Document:

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                                                                     Exhibit 4.1

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                                RIGHTS AGREEMENT

                                     BETWEEN

                           ART TECHNOLOGY GROUP, INC.

                                       AND

                         EQUISERVE TRUST COMPANY, N.A.,

                                 AS RIGHTS AGENT

                            DATED SEPTEMBER 26, 2001

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                                Table of Contents

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<S>                                                                                                          <C>

Section 1.     Certain Definitions..............................................................................  1

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

Section 3.     Issuance of Rights...............................................................................  5

Section 4.     Form of Rights Certificates......................................................................  8

Section 5.     Countersignature and Registration................................................................  9

Section 6.     Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
               Destroyed, Lost or Stolen Rights Certificates....................................................  9

Section 7.     Exercise of Rights; Purchase Price; Expiration Date of Rights.................................... 10

Section 8.     Cancellation and Destruction of Rights Certificates.............................................. 12

Section 9.     Reservation and Availability of Capital Stock.................................................... 12

Section 10.    Preferred Stock Record Date...................................................................... 13

Section 11.    Adjustment of Purchase Price, Number and Kind of Shares or Number
               of Rights........................................................................................ 14

Section 12.    Certificate of Adjusted Purchase Price or Number of Shares....................................... 21

Section 13.    Consolidation, Merger or Sale or Transfer of Assets or Earning Power............................. 21

Section 14.    Fractional Rights and Fractional Shares.......................................................... 24

Section 15.    Rights of Action................................................................................. 25

Section 16.    Agreement of Rights Holders...................................................................... 25

Section 17.    Rights Certificate Holder Not Deemed a Stockholder............................................... 26

Section 18.    Concerning the Rights Agent...................................................................... 26

Section 19.    Merger or Consolidation or Change of Name of Rights Agent........................................ 27

Section 20.    Duties of Rights Agent........................................................................... 27

Section 21.    Change of Rights Agent........................................................................... 29

Section 22.    Issuance of New Rights Certificates.............................................................. 30

Section 23.    Redemption....................................................................................... 30
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<TABLE>
<S>                                                                                                         <C>

Section 24.    Exchange......................................................................................... 31

Section 25.    Notice of Certain Events......................................................................... 32

Section 26.    Notices.......................................................................................... 33

Section 27.    Supplements and Amendments....................................................................... 34

Section 28.    Successors....................................................................................... 34

Section 29.    Actions by the Board, etc........................................................................ 34

Section 30.    Benefits of this Agreement....................................................................... 35

Section 31.    Severability..................................................................................... 35

Section 32.    Governing Law.................................................................................... 35

Section 33.    Counterparts..................................................................................... 35

Section 34.    Descriptive Headings............................................................................. 35
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                                RIGHTS AGREEMENT

RIGHTS AGREEMENT, dated September 26, 2001 (the "Agreement"), between Art
Technology Group, Inc., a Delaware corporation (the "Company"), and EquiServe
Trust Company, N.A., a national banking association, as Rights Agent (the
"Rights Agent").

                               W I T N E S S E T H

WHEREAS, on September 26, 2001 the Board of Directors of the Company (the
"Board") authorized and declared a dividend distribution of one Right for each
share of Common Stock (as hereinafter defined) of the Company outstanding at the
close of business on October 9, 2001 (the "Record Date"), and authorized the
issuance of one Right (as such number may hereinafter be adjusted pursuant to
the provisions of Section 11(i) or Section 11(p) hereof) for each share of
Common Stock of the Company issued between the Record Date (whether originally
issued or delivered from the Company's treasury) and the earlier of the
Distribution Date or the Expiration Date, each Right initially representing the
right to purchase one one-thousandth of a share of Series A Junior Participating
Preferred Stock of the Company having the rights, powers and preferences set
forth in the form of Certificate of Designations attached hereto as EXHIBIT A,
upon the terms and subject to the conditions hereinafter set forth (the
"Rights");

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

         Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the 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 shares of Common Stock then outstanding, but shall not
include (i) the Company, (ii) any Subsidiary of the Company, (iii) any employee
benefit plan of the Company or of any Subsidiary of the Company, or (iv) any
Person organized, appointed or established by the Company for or pursuant to the
terms of any such plan. Notwithstanding the foregoing, (x) no Person shall
become an "Acquiring Person" as the result of an acquisition of Common Stock by
the Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or more
of the shares of Common Stock of the Company then outstanding; provided, however
that if a Person shall become the Beneficial Owner of 15% or more of the shares
of Common Stock of the Company then outstanding as the result of an acquisition
of Common Stock by the Company and shall, following written notice from, or
public disclosure by the Company of such share purchases by the Company become
the Beneficial Owner of any additional Common Stock of the Company and shall
then beneficially own 15% or more of the shares of Common Stock then
outstanding, then such Person shall be deemed to be an "Acquiring Person" and
(y) if the Board determines in good faith that a Person who would otherwise be
an "Acquiring Person," as defined pursuant to the foregoing provisions

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of this paragraph (a), has become such inadvertently, and such Person divests as
promptly as practicable (as determined in good faith by the Board of Directors),
but in any event within 15 Business Days, following receipt of written notice
from the Company of such event, of Beneficial Ownership of a sufficient number
of shares of Common Stock 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 unless and until such Person shall again become an
"Acquiring Person."

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

         (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 Securities Exchange Act of 1934, as amended (the "Exchange Act") as in
effect on the date of this Agreement.

         (d) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii).

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

             (i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, owns or has the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with respect
to a bona fide public offering of securities), whether or not in writing, or
upon the exercise of conversion rights, exchange rights, other rights, warrants
or options, or otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," (A) 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 (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Triggering Event, or (C)
securities issuable upon exercise of Rights from and after the occurrence of a
Triggering Event which Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the Distribution Date or pursuant to
Section 3(a) or Section 22 hereof (the "Original Rights") or pursuant to Section
11(i) hereof in connection with an adjustment made with respect to any Original
Rights;

             (ii) which 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 General
Rules and Regulations under the Exchange Act, or any comparable or successor
rule), including pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), 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 (ii) as a result of an agreement, arrangement or understanding to
vote such security if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public

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proxy or consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the Exchange
Act, and (B) is not then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or

             (iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person (or
any of such Person's Affiliates or Associates) has any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of securities)
whether or not in writing, for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy or consent as described in the proviso to
subparagraph (ii) of this paragraph (e)) or disposing of any voting securities
of the Company.

For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(l)(i) of the General Rules and Regulations
under the Exchange Act.

         (f) "Board" shall have the meaning set forth in the WHEREAS clause at
the beginning of this Agreement.

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

         (h) "Close of business" on any given date shall mean 5:00 p.m., Boston
time, on such date; PROVIDED, HOWEVER, that if such date is not a Business Day
it shall mean 5:00 p.m., Boston time, on the next succeeding Business Day.

         (i) "Common Stock" shall mean the common stock, $.01 par value, of the
Company, except that "Common Stock" when used with reference to any Person other
than the Company shall mean the capital stock of such Person with the greatest
voting power, or the equity securities or other equity interest having power to
control or direct the management, of such Person.

         (j) "Common stock equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.

         (k) "Company" shall have the meaning set forth in the introductory
paragraph hereof.

         (l) "Current market price" shall have the meaning set forth in Section
11(d)(i) hereof.

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

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

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

         (p) "Exchange Act" shall have the meaning set forth in Section 1(c)
hereof.

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

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

         (s) "Final Expiration Date" shall mean the close of business on
September 26, 2011.

         (t) "Permitted Offer" shall mean a tender offer or an exchange offer
for all outstanding shares of Common Stock at a price and on terms determined,
prior to the consummation of such tender offer or exchange offer, by directors
constituting at least 75% of all of the members of the Board, after receiving
advice from a nationally recognized investment banking firm selected by the
Board, to be (a) at a price that is fair to stockholders (taking into account
all factors which such members of the Board deem relevant including, without
limitation, prices which could reasonably be achieved if the Company or its
assets were sold on an orderly basis designed to realize maximum value) and (b)
otherwise in the best interests of the Company and its stockholders.

         (u) "Person" shall mean any individual, firm, corporation, partnership,
trust, association, limited liability company or other entity.

         (v) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, $.01 par value, of the Company having the rights
and preferences set forth in the form of Certificate of Designations attached to
this Agreement as EXHIBIT A and, to the extent that there is not a sufficient
number of shares of Series A Junior Participating Preferred Stock authorized to
permit the full exercise of the Rights, any other series of Preferred Stock,
$.01 par value, of the Company designated for such purpose containing terms
substantially similar to the terms of the Series A Junior Participating
Preferred Stock.

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

         (x) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.

         (y) "Record Date" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.

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

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

         (bb) "Rights" shall have the meaning set forth in the WHEREAS clause at
the beginning of this Agreement.

         (cc) "Rights Agent" shall have the meaning set forth in the
introductory paragraph hereof.

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         (dd) "Rights Certificates" shall have the meaning set forth in Section
3(a) hereof.

         (ee) "Section 11(a)(ii) Event" shall mean an acquisition of Common
Stock described in the first sentence of Section 11(a)(ii) hereof.

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

         (gg) "Section 13 Event" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a) hereof.

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

         (ii) "Stock Acquisition Date" shall mean the later of (i) the first
date of public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has
become such or (ii) the first date on which an executive officer of the Company
has actual knowledge that an Acquiring Person has become such; PROVIDED, HOWEVER
that, if such Person is deemed not to be an Acquiring Person pursuant to clause
(y) of Section 1(a) hereof, no Stock Acquisition Date shall be deemed to have
occurred.

         (jj) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which an amount of voting securities sufficient
to elect at least a majority of the directors (or comparable body) of such
corporation or other entity is beneficially owned, directly or indirectly, by
such Person, or otherwise controlled by such Person.

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

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

         (mm) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.

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

         Section 3. ISSUANCE OF RIGHTS.

         (a) Until the earlier of (i) the close of business on the tenth
Business Day (or such later date as may be determined by the Board) after the
Stock Acquisition Date (or, if the tenth Business Day after the Stock
Acquisition Date occurs before the Record Date, the close of

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business on the Record Date), or (ii) the close of business on the tenth
Business Day (or such later date as may be determined by action of the Board)
after the date that a tender or exchange offer (other than a Permitted Offer) by
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person
organized, appointed or established by the Company for or pursuant to the terms
of any such plan) is first published or sent or given within the meaning of Rule
14d-2 of the General Rules and Regulations under the Exchange Act, if upon
consummation thereof, such Person would be the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding, (the earlier of (i) and (ii)
being herein referred to as the "Distribution Date"), (x) the Rights will be
evidenced by the certificates for the Common Stock registered in the names of
the holders of the Common Stock (which certificates for Common Stock shall be
deemed also to be certificates for Rights) and not by separate certificates, and
(y) the Rights will be transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the Company). As soon
as practicable after the Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each record holder of the Common
Stock as of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, one or more rights
certificates, in substantially the form of EXHIBIT B hereto (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. With respect to certificates for the
Common Stock outstanding as of the close of business on the Record Date, until
the Distribution Date, the Rights will be evidenced by such certificates for the
Common Stock and the registered holders of the Common Stock shall also be the
registered holders of the associated Rights. In addition, in connection with the
issuance or sale of shares of Common Stock following the Distribution Date and
prior to the redemption or expiration of the Rights, the Company (i) shall, with
respect to shares of Common Stock so issued or sold pursuant to the exercise of
stock options or under any employee benefit plan or arrangement, or upon the
exercise, conversion or exchange of securities granted or issued by the Company
prior to the Distribution Date, and (ii) may, in any other case, if deemed
necessary or appropriate by the Board, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (x) no such Rights Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued, and (y)
no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof. In the event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Sections 11(i) or 11(p) hereof, at the
time of distribution of the Rights Certificates, the Company shall make the
necessary and appropriate rounding adjustments (in accordance with Section 14(a)
hereof) so that Rights Certificates representing only whole numbers of Rights
are distributed and cash is paid in lieu of any fractional Rights. As of and
after the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.

         (b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form attached hereto as EXHIBIT C, by first-class, postage
prepaid mail, to each record holder of the Common Stock as of the close of
business on the Record Date, at the address of such holder shown on the

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records of the Company. The failure to send a copy of the Summary of Rights
shall not affect the enforceability of any part of this Rights Agreement or the
rights of any holder of the Rights.

         (c) Rights shall be issued (i) in respect of all shares of Common Stock
that are issued (either as an original issuance or from the Company's treasury)
after the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date and (ii) in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the redemption or
expiration of the Rights (x) with respect to shares of Common Stock so issued or
sold pursuant to the exercise of stock options or under any employee benefit
plan or arrangement, or upon the exercise, conversion or exchange of securities,
granted or issued by the Company prior to the Distribution Date and (y) with
respect to shares of Common Stock so issued or sold in any other case, if deemed
necessary or appropriate by the Board. Certificates representing such shares of
Common Stock (including, without limitation, certificates issued upon transfer
or exchange of Common Stock) shall also be deemed to be certificates for Rights,
and shall bear the following legend:

                  This certificate also evidences and entitles the holder hereof
                  to certain Rights as set forth in the Rights Agreement between
                  Art Technology Group, Inc. (the "Company") and EquiServe Trust
                  Company, N.A. (the "Rights Agent") dated September 26, 2001,
                  as the same may be amended, restated or renewed from time to
                  time (the "Rights Agreement"), the terms of which are hereby
                  incorporated herein by reference and a copy of which is on
                  file at the principal 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, as in effect on the date of mailing, without charge
                  promptly after receipt of a written request therefor. Under
                  certain circumstances set forth in the Rights Agreement,
                  Rights issued to, or held by, any Person who is, was or
                  becomes an Acquiring Person or any Affiliate or Associate
                  thereof (as such terms are defined in the Rights Agreement),
                  whether currently held by or on behalf of such Person or by
                  any subsequent holder, may become null and void.

