Company will
promptly notify the Rights Agent thereof, and prepare and execute, and the
Rights Agent will countersign and send, by first-class, insured, postage-prepaid
mail, to each record holder of Common Shares of the Company as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
stock transfer records of the Company, a Right Certificate evidencing one Right
for each Common Share so held, subject to adjustments as provided herein. From
and after the Distribution Date, the Rights will be evidenced solely by such
Right Certificates.

                                      -10-

<PAGE>

                  (b) On the Record Date, or as soon thereafter as practicable,
the Company will send a copy of a Summary of Rights, by first-class,
postage-prepaid mail, to each record holder of Common Shares of the Company as
of the Close of Business on the Record Date, at the address of such holder shown
on the stock transfer records of the Company. With respect to Common Shares
outstanding on the Record Date, the certificates evidencing such Common Shares
shall thereafter also evidence the outstanding Rights (as such Rights may be
amended or supplemented) distributed with respect thereto until the Distribution
Date and the registered holders of Common Shares shall also be the registered
holders of the associated Rights. Until the Distribution Date (or, if earlier,
the Redemption Date or Final Expiration Date), the surrender for registration of
transfer or exchange of (1) any certificate for Common Shares outstanding as of
the Close of Business on the Record Date, with or without a copy of the Summary
of Rights attached thereto, and (2) any Common Shares held in book-entry form,
shall also constitute the surrender for registration of transfer or exchange of
the outstanding Rights associated with the Common Shares represented thereby.

                  (c) The Company agrees that, at any time after the Record Date
and prior to the Distribution Date (or, if earlier, the Redemption Date or Final
Expiration Date) at which it issues any of its Common Shares upon original issue
or out of treasury, it will concurrently distribute to the holder of such Common
Shares one Right for each such Common Share, which Right shall be subject to the
terms and provisions of this Agreement and will evidence the right to purchase
the same number of one one-thousandth (1/1000) of a Preferred Share at the same
Purchase Price as the Rights then outstanding.

                  (d) Certificates for Common Shares issued after the Record
Date but prior to the earliest of the Distribution Date, the Redemption Date and
the Final Expiration Date, whether upon registration of transfer or exchange of
Common Shares outstanding on the Record Date or upon original issue or out of
treasury thereafter, shall also be deemed to be certificates for the Rights and
shall have impressed on, printed on, written on or otherwise affixed to them the
following legend or

                                      -11-

<PAGE>

such similar legend as the Company may deem appropriate (but which do not affect
the rights, duties or responsibilities of the Rights Agent) and as is not
inconsistent with the provisions of this Agreement:

                  This certificate also evidences and entitles the holder hereof
         to certain Rights as set forth in a Rights Agreement between MetaSolv,
         Inc. (the "Company") and Mellon Investor Services LLC, dated as of
         October 24, 2001, as it may be amended (the "Rights Agreement"), the
         terms of which are hereby incorporated herein by reference and a copy
         of which is on file at the principal executive offices of the Company.
         Under certain circumstances, as set forth in the Rights Agreement, such
         Rights will be evidenced by separate certificates and will no longer be
         evidenced by this certificate. The Company will mail to the holder of
         this certificate a copy of the Rights Agreement without charge after
         receipt of a written request therefor. As described in the Rights
         Agreement, Rights issued to or acquired by any Acquiring Person or any
         Affiliate or Associate thereof (each as defined in the Rights
         Agreement), whether currently held by or on behalf of such Person or by
         any subsequent holder, shall, under certain circumstances, become null
         and void.

With respect to certificates containing the foregoing legend, until the earlier
of the Distribution Date or the Final Expiration Date, outstanding Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender of any such certificate
for registration of transfer or exchange of the Common Shares evidenced thereby
shall also constitute surrender for registration of transfer or exchange of the
outstanding Rights (as such Rights may be amended or supplemented) associated
with the Common Shares represented thereby. The failure to print the foregoing
legend on any certificate or any other defect therein shall not affect in any
manner whatsoever the application or interpretation of the provisions of Section
8(e) hereof.

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

         Section 4. Form of Right Certificates. (a) The form of Right
                    --------------------------
Certificates (and the forms of election to purchase Preferred Shares (or other
securities) and of assignment to be printed on the reverse thereof) shall in
form and substance be substantially the same as Exhibit B hereto and may
                                                ---------

                                      -12-

<PAGE>

have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate (but which do
not affect the rights, duties or responsibilities of the Rights Agent) and as
are not inconsistent with the provisions of this Agreement, as may be required
to comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed or as may be necessary to conform to usage.
Subject to the provisions of Section 23 hereof, the Right Certificates, whenever
issued, shall be dated as of the date of authentication thereof, but, regardless
of any adjustments of the Purchase Price or the number of Preferred Shares (or
other securities) as to which a Right is exercisable (whether pursuant to this
Agreement or any future amendments or supplements to this Agreement), or both,
occurring after the Record Date and prior to the date of such authentication,
such Right Certificates may, on their face, without invalidating or otherwise
affecting any such adjustment, expressly entitle the holders thereof to purchase
such number of Preferred Shares at the Purchase Price per one one-thousandth
(1/1000) of a Preferred Share as to which a Right would be exercisable if the
Distribution Date were the Record Date; no adjustment of the Purchase Price or
the number of Preferred Shares (or other securities) as to which a Right is
exercisable, or both, effected subsequent to the date of authentication of any
Right Certificate shall be invalidated or otherwise affected by the fact that
such adjustment is not expressly reflected on the face or in the provisions of
such Right Certificate.

         (b) Pending the preparation of definitive Right Certificates, the
Company may execute, and upon Company Order the Rights Agent shall authenticate
and send, by first-class, insured, postage-prepaid mail, to each record holder
of Common Shares of the Company as of the Close of Business on the Distribution
Date, temporary Right Certificates which are printed, lithographed, typewritten,
mimeographed or otherwise produced substantially of the tenor of the definitive
Right Certificates in lieu of which they are issued and with such appropriate
insertions, omissions,

                                      -13-

<PAGE>

substitutions and other variations as the officers executing such Right
Certificates may determine, as evidenced by their execution of such Right
Certificates.

         (c) If temporary Right Certificates are issued, the Company will cause
definitive Right Certificates to be prepared without unreasonable delay. After
the preparation of definitive Right Certificates, the temporary Right
Certificates shall be exchangeable for definitive Right Certificates, upon
surrender of the temporary Right Certificates at the Corporate Trust Office of
the Rights Agent, without charge to the holder. Upon surrender for cancellation
of any one or more temporary Right Certificates, the Company shall execute and
the Rights Agent shall authenticate and deliver in exchange therefor one or more
definitive Right Certificates, evidencing a like number of Rights. Until so
exchanged, the temporary Right Certificates shall in all respects be entitled to
the same benefits under this Agreement as definitive Right Certificates.

         (d) Any Right Certificate issued pursuant to Section 3(a) or Section 23
hereof that represents Rights beneficially owned by (1) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (2) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (3) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors has determined is part of
a plan, arrangement or understanding which has as a primary purpose or effect
avoidance of Section 8(e) hereof, and any Right Certificate issued pursuant to
Section 6 or Section 7 hereof upon transfer, exchange, replacement or adjustment
of any other Right Certificate referred to in this sentence, shall contain (to
the extent feasible and to the extent the Rights Agent has been notified
thereof) the following legend:

                                      -14-

<PAGE>

                  The Rights represented by this Right Certificate are or were
                  beneficially owned by a Person who was or became an Acquiring
                  Person or an Affiliate or Associate of an Acquiring Person (as
                  such terms are defined in the Rights Agreement). Accordingly,
                  this Right Certificate and the Rights represented hereby may
                  become null and void in the circumstances specified in Section
                  8(e) of such Agreement.

         Section 5. Execution, Authentication and Delivery. (a) The Right
                    --------------------------------------
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President, its Chief Executive Officer or one of its Vice Presidents,
under its corporate seal reproduced thereon attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the Right
Certificates may be manual or facsimile.

         (b) Right Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Right
Certificates or did not hold such offices at the date of authentication of such
Right Certificates. At any time and from time to time after the execution and
delivery of this Agreement and prior to the Distribution Date, the Company may
deliver Right Certificates executed by the Company to the Rights Agent for
authentication, together with a Company Order for the authentication and
delivery of such Right Certificates; and the Rights Agent in accordance with
such Company Order shall authenticate and deliver such Right Certificates as
provided in this Agreement and not otherwise.

         (c) No Right Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on such
Right Certificate a certificate of authentication substantially in the form
provided for herein executed by the Rights Agent by manual signature, and such
certificate upon any Right Certificate shall be conclusive evidence, and the
only evidence, that such Right Certificate has been duly authenticated and
delivered hereunder.

