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                              RIGHTS AGREEMENT            

                                   between                

                    CROSS-CONTINENT AUTO RETAILERS, INC.  

                                     and                  

                    THE BANK OF NEW YORK, as Rights Agent 

                       Dated as of September 20, 1996     

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                              TABLE OF CONTENTS

                                                                     Page 
                                                                     ---- 

Section 1.   Certain Definitions and Rules of Interpretation..........  1

Section 2.   Appointment of Rights Agent..............................  4

Section 3.   Issue of Right Certificates..............................  4

Section 4.   Form of Right Certificates...............................  5

Section 5.   Countersignature and Registration........................  6

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

Section 7.   Exercise of Rights; Purchase Price; Expiration Date 
               of Rights..............................................  6

Section 8.   Cancellation of Right Certificates.......................  7

Section 9.   Availability of Preferred Shares.........................  7

Section 10.  Preferred Shares Record Date.............................  8

Section 11.  Adjustment of Purchase Price, Number of Shares or Number 
               of Rights..............................................  8

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

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

Section 14.  Fractional Rights and Fractional Shares.................. 13

Section 15.  Rights of Action......................................... 13

Section 16.  Agreement of Right Holders............................... 14

Section 17.  Right Certificate Holder Not Deemed a Stockholder........ 15

Section 18.  Concerning the Rights Agent.............................. 15

Section 19.  Merger or Consolidation or Change of Name of 
               Rights Agent........................................... 15

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Section 20.  Duties of Rights Agent................................... 15

Section 21.  Change of Rights Agent................................... 17

Section 22.  Issuance of New Right Certificates....................... 18

Section 23.  Redemption............................................... 18

Section 24.  Exchange................................................. 19

Section 25.  Notice of Certain Events................................. 20

Section 26.  Notices.................................................. 20

Section 27.  Supplements and Amendments............................... 21

Section 28.  Successors............................................... 21

Section 29.  Benefits of this Agreement............................... 21

Section 30.  Severability............................................. 21

Section 31.  Governing Law............................................ 21

Section 32.  Counterparts............................................. 22

Section 33.  Descriptive Heading...................................... 22

Signatures............................................................ 23

Exhibit A - Form of Certificate of Designations

Exhibit B - Form of Right Certificate

Exhibit C - Summary of Rights to Purchase Preferred Shares

                                       -ii-
<PAGE>

       Rights Agreement, dated as of September 20, 1996, between 
Cross-Continent Auto Retailers, Inc., a Delaware corporation (the "Company"), 
and The Bank of New York, a New York banking corporation, as rights agent 
(the "Rights Agent").

       The Board of Directors of the Company has authorized and declared a 
dividend of one Right (as hereinafter defined) for each Common Share (as 
hereinafter defined) of the Company outstanding on September 20, 1996, and 
has further authorized and directed the issuance of one Right with respect to 
each Common Share that shall become outstanding between the Record Date and 
the earliest of the Distribution Date, the Redemption Date and the Final 
Expiration Date (as such terms are hereinafter defined).

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

       Section 1.  DEFINITIONS AND RULES OF INTERPRETATION.  (a) For purposes 
of this Agreement, the following terms have the meanings indicated:

       "Acquiring Person" means any Person who or which, together with all 
Affiliates and Associates of such Person, shall be the Beneficial Owner of 
19.9% or more of the Common Shares of the Company then outstanding, but shall 
not include the Company or any Company Entity. Notwithstanding the foregoing, 
no Person shall become an "Acquiring Person" as the result of an acquisition 
of Common Shares by the Company which, by reducing the number of shares 
outstanding, increases the proportionate number of shares beneficially owned 
by such Person to 19.9% or more of the Common Shares of the Company then 
outstanding; PROVIDED, that if a Person shall become the Beneficial Owner of 
19.9% or more of the Common Shares of the Company then outstanding by reason 
of share purchases by the Company and shall, after such share purchases by 
the Company, become the Beneficial Owner of any additional Common Shares of 
the Company, then such Person shall be deemed to be an "Acquiring Person."  
Notwithstanding the foregoing, if the Board of Directors of the Company 
determines in good faith that a Person who would otherwise be an "Acquiring 
Person," as defined pursuant to the foregoing provisions of this paragraph, 
has become such inadvertently, and such Person divests as promptly as 
practicable a sufficient number of Common Shares so that such Person would no 
longer be an "Acquiring Person," as defined pursuant to the foregoing 
provisions of this paragraph, then such Person shall not be deemed to be an 
"Acquiring Person" for any purposes of this Agreement.