With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date and (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights. Notwithstanding
this Section 3(c), the omission of a legend shall not affect the enforceability
of any part of this Rights Agreement or the rights of any holder of the Rights.

         (d) Until the earlier of the Distribution Date and the Expiration Date,
the transfer of any certificates representing shares of Common Stock in respect
of which Rights have been issued shall also constitute the transfer of the
Rights associated with such shares of Common

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

         Section 4. FORM OF RIGHTS CERTIFICATES.

         (a) The Rights Certificates (and the forms of election to purchase,
certification and assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in EXHIBIT B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or over-the-counter market on which the
Rights may from time to time be listed, or to conform to usage. Subject to the
provisions of Sections 7, 11 and 22 hereof, the Rights Certificates, whenever
distributed, shall entitle the holders thereof to purchase such number of one
one-thousandths of a share of Preferred Stock as shall be set forth therein at
the price set forth therein (such exercise price per one one-thousandth of a
share, the "Purchase Price"), but the amount and type of securities purchasable
upon the exercise of each Right and the Purchase Price thereof shall be subject
to adjustment as provided herein.

         (b) Any Rights Certificate issued pursuant to Section 3, Section 11(i)
or Section 22 hereof that represents Rights beneficially owned by persons known
to be: (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights or (B) a transfer
which the Board has determined is part of a plan, arrangement or understanding
(whether or not in writing) that has as a primary purpose or effect avoidance of
Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6 or
Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:

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

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The provisions of Section 7(e) hereof shall be operative whether or not the
foregoing legend is contained on any such Rights Certificate.

         Section 5. COUNTERSIGNATURE AND REGISTRATION.

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

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

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

         (a) Subject to the provisions of Section 4(b), Section 7(e) and Section
14 hereof, at any time after the close of business on the Distribution Date, and
at or prior to the close of business on the Expiration Date, any Rights
Certificate or Certificates (other than Rights Certificates representing Rights
that have become void pursuant to Section 7(e) hereof or that have been
exchanged pursuant to Section 24 hereof) may be transferred, split up, combined
or exchanged for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of one one-thousandths of a share of
Preferred Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Rights Certificate
or Certificates surrendered then entitled such holder (or former holder in the
case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up, combined or
exchanged, with the form of assignment and certificate appropriately executed,
at the office of the Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to the transfer of any

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such surrendered Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e) and
Section 14 hereof, countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Rights Certificates.

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

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

         (a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the office of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price with respect to the total number of one
one-thousandths of a share of Preferred Stock (or other shares, securities, cash
or other assets, as the case may be) as to which such surrendered Rights are
then exercisable, at or prior to the earliest of (i) the Final Expiration Date,
(ii) the time at which the Rights expire as provided in Section 13(d) hereof,
(iii) the time at which the Rights are redeemed as provided in Section 23 hereof
(the "Redemption Date") and (iv) the time at which such Rights are exchanged as
provided in Section 24 hereof (the earliest of (i), (ii), (iii) and (iv) being
herein referred to as the "Expiration Date").

         (b) The Purchase Price for each one one-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $15 and
shall be subject to adjustment from time to time as provided in Sections 11 and
13(a) hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.

         (c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one one-thousandth of a share of Preferred Stock (or other shares,
securities, cash or other assets, as the case may be) to be purchased and an
amount equal to any applicable transfer tax, the Rights Agent shall, subject to

                                      -10-
<PAGE>

Section 20(k) hereof, thereupon promptly (i) (A) requisition from any transfer
agent of the shares of Preferred Stock (or make available, if the Rights Agent
is the transfer agent for such shares) certificates for the total number of one
one-thousandths of a share of Preferred Stock to be purchased and the Company
hereby authorizes its transfer agent to comply with such requests, or (B) if the
Company shall have elected to deposit the total number of shares of Preferred
Stock issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of one one-thousandths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary agent to comply
with such requests, (ii) requisition from the Company the amount of cash, if
any, to be paid in lieu of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder, and (iv) after receipt thereof, deliver such cash, if any, to or
upon the order of the registered holder of such Rights Certificate. The payment
of the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) may be made in cash or by certified bank check or money order
payable to the order of the Company. In the event that the Company is obligated
to issue other securities (including Common Stock) of the Company, pay cash
and/or distribute other property pursuant to Section 11(a) hereof, the Company
shall make all arrangements necessary so that such other securities, cash and/or
other property are available for distribution by the Rights Agent, if and when
appropriate.

         (d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14 hereof.

         (e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights or (B) a transfer
which the Board has determined is part of a plan, arrangement or understanding
(whether or not in writing) that has as a primary purpose or effect avoidance of
this Section 7(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. No Rights
Certificate shall be issued at any time upon the transfer of any Rights to an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
or any Associate or Affiliate thereof or to any nominee of such Acquiring
Person, Associate or

                                      -11-
<PAGE>

Affiliate; and any Rights Certificate delivered to the Rights Agent for transfer
to an Acquiring Person whose Rights would be void pursuant to the preceding
sentence shall be cancelled. The Company shall use all reasonable efforts to
insure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder.

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

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

         Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.

         (a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Preferred Stock
(and, following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities or out of its authorized
and issued shares held in its treasury), the number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock and/or other
securities) that, as provided in this Agreement including Section 11(a)(iii)
hereof, will be sufficient to permit the exercise in full of all outstanding
Rights.

         (b) So long as the shares of Preferred Stock (and, following the
occurrence of a Section 11(a)(ii) Event, Common Stock and/or other securities)
issuable and deliverable upon the exercise of the Rights may be listed on any
national securities exchange or automated quotation system, the Company shall
use its best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be so listed upon official
notice of issuance upon such exercise.

         (c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration

                                      -12-
<PAGE>

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

         (d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all one one-thousandths of a share of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.

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

         Section 10. PREFERRED STOCK RECORD DATE. Each Person in whose name any
certificate for a number of one one-thousandths of a share of Preferred Stock
(or Common Stock and/or

                                      -13-
<PAGE>

other securities, as the case may be) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of such
fractional shares of Preferred Stock (or Common Stock and/or other securities,
as the case may be) represented thereby on, and such certificate shall be dated,
the date upon which the Rights Certificate evidencing such Rights was duly
surrendered with the forms of election and certification duly executed and
payment of the Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Stock (or Common Stock and/or other securities, as the case
may be) transfer books of the Company are closed, such Person shall be deemed to
have become the record holder of such shares (fractional or otherwise) on, and
such certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate, as such, shall not be
entitled to any rights of a stockholder of the Company with respect to
securities for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.

         Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.

         (a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable in shares
of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine
the outstanding Preferred Stock into a smaller number of shares, or (D) issue
any shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) and Section 7(e) hereof, 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 Preferred Stock or capital stock, as the case may
be, issuable on such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number and kind of
shares of Preferred Stock or capital stock, as the case may be, which, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, he would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs that would
require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.

             (ii) Subject to Section 24 of this Agreement, in the event that any
Person, alone or together with its Affiliates or Associates, becomes an
Acquiring Person (other than pursuant to a Permitted Offer), then, promptly
following the first occurrence of such event,

                                      -14-
<PAGE>

proper provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e) hereof) shall thereafter have the right to
receive (subject to the last sentence of Section 23(a)), upon exercise thereof
at the then current Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-thousandths of a share of Preferred
Stock, such number of shares of Common Stock of the Company that equals the
result obtained by (x) multiplying the then current Purchase Price by the then
number of one one-thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event, and (y) dividing that product (which, following such first occurrence,
shall thereafter be referred to as the "Purchase Price" for each Right and for
all purposes of this Agreement) by 50% of the current market price (determined
pursuant to Section 11(d) hereof) per share of Common Stock on the date of such
first occurrence (such number of shares, the "Adjustment Shares").

             (iii) In the event that the number of shares of Common Stock 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 (ii) of this Section 11(a), the Company shall: (A)
determine the excess of (1) the value of the Adjustment 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 the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Common Stock or other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock which the Board has
deemed to have the same value as shares of Common Stock (such shares of
preferred stock, "common stock 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 based upon the advice of a nationally recognized
investment banking firm selected by the Board; PROVIDED, HOWEVER, if the Company
shall not have made adequate provision to deliver value pursuant to clause (B)
above within thirty (30) days following the later of (x) the first occurrence of
a Section 11(a)(ii) Event and (y) the date on which the Company's right of
redemption pursuant to Section 23(a) expires (the later of (x) and (y) being
referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, shares of Common Stock (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 shall determine in good faith
that it is likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, the thirty (30) day
period set forth above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the Company may seek shareholder 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 11(a)(iii),
the Company (x) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and
to determine

                                      -15-
<PAGE>

the value thereof. In the event of any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii), the
value of the Common Stock shall be the current market price (as determined
pursuant to Section 11(d) hereof) per share of the Common Stock on the Section
11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be
deemed to have the same value as the Common Stock on such date.

         (b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within forty-five (45) calendar
days after such record date) Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred Stock ("equivalent
preferred stock")) or securities convertible into Preferred Stock or equivalent
preferred stock at a price per share of Preferred Stock or per share of
equivalent preferred stock (or having a conversion price per share, if a
security convertible into Preferred Stock or equivalent preferred stock) less
than the current market price (as determined pursuant to Section 11(d) hereof)
per share of Preferred Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred Stock and/or
equivalent preferred stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current market price, and the denominator of which shall be the number
of shares of Preferred Stock outstanding on such record date, plus the number of
additional shares of Preferred Stock and/or equivalent preferred stock to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). In case such subscription price may
be paid by delivery of consideration part or all of which may be in a form other
than cash, the value of such consideration shall be as determined in good faith
by the Board, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes. Shares of Preferred
Stock owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed, and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.

         (c) In case the Company shall fix a record date for a distribution to
all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current market price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock on such record date, less the
fair market value

                                      -16-
<PAGE>

(as determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for
all purposes) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such subscription rights or warrants applicable to a
share of Preferred Stock and the denominator of which shall be such current
market price (as determined pursuant to Section 11(d) hereof) per share of
Preferred Stock on such record date. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such distribution is
not so made, the Purchase Price shall be adjusted to be the Purchase Price which
would have been in effect if such record date had not been fixed.

         (d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "current market
price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date, and for purposes of computations made pursuant to Section
11(a)(iii) hereof, the "current market price" per share of Common Stock on any
date shall be deemed to be the average of the daily closing prices per share of
such Common Stock for the ten (10) consecutive Trading Days immediately
following such date; PROVIDED, HOWEVER, that in the event that the current
market price per share of the Common Stock is determined during a period
following the announcement by the issuer of such Common Stock of (A) a dividend
or distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the Rights),
or (B) any subdivision, combination or reclassification of such Common Stock,
and prior to the expiration of the requisite thirty (30) Trading Day or ten (10)
Trading Day period, as set forth above, after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification occurs, then, and in each such case, the "current market
price" shall be properly adjusted to take into account ex-dividend or post
record date trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
or, if the shares of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and the low asked prices in the over-the-counter market,
as reported by The Nasdaq Stock Market, Inc. ("Nasdaq") or such other system
then in use, or, if on any such date the shares of Common Stock are not quoted
by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common Stock
selected by the Board. All references in this Section to closing prices, last
quoted prices or other stock prices mean prices during regular trading hours,
without giving affect to any after-hours or extended hours trading. If on any
such date no market maker is making a market in the Common Stock, the fair value
of such shares on such date as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. The term "Trading Day" shall mean a day on
which Nasdaq or any national securities exchange on which the shares of Common
Stock are listed or admitted to trading is open for the transaction of business
or, if the shares of Common Stock are not listed or admitted to trading on
Nasdaq or any national securities exchange, a Business Day. If the Common Stock
is not publicly held or not so listed or traded, "current

                                      -17-
<PAGE>

market price" per share shall mean the fair value per share as determined in
good faith by the Board, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.

             (ii) For the purpose of any computation hereunder, the "current
market price" per share of Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in clause (i) of this Section
11(d) (other than the last sentence thereof). If the current market price per
share of Preferred Stock cannot be determined in the manner provided above or if
the Preferred Stock is not publicly held or listed or traded in a manner
described in clause (i) of this Section 11(d), the "current market price" per
share of Preferred Stock shall be conclusively deemed to be an amount equal to
1000 (as such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the current market
price per share of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, "current market price"
per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the "current market price" of one
one-thousandth of a share of Preferred Stock shall be equal to the "current
market price" of one share of Preferred Stock divided by 1000.

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

         (f) If as a result of an adjustment made pursuant to Section 11(a)(ii)
or Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any securities other than Preferred Stock, thereafter
the number of such other securities so receivable upon exercise of any Right and
the Purchase Price thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11(a), (b), (c), (e), (g),
(h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Stock shall apply on like terms to any such
other securities; PROVIDED, HOWEVER, that the Company shall not be liable for
its inability to reserve and keep available for issuance upon exercise of the
Rights pursuant to Section 11(a)(ii) a number of shares of Common Stock greater
than the number then authorized by the Company's Certificate of Incorporation
but not outstanding or reserved for other purposes.

                                      -18-
<PAGE>

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

         (h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-thousandths of
a share of Preferred Stock (calculated to the nearest ten-millionth) obtained by
(i) multiplying (x) the number of one 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 (ii) 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, in lieu of any adjustment in the
number of one one-thousandths of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number of one one-thousandths of a
share of Preferred Stock for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
one-hundred- 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. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10) days later than the
date of the public announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.