                                      -15-

<PAGE>

         Section 6. Registration, Registration of Transfer and Exchange. From
                    ---------------------------------------------------
and after the Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date, the Company shall cause to be kept at the
Corporate Trust Office of the Rights Agent a rights register (a "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Right Certificates and of
transfers of Rights. The Rights Agent is hereby appointed the registrar and
transfer agent (the "Rights Registrar") for the purpose of registering Right
Certificates and transfers of Rights as herein provided and the Rights Agent
agrees to maintain such Rights Register in accordance with such regulations so
long as it continues to be designated as Rights Registrar hereunder.

         Upon surrender to the Rights Agent for registration of transfer of any
Right Certificate, the Company shall execute, and the Rights Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Right Certificates evidencing a like number of
Rights.

         At the option of the holder, Right Certificates may be exchanged for
other Right Certificates upon surrender of the Right Certificates to be
exchanged to the Rights Agent. Whenever any Right Certificates are so
surrendered for exchange, the Company shall execute, and the Rights Agent shall
authenticate and deliver, the Right Certificates which the holder making the
exchange is entitled to receive.

         All Right Certificates issued upon any registration of transfer or
exchange of Right Certificates shall be the valid obligations of the Company,
evidencing the same Rights, and entitled to the same benefits under this
Agreement, as the Right Certificates surrendered upon such registration of
transfer or exchange.

         Every Right Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Rights Agent)
be duly endorsed, or accompanied by a written

                                      -16-

<PAGE>

instrument of transfer in form satisfactory to the Company and the Rights
Registrar duly executed, by the holder thereof or his attorney duly authorized
in writing.

         No service charge shall be made for any registration of transfer or
exchange of Right Certificates, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Right Certificates,
other than exchanges not involving any transfer. The Rights Agent shall have no
duty or obligation to take any action under any Section of this Agreement which
requires the payment by a Rights holder of applicable taxes and governmental
charges unless and until the Rights Agent is satisfied that all such taxes
and/or charges have been paid.

         The provisions of this Section 6 shall be subject to the provisions of
Section 4(d), Section 8(e) and Section 15.

         Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates.
                    --------------------------------------------------------
(a) If any mutilated Right Certificate is surrendered to the Rights Agent, the
Company shall execute and the Rights Agent shall authenticate and deliver in
exchange therefor a new Right Certificate of like tenor, for a like number of
Rights and bearing a registration number not contemporaneously outstanding.

         (b) If there shall be delivered to the Company and the Rights Agent (1)
evidence to their satisfaction of the destruction, loss or theft of a Right
Certificate and (2) such security or indemnity, if any, as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Rights Agent that such Right Certificate
has been acquired by a bona fide purchaser, the Company shall execute and upon
its request the Rights Agent shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Right Certificate, a new Right Certificate of like
tenor, for a like number of Rights and bearing a registration number not
contemporaneously outstanding.

         (c) Upon the issuance of any new Right Certificate under this Section
7, the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may

                                      -17-

<PAGE>

be imposed in relation thereto and any other expenses (including the fees and
expenses of the Rights Agent) connected therewith.

         (d) Every new Right Certificate issued pursuant to this Section 7 in
lieu of any destroyed, lost or stolen Right Certificate shall constitute an
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Right Certificate shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Right Certificates duly issued hereunder.

         (e) The provisions of this Section 7 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Right
Certificates.

         Section 8. Exercise of Rights; Purchase Price; Expiration Date of
                    ------------------------------------------------------
Rights. (a) Subject to the provisions of Section 8(e) hereof, the registered
------
holder of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at its Corporate Trust Office, together with payment of the Purchase Price
for each one one-thousandth (1/1000) of a Preferred Share (or other securities)
as to which the Rights are exercised, at or prior to the earliest of (1) the
Close of Business on the Final Expiration Date, (2) the time of redemption on
the Redemption Date or (3) the time at which such Rights are mandatorily
redeemed and exchanged as provided in Section 25 hereof.

         (b) The Purchase Price for each one one-thousandth (1/1000) of a
Preferred Share pursuant to the exercise of a Right shall initially be $45.00,
shall be subject to adjustment from time to time as provided in Sections 12 and
14 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.

                                      -18-

<PAGE>

         (c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the securities to be purchased and an amount
equal to any applicable tax or charge required to be paid by the holder of such
Right Certificate in accordance with Section 10 in cash, or by certified check
or cashier's check payable to the order of the Company, the Rights Agent shall
thereupon promptly (1) (A) requisition from any transfer agent of the Preferred
Shares (or other securities) certificates for such number of one one-thousandths
of a Preferred Share (or other securities) as are to be purchased and registered
in such name or names as may be designated by the registered holder of such
Right Certificate or, if appropriate, in the name of a depositary agent or its
nominee, and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) if the Company shall have elected to
deposit the total number of Preferred Shares issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from such depositary agent
appointed by the Company, depositary receipts representing such number of one
one-thousandths of a Preferred Share as are to be purchased and registered in
such name or names as may be designated by such holder (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with such depositary agent), and the Company
hereby directs such depositary agent to comply with all such requests, (2) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 15 hereof, (3)
promptly after receipt of such certificates or depositary receipts registered in
such name or names as may be designated by such holder, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate and (4) when appropriate, after receipt, promptly deliver such cash
to or upon the order of such holder. In the event that the Company is obligated
to issue other securities (including Common Shares) of the Company, pay cash
and/or distribute other property pursuant to Section 12(a) hereof, the Company
will make all arrangements necessary so that

                                      -19-

<PAGE>

other securities, cash and/or other property are available for distribution by
the Rights Agent, if and when necessary to comply with this Agreement.

         (d) If the registered holder of the Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equal to the Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Sections 7 and 15 hereof.

         (e) Notwithstanding anything in this Agreement to the contrary, if any
Person shall become an Acquiring Person, thereafter any Rights beneficially
owned by (1) such Acquiring Person or an Associate or Affiliate of such
Acquiring Person, (2) a transferee of such Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (3) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which at least a majority of
the Board of Directors has determined is part of a plan or an agreement,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 8(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall notify the Rights Agent when this Section 8(e)
applies and shall use all reasonable efforts to insure that the provisions of
this Section 8(e) and Section 4(d) hereof are complied with, but neither the
Company nor the Rights Agent shall have any liability to any holder of Right
Certificates or other Person as a result of its failure to make any
determinations with respect to any Acquiring Person or its Affiliates,
Associates or transferees hereunder.

                                      -20-

<PAGE>

         Section 9. Cancellation and Destruction of Right Certificates. All
                    --------------------------------------------------
Right Certificates surrendered for the purpose of exercise, transfer, split up
or exchange shall, if surrendered to the Company or to any of its other agents,
be delivered to the Rights Agent for such purpose and for cancellation or, if
surrendered to the Rights Agent for such purpose, shall be canceled by it. No
Right Certificates shall be authenticated in lieu of or in exchange for any
Right Certificates canceled as provided in this Section 9 except as expressly
permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, pursuant to a Company
Order, destroy such canceled Right Certificates and in such case shall deliver a
certificate of destruction thereof to the Company.

         Section 10. Reservation and Availability of Shares. (a) The Company
                     --------------------------------------
covenants and agrees that it will cause to be reserved and kept available out of
its authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights.

         (b) The Company further covenants and agrees that it will, from and
after the Distribution Date, cause to be reserved and kept available out of its
authorized and unissued Common Shares or any Common Shares held in its treasury,
the number of Common Shares of the Company that will be sufficient to permit the
exercise in full of all outstanding Rights if adjusted pursuant to Section
12(a)(2).

         (c) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares or Common Shares of the
Company issued upon exercise of Rights shall (subject to payment of the Purchase
Price) at the time of delivery of the certificates representing any such
Preferred Shares or Common Shares be duly authorized, validly issued, fully paid
and nonassessable. The Company further covenants and agrees that it will pay

                                      -21-

<PAGE>

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

         (d) So long as the Common Shares issuable and deliverable upon the
exercise of the Rights may be listed on any national securities exchange, the
Company shall use its best efforts to promptly cause, from and after such time
as the Rights become exercisable, all Common Shares and other securities
reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.

         Section 11. Record Date. Each Person in whose name any certificate for
                     -----------
Preferred Shares or Common Shares of the Company is issued upon the exercise of,
or upon mandatory redemption and exchange of, Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Shares or Common
Shares represented thereby on, and such certificate shall be dated, (a) in the
case of the exercise of Rights, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable taxes and charges) was made, or (b) in the case of the
mandatory redemption and exchange of Rights, the date of such mandatory
redemption and exchange; provided, however, that, if the date of such surrender
and

                                      -22-

<PAGE>

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

         Section 12. Adjustment of Purchase Price, Number of Shares or Number of
                     -----------------------------------------------------------
Rights. The Purchase Price, the number and kind of shares of capital stock of
------
the Company covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 12.

                  (a) (1) If the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 12(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised thereafter shall be entitled to
receive, upon payment of the Purchase Price for the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to

                                      -23-

<PAGE>

such date, the aggregate number and kind of shares of capital stock which, if
such Right had been duly exercised immediately prior to such date (at a time
when the Preferred Shares transfer books of the Company were open), such holder
would have acquired upon such exercise and been entitled to receive upon payment
or effectuation of such dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. If an event
occurs which would require an adjustment under both Section 12(a)(1) and Section
12(a)(2), the adjustment provided for in this Section 12(a)(1) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 12(a)(2).