       "Affiliate" has the meaning ascribed thereto in Rule 12b-2 of the 
General Rules and Regulations under the Exchange Act, as in effect on the 
date of this Agreement.

       "Associate" has the meaning ascribed thereto in Rule 12b-2 of the 
General Rules and Regulations under the Exchange Act, as in effect on the 
date of this Agreement.  

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

       (i)  which such Person or any of such Person's Affiliates or 
Associates beneficially owns, directly or indirectly;

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

<PAGE>

of such Person or any of such Person's Affiliates or Associates until such 
tendered securities are accepted for purchase or exchange; or (B) the right 
to vote pursuant to any agreement, arrangement or understanding; PROVIDED, 
that a Person shall not be deemed the Beneficial Owner of, or to beneficially 
own, any security if the agreement, arrangement or understanding to vote such 
security (1) arises solely from a revocable proxy or consent given to such 
Person in response to a public proxy or consent solicitation made pursuant 
to, and in accordance with, the applicable rules and regulations promulgated 
under the Exchange Act and (2) is not also then reportable on Schedule 13D 
under the Exchange Act (or any comparable or successor report); or

       (iii) which are beneficially owned, directly or indirectly, by any 
other Person 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) for the purpose of 
acquiring, holding, voting (except to the extent contemplated by the 
immediately preceding proviso) or disposing of any securities of the Company.

       "Board of Directors" means the Board of Directors of the Company.

       "Business Day" means any day other than a Saturday, a Sunday, or a day 
on which banking institutions in the State of New York are authorized or 
obligated by law or executive order to close.

       "close of business" on any given date means 5:00 p.m., New York City 
time, on such date; PROVIDED, that if such date is not a Business Day it 
shall mean 5:00 p.m., New York City time, on the next succeeding Business Day.

       "Closing Price" for any day for any security means the last sale 
price, regular way, for such security on such day or, in case no such sale 
takes place on such day, the average of the closing bid and asked prices, 
regular way, in either case as reported in the principal consolidated 
transaction reporting system with respect to securities listed or admitted to 
trading on the New York Stock Exchange or, if such security is not listed or 
admitted to trading on the New York Stock Exchange, as reported in the 
principal consolidated transaction reporting system with respect to 
securities listed on the principal national securities exchange on which the 
security is listed or admitted to trading or, if such security is not listed 
or admitted to trading on any national securities exchange, the last quoted 
price or, if not so quoted, the average of the high bid and low asked prices 
in the over-the-counter market, as reported by Nasdaq or such other system 
then in use, or, if on any such date such security is not quoted by any such 
organization, the average of the closing bid and asked prices as furnished by 
a professional market maker making a market in such security selected by the 
Board of Directors. If 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 of Directors shall be used.

       "Common Shares," when used with reference to the Company, means the 
shares of common stock, par value $.01 per share, of the Company.  "Common 
Shares," when used with reference to any Person other than the Company, means 
the capital stock (or equity interest) with the greatest voting power of such 
other Person or, if such other Person is a Subsidiary of another Person, the 
Person or Persons which ultimately control such first-mentioned Person.

       "Company Entity" means (i) any Subsidiary of the Company, (ii) any 
employee benefit plan of the Company or any Subsidiary of the Company, (iii) 
any entity holding Common Shares for or pursuant to the terms of any such 
plan or (iv) any person or group of persons who, immediately prior to the 
Record Date, beneficially owned 19.9% or more of the Common Shares then 
outstanding.