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

                                      -19-
<PAGE>

per one one-thousandth of a share and the number of one one-thousandths of a
share which were expressed in the initial Rights Certificates issued hereunder.

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

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

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

         (n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger or sale there are any charter or bylaw provisions or
any rights, warrants or other instruments or securities outstanding or
agreements in effect that would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the
stockholders of the Person who constitutes, or would constitute, the "Principal
Party" for purposes of

                                      -20-
<PAGE>

Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates or Associates. The Company shall
not consummate any consolidation, merger, sale or transfer described in clause
(i), (ii) or (iii) of the prior sentence unless prior thereto the Company and
such other Person shall have executed and delivered to the Rights Agent a
supplemental agreement evidencing compliance with this Section 11(n).

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

         (p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Record Date and prior to the
Distribution Date (i) declare or pay any dividend on the outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock, or (iii) combine the outstanding shares of Common Stock
into a smaller number of shares, the number of Rights associated with each share
of Common Stock then outstanding, or issued or delivered thereafter but prior to
the Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to the occurrence of such event and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately following the occurrence of such event.

         Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent, and with each transfer agent for the Preferred
Stock and the Common Stock, a copy of such certificate, and (c) mail a brief
summary thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares of Common
Stock) in accordance with Section 26 hereof. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of any adjustment unless and
until it shall have received such certificate.

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

         (a) In the event that, at any time after a Person has become an
Acquiring Person, (x) the Company shall consolidate with, or merge with and
into, any other Person (other than a Subsidiary of the Company in a transaction
that complies with Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (y) any
Person (other than a Subsidiary of the Company in a transaction that complies
with Section 11(o) hereof) shall consolidate with, or merge with or into, the
Company, and the Company shall be the continuing or surviving corporation of
such consolidation or merger and,

                                      -21-
<PAGE>

in connection with such consolidation or merger, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any Person or Persons
(other than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof), then, and in
each such case and except as contemplated by Section 13(d) hereof, proper
provision shall be made so that: (i) each holder of a Right, except as provided
in Section 7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, such number of validly authorized and issued, fully paid,
non-assessable and freely tradeable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), which shall not be subject to any
liens, encumbrances, rights of first refusal or other adverse claims, as shall
be equal to the result obtained by (1) multiplying the then current Purchase
Price by the number of one one-thousandths of a share of Preferred Stock for
which a Right is exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the
first occurrence of a Section 13 Event, multiplying the number of such one
one-thousandths of a share for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and (2) dividing that
product (which, following the first occurrence of a Section 13 Event, shall be
referred to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the current market price (determined pursuant to Section
11(d)(i) hereof) per share of the Common Stock of such Principal Party on the
date of consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that, subject to clause (v) below, the provisions
of Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock) in connection with the consummation of any
such transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.

         (b) "Principal Party" shall mean

                  (i) in the case of any transaction described in clause (x) or
         (y) of the first sentence of Section 13(a), the Person that is the
         issuer of any securities into which shares of Common Stock of the
         Company are converted in such merger or consolidation, and if no
         securities are so issued, the Person that is the other party to such
         merger or consolidation; and

                                      -22-
<PAGE>

                           (ii) in the case of any transaction described in
                  clause (z) of the first sentence of Section 13(a), the Person
                  that is the party receiving the greatest portion of the assets
                  or earning power transferred pursuant to such transaction or
                  transactions;

PROVIDED, HOWEVER, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Stock of which is
and has been so registered, "Principal Party" shall refer to such other Person;
(2) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value; and (3)
in case such Person is owned, directly or indirectly, by a joint venture formed
by two or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint venture as if such party
were a "Subsidiary" of both or all of such joint ventures and the Principal
Parties in each such chain shall bear the obligations set forth in this Section
13 in the same ratio as their direct or indirect interests in such Person bear
to the total of such interests.

         (c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will

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

                           (ii) use its best efforts to qualify or register the
                  Rights and the securities purchasable upon exercise of the
                  Rights under the blue sky laws of such jurisdictions as may be
                  necessary or appropriate; and

                           (iii) deliver to holders of the Rights historical
                  financial statements for the Principal Party and each of its
                  Affiliates that comply in all respects with the requirements
                  for registration on Form 10 under the Exchange Act.

The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at the same time as, or at

                                      -23-
<PAGE>

any time after, the occurrence of a Section 11(a)(ii) Event, the Rights which
have not theretofore been exercised shall thereafter become exercisable in the
manner described in Section 13(a).

         (d) Notwithstanding anything in this Agreement to the contrary, Section
13 shall not be applicable to a transaction described in subparagraphs (x) and
(y) of Section 13(a) if (i) such transaction is consummated with a Person or
Persons (or a wholly owned subsidiary of any such Person or Persons) who
acquired shares of Common Stock pursuant to a Permitted Offer, (ii) the price
per share of Common Stock paid in such transaction is not less than the price
per share of Common Stock paid to all holders of shares of Common Stock whose
shares were purchased pursuant to such Permitted Offer, and (iii) the form of
consideration paid in such transaction is the same as the form of consideration
paid pursuant to such Permitted Offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.

         Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

         (a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(i) or (p)
hereof, or to distribute Rights Certificates that evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered holders of
the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price of the Rights for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the principal national securities exchange on which the Rights are
listed or admitted to trading, or if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and the low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board. All references
in this Section to closing prices, last quoted prices or other stock prices
means prices during regular trading hours, without giving effect to any
after-hours or extended hours trading. If on any such date no such market maker
is making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board shall be used, which determination shall
be described in a statement filed with Rights Agent and shall be conclusive for
all purposes.

         (b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates that evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock). Fractional shares of Preferred Stock in integral
multiples of one one-thousandth of a share of Preferred Stock may, at the
election of the Company, be evidenced by

                                      -24-
<PAGE>

depositary receipts; provided, however, that holders of such depositary receipts
shall have all of the designations and the powers, preferences and rights, and
the qualifications, limitations and restrictions to which they are entitled as
beneficial owners of the shares of Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock), the Company shall pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one
one-thousandth of a share of Preferred Stock. For purposes of this Section
14(b), the current market value of one one-thousandth of a share of Preferred
Stock shall be one one-thousandth of the closing price of a share of Preferred
Stock (as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.

         (c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of shares of Common Stock upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company shall
pay to the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market price of one (1) share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.

         (d) The holder of a Right by the acceptance of such Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.

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

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

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

                                      -25-
<PAGE>

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

         (c) subject to Section 6(a) and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the penultimate sentence of
Section 7(e) hereof, shall be required to 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 or ruling 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 prevent the issuance of any such order, decree or ruling and to have
any such order, decree or ruling lifted or otherwise overturned as soon as
possible.

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

         Section 18. CONCERNING THE RIGHTS AGENT.

         (a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without gross
negligence, bad faith or willful

                                      -26-
<PAGE>

misconduct on the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability in the premises.

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

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

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

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

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

         (a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and

                                      -27-
<PAGE>

protection to the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.

         (b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by 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
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.

         (c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.

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

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

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

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

                                      -28-
<PAGE>

faith in accordance with instructions of any such officer. Any application by
the Rights Agent for written instructions from the Company may, at the option of
the Rights Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent with respect to its duties or obligations under this
Rights Agreement and the date on and/or after which such action shall be taken
or omitted and the Rights Agent shall not be liable for any action taken or
omitted in accordance with a proposal included in any such application on or
after the date specified therein (which date shall not be less than five
Business Days after the date any such officer actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking or omitting any such action, the Rights
Agent has received written instructions in response to such application
specifying the action to be taken or omitted.

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

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

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

         (k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has not been
completed, the Company and the Rights Agent will deem the beneficial owner of
the rights evidenced by such Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof and such assignment or election to purchase will
not be honored.

         Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
and Preferred Stock, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the

                                      -29-
<PAGE>

Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then any registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a corporation organized and
doing business under the laws of the United States (or of any state of the
United States) in good standing, which is authorized under such laws to exercise
corporate trust or 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
$50,000,000 or (b) an affiliate of a corporation 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 of the Common Stock
and the Preferred Stock, and mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.

         Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by the Board to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares or other securities or
property purchasable under the Rights Certificates made in accordance with the
provisions of this Agreement.

         Section 23. REDEMPTION.

         (a) The Board may, at its option, at any time prior to the earlier of
(i) the close of business on the tenth Business Day (or such later date as may
be determined by the Board pursuant to clause (i) of the first sentence of
Section 3(a) with respect to the Distribution Date) following the Stock
Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior to
the Record Date, the close of business on the tenth Business Day following the
Record Date) and (ii) the Final Expiration Date, redeem all but not less than
all the then outstanding Rights at a redemption price of $0.001 per Right, as
such amount may be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price"). The redemption
of the Rights by the Board may be made effective at such time, on such basis and
with such conditions as the Board in its sole discretion may establish. The
Company may, at its option, pay the Redemption Price in cash, shares of Common
Stock (based on the "current market price," as

                                      -30-
<PAGE>

defined in Section 11(d)(i) hereof, of the Common Stock at the time of
redemption) or any other form of consideration, or any combination of any of the
foregoing, deemed appropriate by the Board. Notwithstanding anything contained
in this Agreement to the contrary, the Rights shall not be exercisable after the
first occurrence of a Section 11(a)(ii) Event until such time as the Company's
right of redemption hereunder has expired.

         (b) Immediately upon the action of the Board ordering the redemption of
the Rights, evidence of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right to exercise the
Rights shall terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right so held. Promptly after
the action of the Board ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at each holder's
last address as it appears upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the Transfer Agent for the
Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made.

         (c) In the event of a redemption of the Rights in accordance with this
Agreement, the Company may, at its option, discharge all of its obligations with
respect to the Rights by (i) issuing a press release announcing the manner of
redemption of the Rights in accordance with this Agreement and (ii) mailing
payment of the Redemption Price to the registered holders of the Rights at their
last addresses as they appear on the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the Transfer Agent of
the Common Stock, and upon such action, all outstanding Rights and Right
Certificates shall be null and void without any further action by the Company.

         Section 24. EXCHANGE.

         (a) The Board may, at its option, at any time after a Section 11(a)(ii)
Event, exchange all or part of the then outstanding and exercisable Rights
(which (i) shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof, and (ii) shall include, without limitation,
any Rights issued after the Distribution Date) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board shall not be
empowered to effect such exchange at any time after any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or any such Subsidiary, or any entity holding Common Stock for or pursuant to
the terms of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the shares of Common
Stock then outstanding.

         (b) Immediately upon the action of the Board ordering the exchange of
any Rights pursuant to subsection (a) of this Section 24, evidence of which
shall have been filed with the Rights Agent, and without any further action and
without any notice, the right to exercise such

                                      -31-
<PAGE>

Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; PROVIDED, HOWEVER, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange shall state the method by which the
exchange of shares of Common Stock for Rights will be effected and, in the event
of any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions of Section 7(e)
hereof) held by each holder of Rights.

         (c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Stock (or equivalent preferred stock, as such
term is defined in Section 11(b) hereof) for shares of Common Stock exchangeable
for Rights, at the initial rate of one one-thousandth of a share of Preferred
Stock (or equivalent preferred stock) for each share of Common Stock, as
appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Stock pursuant to Section 3(A) of the Certificate of Designations
attached hereto as EXHIBIT A, so that the fraction of a share of Preferred Stock
(or equivalent preferred stock) delivered in lieu of each share of Common Stock
shall have the same voting rights as one share of Common Stock.

         (d) In the event that there shall not be sufficient shares of Common
Stock or Preferred Stock issued but not outstanding or authorized but unissued
to permit any exchange of Rights as contemplated in accordance with this Section
24, the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock or Preferred Stock for issuance upon exchange
of the Rights.

         (e) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of such fractional shares of Common Stock, there shall be
paid to the registered holders of the Right Certificates with regard to which
such fractional shares of Common Stock would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this subsection (e), the current market value
of a whole share of Common Stock shall be the closing price per share of Common
Stock (as determined pursuant to the second sentence of Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of exchange pursuant to this
Section 24.

         Section 25. NOTICE OF CERTAIN EVENTS.

         (a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of Preferred

                                      -32-
<PAGE>

Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, or (iii) to effect any reclassification of its Preferred
Stock (other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect any consolidation or
merger into or with any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof), 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 transaction or a series of related transactions,
of more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution of
rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take place
and the date of participation therein by the holders of the shares of Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least twenty (20) days
prior to the record date for determining holders of the shares of Preferred
Stock for purposes of such action, and in the case of any such other action, at
least twenty (20) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the shares of Preferred
Stock, whichever shall be the earlier.

         (b) In case a Section 11(a)(ii) Event shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Section
11(a)(ii) hereof, and (ii) all references in the preceding paragraph to
Preferred Stock shall be deemed thereafter to refer also to Common Stock and/or,
if appropriate, other securities; provided that the failure to give such notice
shall not affect the validity of such consent.

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

                               Art Technology Group, Inc.
                               25 First Street
                               Second Floor
                               Cambridge, MA  02141
                               Attention:  Chief Executive Officer

                               with a copy to:

                               Hale and Dorr LLP
                               60 State Street
                               Boston, MA 02109
                               Attention:  Jay E. Bothwick, Esq.