                  (2) Subject to action of the Board of Directors pursuant to
Section 25 of this Agreement, if any Person shall become an Acquiring Person,
each holder of a Right shall thereafter have a right to receive, upon exercise
thereof at a price equal to the then current Purchase Price multiplied by the
number of one one-thousandths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase Price by the number
of one one-thousandths of a Preferred Share for which a Right is then
exercisable and dividing that product by (y) 50% of the then current per share
market price of the Company's Common Shares (determined pursuant to Section
12(d)) on the date such Person became an Acquiring Person. If any Person shall
become an Acquiring Person and the Rights shall then be outstanding, the Company
shall not take any action which would eliminate or diminish the benefits
intended to be afforded by the Rights.

                  (3) In the event that the number of Common Shares that are
authorized by the Company's certificate of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights are
not sufficient to permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (2) of this Section 12(a), the Company shall: (A)

                                      -24-

<PAGE>

determine the excess of (1) the value of the Common Shares issuable upon the
exercise of a Right (the "Current Value"), over (2) the Purchase Price (such
excess, the "Spread"), and (B) with respect to each Right, make adequate
provision to substitute for such Common Shares, upon exercise of the Rights and
payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Shares or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred stock
which the Board of Directors of the Company has deemed to have the same value as
shares of Common Shares (such shares of preferred stock, "Common Share
Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board of Directors
of the Company based upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the Company; provided,
however, that if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty days following the first
occurrence of a Shares Acquisition Date, then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, Common Shares (to the extent available) and then,
if necessary, cash, which shares and/or cash have an aggregate value equal to
the Spread. If the Board of Directors of the Company shall determine in good
faith that it is likely that sufficient additional Common Shares could be
authorized for issuance upon exercise in full of the Rights, the thirty day
period set forth above may be extended to the extent necessary, but not more
than ninety days after the Shares Acquisition Date, in order that the Company
may seek stockholder approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution Period"). To the extent
that the Company determines that some action need be taken pursuant to the first
and/or second sentences of this Section 12(a)(3), the Company (x) shall provide,
subject to Section 8(e) hereof, that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek

                                      -25-

<PAGE>

any authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall promptly
notify the Rights Agent in writing of such suspension and shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect (with prompt written notice to the Rights Agent that such
suspension is no longer in effect). For purposes of this Section 12(a)(3), the
value of Common Shares shall be the current market price (as determined pursuant
to Section 12(d) hereof) per share of the Common Shares on the Shares
Acquisition Date and the value of any Common Share Equivalent shall be deemed to
have the same value as the Common Shares on such date.

                  (b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into or exchangeable for Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (together with any additional consideration required upon
conversion or exchange in the case of a security convertible into or
exchangeable for Preferred Shares or equivalent preferred shares), less than the
current per share market price of the Preferred Shares (determined pursuant to
Section 12(d) on such record date), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of Preferred Shares outstanding on such record date plus the
number of Preferred Shares which the aggregate offering price of the total
number of Preferred Shares and/or equivalent preferred shares so to be offered
(together with the aggregate of any additional consideration required upon
conversion or exchange in the case of any convertible or exchangeable securities
so to be offered) would

                                      -26-

<PAGE>

purchase at such current market price and the denominator of which shall be the
number of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into or for which the convertible or exchangeable
securities so to be offered are initially convertible or exchangeable);
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. In case all or
part of such subscription or purchase price may be paid in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors, whose determination shall be described in a statement
filed with the Rights Agent. Preferred Shares owned by or held for the account
of the Company or any of its Subsidiaries shall not be deemed outstanding for
the purpose of any computation described in this Section 12(b). The adjustment
described in this Section 12(b) shall be made successively whenever such a
record date is fixed; and, if none of such rights, options or warrants are so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.

                  (c) If the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 12(b)), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
then current per share market price of the Preferred Shares (determined pursuant
to Section 12(d)) on such record date, less the fair market value (as determined
in good faith by the Board of Directors, whose determination shall be described
in a statement filed with the Rights

                                      -27-

<PAGE>

Agent) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one
Preferred Share and the denominator of which shall be such current per share
market price of the Preferred Shares; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon the exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and, if such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.

                  (d) (1) For the purpose of any computation hereunder, the
"current per share market price" of the Common Shares on any date shall be
deemed to be the average of the daily Closing Prices per share of such Common
Shares for the 30 consecutive Trading Days immediately prior to, but not
including, such date; provided, however, that, if the issuer of such Common
Shares shall announce (A) a dividend or distribution on such Common Shares
payable in such Common Shares or securities convertible into such Common Shares
or (B) any subdivision, combination or reclassification of such Common Shares,
and the ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, shall occur during such
period of 30 Trading Days, then, and in each such case, the current per share
market price of the Common Shares shall be appropriately adjusted to reflect the
current market price per Common Share Equivalent.

                      (2) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be determined in
the same manner as set forth above for Common Shares in paragraph (1) of this
Section 12(d). If the current per share market price of the Preferred Shares
cannot be determined in the manner provided above, the "current per share market
price" of the Preferred Shares shall be conclusively deemed to be the current
per share market price of the Common Shares (determined in the manner provided
above) multiplied by one thousand.

                                      -28-

<PAGE>

                  (e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; provided, however, that any adjustments which by reason of
this Section 12(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 12 shall be made to the nearest cent or to the nearest ten-thousandth of
a Common Share or other share or one ten-millionth of a Preferred Share, as the
case may be, and references herein to the "number of one one-thousandths of a
Preferred Share" (or similar phrases) shall be construed to include fractions of
one one-thousandth of a Preferred Share. Notwithstanding the first sentence of
this Section 12(e), any adjustment required by this Section 12 shall be made no
later than the earlier of (1) three years from the date of the transaction which
requires such adjustment or (2) the thirtieth day preceding the Final Expiration
Date.

                  (f) If as a result of an adjustment made pursuant to Section
12(a), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the shares
contained in this Section 12, and the provisions of this Agreement, including
without limitation Sections 8, 10, 11 and 14, with respect to the Preferred
Shares shall apply on like terms to any such other shares.

                  (g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall, whether or not the
Right Certificate evidencing such Rights reflects such adjusted Purchase Price,
evidence the right to purchase, at the adjusted Purchase Price, the number of
one one-thousandths of a Preferred Share purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.

                  (h) Unless the Company shall have exercised its election as
provided in Section 12(i), upon each adjustment of the Purchase Price pursuant
to Section 12(b) or 12(c), each Right

                                      -29-

<PAGE>

outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price per one
one-thousandth of a Preferred Share, that number of one one-thousandths of a
Preferred Share obtained by (1) multiplying (x) the number of one-thousandths of
a share covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price and (2) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.

                  (i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights outstanding in
lieu of any adjustment in the number of one one-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each Right outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment of the Purchase Price. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made, and shall
promptly give the Rights Agent a copy of such announcement. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. Until such record date, however, any
adjustment in the number of one one-thousandths of a Preferred Share for which a
Right shall be exercisable made as required by this Agreement shall remain in
effect. If Right Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 12(i), the Company shall, as promptly
as practicable, cause to be distributed to holders of record of

                                      -30-

<PAGE>

Right Certificates on such record date Right Certificates evidencing, subject to
Section 15 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and authenticated in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.

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

                  (k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-thousandth of the amount of
consideration per Preferred Share determined by the Board of Directors to be
capital, or below one one-thousandth of the par value, if any, per Preferred
Share issuable upon exercise of the Rights, the Company agrees to take such
corporate action as is within its power, including without limitation
appropriate action by its Board of Directors, and which is, in the opinion of
its counsel, necessary in order that the Company may validly and legally issue
fully paid and nonassessable one one-thousandths of Preferred Shares at such
adjusted Purchase Price.

                  (l) In any case in which this Section 12 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer (and shall give prompt written
notice of such election to the Rights Agent) until the occurrence

                                      -31-

<PAGE>

of such event the issuance to the holder of any Right exercised after such
record date of the Preferred Shares or other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Preferred Shares
or other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder's right to receive such
additional securities upon the occurrence of the event requiring such
adjustment.

                  (m) Anything in this Section 12 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 12, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any combination or subdivision of the Preferred
Shares, issuance wholly for cash of any of the Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred Shares,
dividends on Preferred Shares payable in Preferred Shares or issuance of rights,
options or warrants referred to in subsection (b) of this Section 12, hereafter
effected by the Company to holders of its Preferred Shares shall not be taxable
to such stockholders.