       "Current Per Share Market Price" of any security on any date means the 
average of the daily Closing Prices per share of such security for the 30 
consecutive Trading Days immediately prior 

                                      -2-

<PAGE>

to such date; PROVIDED, that (i) in the case of the Preferred Shares, if the 
Preferred Shares are not publicly traded, the "Current Per Share Market 
Price" of the Preferred Shares shall be conclusively deemed to be the Current 
Per Share Market Price of the Common Shares (appropriately adjusted to 
reflect any stock split, stock dividend or similar transaction occurring 
after the date of this Agreement), multiplied by 100, (ii) in the case of the 
Common Shares, if the Common Shares are not publicly held or so listed or 
traded, the "Current Per Share Market Price" of the Common Shares means the 
fair value per share as determined in good faith by the Board of Directors, 
whose determination shall be described in a statement filed with the Rights 
Agent, and (iii) if the Current Per Share Market Price of the security is 
determined during a period following the announcement by the issuer of such 
security of (A) a dividend or distribution on such security payable in shares 
of such security or securities convertible into such shares, or (B) any 
subdivision, combination or reclassification of such security and prior to 
the expiration of 30 Trading Days after the ex-dividend date for such 
dividend or distribution, or the record date for such subdivision, 
combination or reclassification, then, and in each such case, the Current Per 
Share Market Price of such security shall be appropriately adjusted to 
reflect the current market price per share equivalent of such security. 

       "Distribution Date" means the earlier of (i) the tenth day after the 
Shares Acquisition Date or (ii) the tenth Business Day (or such later date as 
may be determined by action of the Board of Directors prior to such time as 
any Person becomes an Acquiring Person) after the date of the commencement by 
any Person (other than the Company or any Subsidiary of the Company, any 
employee benefit plan of the Company or any Subsidiary of the Company or any 
entity holding Common Shares for or pursuant to the terms of any such plan) 
of, or of the first public announcement of the intention of any Person (other 
than the Company or any Subsidiary of the Company, any employee benefit plan 
of the Company or any Subsidiary of the Company or any entity holding Common 
Shares for or pursuant to the terms of any such plan) to commence, a tender 
or exchange offer, the consummation of which would result in any Person 
becoming the Beneficial Owner of Common Shares aggregating 19.9% or more of 
the then outstanding Common Shares.

       "Exchange Act" means the Securities Exchange Act of 1934, as amended.

       "Final Expiration Date" has the meaning set forth in Section 7.

       "Nasdaq" means the National Association of Securities Dealers, Inc. 
Automated Quotations System.

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

       "Preferred Shares" means shares of Series A Junior Participating 
Preferred Stock, par value $.01 per share, of the Company having the rights 
and preferences set forth in the Form of Certificate of Designations attached 
to this Agreement as Exhibit A.

       "Purchase Price" has the meaning set forth in Section 7(b).

       "Record Date" means September 20, 1996.

       "Redemption Date" has the meaning set forth in Section 7(a).

       ""Right" means a preferred share purchase right representing the right 
to purchase (subject to adjustment pursuant to Section 11) one one-hundredth 
of a Preferred Share upon the terms and subject to the conditions set forth 
in this Agreement.

       "Right Certificate" means a certificate substantially in the form of 
Exhibit B.


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<PAGE>

       "Shares Acquisition Date" means the first date of public announcement 
by the Company or an Acquiring Person that an Acquiring Person has become 
such.

       "Subsidiary" of any Person means any corporation or other entity of 
which a majority of the voting power of the voting equity securities or 
equity interest is owned, directly or indirectly, by such Person.

       "then outstanding," when used with reference to a Person's Beneficial 
Ownership of securities of the Company, means the number of such securities 
then issued and outstanding together with the number of such securities not 
then actually issued and outstanding which such Person would be deemed to own 
beneficially hereunder.

       "Trading Day" means, with respect to any security, a day on which the 
principal national securities exchange on which such security is listed or 
admitted to trading is open for the transaction of business or, if such 
security is not listed or admitted to trading on any national securities 
exchange, a Business Day.

       (b)  Except as otherwise expressly provided in this Agreement, the 
following rules of interpretation apply to this Agreement:  (i) the singular 
includes the plural and the plural includes the singular; (ii) "or" and "any" 
are not exclusive and "include" and "including" are not limiting; (iii) a 
reference to any agreement or other contract includes permitted supplements 
and amendments; (iv) a reference to a law includes any amendment or 
modification to such law and any rules or regulations issued thereunder; (v) 
a reference to a person includes its permitted successors and assigns; and 
(vi) a reference in this Agreement to a Section, Exhibit or paragraph is to 
the Section, Exhibit of paragraph of this Agreement.