                                      -33-
<PAGE>

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

                               Equiserve Trust Company, N.A.
                               150 Royall Street
                               Canton, MA  02021
                               Attention:  General Counsel

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

         Section 27. SUPPLEMENTS AND AMENDMENTS. Except as provided in the
penultimate sentence of this Section 27, for so long as the Rights are then
redeemable, the Company may, in its sole and absolute discretion, and the Rights
Agent shall, if the Company so directs, supplement or amend any provision of
this Agreement in any respect without the approval of any holders of the Rights.
At any time when the Rights are no longer redeemable, except as provided in the
penultimate sentence of this Section 27, the Company may, by approval of at
least 75% of the members of the Board, and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Rights in order (i) to cure any ambiguity or (ii) to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, provided that no such supplement or amendment
shall adversely affect the interests of the holders of Rights as such (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person).
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 27, the Rights Agent shall execute such supplement or
amendment. Notwithstanding anything contained in this Agreement to the contrary,
no supplement or amendment shall be made which changes the Redemption Price.
Prior to the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Stock.

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

         Section 29. ACTIONS BY THE BOARD, ETC. The Board shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board or to the Company, or as may
be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the

                                      -34-
<PAGE>

administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board to any liability to the holders of the Rights.

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

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

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

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

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

                                      -35-
<PAGE>

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

Attest:                                 ART TECHNOLOGY GROUP, INC.

By: /s/ Linda Handman              By:  /s/ Paul G. Shorthose
   --------------------------           ----------------------------------
Name: Linda Handman                Name: /s/ Paul G. Shorthose
     ------------------------           ----------------------------------
Title: General Counsel             Title: President and Chief Operating Officer
      -----------------------           ----------------------------------

Attest:                                 EQUISERVE TRUST COMPANY, N.A.

By: /s/ Greg Veliotis              By:  /s/ Michael Connor
   --------------------------         ------------------------------------
Name: Greg Veliotis                Name: Michael Connor
     ------------------------           ----------------------------------
Title: Account Manager             Title: Managing Director
      -----------------------           ----------------------------------

                                      -36-
<PAGE>

                                     FORM OF

                           CERTIFICATE OF DESIGNATIONS

                                       OF

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       OF

                           ART TECHNOLOGY GROUP, INC.

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

Art Technology Group, Inc., a corporation organized and existing under the laws
of the State of Delaware (hereinafter called the "Corporation"), hereby
certifies that the following resolution was adopted by the Board of Directors of
the Corporation at a meeting duly called and held on September 26, 2001:

RESOLVED: That pursuant to the authority granted to and vested in the Board of
Directors of the Corporation (hereinafter called the "Board") in accordance with
the provisions of the Certificate of Incorporation, as amended, the Board hereby
creates a series of Preferred Stock, $.01 par value per share (the "Preferred
Stock"), of the Corporation and hereby states the designation and number of
shares, and fixes the relative rights, preferences and limitations thereof 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
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be Five Hundred Thousand (500,000). Such number of shares may be
increased or decreased by resolution of the Board prior to issuance; provided,
that no decrease shall reduce the number of shares of Series A 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 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 Preferred Stock with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Common Stock, par value $.01
per share (the "Common Stock"), of the Corporation, and of any other junior
stock, shall be entitled to receive, when, as and if declared by the Board out
of funds

                                      A-1
<PAGE>

of the Corporation legally available for the payment of dividends, quarterly
dividends payable in cash on the last day of each fiscal quarter of the
Corporation in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $10 or (b) subject to the provision for adjustment
hereinafter set forth, 1000 times the aggregate per share amount of all cash
dividends, and 1000 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 Preferred Stock. In the event 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, combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) 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 Preferred Stock were entitled immediately prior to such event
under clause (b) 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 were outstanding immediately prior to
such event. In the event the Corporation shall at any time declare or pay any
dividend on the Series A Preferred Stock payable in shares of Series A Preferred
Stock, or effect a subdivision, combination or consolidation of the outstanding
shares of Series A Preferred Stock (by reclassification or otherwise than by
payment of a dividend in shares of Series A Preferred Stock) into a greater or
lesser number of shares of Series A Preferred Stock, then in each such case the
amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the first sentence of this
Section 2(A) shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Series A Preferred Stock that were
outstanding immediately prior to such event and the denominator of which is the
number of shares of Series A Preferred Stock outstanding immediately after such
event.

         (B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock) and the Corporation
shall pay such dividend or distribution on the Series A Preferred Stock before
the dividend or distribution declared on the Common Stock is paid or set apart;
provided that, in the event 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 $10
per share on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.

         (C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A 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

                                      A-2
<PAGE>

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 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 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 may fix a record date
for the determination of holders of shares of Series A 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 Preferred
Stock shall have the following voting rights:

         (A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 1000 votes
on all matters submitted to a vote of the stockholders of the Corporation. In
the event 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,
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) 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
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 were
outstanding immediately prior to such event. In the event the Corporation shall
at any time declare or pay any dividend on the Series A Preferred Stock payable
in shares of Series A Preferred Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Series A Preferred Stock (by
reclassification or otherwise than by payment of a dividend in shares of Series
A Preferred Stock) into a greater or lesser number of shares of Series A
Preferred Stock, then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Series A Preferred Stock that were
outstanding immediately prior to such event and the denominator of which is the
number of shares of Series A Preferred Stock outstanding immediately after such
event.

         (B) Except as otherwise provided herein, in the Certificate of
Incorporation or by law, the holders of shares of Series A 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) (i) If at any time dividends on any Series A Preferred Stock shall
be in arrears in an amount equal to six quarterly dividends thereon, the holders
of the Series A Preferred Stock, voting as a separate series from all other
series of Preferred Stock and classes of

                                      A-3
<PAGE>

capital stock, shall be entitled to elect two members of the Board in addition
to any Directors elected by any other series, class or classes of securities and
the authorized number of Directors will automatically be increased by two.
Promptly thereafter, the Board of the Corporation shall, as soon as may be
practicable, call a special meeting of holders of Series A Preferred Stock for
the purpose of electing such members of the Board. Such special meeting shall in
any event be held within 45 days of the occurrence of such arrearage.

             (ii) During any period when the holders of Series A Preferred
Stock, voting as a separate series, shall be entitled and shall have exercised
their right to elect two Directors, then, and during such time as such right
continues, (a) the then authorized number of Directors shall be increased by
two, and the holders of Series A Preferred Stock, voting as a separate series,
shall be entitled to elect the additional Directors so provided for, and (b)
each such additional Director shall not be a member of any existing class of the
Board, but shall serve until the next annual meeting of stockholders for the
election of Directors, or until his successor shall be elected and shall
qualify, or until his right to hold such office terminates pursuant to the
provisions of this Section 3(C).

             (iii) A Director elected pursuant to the terms hereof may be
removed with or without cause by the holders of Series A Preferred Stock
entitled to vote in an election of such Director.

             (iv) If, during any interval between annual meetings of
stockholders for the election of Directors and while the holders of Series A
Preferred Stock shall be entitled to elect two Directors, there is no such
Director in office by reason of resignation, death or removal, then, promptly
thereafter, the Board shall call a special meeting of the holders of Series A
Preferred Stock for the purpose of filling such vacancy and such vacancy shall
be filled at such special meeting. Such special meeting shall in any event be
held within 45 days of the occurrence of such vacancy.

             (v) At such time as the arrearage is fully cured, and all dividends
accumulated and unpaid on any shares of Series A Preferred Stock outstanding are
paid, and, in addition thereto, at least one regular dividend has been paid
subsequent to curing such arrearage, the term of office of any Director elected
pursuant to this Section 3(C), or his successor, shall automatically terminate,
and the authorized number of Directors shall automatically decrease by two, the
rights of the holders of the shares of the Series A Preferred Stock to vote as
provided in this Section 3(C) shall cease, subject to renewal from time to time
upon the same terms and conditions, and the holders of shares of the Series A
Preferred Stock shall have only the limited voting rights elsewhere herein set
forth.

         (D) Except as set forth herein, or as otherwise provided by law,
holders of Series A 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.

                                      A-4
<PAGE>

         Section 4. CERTAIN RESTRICTIONS.

         (A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A 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 Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:

                           (i) 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 Preferred Stock;

                           (ii) 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 Preferred Stock, except
                  dividends paid ratably on the Series A Preferred Stock and all
                  such parity stock on which dividends are payable or in arrears
                  in proportion to the total amounts to which the holders of all
                  such shares are then entitled;

                           (iii) redeem or purchase or otherwise acquire for
                  consideration shares of any stock ranking junior (either as to
                  dividends or upon liquidation, dissolution or winding up) to
                  the Series A 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 (either as to dividends or
                  upon dissolution, liquidation or winding up) to the Series A
                  Preferred Stock; or

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

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

         Section 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled 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 Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.

                                      A-5
<PAGE>

         Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP.

         (A) Upon any liquidation, dissolution or winding up of the Corporation,
no distribution shall be made (1) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series A Preferred Stock unless, prior thereto, the holders of shares of
Series A Preferred Stock shall have received $1000 per share, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1000 times the aggregate amount to be distributed per share to holders of shares
of Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the Series A
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.

         (B) Neither the consolidation, merger or other business combination of
the Corporation with or into any other corporation nor the sale, lease, exchange
or conveyance of all or any part of the property, assets or business of the
Corporation shall be deemed to be a liquidation, dissolution or winding up of
the Corporation for purposes of this Section 6.

         (C) In the event 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, combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) 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
Preferred Stock were entitled immediately prior to such event under the proviso
in clause (1) of paragraph (A) of this Section 6 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 were
outstanding immediately prior to such event. In the event the Corporation shall
at any time declare or pay any dividend on the Series A Preferred Stock payable
in shares of Series A Preferred Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Series A Preferred Stock (by
reclassification or otherwise than by payment of a dividend in shares of Series
A Preferred Stock) into a greater or lesser number of shares of Series A
Preferred Stock, then in each such case the aggregate amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such event
under the proviso in clause (1) of paragraph (A) of this Section 6 shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Series A Preferred Stock that were outstanding immediately
prior to such event and the denominator of which is the number of shares of
Series A Preferred Stock outstanding immediately after such event.

         Section 7. CONSOLIDATION, MERGER, ETC. Notwithstanding anything to the
contrary contained herein, in case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series A
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

                                      A-6
<PAGE>

times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event 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, combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) 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 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 were outstanding immediately prior to such event. In the event the
Corporation shall at any time declare or pay any dividend on the Series A
Preferred Stock payable in shares of Series A Preferred Stock, or effect a
subdivision, combination or consolidation of the outstanding shares of Series A
Preferred Stock (by reclassification or otherwise than by payment of a dividend
in shares of Series A Preferred Stock) into a greater or lesser number of shares
of Series A Preferred Stock, then in each such case the amount set forth in the
first sentence of this Section 7 with respect to the exchange or change of
shares of Series A Preferred Stock shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Series A
Preferred Stock that were outstanding immediately prior to such event and the
denominator of which is the number of shares of Series A Preferred Stock
outstanding immediately after such event.

         Section 8. NO REDEMPTION. The shares of Series A Preferred Stock shall
not be redeemable.

         Section 9. RANK. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to all series
of any other class of the Preferred Stock issued either before or after the
issuance of the Series A Preferred Stock, unless the terms of any such series
shall provide otherwise.

         Section 10. AMENDMENT. At such time as any shares of Series A Preferred
Stock are outstanding, the Certificate of Incorporation, as amended, of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A 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 Preferred Stock, voting
together as a single class.

         Section 11. FRACTIONAL SHARES. Series A Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of holders
of Series A Preferred Stock.

                                      A-7
<PAGE>

         IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its Chief Executive Officer this 26th day of
September, 2001.

                                   ART TECHNOLOGY GROUP, INC.

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

                                      A-8
<PAGE>

                          [Form of Rights Certificate]

Certificate No. R-                                               ______ Rights

NOT EXERCISABLE AFTER SEPTEMBER 26, 2011 OR EARLIER IF REDEEMED OR EXCHANGED BY
THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.]

                           Art Technology Group, Inc.

                               Rights Certificate

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 September 26, 2001 (the "Rights Agreement"), between Art
Technology Group, Inc., a Delaware corporation (the "Company"), and EquiServe
Trust Company, N.A. (the "Rights Agent"), to purchase from the Company after the
Distribution Date (as such term is defined in the Rights Agreement) and at any
time prior to 5:00 p.m. (Boston time) on September 26, 2011 at the office of the
Rights Agent designated for such purpose, or its successors as Rights Agent, one
one-thousandth of a fully paid, non-assessable share of Series A Junior
Participating Preferred Stock (the "Preferred Stock") of the Company, $.01 par
value per share, at a purchase price of $15 in cash per one one-thousandth of a
share (the "Purchase Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related Certificate duly
executed. The number of Rights evidenced by this Rights Certificate (and the
number of one one-thousandth of a share of Preferred Stock which may be
purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of the close of business on
September 26, 2001, based on the Preferred Stock as constituted at such date.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Rights Agreement.

Upon the occurrence of a Section 11(a)(ii) Event, if the Rights evidenced by
this Rights Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement), (ii) a transferee of any such Acquiring Person,
Associate or Affiliate who becomes a transferee after the Acquiring Person
becomes an Acquiring Person, or (iii) under certain circumstances specified in
the Rights Agreement, a transferee of a person who, concurrently with or after
such transfer, became an

                                      B-1
<PAGE>

Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.

As provided in the Rights Agreement, the Purchase Price and the number and kind
of shares of Preferred Stock or other securities which may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events, including
Section 11(a)(ii) Events.

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

This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, with
the Form of Election and Certificate set forth on the reverse side duly
executed, may be exchanged for another Rights Certificate or Rights Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of one one-thousandths of a share of Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.

Subject to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed by the Company at its option at a redemption price
of $.001 per Right at any time prior to the earlier of (i) the close of business
on the tenth Business Day (or such later date as may be determined by the Board
pursuant to clause (i) of the first sentence of Section 3(a) with respect to the
Distribution Date) following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the close of
business on the tenth Business Day following the Record Date) and (ii) the Final
Expiration Date.