                  (n) If at any time prior to the Distribution Date, the Company
shall (1) declare or pay any dividend on the Common Shares payable in Common
Shares or (2) effect a subdivision or combination of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (A) the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision or combination shall be adjusted by
multiplying such Purchase Price by a fraction, the numerator of which is the
number of Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding immediately
after such event, and (B) the number of Rights outstanding immediately after
such event shall be adjusted,

                                      -32-

<PAGE>

either through cancellation of outstanding Rights or through distribution of
additional Rights (but without duplication of the Company's obligations under
Section 3(c)), so that the certificate evidencing each Common Share outstanding
immediately after such event shall also evidence the associated Right to
purchase the same number of one one-thousandths of a Preferred Share as to which
a Right would have entitled the holder thereof to purchase immediately prior to
such event. The adjustment provided for in this Section 12(n) shall be made
successively whenever such a dividend is declared or paid or such a subdivision
or combination is effected. If an event occurs which would require an adjustment
under Section 12(a)(2) and this Section 12(n), the adjustments provided for in
this Section 12(n) shall be in addition and prior to any adjustment required
pursuant to Section 12(a)(2).

         Section 13. Certificate of Adjusted Purchase Price or Number of Shares.
                     ----------------------------------------------------------
Whenever an adjustment is made as provided in Section 12 or 14 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts and computations accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer agent
for the Common Shares of the Company and the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each holder of record of a
Right Certificate in accordance with Section 28 hereof. The Rights Agent shall
be fully protected in relying on any such certificate and on any adjustment
contained therein and shall have no duty with respect to and shall not be deemed
to have knowledge of such adjustment unless and until it shall have received
such certificate.

         Section 14. Consolidation, Merger or Sale or Transfer of Assets or
                     ------------------------------------------------------
Earning Power. If, directly or indirectly at any time after a Person has become
-------------
an Acquiring Person, (a) the Company shall consolidate with, or merge with and
into, any other Person, (b) any Person shall merge with and into the Company and
the Company shall be the continuing or surviving corporation of such merger and,
in connection with any such merger, all or part of the Common Shares of the
Company shall be changed into or exchanged for stock or other securities of any
other Person (or the Company) or cash

                                      -33-

<PAGE>

or any other property, or (c) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise transfer), in one or a
series of two or more transactions, assets of the Company or its Subsidiaries
which constitute more than 50% of the assets or which produce more than 50% of
the earning power of the Company and its Subsidiaries (taken as a whole) to any
Person or any Affiliate or Associate of such Person other than the Company or
one or more of its Wholly-Owned Subsidiaries, then, and in each such case, the
Company agrees that, as a condition to engaging in any such transaction, it will
make or cause to be made proper provision so that (1) each holder of a Right
(except as otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of such
other Person (including the Company as successor thereto or as the surviving
corporation) or, if such other Person is a Subsidiary of another Person, of the
Person or Persons (other than individuals) which ultimately control such
first-mentioned Person, as shall be equal to the result obtained by (x)
multiplying the then current Purchase Price by the number of one one-thousandths
of a Preferred Share for which a Right is then exercisable (without taking into
account any adjustment previously made pursuant to Section 12(a)(2)) and
dividing that product by (y) 50% of the current per share market price of the
Common Shares of such other Person (determined pursuant to Section 12(d) hereof)
on the date of consummation of such consolidation, merger, sale or transfer; (2)
the issuer of such Common Shares shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (3) the term
"Company", as used herein, shall thereafter be deemed to refer to such issuer;
and (4) such issuer shall take such steps (including without limitation the
reservation of a sufficient number of shares of its Common Shares in accordance
with Section 10) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the Common Shares thereafter deliverable upon
the exercise of the Rights. The Company shall not enter into any transaction of
the

                                      -34-

<PAGE>

kind referred to in this Section 14 if at the time of such transaction there are
outstanding any rights, warrants, instruments or securities or any agreement,
understanding or arrangements which, as a result of the consummation of such
transaction, would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company and
such issuer shall have executed and delivered to the Rights Agent an agreement
supplemental to this Agreement complying with the provisions of this Section 14.
The provisions of this Section 14 shall similarly apply to successive mergers or
consolidations or sales or other transfers. For the purposes of this Section 14,
50% of the assets of the Company and its Subsidiaries shall be determined by
reference to the book value of such assets as set forth in the most recent
consolidated balance sheet of the Company and its Subsidiaries (which need not
be audited) and 50% of the earning power of the Company and its Subsidiaries
shall be determined by reference to the mathematical average of the operating
income resulting from the operations of the Company and its Subsidiaries for the
two most recent full fiscal years as set forth in the consolidated and
consolidating financial statements of the Company and its Subsidiaries for such
years; provided, however, that, if the Company has, during such period, engaged
in one or more transactions to which purchase accounting is applicable, such
determination shall be made by reference to the pro forma operating income of
the Company and its Subsidiaries giving effect to such transactions as if they
had occurred at the commencement of such two-year period.

         Section 15. Fractional Rights and Fractional Shares. (a) The Company
                     ---------------------------------------
shall not be required to issue or distribute Right Certificates which evidence
fractional Rights. If, on the Distribution Date or thereafter, as a result of
any adjustment effected pursuant to Section 12(i) or otherwise hereunder, a
Person would otherwise be entitled to receive a Right Certificate evidencing a
fractional Right, the Company shall, in lieu thereof, pay or cause to be paid to
such Person an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purpose of

                                      -35-

<PAGE>

this Section 15(a), the current market value of a whole Right shall be the
Closing Price of the Rights for the Trading Day immediately prior to, but not
including, the date on which such fractional Rights would have been otherwise
issuable.

                  (b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one
one-thousandth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Shares. If, on the Distribution Date or thereafter, as a result of
any adjustment effected hereunder in the number of one one-thousandths of a
Preferred Share as to which a Right has become exercisable, a Person would
otherwise be entitled to receive a fractional Preferred Share that is not an
integral multiple of one one-thousandth of a Preferred Share, the Company shall,
in lieu thereof, pay to such Person at the time such Right is exercised as
herein provided an amount in cash equal to the same fraction (which is not an
integral multiple of one one-thousandth of a Preferred Share) of the current
market value of one Preferred Share. For purposes of this Section 15(b), the
current market value of a Preferred Share shall be the Closing Price of a
Preferred Share for the Trading Day immediately prior to, but not including, the
date of such exercise.

                  (c) Should any adjustment contemplated by Section 12(a)(2) or
any mandatory redemption and exchange contemplated by Section 25 occur, the
Company shall not be required to issue fractions of Common Shares upon exercise
of the Rights or to distribute certificates which evidence fractional Common
Shares. If after any such adjustment or mandatory redemption and

                                      -36-

<PAGE>

exchange, a Person would otherwise be entitled to receive a fractional Common
Share of the Company upon exercise of any Right Certificate or upon mandatory
redemption and exchange as contemplated by Section 25, the Company shall, in
lieu thereof, pay to such Person at the time such Right is exercised as herein
provided or upon such mandatory redemption and exchange an amount in cash equal
to the same fraction of the current market value of one Common Share. For
purposes of this Section 15(c), the current market value of a Common Share shall
be the Closing Price of a Common Share for the Trading Day immediately prior to
the date of such exercise or the date of such mandatory redemption and exchange.

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

                  (e) Whenever a payment for fractional Rights or fractional
shares is to be made by the Rights Agent, the Company shall (i) promptly prepare
and deliver to the Rights Agent a certificate setting forth in reasonable detail
the facts related to such payments and the prices and/or formulas utilized in
calculating such payments, and (ii) provide sufficient monies to the Rights
Agent in the form of fully collected funds to make such payments. The Rights
Agent shall be fully protected in relying upon such a certificate and shall have
no duty with respect to, and shall not be deemed to have knowledge of any
payment for fractional Rights or fractional shares under any Section of this
Agreement relating to the payment of fractional Rights or fractional shares
unless and until the Rights Agent shall have received such a certificate and
sufficient monies.

         Section 16. Rights of Action. (a) All rights of action in respect of
                     ----------------
the obligations and duties owed to the holders of the Rights under this
Agreement are vested in the registered holders of the Rights; and, without the
consent of the Rights Agent or of the holder of any other Rights, any registered
holder of any Rights may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding, judicial or
otherwise, against the Company to

                                      -37-

<PAGE>

enforce, or otherwise to act in respect of, such holder's right to exercise such
Rights in the manner provided in the Right Certificate evidencing such Rights
and in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.

                  (b) No right or remedy herein conferred upon or reserved to
the registered holder of Rights is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy, whether hereunder or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right or
remedy.

                  (c) No delay or omission of any registered holder of Rights to
exercise any right or remedy accruing hereunder shall impair any such right or
remedy or constitute a waiver of any default hereunder or an acquiescence
therein. Every right and remedy given hereunder or by law to such holders may be
exercised from time to time, and as often as may be deemed expedient, by such
holders.

         Section 17. Agreement of Right Holders. Every holder of a Right, by
                     --------------------------
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:

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

                  (b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the Corporate Trust Office of the Rights Agent duly endorsed or accompanied by a
proper instrument of transfer;

                                      -38-

<PAGE>

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

                  (d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree, judgment or ruling (whether
interlocutory or final) issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts to have any such order,
decree, judgment or ruling lifted or otherwise overturned as soon as possible.