       Section 2.  APPOINTMENT OF RIGHTS AGENT.  The Company hereby appoints 
the Rights Agent to act as agent for the Company and the holders of the 
Rights 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 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.  ISSUE OF RIGHT CERTIFICATES.  (a) Until the Distribution 
Date, (i) the Rights will be evidenced by the certificates for Common Shares 
registered in the names of the holders thereof (which certificates shall also 
be deemed to be Right Certificates) and not by separate Right Certificates, 
and (ii) the right to receive Right Certificates will be transferable only in 
connection with the transfer of Common Shares.  The Company shall give the 
Rights Agent prompt written notice of the Distribution Date.  Subject to 
Section 11(a)(iii), as soon as practicable after the Distribution Date, the 
Company will prepare and execute, the Rights Agent will countersign, and the 
Company will send or cause to be sent (and the Rights Agent will, if 
requested, send, at the Company's expense) by first-class, postage-prepaid 
mail, to each record holder of Common Shares as of the close of business on 
the Distribution Date, at the address of such holder shown on the records of 
the Company, a Right Certificate evidencing one Right for each Common Share 
so held.  As of the Distribution Date, the Rights will be evidenced solely by 
such Right Certificates.

       (b)  On the Record Date, or as soon as practicable thereafter, the 
Company will send a copy of a Summary of Rights, in substantially the form of 
Exhibit C ( the "Summary of Rights"), by first-class, postage-prepaid mail, 
to each record holder of Common Shares as of the close of business on the 
Record Date, at the address of such holder shown on the records of the 
Company.  With respect to certificates of Common Shares outstanding as of the 
Record Date, until the Distribution Date, the Rights will be evidenced by 
such certificates registered in the names of the holders thereof together 
with a copy of the Summary of Rights attached thereto.  Until the earliest of 
the Distribution Date, Redemption Date or Final Expiration Date, the 
surrender for transfer of any certificate for Common 

                                      -4-

<PAGE>

Shares outstanding on the Record Date, with or without a copy of the Summary 
of Rights attached thereto, shall also constitute the transfer of the Rights 
associated with the Common Shares represented thereby.

       (c)  Certificates for Common Shares outstanding that become 
outstanding (including, without limitation, reacquired Common Shares referred 
to in the last sentence of this paragraph (b)) after the Record Date but 
prior to the earliest of the Distribution Date, the Redemption Date or the 
Final Expiration Date shall have impressed on, printed on, written on or 
otherwise affixed to them the following legend:

       This certificate also evidences and entitles the holder 
       hereof to certain rights as set forth in a Rights 
       Agreement between Cross-Continent Auto Retailers, Inc. 
       and The Bank of New York, dated as of September 20, 
       1996 (the "Rights Agreement"), the terms of which are 
       hereby incorporated herein by reference and a copy of 
       which is on file at the principal executive offices of 
       Cross-Continent Auto Retailers, Inc.  Under certain 
       circumstances, as set forth in the Rights Agreement, 
       such Rights will be evidenced by separate certificates 
       and will no longer be evidenced by this certificate.  
       Cross-Continent Auto Retailers, Inc. will mail to the 
       holder of this certificate a copy of the Rights 
       Agreement without charge after receipt of a written 
       request therefor.  Under certain circumstances, as set 
       forth in the Rights Agreement, Rights issued to any 
       Person who becomes an Acquiring Person (as defined in 
       the Rights Agreement) may become null and void.

With respect to such certificates containing the foregoing legend, until the 
Distribution Date, the Rights associated with the Common Shares represented 
by such certificates shall be evidenced only by such certificates, and the 
surrender for transfer of any such certificate shall also constitute the 
transfer of the Rights associated with the Common Shares represented thereby. 
In the event that the Company purchases or acquires any Common Shares after 
the Record Date but prior to the Distribution Date, any Rights associated 
with such Common Shares shall be deemed cancelled and retired so that the 
Company shall not be entitled to exercise any Rights associated with the 
Common Shares which are no longer outstanding.

       Section 4.  FORM OF RIGHT CERTIFICATES.  The Right Certificates (and 
the forms of election to purchase Preferred Shares and of assignment to be 
printed on the reverse thereof) shall be substantially the same as 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 on which the Rights may from time to time be listed, or 
to conform to usage.  The Rights Certificates shall be in a machine printable 
format and, if not substantially in the form of Exhibit B hereto, in such 
other form reasonably satisfactory to the Rights Agent.  Subject to the 
provisions of Section 22, the Right Certificates shall entitle the holders 
thereof to purchase such number of one one-hundredths of a Preferred Share as 
shall be set forth therein at the price per one one-hundredth of a Preferred 
Share set forth therein (the "Purchase Price"), but the number of such one 
one-hundredths of a Preferred Share and the Purchase Price shall be subject 
to adjustment as provided herein.