Subject to the provisions of the Rights Agreement, the Company may, at its
option, at any time after a Section 11(a)(ii) Event, exchange all or part of the
Rights evidenced by this Certificate for shares of the Company's Common Stock or
for Preferred Stock (or shares of a class or series of the Company's preferred
stock having the same rights, privileges and preferences as the Preferred
Stock).

No fractional shares of Preferred Stock 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 share of Preferred Stock, 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.

                                      B-2
<PAGE>

No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Preferred
Stock 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 Rights
Certificate shall have been exercised as provided in the Rights Agreement.

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

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

Dated as of _______________

ATTEST:                                     ART TECHNOLOGY GROUP, INC.

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

COUNTERSIGNED:

EQUISERVE TRUST COMPANY, N.A.

By:___________________________

  Authorized Signature

                                      B-3
<PAGE>

                  [Form of Reverse Side of Rights Certificate]

                               FORM OF ASSIGNMENT

                (To be executed by the registered holder if such

               holder desires to transfer the Rights Certificate.)

FOR VALUE RECEIVED _____________________________________________ hereby sells,
assigns and transfers unto ____________________________________________________
_________________________________________________________________

                  (Please print name and address of transferee)

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

Dated: ________________

                                                  -----------------------------
                                                  Signature
Signature Guaranteed:

                                   Certificate

The undersigned hereby certifies that the Rights evidenced by this Rights
Certificate are not beneficially owned by, or being assigned to, an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined pursuant
to the Rights Agreement).

Dated: ______________

                                                  -----------------------------
                                                  Signature
Signature Guaranteed:

                                     NOTICE

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

                                      B-4
<PAGE>

                          FORM OF ELECTION TO PURCHASE

                  (To be executed if holder desires to exercise

                 Rights represented by the Rights Certificate.)

To:    EquiServe Trust Company, N.A.

The undersigned hereby irrevocably elects to exercise ___________ Rights
represented by this Rights Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:

Please insert social security

or other identifying number  __________________________________________________

_______________________________________________________________________________

                         (Please print name and address)

_______________________________________________________________________________

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

Please insert social security

or other identifying number  __________________________________________________

_______________________________________________________________________________

                         (Please print name and address)

_______________________________________________________________________________

Dated: ______________

                                                  -----------------------------
                                                  Signature
Signature Guaranteed:

                                      B-5
<PAGE>

                                   Certificate

         The undersigned hereby certifies by checking the appropriate boxes
that:

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

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

Dated: _______________

                                                  -----------------------------
                                                  Signature
Signature Guaranteed:

                                     NOTICE

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

                                      B-6
<PAGE>

                              SUMMARY OF RIGHTS TO

                            PURCHASE PREFERRED STOCK

On September 26, 2001, the Board of Directors of Art Technology Group, Inc. (the
"Company"), declared a dividend of one Right for each outstanding share of the
Company's Common Stock to stockholders of record at the close of business on
October 9, 2001 (the "Record 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 per share (the "Preferred Stock"),
at a Purchase Price of $15 in cash, subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement dated September 26, 2001
(the "Rights Agreement") between the Company and EquiServe Trust Company, N.A.,
as Rights Agent.

Initially, the Rights are not exercisable and will be attached to all
certificates representing outstanding shares of Common Stock, and no separate
Rights Certificates will be distributed. The Rights will separate from the
Common Stock, and the Distribution Date will occur, upon the earlier of (i) 10
business days following the later of (a) the first date of a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired, or obtained the right to acquire, beneficial ownership of
15% or more of the outstanding shares of Common Stock or (b) the first date on
which an executive officer of the Company has actual knowledge that an Acquiring
Person has become such (the "Stock Acquisition Date"), or (ii) 10 business days
following the commencement of a tender offer or exchange offer that would result
in a person or group beneficially owning 15% or more of the outstanding shares
of Common Stock. The Distribution Date may be deferred in circumstances
determined by the Board of Directors. In addition, certain inadvertent
acquisitions will not trigger the occurrence of the Distribution Date. Until the
Distribution Date (or earlier redemption or expiration of the Rights), (i) the
Rights will be evidenced by the Common Stock certificates outstanding on the
Record Date, together with this Summary of Rights, or by new Common Stock
certificates issued after the Record Date which contain a notation incorporating
the Rights Agreement by reference, (ii) the Rights will be transferred with and
only with such Common Stock certificates; and (iii) the surrender for transfer
of any certificates for Common Stock outstanding (with or without a copy of this
Summary of Rights or such notation) will also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate.

The Rights are not exercisable until the Distribution Date and will expire upon
the close of business on September 26, 2011 (the "Final Expiration Date") unless
earlier redeemed or exchanged as described below. As soon as practicable after
the Distribution Date, separate Rights Certificates will be mailed to holders of
record of the Common Stock as of the close of business on the Distribution Date
and, thereafter, the separate Rights Certificates alone will represent the
Rights. Except as otherwise determined by the Board of Directors, and except for
shares of Common Stock issued upon exercise, conversion or exchange of then
outstanding options, convertible or exchangeable securities or other contingent
obligations to issue shares or pursuant to any employee benefit plan or
arrangement, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.

                                      C-1
<PAGE>

In the event that any Person becomes an Acquiring Person, unless the event
causing the 15% threshold to be crossed is a Permitted Offer (as defined in the
Rights Agreement), then, promptly following the first occurrence of such event,
each holder of a Right (except as provided below and in Section 7(e) of the
Rights Agreement) shall thereafter have the right to receive, upon exercise,
that number of shares of Common Stock of the Company (or, in certain
circumstances, cash, property or other securities of the Company) which equals
the exercise price of the Right divided by 50% of the current market price (as
defined in the Rights Agreement) per share of Common Stock at the date of the
occurrence of such event. However, Rights are not exercisable following such
event until such time as the Rights are no longer redeemable by the Company as
described below. Notwithstanding any of the foregoing, following the occurrence
of such event, all Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any Acquiring Person will be
null and void. The event summarized in this paragraph is referred to as a
"Section 11(a)(ii) Event."

For example, at an exercise price of $15 per Right, each Right not owned by an
Acquiring Person (or by certain related parties) following a Section 11(a)(ii)
Event would entitle its holder to purchase for $15 such number of shares of
Common Stock (or other consideration, as noted above) as equals $15 divided by
one-half of the current market price (as defined in the Rights Agreement) of the
Common Stock. Assuming that the Common Stock had a market price of $7.50 per
share at such time, the holder of each valid Right would be entitled to purchase
four shares of Common Stock, having a market value of 4 x $7.50, or $30, for
$15.

In the event that, at any time after any Person becomes an Acquiring Person, (i)
the Company is consolidated with, or merged with and into, another entity and
the Company is not the surviving entity of such consolidation or merger (other
than a consolidation or merger which follows a Permitted Offer) or if the
Company is the surviving entity, but shares of its outstanding Common Stock are
changed or exchanged for stock or securities (of any other person) or cash or
any other property, or (ii) more than 50% of the Company's assets or earning
power is sold or transferred, each holder of a Right (except Rights which
previously have been voided as set forth above) shall thereafter have the right
to receive, upon exercise, that number of shares of common stock of the
acquiring company which equals the exercise price of the Right divided by 50% of
the current market price (as defined in the Rights Agreement) of such common
stock at the date of the occurrence of the event. The events summarized in this
paragraph are referred to as "Section 13 Events." A Section 11(a)(ii) Event and
Section 13 Events are collectively referred to as "Triggering Events."

For example, at an exercise price of $15 per Right, each valid Right following a
Section 13 Event would entitle its holder to purchase for $15 such number of
shares of common stock of the acquiring company as equals $15 divided by
one-half of the current market price (as defined in the Rights Agreement) of
such common stock. Assuming that such common stock had a market price of $15 per
share at such time, the holder of each valid Right would be entitled to purchase
four shares of common stock of the acquiring company, having a market value of 2
x $15, or $30, for $15.

At any time after the occurrence of a Section 11(a)(ii) Event, when no person
owns a majority of the Common Stock, the Board of Directors of the Company may
exchange the Rights (other than

                                      C-2
<PAGE>

Rights owned by such Acquiring Person which have become void), in whole or in
part, at an exchange ratio of one share of Common Stock, or one one-thousandth
of a share of Preferred Stock (or of a share of a class or series of the
Company's preferred stock having equivalent rights, preferences and privileges),
per Right (subject to adjustment).

The Purchase Price payable, and the number of units of Preferred Stock or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) if holders of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or convertible securities at less than
the then-current market price (as defined in the Rights Agreement) of the
Preferred Stock, or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding regular periodic cash
dividends paid out of earnings or retained earnings) or of subscription rights
or warrants (other than those referred to above). The number of Rights
associated with each share of Common Stock is also subject to adjustment in the
event of a stock split of the Common Stock or a stock dividend on the Common
Stock payable in Common Stock or subdivisions, consolidations or combinations of
the Common Stock occurring, in any such case, prior to the Distribution Date.

With certain exceptions, no adjustment in the Purchase Price will be required
until cumulative adjustments amount to at least 1% of the Purchase Price. No
fractional shares of Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock) will be issued
and, in lieu thereof, an adjustment in cash will be made based on the market
price of the Preferred Stock on the last trading date prior to the date of
exercise.

Preferred Stock purchasable upon exercise of the Rights will not be redeemable.
Each share of Preferred Stock will be entitled to receive, when, as and if
declared by the Board of Directors, a minimum preferential quarterly dividend
payment of $10 per share or, if greater, an aggregate dividend of 1000 times the
dividend declared per share of Common Stock. In the event of liquidation, the
holders of the Preferred Stock will be entitled to a minimum preferential
liquidation payment of $1000 per share, plus an amount equal to accrued and
unpaid dividends, and will be entitled to an aggregate payment of 1000 times the
payment made per share of Common Stock. Each share of Preferred Stock will have
1000 votes, voting together with the Common Stock. In the event of any merger,
consolidation or other transaction in which Common Stock is changed or
exchanged, each share of Preferred Stock will be entitled to receive 1000 times
the amount received per share of Common Stock. These rights are protected by
customary antidilution provisions. Because of the nature of the Preferred
Stock's dividend, liquidation and voting rights, the value of one one-thousandth
of a share of Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.

At any time prior to the earlier of the tenth Business Day (or such later date
as may be determined by the Board of Directors of the Company) after the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at a price of $0.001 per Right (the "Redemption Price"), payable in cash or
stock. Immediately upon the redemption of the Rights or such earlier time as
established by the Board in the resolution ordering the redemption of the

                                      C-3
<PAGE>

Rights, the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price. The Rights may also be redeemable
following certain other circumstances specified in the Rights Agreement.

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. Although the distribution of the Rights should not be
taxable to stockholders or to the Company, stockholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.

Any provision of the Rights Agreement, other than the redemption price, may be
amended by the Board prior to such time as the Rights are no longer redeemable.
Once the Rights are no longer redeemable, the Board's authority to amend the
Rights is limited to correcting ambiguities or defective or inconsistent
provisions in a manner that does not adversely affect the interest of holders of
Rights.

The Rights are intended to protect the stockholders of the Company in the event
of an unfair or coercive offer to acquire the Company and to provide the Board
with adequate time to evaluate unsolicited offers. The Rights may have
anti-takeover effects. The Rights will cause substantial dilution to a person or
group that attempts to acquire the Company without conditioning the offer on a
substantial number of Rights being acquired. The Rights, however, should not
affect any prospective offeror willing to make an offer at a fair price and
otherwise in the best interests of the Company and its stockholders, as
determined by a majority of the Board. The Rights should not interfere with any
merger or other business combination approved by the Board.

A copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to the Company's Current Report on Form 8-K dated
September __, 2001. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.

                                      C-4<Page>

     SIXTH SUPPLEMENTAL INDENTURE, dated as of               , 2001 (the
"Supplemental Indenture"), between Household International, Inc., a Delaware
corporation (the "Company"), and Bank One, National Association, as trustee
(the "Trustee") under the Indenture dated as of May 15, 1995 between the
Company and the Trustee (the "Indenture").

     WHEREAS, the Company executed and delivered the Indenture to the Trustee
to provide for the future issuance of the Company's unsecured junior
subordinated debt securities, to be issued from time to time in one or more
series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered
as provided in the Indenture;

     WHEREAS, pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of its debt securities to be
known as its % Junior Subordinated Deferrable Interest Notes due
 , (the "Notes"), the form and substance of such Notes and the terms,
provisions and conditions thereof to be set forth as provided in the
Indenture and this Supplemental Indenture;

     WHEREAS, Household Capital Trust VII, a Delaware statutory business
trust (the "Trust"), intends to offer to the public $           aggregate
liquidation amount of its    % Trust Preferred Securities (the "Preferred
Securities") and intends to issue to the Company, as sponsor, its    % Trust
Common Securities (the "Common Securities", and together with the Preferred
Securities, the "Trust Securities"), representing undivided beneficial
interests in the assets of the Trust and proposes to invest the proceeds from
such offering in $           aggregate principal amount of the Notes; and

     WHEREAS, the Company has requested that the Trustee execute and deliver
this Supplemental Indenture, and all requirements necessary to make this
Supplemental Indenture a valid instrument, in accordance with its terms, and to
make the Notes, when executed by the Company and authenticated and delivered by
the Trustee, the valid obligations of the Company, have been performed, and the
execution and delivery of this Supplemental Indenture has been duly authorized
in all respects:

     NOW THEREFORE, in consideration of the purchase and acceptance of the Notes
by the holders thereof, and for the purpose of setting forth, as provided in the
Indenture, the form and substance of the Notes and the terms, provisions and
conditions thereof, the Company covenants and agrees with the Trustee as
follows:

                                    ARTICLE I

                                   DEFINITIONS

     SECTION 1.1 DEFINITION OF TERMS.