         Section 18. Right Certificate Holder Not Deemed a Stockholder. No
                     -------------------------------------------------
holder, as such, of any Right (whether or not then evidenced by a Right
Certificate) shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of Preferred Shares, Common Shares of the Company or any
other securities of the Company which may at any time be issuable on the
exercise (or mandatory redemption and exchange) of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon any such holder, as such, any of the rights of a
stockholder of the Company, including without limitation any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, to give or withhold consent to any corporate action, to receive
notice of meetings or other actions affecting

                                      -39-

<PAGE>

stockholders (except as provided in Section 26) or to receive dividends or
subscription rights or otherwise.

         Section 19. Concerning the Rights Agent. (a) The Company agrees to pay
                     ---------------------------
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the preparation,
administration, delivery, execution and amendment of this Agreement and the
exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent (each as determined by a final, non-appealable
order, judgment, decree or ruling of a court of competent jurisdiction), for any
action taken, suffered or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including, without limitation,
the costs and expenses of defending against any claim of liability hereunder.
The costs and expenses incurred by the Rights Agent in enforcing this right of
indemnification shall be paid by the Company unless it is determined by order,
judgment, decree or ruling of a court of competent jurisdiction that the Rights
Agent is not entitled to indemnification due to the Rights Agent's gross
negligence, bad faith or willful misconduct. The provisions of this Section 19
and Section 20 shall survive the termination of this Agreement, the exercise or
expiration of the Rights and the resignation or removal of the Rights Agent.

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

                                      -40-

<PAGE>

to be executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of its counsel as set forth in
Section 20 hereof. The Rights Agent shall not be deemed to have knowledge of any
event of which it was supposed to receive notice thereof hereunder, and the
Rights Agent shall be fully protected and shall incur no liability for failing
to take any action in connection therewith, unless and until it has received
such notice in writing.

         Section 20. Duties of Rights Agent. The Rights Agent undertakes only
                     ----------------------
the duties and obligations expressly imposed by this Agreement (and no implied
duties and obligations) upon the following terms and conditions, by all of which
the Company and the holders of Right Certificates, by their acceptance thereof,
shall be bound:

                  (a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the advice or opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent as
to, and the Rights Agent shall incur no liability for or in respect of, any
action taken, suffered or omitted by it in accordance with such advice or
opinion.

                  (b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking, suffering or
omitting to take any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization and protection to the Rights Agent for
any action taken, suffered or omitted by it under the provisions of this
Agreement in reliance upon such certificate.

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

                                      -41-

<PAGE>

final, non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction). Anything in this Agreement to the contrary notwithstanding, in no
event shall the Rights Agent be liable for special, indirect, incidental,
punitive or consequential loss or damage of any kind whatsoever (including, but
not limited to, lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action. Any
liability of the Rights Agent under this Agreement shall be limited to $50,000.

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

                  (e) The Rights Agent shall not have any responsibility or have
any liability with respect to the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or
with respect to the validity or execution of any Right Certificate (except its
authentication thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights (including the Rights becoming void pursuant to Section 12(a)(2)
hereof), a transfer to an Acquiring Person or any adjustment in the terms of the
Rights (including the manner, method or amount thereof) provided for in Sections
3, 12, 14, 24 and 25, or the ascertainment of the existence of facts that would
require any such change or adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual notice that such change or
adjustment is required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares or Common Shares to be issued pursuant to this Agreement or any
Right Certificate or as to whether any Preferred Shares or Common Shares will,
when issued, be duly authorized, validly issued, fully paid and nonassessable.

                                      -42-

<PAGE>

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

                  (g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and such instructions shall be full authorization
and protection to the Rights Agent, and the Rights Agent shall not be liable for
any action taken, suffered or omitted to be taken by it in accordance with
instructions of any such officer.

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

                  (i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss of the Company resulting from any such
act, default, neglect or misconduct, absent gross negligence, bad faith or
willful misconduct (each as determined by a final, non-appealable order,
judgment, decree or ruling of a court of competent jurisdiction) in the
selection and continued employment thereof.

                                      -43-

<PAGE>

         Section 21. Merger or Consolidation or Change of Name of Rights Agent.
                     ---------------------------------------------------------
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the corporate trust or stock
transfer business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such Person would be eligible for appointment as a successor
Rights Agent under the provisions of Section 22. If at the time such successor
Rights Agent shall succeed to the agency created by this Agreement any of the
Right Certificates shall have been authenticated but not delivered, any such
successor Rights Agent may adopt the authentication of the predecessor Rights
Agent and deliver such Right Certificates so authenticated, and, if at that time
any of the Right Certificates shall not have been authenticated, any successor
Rights Agent may authenticate such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.

         If at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been authenticated but not
delivered, the Rights Agent may adopt the authentication under its prior name
and deliver Right Certificates so authenticated; and, in case at that time any
of the Right Certificates shall not have been authenticated, the Rights Agent
may authenticate such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.

         Section 22. Change of Rights Agent. The Rights Agent or any successor
                     ----------------------
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
for the Common Shares of the Company and the

                                      -44-

<PAGE>

Preferred Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent for the Common Shares of the Company and the Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the registered holder of a Right Certificate
(or, prior to the Distribution Date, of Common Shares), then any registered
holder of a Right Certificate (or, prior to the Distribution Date, of Common
Shares) may apply to any court of competent jurisdiction for the appointment of
a new Rights Agent. Any successor Rights Agent, whether appointed by the Company
or by such a court, shall be either (a) a Person organized and doing business
under the laws of the United States or of any state of the United States, which
is authorized under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million or (b) an Affiliate of a
Person described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent for the Common Shares of the Company and the Preferred
Shares, and mail a notice thereof in writing to the registered holders of the
Right

                                      -45-

<PAGE>

Certificates. Failure to give any notice provided for in this Section 22,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.

         Section 23. Issuance of New Right Certificates. Notwithstanding any of
                     ----------------------------------
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price per share and the number or kind or class of shares or
other securities purchasable under the Right Certificates made in accordance
with the provisions of this Agreement.

         Section 24. Redemption. (a) The Rights may be redeemed by action of the
                     ----------
Board of Directors pursuant to paragraph (b) of this Section 24, or may be
redeemed and exchanged by action of the Board of Directors pursuant to
Section 25 herein, but shall not be redeemed in any other manner.

                  (b) The Board of Directors may, at its option, at
any time prior to the time any Person becomes an Acquiring Person redeem all but
not less than all of the then outstanding Rights at a redemption price of one
thousandth of one cent ($0.00001) per Right then outstanding, appropriately
adjusted to reflect any adjustment in the number of Rights outstanding pursuant
to Section 12(i) herein (such redemption price being hereinafter referred to as
the "Redemption Price"). Any such redemption of the Rights by the Board of
Directors may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.

                  (c) The right of the registered holders of Right Certificates
to exercise the Rights evidenced thereby or, if the Distribution Date has not
theretofore occurred, the inchoate right of the registered holders of Rights to
exercise the same shall, without notice to such holders or to the Rights Agent
and without further action, terminate and be of no further force or effect
effective as of the time of adoption by the Board of Directors of a resolution
authorizing and directing the redemption

                                      -46-

<PAGE>

of the Rights pursuant to paragraph (b) of this Section 24 (or, alternatively,
if the Board of Directors qualified such action as to time, basis or conditions,
then at such time, on such basis and with such conditions as the Board of
Directors may have established pursuant to such paragraph (b)); thereafter, the
only right of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any redemption resolution
pursuant to paragraph (b) of this Section 24; provided, however, that the
failure to give, or any defect in, any such notice shall not affect the validity
of such redemption. Within 10 days after the adoption of any redemption
resolution pursuant to paragraph (b) of this Section 24, the Company shall give
prompt written notice of such redemption to the Rights Agent and to the holders
of the then outstanding Rights by mailing such notice to all such holders at
their last addresses as they appear upon the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the transfer agents
for the Common Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption shall state the method by which the payment of the
Redemption Price will be made.

                  (d) Neither the Company nor any of its Affiliates or
Associates may acquire (other than, in the case of such Affiliates and
Associates, in their capacity as holders of Common Shares of the Company),
redeem or purchase for value any Rights at any time in any manner other than as
specifically set forth in this Section 24 or in Section 25 herein, and other
than in connection with the purchase of Common Shares prior to the Distribution
Date.

         Section 25. Mandatory Redemption and Exchange. (a) The Board of
                     ---------------------------------
Directors may, at its option, at any time after any Person becomes an Acquiring
Person, issue Common Shares of the Company in mandatory redemption of, and in
exchange for, all or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become null and void pursuant to the
provisions of Section 8(e) hereof) at an exchange ratio of one Common Share for
each two Common Shares for which each Right is then exercisable pursuant to the
provisions of Section 12(a)(2) hereof.

                                      -47-

<PAGE>

Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such redemption and exchange at any time after any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any such Subsidiary, or any trustee of or fiduciary with respect to any
such plan when acting in such capacity), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Voting Shares then outstanding.