       Section 5.  COUNTERSIGNATURE AND REGISTRATION.  (a)  The Right 
Certificates shall be executed on behalf of the Company by its Chairman of 
the Board, any Vice Chairman, its Chief Executive Officer, its President, any 
of its Vice Presidents, or its Treasurer, either manually or by facsimile 
signature, shall have affixed thereto the Company's seal or a facsimile 
thereof, and shall be attested by the Secretary or an Assistant Secretary of 
the Company, either manually or by facsimile signature.  The Right 
Certificates shall be manually countersigned by the Rights Agent and shall 
not be 

                                      -5-

<PAGE>

valid for any purpose unless countersigned.  In case any officer of the 
Company who shall have signed any of the Right Certificates shall cease to be 
such officer of the Company before countersignature by the Rights Agent and 
issuance and delivery by the Company, such Right Certificates, nevertheless, 
may be countersigned by the Rights Agent and issued and delivered by the 
Company with the same force and effect as though the person who signed such 
Right Certificates had not ceased to be such officer of the Company; and any 
Right Certificate may be signed on behalf of the Company by any person who, 
at the actual date of the execution of such Right Certificate, shall be a 
proper officer of the Company to sign such Right Certificate, although at the 
date of the execution of this Agreement such person was not such an officer.

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

       Section 6.  TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT 
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.  (a)  
Subject to the provisions of Section 14, at any time after the close of 
business on the Distribution Date, and at or prior to the close of business 
on the earlier of the Redemption Date or the Final Expiration Date, any Right 
Certificate or Right Certificates (other than Right Certificates representing 
Rights that have become void pursuant to Section 11(a)(ii) or that have been 
exchanged pursuant to Section 24) may be transferred, split up, combined or 
exchanged for another Right Certificate or Right Certificates, entitling the 
registered holder to purchase a like number of one one-hundredths of a 
Preferred Share as the Right Certificate or Right Certificates surrendered 
then entitled such holder to purchase.  Any registered holder desiring to 
transfer, split up, combine or exchange any Right Certificate or Right 
Certificates shall make such request in writing delivered to the Rights 
Agent, and shall surrender the Right Certificate or Right Certificates to be 
transferred, split up, combined or exchanged at the designated office of the 
Rights Agent.  Thereupon the Rights Agent shall countersign and deliver to 
the person entitled thereto a Right Certificate or Right Certificates, as the 
case may be, as so requested.  The Company may require payment by the holder 
of a Rights Certificate of a sum sufficient to cover any tax or governmental 
charge that may be imposed in connection with any transfer, split up, 
combination or exchange of Right Certificates.

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

       Section 7.  EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF 
RIGHTS. (a) The registered holder of any Right Certificate may exercise the 
Rights evidenced thereby (except as otherwise provided herein) in whole or in 
part at any time after the Distribution Date and before the earliest of (i) 
the close of business on the tenth annual anniversary of the Record Date (the 
"Final Expiration Date"), (ii) the time at which the Rights are redeemed as 
provided in Section 23 (the "Redemption Date") or (iii) the time at which 
such Rights are exchanged as provided in Section 24.  The Rights shall be 
exercised by and upon surrender of the Right Certificate evidencing such 
Rights, with the form of election to purchase on the reverse side thereof 
duly executed, to the Rights Agent at the designated office of the Rights 
Agent, together with payment of the Purchase Price for each one one-hundredth 
of a Preferred Share as to which the Rights are exercised.

                                      -6-

<PAGE>

       (b)  The purchase price for each one one-hundredth of a Preferred 
Share purchasable pursuant to the exercise of a Right shall initially be 
$100.00, and shall be subject to adjustment from time to time as provided in 
Section 11 or 13 hereof (such initial price, as the same may be adjusted, 
being referred to as the "Purchase Price").  The Purchase Price shall be 
payable in lawful money of the United States of America by certified check, 
cashier's check or money order payable to the order of the Company. 