     Unless the context otherwise requires:

     (a)  a term defined in the Indenture has the same meaning when used in this
          Supplemental Indenture;

     (b)  a term defined anywhere in this Supplemental Indenture has the same
          meaning throughout;

     (c)  the singular includes the plural and vice versa;

     (d)  a reference to a Section or Article is to a Section or Article of this
          Supplemental Indenture;

     (e)  headings are for convenience of reference only and do not affect
          interpretation;

     (f)  the following terms have the meanings given to them in the
          Declaration: (i) Clearing Agency (ii) Delaware Trustee;
          (iii)Dissolution Tax Opinion; (iv) No Recognition Opinion; (v) Pricing
          Agreement; (vi) Property

                                       1

<Page>

          Trustee; (vii) Preferred Security Certificate; (viii) Redemption Tax
          Opinion; (ix) Regular Trustees; (x) Special Event; (xi) Tax Event; and
          (xii) Underwriting Agreement); and

     (g)  the following terms have the meanings given to them in this Section
          l.l(g):

     "Additional Interest" has the meaning set forth in Section 2.5(c).

     "Compounded Interest" has the meaning set forth in Section 4.1.

     "Coupon Rate" has the meaning set forth in Section 2.5(a).

     "Declaration" means the Amended and Restated Declaration of Trust of
     Household Capital Trust VII, a Delaware business trust, dated as of
                   , 2001.

     "Deferred Interest" has the meaning set forth in Section 4.1.

     "Dissolution Event" means that as a result of the occurrence and
     continuation of a Special Event, the Trust is to be dissolved in accordance
     with the Declaration and the Notes held by the Trustee are to be
     distributed to the holders of the Trust Securities issued by the Trust pro
     rata in accordance with the Declaration.

     "Extended Interest Payment Period" has the meaning set forth in Section
     4.1.

     "Interest Payment Date" has the meaning set forth in Section 2.5(a).

     "Maturity Date" means,           ,           , or such other earlier date
     as may be determined by the Company pursuant to Section 3.4 herein.

     "Ministerial Action" has the meaning set forth in Section 3.1.

     "90 Day Period" has the meaning set forth in Section 3.1.

     "Non Book Entry Preferred Securities" has the meaning set forth in Section
     2.4(b).

     "Paying Agent" means The BankOne, National Association, until a successor
     paying agent has been appointed and has accepted such appointment.

     "Redemption Price" has the meaning set forth in Section 3.1.

                                   ARTICLE II
                         GENERAL TERMS AND CONDITIONS OF
                                    THE NOTES

     SECTION 2.1 DESIGNATION AND PRINCIPAL AMOUNT.

     There is hereby authorized a series of debt securities designated the "  %
Junior Subordinated Deferrable Interest Notes due          ,  ", limited in
aggregate principal amount to $      , which amount shall be as set forth in any
written order of the Company for the authentication and delivery of Notes
pursuant to Section 2.02 of the Indenture.

                                       2

<Page>

     SECTION 2.2 MATURITY.

     The Maturity Date will be           ,           , or such other earlier
date as may be determined by the Company pursuant to Section 3.4 herein, and
the date on which the Notes mature and on which the principal shall be due
and payable together with all accrued and unpaid interest thereon.

     SECTION 2.3 FORM AND PAYMENT.

     Except as provided in Section 2.4, the Notes shall be issued in fully
registered certificated form without interest coupons. Principal and interest on
the Notes issued in certificated form will be payable, the transfer of such
Notes will be registrable and such Notes will be exchangeable for Notes bearing
identical terms and provisions at the office or agency of the Trustee; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the registered Holder at such address as shall appear in the
Note Register. Notwithstanding the foregoing, so long as the registered Holder
of any Notes is the Property Trustee, the payment of the principal of (and
premium, if any) and interest on such Notes held by the Property Trustee will be
made by wire transfer at such place and to such account as may be designated by
the Property Trustee.

     SECTION 2.4 DEPOSITORY NOTE.

     In connection with a Dissolution Event;

     (a)  the Notes in certificated form may be presented to the Trustee by the
          Property Trustee in exchange for a Depository Note in an aggregate
          principal amount equal to all Outstanding Notes, to be registered in
          the name of the Depository, or its nominee, and delivered by the
          Trustee to the Depository for crediting to the accounts of its
          participants pursuant to the instructions of the Regular Trustees. The
          Company upon any such presentation shall execute a Depository Note in
          such aggregate principal amount and deliver the same to the Trustee
          for authentication and delivery in accordance with the Indenture and
          this Supplemental Indenture. Payments on the Notes issued as a
          Depository Note will be made to the Depository; and

     (b)  if any Preferred Securities are held in non book-entry certificated
          form, the Notes in certificated form may be presented to the Trustee
          by the Property Trustee and any Preferred Security Certificate which
          represents Preferred Securities other than Preferred Securities held
          by the Clearing Agency or its nominee ("Non Book-Entry Preferred
          Securities") will be deemed to represent beneficial interests in Notes
          presented to the Trustee by the Property Trustee having an aggregate
          principal amount equal to the aggregate liquidation amount of the Non
          Book-Entry Preferred Securities until such Preferred Security
          Certificates are presented to the Security Registrar for transfer or
          reissuance at which time such Preferred Security Certificates will be
          cancelled and a Note registered in the name of the holder of the
          Preferred Security Certificate or the transferee of the holder of such
          Preferred Security Certificate as the case may be, with an aggregate
          principal amount equal to the aggregate liquidation amount of the
          Preferred Security Certificate cancelled will be executed by the
          Company and delivered to the Trustee for authentication and delivery
          in accordance with the Indenture and this Supplemental Indenture. On
          issue of such Notes, Notes with an equivalent aggregate principal
          amount that were presented by the Property Trustee to the Trustee will
          be deemed to have been cancelled.

     SECTION 2.5 INTEREST.

     (a)  Each Note will bear interest at the rate of    % per annum (the
          "Coupon Rate") from the original date of issuance until the principal
          thereof becomes due and payable, and on any overdue principal and
          (to the extent that payment of such interest is enforceable under
          applicable law) on any overdue installment of interest at the Coupon
          Rate, compounded quarterly and payable (subject to the provisions
          of Article IV) quarterly in arrears on     ,     ,     , and      of
          each year (each, an "Interest Payment Date", commencing on          ,
          2001), to the person in whose name such Note or any predecessor Note
          is registered, at the close of business on the Regular Record Date
          for such interest installment, which shall be the close of business
          on the Business

                                    3

<Page>

          Day next preceding that Interest Payment Date. If pursuant to the
          provisions of Section 2.11(c) of the Indenture the Notes are no
          longer represented by a Depository Note, the Company may select a
          Regular Record Date for such interest installment which shall be any
          date at least fifteen days before an Interest Payment Date.

     (b)  The amount of interest payable for any period will be computed (i) for
          any full 90-day quarterly interest payment period, on the basis of a
          360-day year of twelve 30-day months and (ii) for any period shorter
          than a full 90-day quarterly interest payment period for which
          interest payments are computed, on the basis of a 30-day month, and
          for periods of less than a month, the actual number of days elapsed
          per 30-day month. In the event that any date on which interest is
          payable on the Notes is not a Business Day, then payment of interest
          payable on such date will be made on the next succeeding day which is
          a Business Day (and without any interest or other payment in respect
          of any such delay), except that, if such Business Day is in the next
          succeeding calendar year, such payment shall be made on the
          immediately preceding Business Day, in each case with the same force
          and effect as if made on such date.

     (c)  If at any time while the Property Trustee is the Holder of any Notes,
          the Trust or the Property Trustee is required to pay any taxes,
          duties, assessments or governmental charges of whatever nature (other
          than withholding taxes) imposed by the United States, or any other
          taxing authority, then, in any case, the Company will pay as
          additional interest ("Additional Interest") on the Notes held by the
          Property Trustee, such additional amounts as shall be required so that
          the net amounts received and retained by the Trust and the Property
          Trustee after paying such taxes, duties assessments or other
          governmental charges will be equal to the amounts the Trust and the
          property Trustee would have received had no such taxes, duties,
          assessments or other government charges been imposed.

                                   ARTICLE III
                           REDEMPTION OF THE NOTES AND
                            ACCELERATION OF MATURITY

     SECTION 3.1 TAX EVENT REDEMPTION.

     If a Tax Event has occurred and is continuing and:

     (a)  the Company has received a Redemption Tax Opinion; or

     (b)  after receiving a Dissolution Tax Opinion, the Regular Trustees shall
          have been informed by tax counsel rendering the Dissolution Tax
          Opinion that a No Recognition Opinion cannot be delivered to the
          Trust,

then, notwithstanding Section 3.2, the Company shall have the right upon not
less than 30 days nor more than 60 days notice to the registered Holders of the
Notes to redeem the Notes in whole or in part for cash, at the redemption price
set forth below, within 90 days following the occurrence of such Tax Event (the
"90 Day Period"), provided that, if at the time there is available to the
Company the opportunity to eliminate within the 90 Day Period, the Tax Event by
taking some ministerial action ("Ministerial Action"), such as filing a form or
making an election, or pursuing some other similar reasonable measure which has
no adverse effect on the Company, the Trust or the Holders of the Trust
Securities issued by the Trust, the Company shall pursue such Ministerial Action
in lieu of redemption; and provided, further, that the Company shall have no
right to redeem the Notes while the Trust is pursuing any Ministerial Action
pursuant to its obligations under the Declaration.

     The Redemption Price shall be equal to 100% of the principal amount to be
redeemed plus any accrued and unpaid interest thereon to the date of such
redemption (The "Redemption Price").

                                       4

<Page>

     SECTION 3.2 OPTIONAL REDEMPTION BY COMPANY.

     (a)  Subject to the provisions of Article III of the Indenture and to
          Section 3.2(b) hereof, the Company shall have the right to redeem the
          Notes, in whole or in part, from time to time, on or after           ,
                    , at the Redemption Price. Any redemption pursuant to this
          paragraph will be made upon not less than 30 nor more than 60 days'
          notice to the registered Holder of the Notes, at the Redemption
          Price. If the Notes are only partially redeemed pursuant to this
          Section 3.2, the Notes will be redeemed pro rata or by lot or by any
          other method utilized by the Trustee; provided, that if at the time
          of redemption, the Notes are registered as a Depository Note, the
          Depository shall determine by lot the principal amount of such Notes
          held by each Holder to be redeemed.

     (b)  If a partial redemption of the Notes would result in the delisting of
          the Preferred Securities issued by the Trust from any national
          securities exchange or other organization on which the Preferred
          Securities are then listed, the Company shall not be permitted to
          effect such partial redemption and may only redeem the Notes in whole.

     SECTION 3.3 NO SINKING FUND.

     The Notes are not entitled to the benefit of any sinking fund.

     SECTION 3.4 CONDITIONAL RIGHT TO ADVANCE MATURITY.

     If a Tax Event has occurred and is continuing the Company shall have the
right, prior to dissolution of the Trust, to advance the Maturity Date of the
Notes to the minimum extent required in order to allow the Company to deduct
the interest payments on the Notes for United States federal income tax
purposes; provided, however, the resulting Maturity Date shall not be less
than 15 years from the original issuance of the Notes or earlier than
      , 2016. The Company may elect to advance the Maturity Date only if it
has received an opinion of nationally recognized independent tax counsel to
the Company experienced in such matters (which opinion may rely on published
revenue rulings of the Internal Revenue Service), to the effect that (i)
after the Maturity Date has been advanced, interest paid on the Notes will be
deductible by the Company for United States federal income tax purposes and
(ii) advancing the Maturity Date will not result in a taxable event to
holders of the Preferred Securities.

     SECTION 3.5 NOTICE OF ADVANCEMENT OF MATURITY DATE.

     If the Company elects to advance the Maturity Date of the Notes pursuant to
Section 3.4, the Company shall give written notice of such election to the
Trustee, the Regular Trustees and the Property Trustee, and the Trustee shall
give notice to the holders of the Preferred Securities not less than 30 and not
more than 60 days prior to the effective date of such election.

                                   ARTICLE IV
                      EXTENSION OF INTEREST PAYMENT PERIOD

     SECTION 4.1 EXTENSION OF INTEREST PAYMENT PERIOD.

     The Company shall have the right, at any time during the term of the Notes,
from time to time to defer the payment of interest by extending the interest
payment period of such Notes for up to 20 consecutive quarters (the "Extended
Interest Payment Period"), provided that no Extended Interest Payment Period may
extend beyond the Maturity Date of the Notes. To the extent permitted by
applicable law, interest, the payment of which has been deferred because of the
extension of the interest payment period pursuant to this Section 4.1, will bear
interest thereon at the Coupon Rate, compounded quarterly, for each quarter of
the Extended Interest Payment Period ("Compounded Interest"). At the end of the
Extended Interest Payment Period the Company shall pay all interest accrued and
unpaid on the Notes including any Additional Interest and Compounded Interest
("Deferred Interest") which shall be payable to the Holders of the Notes in
whose names the Notes are registered in the Note Register on the first record
date after the end of the Extended Interest Payment Period. Before the
termination of any Extended Interest Payment Period, the Company may further
extend such period, provided that such period together with all such further
extensions thereof shall not exceed 20 consecutive quarters and provided further
that no Extended Interest Payment Period may extend beyond the Maturity Date of
the Notes. Upon the termination of any Extended Interest Payment Period and upon
the payment of all Deferred Interest then due, the Company may select a new
Extended Interest Payment Period, subject to the

                                       5

<Page>

foregoing requirements. No interest shall be due and payable during an Extended
Interest Payment Period, except at the end thereof.