                  (b) Immediately upon the action of the Board of Directors
ordering the mandatory redemption and exchange of any Rights pursuant to
subsection (a) of this Section 25 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive such number of Common
Shares as is provided in paragraph (a) of this Section 25. The Company shall
promptly give public notice of any such redemption and exchange (with prompt
written notice thereof to the Rights Agent); provided, however, that the failure
to give, or any defect in, such notice shall not affect the validity of such
redemption and exchange. The Company promptly shall mail a notice of any such
redemption and exchange to all the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of mandatory redemption and
exchange shall state the method by which the redemption and exchange of the
Common Shares for Rights will be effected and, in the event of any partial
redemption and exchange, the number of Rights which will be redeemed and
exchanged. Any partial redemption and exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become null and void
pursuant to the provisions of Section 8(e) hereof) held by each holder of
Rights.

                  (c) In any mandatory redemption and exchange pursuant to this
Section 25, the Company, at its option, may substitute Preferred Shares (or
equivalent preferred shares, as such term

                                      -48-

<PAGE>

is defined in Section 12(b) hereof) for Common Shares, at the initial rate of
one one-thousandth of a Preferred Share (or equivalent preferred share) for each
Common Share, as appropriately adjusted.

                  (d) In any exchange pursuant to this Section 25, the Company,
at its option, may substitute for any Common Shares exchangeable for a Right (i)
Common Share Equivalents, (ii) cash, (iii) debt securities of the Company, (iv)
other assets, or (v) any combination of the foregoing, having an aggregate value
which the Board of Directors shall have determined in good faith to be equal to
the current market price of one Common Share (determined pursuant to Section
12(d) hereof) on the Trading Day immediately preceding the date of exchange
pursuant to this Section 25.

         Section 26. Notice of Certain Events. If the Company shall, on or after
                     ------------------------
the Distribution Date, propose (a) to pay any dividend or other distribution
payable in stock of any class of the Company or any Subsidiary of the Company to
the holders of its Preferred Shares, (b) to distribute to the holders of its
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, (c) to make any other distribution to the holders
of its Preferred Shares (other than a regular quarterly cash dividend), (d) to
effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (e) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power of the Company and its Subsidiaries
(determined as provided in Section 14 herein) to, any other Person (other than
the Company or a Wholly-Owned Subsidiary or Wholly-Owned Subsidiaries), (f) to
effect the liquidation, dissolution or winding up of the Company or (g) if the
Rights have theretofore become exercisable with respect to Common Shares
pursuant to Section 12(a)(2) herein, to declare or pay any dividend or other
distribution on the Common Shares payable in Common Shares or in stock of any
other class of the Company or any Subsidiary of the Company or to effect a
subdivision or combination of the Common Shares (by reclassification or
otherwise

                                      -49-

<PAGE>

than by payment of dividends in Common Shares) then, in each such case, the
Company shall give to the Rights Agent and to each holder of a Right
Certificate, in accordance with Section 28 hereof, notice of such proposed
action, which shall specify the date of authorization by the Board of Directors
of, and record date for, such stock dividend or such distribution of rights or
warrants or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, winding up, subdivision or combination
is to take place and the date of participation therein by the holders of the
Common Shares of the Company or the Preferred Shares, or both, if any such date
is to be fixed. Such notice shall be so given in the case of any action covered
by clause (a), (b) or (g) above at least 20 days prior to the record date for
determining holders of the Preferred Shares or of the Common Shares of the
Company, as the case may be, for purposes of such action, and in the case of any
such other action, at least 20 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Preferred Shares or Common Shares of the Company, as the case may be, whichever
shall be the earlier.

         If any of the events set forth in Section 12(a)(2) of this Agreement
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to the Rights Agent and to each holder of a Right Certificate,
in accordance with Section 28 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Section 12(a)(2) hereof.

         Section 27. Securities Laws Registrations. To the extent legally
                     -----------------------------
required, the Company agrees that it will prepare and file, as soon as
practicable following the Distribution Date, and will use its best efforts to
cause to be declared effective, a registration statement under the Securities
Act registering the offering, sale and delivery of the Preferred Shares issuable
upon exercise of the Rights, and the Company will, thereafter, use its best
efforts to maintain such registration statement (or another) continuously in
effect so long as any Rights remain outstanding and exercisable with respect to
Preferred Shares. Should the Rights become exercisable with respect to
securities of the

                                      -50-

<PAGE>

Company or one of its Subsidiaries other than Preferred Shares, the Company
agrees that it will, to the extent legally required, promptly thereafter prepare
and file, or cause to be prepared and filed, and will use its best efforts to
cause to be declared effective, a registration statement under such Act
registering the offering, sale and delivery of such other securities and the
Company will, thereafter, use its best efforts to maintain such registration
statement (or another) continuously in effect so long as any outstanding Rights
are exercisable with respect to such securities. The Company further agrees to
use its best efforts, from and after the Distribution Date, to qualify or
register for sale the Preferred Shares or other securities of the Company or one
of its Subsidiaries issuable upon exercise of the Rights under the securities or
"blue sky" laws (to the extent legally required thereunder) of all jurisdictions
in which registered holders of Right Certificates reside determined by reference
to the Rights Register. The Company may temporarily suspend, for a period of
time not to exceed ninety days after the Distribution Date, the exercisability
of the Rights in order to prepare and file such registration statement and
permit it to become effective. Upon any such suspension the Company shall
promptly notify the Rights Agent in writing of such suspension and shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect (with prompt written notice to the Rights
Agent that such suspension is no longer in effect). Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained, the exercise thereof shall not be permitted under
applicable law or a registration statement shall not have been declared
effective.

         Section 28. Notices. Notices or demands authorized by this Agreement to
                     -------
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:

                                      -51-

<PAGE>

                                    MetaSolv, Inc.
                                    5560 Tennyson Parkway
                                    Plano, Texas  75024
                                    Attention: President
                                    Facsimile No.: (972) 403-8989

Subject to the provisions of Section 22 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company)or by facsimile transmission as follows:

                                    Mellon Investor Services LLC
                                    ----------------------------
                                    600 N. Pearl Street
                                    Suite 1010
                                    Dallas, Texas 75201
                                    Attention: Relationship Manager
                                    Facsimile No.: (214) 922-4477

                                    with a copy to:

                                    Melon Investor Services
                                    85 Challenger Road
                                    Ridgefield Park, New Jersey 07660
                                    Attention: General Counsel
                                    Facsimile No.: (201) 296-4004

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the Rights
Register of the Company or, prior to the Distribution Date, on the stock
transfer records for the Common Shares of the Company.

         Section 29. Supplements and Amendments. The Company may from time to
                     --------------------------
time supplement or amend this Agreement (which supplement or amendment shall be
evidenced by a writing signed by the Company and the Rights Agent) without the
approval of any holders of any certificates representing Common Shares or any
holders of Right Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or

                                      -52-

<PAGE>

inconsistent with any other provisions herein, to make any other provisions in
regard to matters or questions arising hereunder, or to add, delete, modify or
otherwise amend any provision, which the Company may deem necessary or
desirable, including without limitation extending the Final Expiration Date;
provided that the period during which the Rights may be redeemed may not be
extended at a time when the Rights are not then redeemable; provided further,
however, that, from and after the Shares Acquisition Date, any such amendment or
supplement shall not materially and adversely affect the interests of the
holders of Right Certificates other than an Acquiring Person or transferees of
such Acquiring Person. Without limiting the foregoing, the Board of Directors
may by resolution adopted at any time prior to such time as any Person becomes
an Acquiring Person amend this Agreement to lower the threshold set forth in the
definition of Acquiring Person herein from 15% to a percentage not less than the
greater of any percentage greater than the largest percentage of the outstanding
Voting Shares then known to the Company to be beneficially owned by any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any trustee of or
fiduciary with respect to any such plan when acting in such capacity) and 10%,
if the Board of Directors shall determine that a Person whose interests are
adverse to the Company and its stockholders may seek to acquire control of the
Company. Upon the delivery of a certificate from an appropriate officer of the
Company, which states that the proposed supplement or amendment is in compliance
with the terms of this Section 29 and, provided such supplement or amendment
does not change or increase the Rights Agent's rights, duties, liabilities or
obligations hereunder, the Rights Agent shall execute such supplement or
amendment.

         Section 30. Successors. All the covenants and provisions of this
                     ----------
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

                                      -53-

<PAGE>

         Section 31. Benefits of this Agreement. Nothing in this Agreement shall
                     --------------------------
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights.

         Section 32. Severability. If any term, provision, covenant or
                     ------------
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

         Section 33. Governing Law. This Agreement and each Right Certificate
                     -------------
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State; provided, however, that all provisions
regarding the rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.

         Section 34. Counterparts. This Agreement may be executed in any number
                     ------------
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.