     SECTION 4.2 NOTICE OF EXTENSION.

     (a)  If the Property Trustee is the only registered Holder of the Notes at
          the time the Company selects an Extended Interest Payment Period, the
          Company shall give written notice to both the Regular Trustees and the
          Property Trustee of its selection of such Extended Interest Payment
          Period one Business Day before the earlier of (i) the next succeeding
          date on which Distributions on the Trust Securities issued by the
          Trust are payable, or (ii) the date the Trust is required to give
          notice of the record date or the date such Distributions are payable
          to the New York Stock Exchange or other applicable self-regulatory
          organization or to holders of the Preferred Securities issued by the
          Trust, but in any event at least one Business Day before such record
          date.

     (b)  If the Property Trustee is not the only Holder of the Notes at the
          time the Company selects an Extended Interest Payment Period, the
          Company shall give the Holders of the Notes written notice of its
          selection of such Extended Interest Payment Period 10 Business Days
          before the earlier of (i) the next succeeding Interest Payment Date,
          or (ii) the date the Company is required to give notice of the record
          or payment date of such interest payment to the New York Stock
          Exchange or other applicable self-regulatory organization or to
          Holders of the Notes, but in any event at least two Business Days
          before such record date.

     (c)  The quarter in which any notice is given pursuant to paragraphs (a) or
          (b) of this Section 4.2 shall be counted as one of the 20 quarters
          permitted in the maximum Extended Interest Payment Period permitted
          under Section 4.1.

                                    ARTICLE V
                             EXPENSES AND GUARANTEE

     SECTION 5.1 PAYMENT OF EXPENSES.

     In connection with the offering, sale and issuance of the Notes to the
Property Trustee in connection with the sale of the Trust Securities by the
Trust, the Company shall:

     (a)  pay for all costs and expenses relating to the offering, sale and
          issuance of the Notes, including commissions to the underwriters
          payable pursuant to the Underwriting Agreement and the Pricing
          Agreement and compensation of the Trustee under the Indenture in
          accordance with the provisions of Section 8.07 of the Indenture;

     (b)  pay for all costs and expenses of the Trust (including, but not
          limited to, costs and expenses relating to the organization of the
          Trust, the offering, sale and issuance of the Trust Securities
          (including commissions to the underwriters in connection therewith),
          the fees and expenses of the Property Trustee and the Delaware
          Trustee, the costs and expenses relating to the operation of the
          Trust, including without limitation, costs and expenses of
          accountants, attorneys, statistical or bookkeeping services, expenses
          for printing and engraving and computing or accounting equipment,
          paying agent(s), registrar(s), transfer agent(s), travel expenses and
          costs and expenses incurred in connection with the acquisition,
          financing, and disposition of Trust assets); and

     (c)  pay any and all taxes (other than United States withholding taxes
          attributable to the Trust or its assets) and all liabilities, costs
          and expenses with respect to such taxes of the Trust.

                                       6

<Page>

                                   ARTICLE VI
                                  SUBORDINATION

     SECTION 6.1 AGREEMENT TO SUBORDINATE.

     The Company covenants and agrees, and each Holder of Notes issued hereunder
by such Holder's acceptance thereof likewise covenants and agrees, that all
Notes shall be issued subject to the provisions of this Article VI; and each
Holder of a Note, whether upon original issue or upon transfer or assignment
thereof, accepts and agrees to be bound by such provisions.

     The payment by the Company of the principal of, (premium, if any) and
interest on all Notes issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and junior in right of payment to the
prior payment in full of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter incurred.

     No provision of this Article VI shall prevent the occurrence of any default
or Event of Default hereunder.

     SECTION 6.2 DEFAULT ON SENIOR INDEBTEDNESS.

     In the event and during the continuation of any default by the Company in
the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness of the Company, or in the event that the maturity of any
Senior Indebtedness of the Company, has been accelerated because of a default,
then, in either case, no payment shall be made by the Company with respect to
the principal (including redemption payments) of, or premium, if any, or
interest on the Notes including payment with respect to any obligation due under
the Preferred Securities Guarantee.

     In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder when such payment is prohibited by the
preceding paragraph of this Section 6.2, such payment shall be held in trust for
the benefit of, and shall be paid over or delivered to, the holders of such
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent that the holders of such Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee within 90 days of such payment
of the amounts then due and owing on such Senior Indebtedness and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
such Senior Indebtedness.

     SECTION 6.3 LIQUIDATION; DISSOLUTION; BANKRUPTCY.

     Upon any payment by the Company, or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding-up or liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness
of the Company, shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the Company,
as the case may be, on account of the principal (and premium, if any) or
interest on the Notes; and upon any such dissolution or winding-up or
liquidation or reorganization any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to which the Holders of the Notes or the Trustee would be entitled
to receive from the Company, except for the provisions of this Article VI, shall
be paid by the Company, or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, or by the
Holders of the Notes or by the Trustee under this Indenture if received by them
or it, directly to the holders of Senior Indebtedness of the Company, (pro rata
to the holders of the respective amounts of Senior Indebtedness, as calculated
by the Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay such Senior Indebtedness in full, in
money or money's worth, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness before any
payment or distribution is made to the Holders of Notes or to the Trustee.

                                       7

<Page>

     In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the Holders of the Notes before all Senior Indebtedness of the
Company is paid in full, or provision is made for such payment in money in
accordance with its terms, such payment or distribution shall be held in trust
for the benefit of and shall be paid over or delivered to the holders of such
Senior Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior Indebtedness of the Company, as the case may be, remaining
unpaid to the extent necessary to pay such Senior Indebtedness in full in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.

     For purposes of this Article VI, the words "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article VI with respect to
the Notes to the payment of all Senior Indebtedness of the Company that may at
the time be outstanding, provided that (i) such Senior Indebtedness is assumed
by the new corporation, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of such Senior Indebtedness are
not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article X of the Indenture shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 6.3 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article X
of the Indenture. Nothing in Section 6.2 or in this Section 6.3 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 8.07 of the
Indenture.

     SECTION 6.4 SUBORDINATION.

     Subject to the payment in full of all Senior Indebtedness of the Company,
the rights of the Holders of the Notes shall be subrogated to the rights of the
holders of such Senior Indebtedness to receive payments or distributions of
cash, property or securities of the Company applicable to such Senior
Indebtedness until the principal of (and premium, if any) and interest on the
Notes shall be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of such Senior Indebtedness of any
cash, property or securities to which the Holders of the Notes or the Trustee
would be entitled except for the provisions of this Article VI, and no payment
over pursuant to the provisions of this Article VI, to or for the benefit of the
holders of such Senior Indebtedness by Holders of the Notes or the Trustee,
shall, as between the Company, its creditors other than holders of Senior
Indebtedness of the Company, and the Holders of the Notes, be deemed to be a
payment by the Company to or on account of such Senior Indebtedness. It is
understood that the provisions of this Article VI are and are intended solely
for the purposes of defining the relative rights of the Holders of the Notes, on
the one hand, and the holders of Senior Indebtedness of the Company on the other
hand. Nothing contained in this Article VI or elsewhere in this Indenture or in
the Notes is intended to or shall impair, as between the Company, its creditors
other than the holders of Senior Indebtedness of the Company, and the Holders of
the Notes the obligation of the Company which is absolute and unconditional, to
pay to the Holders of the Notes the principal of (and premium, if any) and
interest on the Notes as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Notes and creditors of the Company other than the
holders of Senior Indebtedness of the Company, nor shall anything herein or
therein prevent the Trustee or the Holder of any Note from exercising all
remedies otherwise permitted by applicable law upon default under the Indenture,
subject to the rights, if any, under this Article VI of the holders of such
Senior Indebtedness in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.

     Upon any payment or distribution of assets of the Company referred to in
this Article VI, the Trustee, subject to the provisions of Section 8.01 of the
Indenture, and the Holders of the Notes, shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of the Notes, for the purposes of ascertaining the
Persons entitled to

                                       8

<Page>

participate in such distribution, the holders of Senior Indebtedness of the
Company the amount thereof or payable thereon, the amount facts pertinent
thereto or to this Article VI.

     SECTION 6.5 TRUSTEE TO EFFECTUATE SUBORDINATION.

     Each Holder of Notes by such Holder's acceptance thereof authorizes and
directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article VI and appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes.

     SECTION 6.6 NOTICE BY THE COMPANY.

     The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company that would prohibit the making of
any payment of monies to or by the Trustee in respect of the Notes pursuant to
the provisions of this Article VI. Notwithstanding the provisions of this
Article VI or any other provision of the Indenture and this Supplemental
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Notes pursuant to the provisions of this Article VI,
unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office of the Trustee from the
Company or a holder or holders of Senior Indebtedness or from any trustee
therefor; and before the receipt of any such written notice, the Trustee,
subject to the provisions of Section 8.01 of the Indenture, shall be entitled in
all respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section 6.6 at
least two Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment of the principal of (or premium, if any) or interest on any Note), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to the
purposes for which they were received, and shall not be affected by any notice
to the contrary that may be received by it within two Business Days prior to
such date.

     The Trustee, subject to the provisions of Section 8.01 of the Indenture,
shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness of the Company (or a
trustee on behalf of such holder) to establish that such notice has been given
by a holder of such Senior indebtedness or a trustee on behalf of any such
holder or holders. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of such Senior Indebtedness to participate in any payment or distribution
pursuant to this Article VI, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of such
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article VI, and if such
evidence is not furnished the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.

                                       9

<Page>

     SECTION 6.7 RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.

     The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article VI in respect of any Senior Indebtedness at any time
held by it, to the same extent as any other holder of Senior Indebtedness, and
nothing in this Indenture shall deprive the Trustee of any of its rights as such
holder.

     With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article VI, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and,
subject to the provisions of Section 8.01 of the Indenture, the Trustee shall
not be liable to any holder of such Senior Indebtedness if it shall pay over or
deliver to Holders of Notes, the Company, or any other Person money or assets to
which any holder of such Senior Indebtedness shall be entitled by virtue of this
Article VI or otherwise.

     SECTION 6.8 SUBORDINATION MAY NOT BE IMPAIRED.

     No right of any present or future holder of any Senior Indebtedness of the
Company to enforce subordination as herein provided shall at any time in any way
be prejudiced or impaired by any act or failure to act on the part of the
Company, or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by the Company with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof that any such holder may
have or otherwise be charged with.

     Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness of the Company, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Notes may, without incurring responsibility to the Holders of the Notes and
without impairing or releasing the subordination provided in this Article VI or
the obligations hereunder of the Holders of the Notes to the holders of such
Senior Indebtedness, do any one or more the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
such Senior Indebtedness, or otherwise amend or supplement in any manner such
Senior Indebtedness or any instrument evidencing the same or any agreement under
which such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company, and any other Person.

                                   ARTICLE VII
                                    COVENANTS

     SECTION 7.1 LISTING ON EXCHANGES.

     If the Notes are to be issued as a Depository Note in connection with the
distribution of the Notes to the holders of the Preferred Securities issued by
the Trust upon a Dissolution Event, the Company will use its best efforts to
list such Notes on the New York Stock Exchange or on such other exchange as the
Preferred Securities are then listed.

     SECTION 7.2 LIMITATION ON DIVIDENDS; TRANSACTIONS WITH AFFILIATES.

     (a) If (i) there shall have occurred any event that would constitute an
Event of Default or (ii) the Company shall be in default with respect to its
payment of any obligations under the Preferred Securities Guarantee relating to
the Trust, then (a) the Company shall not declare or pay any dividend on, make
any distributions with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of its capital stock (other than (i) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of any class or
series of the Company's capital stock for any other class or series of the
Company's capital stock, or (iii) the purchase of fractional interests in shares
of the Company's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the

                                       10

<Page>

security being converted or exchanged), and (b) the Company shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by the Company which rank pari passu with or
junior to the Notes. However, nothing herein will limit the Company's ability to
pay stock dividends where the dividend stock is the same stock as that on which
the dividend is being paid.

     (b) If the Company shall have given notice of its election to defer
payments of interest on the Notes by extending the interest payment period as
provided in Article IV of this Supplemental Indenture and such period, or any
extension thereof, shall be continuing, then (i) the Company shall not declare
or pay any dividend on, make any distributions with respect to, or redeem,
purchase or make a liquidation payment with respect to, any of its capital stock
(other than (x) repurchases, redemptions or other acquisitions of shares of
capital stock of the Company in connection with any employment contract, benefit
plan or other similar arrangement with or for the benefit of employees,
officers, directors or consultants, (y) as a result of an exchange or conversion
of any class or series of the Company's capital stock for any other class or
series of the Company's capital stock, or (z) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged), and (ii) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company which rank pari passu with or junior to the
Notes. However, nothing herein will limit the Company's ability to pay stock
dividends where the dividend stock is the same stock as that on which the
dividend is being paid.

     SECTION 7.3 COVENANTS AS TO THE TRUST.

     For so long as such Trust Securities remain outstanding, the Company will
(i) maintain 100% direct or indirect ownership of the Common Securities of the
Trust; provided, however, that any permitted successor of the Company under the
Indenture may succeed to the Company's ownership of the Common Securities, (ii)
use its reasonable efforts to cause the Trust (a) to remain a statutory business
trust, except in connection with the distribution of Notes to the holders of
Trust Securities in liquidation of the Trust, the redemption of all of the Trust
Securities of the Trust, or certain mergers, consolidations or amalgamations,
each as permitted by the Declaration of the Trust, and (b) to otherwise continue
to be classified as a grantor trust for United States federal income tax
purposes.

                                  ARTICLE VIII
                                  FORM OF NOTE

     SECTION 8.1 FORM OF NOTE.

     The Notes, and the Trustee's Certificate of Authentication to be endorsed
thereon are to be substantially in the following forms:

                             (FORM OF FACE OF NOTE)

     [IF THE NOTE IS TO BE A Depository Note, INSERT - This Note is a Depository
Note within the meaning of the Indenture hereinafter referred to and is
registered in the name of a Depository or a nominee of a Depository. This Note
is exchangeable for Notes registered in the name of a person other than the
Depository or its nominee only in the limited circumstances described in the
Indenture, and no transfer of this Note (other than a transfer of this note as a
whole by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository) may be
registered except in limited circumstances.

     Unless this Note is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment hereon
is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede & Co.,
has an interest herein.]

                                       11

<Page>

No.                                                                   $
CUSIP No.

                          HOUSEHOLD INTERNATIONAL, INC.

        % JUNIOR SUBORDINATED DEFERRABLE INTEREST NOTE DUE           ,

     Household International, Inc., a Delaware corporation (the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to _________________
__________________________________ or registered assigns, the principal sum
of $__________ Dollars on           , 20 , and to pay interest on said
principal sum from , 200 or from the most recent interest payment date (each
such date, an "Interest Payment Date") to which interest has been paid or
duly provided for, quarterly (subject to deferral as set forth herein) in
arrears on           ,           ,           , and of each year commencing
       , 200 , at the rate of    % per annum until the principal hereof shall
have become due and payable, and on any overdue principal and premium, if
any, and (without duplication and to the extent that payment of such interest
is enforceable under applicable law) on any overdue installment of interest
at the same rate per annum, compounded quarterly. The amount of interest
payable on any Interest Payment Date shall be computed (i) for any full
90-day quarterly interest payment period, on the basis of a 360-day year of
twelve 30-day months and (ii) for any period shorter than a full 90-day
quarterly interest payment period for which interest payments are computed,
on the basis of a 30-day month, and for periods of less than a month, the
actual number of days elapsed per 30-day month. In the event that any date on
which interest is payable on this Note is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the person in whose name this Note (or one or more
Predecessor Notes, as defined in said Indenture) is registered at the close
of business on the Regular Record Date for such interest installment [which
shall be the close of business on the day preceding such Interest Payment
Date]. [IF PURSUANT TO THE PROVISIONS OF SECTION 2.11(c) OF THE INDENTURE THE
NOTES ARE NO LONGER REPRESENTED BY A Depository Note -- which shall be the
close of business on the fifteenth day preceding such Interest Payment Date.]
Any such interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the registered Holders on such Regular
Record Date, and may be paid to the person in whose name this Note (or one or
more Predecessor Notes) is registered at the close of business on a special
record date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the registered Holders of this
series of Notes not less than 10 days prior to such special record date, or
may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. The principal of (and premium, if any) and the
interest on this Note shall be payable at the office or agency of the Trustee
maintained for that purpose in any coin or currency of the United States of
America which at the time of payment is legal tender for payment of public
and private debts; provided, however, that payment of interest may be made at
the option of the Company by check mailed to the registered Holder at such
address as shall appear in the Note Register. Notwithstanding the foregoing,
so long as the Holder of this Note is the Property Trustee, the payment of
the principal of (and premium, if any) and interest on this Note will be made
at such place and to such account as may be designated by the Property
Trustee.

     The indebtedness evidenced by this Note is, to the extent provided in the
Indenture, subordinate and junior in right of payment to the prior payment in
full of all Senior Indebtedness, and this Note is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Note, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
so provided and (c) appoints the Trustee his or her attorney-in-fact for any and
all such purposes. Each Holder hereof, by his or her acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such Holder upon
said provisions.

                                       12

<Page>

     This Note shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.

     Unless the Certificate of Authentication hereon has been executed by the
Trustee referred to on the reverse side hereof, this Note shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.

     The provisions of this Note are continued on the reverse side hereof and
such continued provisions shall for all purposes have the same effect as though
fully set forth at this place.

     IN WITNESS WHEREOF, the Company has caused this instrument to be executed.

     Dated
           --------------------------------------------------------------------

     HOUSEHOLD INTERNATIONAL, INC.

     By
        -----------------------------------------------------------------------

     Attest:

     By
        -----------------------------------------------------------------------
                              Assistant Secretary

                     (FORM OF CERTIFICATE OF AUTHENTICATION)

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Notes of the series of Notes described in the
within-mentioned Indenture.

<Table>
<S>                                       <C>  <C>
     BANK ONE, NATIONAL ASSOCIATION

     ----------------------------------        --------------------------------
     as Trustee                           or   as Authentication Agent

     By                                        By
        -------------------------------           -----------------------------
          Authorized Signatory                      Authorized Signatory
</Table>

                            (FORM OF REVERSE OF NOTE)

     This Note is one of a duly authorized series of Notes of the Company
(herein sometimes referred to as the "Notes"), specified in the Indenture,
all issued or to be issued in one or more series under and pursuant to an
Indenture dated as of May 15, 1995 duly executed and delivered between the
Company and Bank One, National Association (formerly known as The First
National Bank of Chicago), a national banking association, as Trustee (the
"Trustee"), as supplemented by the Sixth Supplemental Indenture dated as of
        , 2001 between the Company and the Trustee (the Indenture as so
supplemented, the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the Holders of the Notes. By the terms of the
Indenture, the Notes are issuable in series which may vary as to amount, date
of maturity, rate of interest and in other respects as in the Indenture
provided. This series of Notes is limited in aggregate principal amount as
specified in said Sixth Supplemental Indenture.

                                       13

<Page>

     In the event of the occurrence and continuation of a Tax Event, in
certain circumstances this Note may become due and payable at the redemption
price set forth below (the "Redemption Price"). The Redemption Price shall be
paid prior to 12:00 noon, New York time, on the date of such redemption or at
such earlier time as the Company determines. The Redemption Price shall be
equal to 100% of the principal amount plus any accrued but unpaid interest
thereon to the date of such redemption. In addition, the Company shall have
the right to redeem this Note at the option of the Company, without premium
or penalty, in whole or in part at any time on or after           , 200 , at
the Redemption Price (an "Optional Redemption"). Any redemption pursuant to
this paragraph will be made upon not less than 30 nor more than 60 days'
notice, at the Redemption Price. If the Notes are only partially redeemed by
the Company pursuant to an Optional Redemption, the Notes will be redeemed
pro rata or by lot or by any other method utilized by the Trustee; provided
that if, at the time of redemption, the Notes are registered as a Depository
Note, the Depository shall determine by lot the principal amount of such
Notes held by each Holder to be redeemed.

     In the event of redemption of this Note in part only, a new Note or Notes
of this series for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof. In the event of the occurrence
and continuation of a Tax Event, in certain circumstances the Company may elect
to advance the Maturity Date of this Note to the minimum extent required in
order to allow the Company to deduct the interest payments on the Notes for
United States federal income tax purposes. However, the Maturity Date will not
be advanced to a date less than 15 years from the original issuance of the
Notes.

     In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Notes may be declared,
and upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.

     The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Notes of each series affected at the time outstanding,
as defined in the Indenture, to execute supplemental indentures for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or of modifying in
any manner the rights of the Holders of the Notes; provided, however, that no
such supplemental indenture shall (i) extend the fixed maturity of any Notes of
any series, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any premium payable upon the
redemption thereof, without the consent of the Holder of each Note so affected
or (ii) reduce the aforesaid percentage of Notes, the Holders of which are
required to consent to any such supplemental indenture, without the consent of
the Holders of each Note then outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of a majority in aggregate
principal amount of the Notes of any series at the time outstanding affected
thereby, on behalf of all of the Holders of the Notes of such series, to waive
any past default in the performance of any of the covenants contained in the
Indenture, or established pursuant to the Indenture with respect to such series,
and its consequences, except a default in the payment of the principal of or
premium, if any, or interest on any of the Notes of such series. Any such
consent or waiver by the registered Holder of this Note (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such Holder and
upon all future Holders and owners of this Note and of any Note issued in
exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Note.

     No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Note at the time and place and at the rate and in the money
herein prescribed.

     The Company shall have the right at any time during the term of the Notes
from time to time to extend the interest payment period of such Notes to up to
20 consecutive quarters (an "Extended Interest Payment Period"), at the end of
which period the Company shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Notes to the
extent that payment of such interest is enforceable under applicable law),
provided that no Extended Interest Payment Period may extend beyond the Maturity
Date of the Notes. Before the termination of any such Extended Interest Payment
Period, the Company may further extend such Extended Interest Payment Period,
provided that such Extended Interest Payment Period together with all such
further extensions thereof shall not exceed 20 consecutive quarters and provided
further that no Extended

                                       14

<Page>

Interest Payment Period may extend beyond the Maturity Date of the Notes. At the
termination of any such Extended Interest Payment Period and upon the payment of
all accrued and unpaid interest and any additional amounts then due, the Company
may select a new Extended Interest Payment Period.

     As provided in the Indenture and subject to certain limitations therein set
forth, this Note is transferable by the registered Holder hereof on the Note
Register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the Company in Chicago, Illinois accompanied
by written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the registered Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Notes of
authorized denominations and for the same aggregate principal amount and series
will be issued to the designated transferee or transferees. No service charge
will be made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.

     Prior to due presentment for registration of transfer of this Note, the
Company, the Trustee, any paying agent and any Note Registrar may deem and treat
the registered Holder hereof as the absolute owner hereof (whether or not this
Note shall be overdue and notwithstanding any notice of ownership or writing
hereon made by anyone other than the Note Registrar) for the purpose of
receiving payment of or on account of the principal hereof and premium, if any,
and interest due hereon and for all other purposes, and neither the Company nor
the Trustee nor any paying agent nor any Note Registrar shall be affected by any
notice to the contrary.

     No recourse shall be had for the payment of the principal of or the
interest on this Note, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture, against any incorporator,
stockholder, officer or director, past, present or future, as such, of the
Company or of any predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issuance hereof, expressly waived and
released.

     The notes of this series are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. This
Depository Note is exchangeable for Notes in definitive form only under certain
limited circumstances set forth in the Indenture. Notes of this series so issued
are issuable only in registered form without coupons in denominations of $25 and
any integral multiple thereof. As provided in the Indenture and subject to
certain limitations herein and therein set forth, Notes of this series so issued
are exchangeable for a like aggregate principal amount of Notes of this series
of a different authorized denomination, as requested by the Holder surrendering
the same.

     All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.

                                   ARTICLE IX
              ADDITIONAL EVENT OF DEFAULT; MODIFICATION AND WAIVER

     SECTION 9.1 ADDITIONAL EVENT OF DEFAULT.

     "Event of Default", wherever used in the Indenture or this Supplemental
Indenture with respect to the Notes, in addition to the Events of Default set
forth in Section 7.01 of the Indenture shall include the following event:

     the Trust shall have voluntarily or involuntarily dissolved, wound-up its
     business or otherwise terminated its existence except in connection with
     (i) the distribution of Notes to Holders of Trust Securities in liquidation
     of their interests in the Trust, (ii) the redemption of all of the
     outstanding Trust Securities of the Trust or (iii) certain mergers,
     consolidations or amalgamations, each as permitted by the Declaration of
     the Trust.

                                       15

<Page>

     SECTION 9.2 MODIFICATION AND WAIVER.

         The covenant set forth in Section 7.2 of this Supplemental Indenture
shall not be modified or waived without the consent of the Holders of each Note
affected thereby.

                                    ARTICLE X
                             ORIGINAL ISSUE OF NOTES

     SECTION 10.1 ORIGINAL ISSUE OF NOTES.

     Notes in the aggregate principal amount of $           may, upon
execution of this Supplemental Indenture, be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes to or upon the written order of the
Company, signed by its Chairman, its President, or any Vice President and its
Treasurer or an Assistant Treasurer, without any further action by the
Company.

                                   ARTICLE XI
                                  MISCELLANEOUS

     SECTION 11.1 RATIFICATION OF INDENTURE.

     The Indenture, as supplemented by this Supplemental Indenture, is in all
respects ratified and confirmed, and this Supplemental Indenture shall be deemed
part of the Indenture in the manner and to the extent herein and therein
provided.

     SECTION 11.2 TRUSTEE NOT RESPONSIBLE FOR RECITALS.

     The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
Supplemental Indenture.

     SECTION 11.3 GOVERNING LAW.

     This Supplemental Indenture and each Note shall be deemed to be a contract
made under the internal laws of the State of Illinois, and for all purposes
shall be construed in accordance with the laws of said State.

     SECTION 11.4 SEPARABILITY.

     In case any one or more of the provisions contained in this Supplemental
Indenture or in the Notes shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Supplemental Indenture or of the
Notes, but Supplemental Indenture and the Notes shall be construed as if such
invalid or illegal or unenforceable provision had never been contained herein or
therein.

     SECTION 11.5 COUNTERPARTS.

     This Supplemental Indenture may be executed in any number of counterparts
each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.

                                       16

<Page>

                                          HOUSEHOLD INTERNATIONAL, INC.

                                          By
                                              ---------------------------------

Attest:

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

                                          BANK ONE, NATIONAL ASSOCIATION,
                                          as Trustee

                                          By
                                             ----------------------------------

Attest:

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

                                       17

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