         Section 35. Descriptive Headings. Descriptive headings of the several
                     --------------------
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

         Section 36. Board of Directors. The Board of Directors shall have the
                     ------------------
exclusive power and authority to administer this Agreement and to exercise the
rights and powers specifically granted to the Board of Directors or to the
Company. All such actions, calculations, interpretations and

                                      -54-

<PAGE>

determinations that are done or made by the Board of Directors in good faith
shall be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights, as such, and all other Persons. The Rights Agent shall
always be entitled to assume that the Company's Board of Directors acted in good
faith and shall be fully protected and incur no liability in reliance thereon.

                                      -55-

<PAGE>

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

                                        METASOLV, INC.
Attest:

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

                                        MELLON INVESTOR SERVICES LLC,
                                        as Rights Agent

Attest:

By:                                     By:
   ----------------------------            ------------------------------------
    Authorized Officer                      Authorized Officer

<PAGE>

                                                                       EXHIBIT A

                                     FORM OF
                           CERTIFICATE OF DESIGNATION
                                       OF
                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       of

                                 METASOLV, INC.

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

         MetaSolv, Inc., a Delaware corporation (the "Corporation"), through the
undersigned duly authorized officer, in accordance with the provisions of
Sections 103 and 151 of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:

         That, the Board of Directors of the Corporation on October 11, 2001,
pursuant to the authority conferred upon the Board of Directors by the Amended
and Restated Certificate of Incorporation of the Corporation (the "Certificate
of Incorporation") and in accordance with the provisions of Section 151 of the
General Corporation Law of the State of Delaware, adopted the following
resolution creating a series of 200,000 shares of Preferred Stock, par value
$.01 per share:

         RESOLVED, that, pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation in accordance with the
provisions of Article IV of its Certificate of Incorporation, a series of the
Preferred Stock of the Corporation, par value $.01 per share, be, and it hereby
is, created and that the voting powers, designations, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof are as follows:

Series A Junior Participating Preferred Stock:
---------------------------------------------

         Section 1. Designation and Amount. The shares of such series shall be
                    ----------------------
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Junior Preferred Stock") and the number of shares constituting the Series A
Junior Preferred Stock shall be 200,000. Such number of shares may be increased
or decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series A Junior Preferred Stock to a number
less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Junior Preferred Stock.

         Section 2. Dividends and Distributions.
                    ---------------------------

         (a) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Series
A Junior Preferred Stock with respect to dividends, the holders of shares of
Series A Junior Preferred Stock, in preference to the holders of Common Stock,
par value $0.005 per share (the "Common Stock"), of the Corporation, and of any

                                       A-1

<PAGE>

other junior stock, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose, quarterly
dividends payable on the first business day of February, May, August and
November in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date") as provided in paragraphs (b) and (c) of this Section 2
in an amount per share (rounded to the nearest cent) equal to the greater of (1)
$1.00 in cash or (2) subject to the provision for adjustment hereinafter set
forth, 1,000 times the aggregate per share amount (payable in cash) of all cash
dividends, and 1,000 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Junior Preferred Stock. If the Corporation shall
at any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Junior Preferred Stock were
entitled immediately prior to such event under clause (2) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that was outstanding immediately prior to such event.

         (b) The Corporation shall declare a dividend or distribution on the
Series A Junior Preferred Stock as provided in paragraph (a) of this Section 2
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, if no
                                                           --------
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share payable in cash
on the Series A Junior Preferred Stock shall nevertheless accrue and be
cumulative on the outstanding shares of Series A Junior Preferred Stock as
provided in paragraph (c) of this Section 2.

         (c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Junior Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination
of holders of shares of Series A Junior Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Junior
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.

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

                                      A-2

<PAGE>

         (a) Subject to the provisions for adjustment hereinafter set forth,
each share of Series A Junior Preferred Stock shall entitle the holder thereof
to 1,000 votes on all matters submitted to a vote of the stockholders of the
Corporation. If the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the number of votes per share to which holders of shares of
Series A Junior Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
was outstanding immediately prior to such event.

         (b) Except as otherwise provided herein, in the Certificate of
Incorporation, as it may be amended from time to time, in any other Certificate
of Designation creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A Junior Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.

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

         Section 4. Certain Restrictions.
                    --------------------

         (a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Junior Preferred
Stock outstanding shall have been paid in full, or declared and a sum sufficient
for the payment therefor be set apart for payment and be in the process of
payment, the Corporation shall not:

                  (1) declare or pay dividends, or make any other distributions,
         on any shares of stock ranking junior (either as to dividends or upon
         liquidation, dissolution or winding up) to the Series A Junior
         Preferred Stock;

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

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

                                       A-3

<PAGE>

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

         (b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.

         Section 5. Reacquired Shares. Any shares of Series A Junior Preferred
                    -----------------
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock subject to the conditions and restrictions on issuance set forth
herein, in the Certificate of Incorporation, or in any other Certificate of
Designation creating a series of Preferred Stock or any similar stock or as
otherwise required by law.

         Section 6. Liquidation, Dissolution or Winding Up. Upon any
                    --------------------------------------
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (a) to the holders of shares of stock ranking junior (either as to
dividends or as to amounts payable upon liquidation, dissolution or winding up)
to the Series A Junior Preferred Stock unless, prior thereto, the holders of
Series A Junior Preferred Stock shall have received an amount per share (rounded
to the nearest cent) equal to the greater of (1) $1,000 per share, or (2) an
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 1,000 times the aggregate amount to be distributed per share to holders
of Common Stock, plus, in either case, an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, or (b) to the holders of stock ranking on a parity (either as to
dividends or as to amounts payable upon liquidation, dissolution or winding up)
with the Series A Junior Preferred Stock, except distributions made ratably on
the Series A Junior Preferred Stock and all such parity stock in proportion to
the total amounts to which the holders of all such Shares are entitled upon such
liquidation, dissolution or winding up. If the Corporation shall at any time
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the aggregate
amount to which holders of shares of Series A Junior Preferred Stock were
entitled immediately prior to such event under the proviso in clause (a)(2) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that was outstanding immediately prior to such
event.

         Section 7. Consolidation, Merger, etc. If the Corporation shall enter
                    --------------------------
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are

                                      A-4

<PAGE>

exchanged for or changed into other stock or securities, cash or any other
property, or any combination thereof, then in any such case each share of Series
A Junior Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount of stock,
securities, cash or any other property (payable in kind), or any combination
thereof, as the case may be, into which or for which each share of Common Stock
is changed or exchanged. If the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series A
Junior Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that was outstanding immediately prior to such
event.

         Section 8. Redemption. The shares of Series A Junior Preferred Stock
                    ----------
shall not be redeemable. So long as any shares of Series A Junior Preferred
Stock remain outstanding, the Corporation shall not purchase or otherwise
acquire for consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A Junior
Preferred Stock unless the Corporation shall substantially concurrently also
purchase or acquire for consideration a proportionate number of shares of Series
A Junior Preferred Stock.

         Section 9. Rank. The Series A Junior Preferred Stock shall rank, with
                    ----
respect to payment of dividends and the distribution of assets, junior to all
series of any other class of the Corporation's Preferred Stock; provided that
any class or series of the Corporation's Preferred Stock hereafter created may
expressly provide that such class or series shall be pari passu with the Series
A Preferred Stock with respect to the payment of dividends and distributions,
voting rights and/or distributions upon liquidation, dissolution or winding up
of the Corporation.

         Section 10. Amendment. The Certificate of Incorporation of the
                     ---------
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences, privileges or special rights of the Series A
Junior Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of Series A
Junior Preferred Stock, voting together as a single class.

                                      A-5

<PAGE>

         IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Corporation by its President, and attested by its Secretary, this
____ day of October, 2001.

                                        METASOLV, INC.

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

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

                                      A-6

<PAGE>

                                                                      EXHIBIT B
                            Form of Right Certificate

Certificate No. R-                                                  _____ Rights

                  NOT EXERCISABLE AFTER NOVEMBER 4, 2011 OR EARLIER IF
                  REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
                  REDEMPTION AT $.00001 PER RIGHT AND TO EXCHANGE ON THE TERMS
                  SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
                  CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS
                  (AS DEFINED IN SECTION 1 OF THE RIGHTS AGREEMENT) OR ANY
                  SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.

                                Right Certificate

                                 METASOLV, INC.

         This certifies that _____________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of October 24, 2001 (the "Rights
Agreement"), between METASOLV, INC., a Delaware corporation (the "Company"), and
Mellon Investor Services LLC (the "Rights Agent"), to purchase from the Company
at any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 p.m., Dallas, Texas time, on November 4, 2011, at
the office of the Rights Agent (or at the office of its successor as Rights
Agent), one one-thousandth (1/1000) of a fully paid non-assessable share of
Series A Junior Participating Preferred Stock, par value $0.01 per share (the
"Preferred Shares"), of the Company, at a purchase price of $45.00 per one
one-thousandth (1/1000) of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-thousandths of a Preferred Share which
may be purchased upon exercise hereof) set forth above, and the Purchase Price
set forth above, are the number and Purchase Price as of November 5, 2001, based
on the Preferred Shares as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of one one-thousandths of a
Preferred Share which may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and adjustment upon the
happening of certain events.

         This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the Corporate Trust Office of the Rights Agent.

                                      B-1

<PAGE>

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

         Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price of
$.00001 per Right or (ii) may be exchanged by the Company in whole or in part
for Preferred Shares or shares of the Company's common stock, par value $0.005
per share.

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

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

         This Right Certificate shall not be entitled to any benefit under the
Rights Agreement or be valid or obligatory for any purpose until it shall have
been authenticated by the Rights Agent.

                                      B-2

<PAGE>

         WITNESS the facsimile signatures of the proper officers of the Company
and its corporate seal.

Dated as of ___________________, ____.

ATTEST:                                 METASOLV, INC.

               [SEAL]
                                         By:
--------------------------------------      ----------------------------------
Name:                                    Name:
     ---------------------------------        --------------------------------
Title:                                   Title:
      --------------------------------         -------------------------------

Authentication:

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

MELLON INVESTOR SERVICES LLC,
as Rights Agent

By:
   -------------------------------------
         Authorized Signature

                                      B-3

<PAGE>

                   [Form of Reverse Side of Right Certificate]

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

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

         FOR VALUE RECEIVED,                               hereby sells, assigns
                            -------------------------------
and transfers unto
                   -------------------------------------------------------------

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

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

Dated as of
           ----------------------, ------.

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

Signature Guaranteed:

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

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

                    [To be executed if statement is correct]

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

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

                                      B-4

<PAGE>

            [Form of Reverse Side of Right Certificate -- continued]

                          FORM OF ELECTION TO PURCHASE
                          ----------------------------
                      (To be executed if holder desires to
                         exercise the Right Certificate)

TO METASOLV, INC.

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

Please insert social security
or other identifying number:

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

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

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

Please insert social security
or other identifying number:

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

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

Dated as of
           ----------------------, ------.

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

                                      B-5

<PAGE>

            [Form of Reverse Side of Right Certificate -- continued]

Signature Guaranteed:

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

--------------------------------------------------------------------------------
                    [To be executed if statement is correct]

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

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

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

                                     NOTICE
                                     ------

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

         In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.

                                      B-6

<PAGE>

                                                                      EXHIBIT C

                          SUMMARY OF RIGHTS TO PURCHASE
                                 PREFERRED STOCK

         On October 11, 2001, the Board of Directors of MetaSolv, Inc. (the
"Company"), authorized the issuance of one preferred share purchase right (a
"Right") with respect to each outstanding share of common stock, $0.005 par
value (the "Common Shares"), of the Company. The rights were issued on November
5, 2001 to the holders of record of Common Shares on that date. Each Right
entitles the registered holder to purchase from the Company one one-thousandth
of a share of Series A Junior Participating Preferred Stock, $.01 par value (the
"Preferred Shares"), of the Company at a price of $45.00 per one one-thousandth
of a Preferred Share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") dated as of October 24, 2001, between the Company and Mellon
Investor Services LLC, as Rights Agent (the "Rights Agent").

         Detachment of Rights; Exercise. Initially, the Rights will attach to
         ------------------------------
all Common Share certificates representing outstanding shares and no separate
Right Certificate will be distributed. The Rights will separate from the Common
Shares and a "Distribution Date" will occur upon close of Business (as defined
in the Rights Agreement) on the earlier of (i) ten business days following a
public announcement that a person or group of affiliated or associated persons
has become an Acquiring Person, or (ii) ten business days following the
commencement or announcement of an intention to commence a tender offer or
exchange offer the consummation of which would result in a person or group
becoming an Acquiring Person, subject to the right of the Board of Directors to
defer the occurrence of a Distribution Date upon the occurrence of an event
described in this clause (ii).

         In general, a person becomes an Acquiring Person if such person, or a
group of which such person is a member, becomes the beneficial owner of 15% or
more of the Company's outstanding common stock.

         Until the Distribution Date (or earlier redemption or expiration of the
Rights) (i) the Rights will be evidenced with respect to any of the Common
Shares outstanding on November 5, 2001, by the certificates representing such
Common Shares with a copy of this Summary of Rights attached thereto, (ii) the
Rights will be transferred with and only with the Common Shares, (iii) new
Common Share certificates issued after November 5, 2001, upon transfer or new
issuance of the Common Shares will contain a notation incorporating the Rights
Agreement by reference, and (iv) the surrender for transfer of any certificates
for Common Shares outstanding as of November 5, 2001, even without such notation
or a copy of this Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Shares represented by such
certificate.

         As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.

                                      C-1

<PAGE>

         The Rights are not exercisable until the Distribution Date. The Rights
will expire on November 4, 2011 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or the Rights are earlier redeemed or exchanged by
the Company as described below.

         If a person or group were to become an Acquiring Person, then each
Right then outstanding (other than Rights beneficially owned by the Acquiring
Person which would become null and void) would become a right to buy that number
of Common Shares (or under certain circumstances, the equivalent number of one
one-thousandths of a Preferred Share or other assets or securities of the
Company) that at the time of such acquisition would have a market value of two
times the Purchase Price of the Right.

         At any time after a person or group of affiliated or associated persons
becomes an Acquiring Person, if the Company were acquired in a merger or other
business combination transaction or more than 50% of its consolidated assets or
earning power were sold, proper provision will be made so that each holder of a
Right will thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction would have
a market value of two times the Purchase Price of the Right.

         Preferred Shares. The dividend and liquidation rights, and the
         ----------------
non-redemption feature, of the Preferred Shares are designed so that the value
of one one-thousandth of a Preferred Share purchasable upon exercise of each
Right will approximate the value of one Common Share. The Preferred Shares
issuable upon exercise of the Rights will be non-redeemable and rank junior to
all other series of the Company's preferred stock. Each whole Preferred Share
will be entitled to receive a quarterly preferential dividend in an amount per
share equal to the greater of (i) $1.00 in cash, or (ii) in the aggregate, 1,000
times the dividend declared on each Common Share. In the event of liquidation,
the holders of the Preferred Shares will be entitled to receive a preferential
liquidation payment equal to the greater of (i) $1,000 per share, or (ii) in the
aggregate, 1,000 times the payment made on each Common Share. In the event of
any merger, consolidation or other transaction in which Common Shares are
exchanged for or changed into other stock or securities, cash or other property,
each whole Preferred Share will be entitled to receive 1,000 times the amount
received per Common Share. Each whole Preferred Share shall be entitled to 1,000
votes on all matters submitted to a vote of the stockholders of the Company, and
Preferred Shares shall generally vote together as one class with the Common
Stock and any other capital stock entitled to vote thereon on all matters
submitted to a vote of stockholders of the Company.

         The offer and sale of the Preferred Shares issuable upon exercise of
the Rights will be registered with the Securities and Exchange Commission and
such registration will not be effective until the Rights become exercisable.

         Antidilution and Other Adjustments. The number of one one-thousandths
         ----------------------------------
of a Preferred Share or other securities or property issuable upon exercise of
the Rights, and the Purchase Price payable, are subject to customary adjustments
from time to time to prevent dilution.

         The number of outstanding Rights and the number of one one-thousandths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.

                                      C-2

<PAGE>

         Exchange Option. At any time after a person or group of affiliated or
         ---------------
associated persons has become an Acquiring Person and before the acquisition by
a person or group of 50% or more of the outstanding Voting Shares, the Board of
Directors may, at its option, issue Common Shares (or Preferred Shares) in
mandatory redemption of, and in exchange for, all or part of the then
outstanding and exercisable Rights (other than Rights owned by such person or
group which would become null and void) at an exchange ratio of one Common Share
(or one one-thousandth of a Preferred Share) for each two Common Shares for
which each Right then outstanding is then exercisable, subject to adjustment.

         Redemption of Rights. At any time prior to the time that a person or
         --------------------
group has become an Acquiring Person, the Board of Directors of the Company may
redeem all but not less than all the then outstanding Rights at a price of
$0.00001 per Right (the "Redemption Price"). The redemption of the Rights may be
made effective at such time, on such basis and with such conditions as the Board
of Directors in its sole discretion may establish. Immediately upon the action
of the Board of Directors ordering redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.

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

         Amendment of Rights. The terms of the Rights may be amended by the
         -------------------
Board of Directors of the Company without the consent of the holders of the
Rights, including an amendment to extend the Final Expiration Date, and,
provided a Distribution Date has not occurred, to extend the period during which
the Rights may be redeemed, except that after the first public announcement that
a person or group has become an Acquiring Person, no such amendment may
materially and adversely affect the interests of the holders of the Rights other
than the Acquiring Person and transferees of the Acquiring Person.

         THIS SUMMARY DESCRIPTION OF THE RIGHTS DOES NOT PURPORT TO BE COMPLETE
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS AGREEMENT, WHICH IS
HEREBY INCORPORATED HEREIN BY REFERENCE.

         A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
October 24, 2001. A copy of the Rights Agreement is available free of charge
from the Company.

                                      C-3

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