       (c)  Upon receipt of a Right Certificate representing exercisable 
Rights, with the form of election to purchase duly executed, accompanied by 
payment of the Purchase Price for the shares to be purchased in accordance 
with Section 7(b) and an amount equal to any applicable transfer tax required 
to be paid by the holder of such Right Certificate in accordance with Section 
9 hereof, the Rights Agent shall thereupon promptly (i) (A) requisition from 
any transfer agent of the Preferred Shares certificates for the number of 
Preferred Shares to be purchased and the Company hereby irrevocably 
authorizes its transfer agent to comply with all such requests or (B) 
requisition from the depositary agent depositary receipts representing such 
number of one one-hundredths of a Preferred Share as are to be purchased (in 
which case certificates for the Preferred Shares represented by such receipts 
shall be deposited by the transfer agent with the depositary agent) and the 
Company hereby directs the depositary agent to comply with such request, (ii) 
when appropriate, requisition from the Company the amount of cash to be paid 
in lieu of issuance of fractional shares in accordance with Section 14 and, 
after receipt, deliver such cash to or upon the order of the registered 
holder of such Right Certificate and (iii) after receipt of such certificates 
or depositary receipts referred to in clauses (i) and (ii) above, cause the 
same to be delivered to or upon the order of the registered holder of such 
Right Certificate, registered in such name or names as may be designated by 
such holder.

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

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

       Section 9.  AVAILABILITY OF PREFERRED SHARES.  (a)  The Company 
covenants and agrees that it will cause to be reserved and kept available out 
of its authorized and unissued Preferred Shares or any Preferred Shares held 
in its treasury, the number of Preferred Shares that will be sufficient to 
permit the exercise in full of all outstanding Rights in accordance with 
Section 7. The Company covenants and agrees that it will take all such action 
as may be necessary to ensure that all Preferred Shares delivered upon 
exercise of Rights shall, at the time of delivery of the certificates for 
such Preferred Shares (subject to payment of the Purchase Price), be duly and 
validly authorized and issued and fully paid and nonassessable shares.

       (b)  The Company further covenants and agrees that it will pay when 
due and payable any and all federal and state transfer taxes and charges 
which may be payable in respect of the issuance or delivery of the Right 
Certificates or of any Preferred Shares upon the exercise of Rights.  The 
Company shall not, however, be required to pay any transfer tax which may be 
payable in respect of any transfer or delivery of Right Certificates to a 
person other than, or the issuance or delivery of certificates or depositary 
receipts for the Preferred Shares in a name other than that of, the 
registered holder of the Right Certificate evidencing Rights surrendered for 
exercise or to issue or to deliver any 

                                      -7-

<PAGE>

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

       Section 10.  PREFERRED SHARES RECORD DATE.  Each person in whose name 
any certificate for Preferred Shares is issued upon the exercise of Rights 
shall, for all purposes, be deemed to have become the holder of record of the 
Preferred Shares represented thereby on, and such certificate shall be dated, 
the date upon which the Right Certificate evidencing such Rights was duly 
surrendered and payment of the Purchase Price (and any applicable transfer 
taxes) was made; PROVIDED, that if the date of such surrender and payment is 
a date upon which the Preferred Shares transfer books of the Company are 
closed, such person shall be deemed to have become the record holder of such 
shares on, and such certificate shall be dated, the next succeeding Business 
Day on which the Preferred Shares transfer books of the Company are open.  
Prior to the exercise of the Rights evidenced thereby, the holder of a Right 
Certificate shall not be entitled to any rights of a holder of Preferred 
Shares 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 OF SHARES OR NUMBER 
OF RIGHTS. The Purchase Price, the number of Preferred 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)  If the Company shall at any time after the Record Date (A) 
declare a dividend on the Preferred Shares payable in Preferred Shares, (B) 
subdivide the outstanding Preferred Shares, (C) combine the outstanding 
Preferred Shares into a smaller number of Preferred Shares or (D) issue any 
shares of its capital stock in a reclassification of the Preferred Shares 
(including any such reclassification in connection with a consolidation or 
merger in which the Company is the continuing or surviving corporation), 
except as otherwise provided in this Section 11(a), the Purchase Price in 
effect at the time of the record date for such dividend or of the effective 
date of such subdivision, combination or reclassification, and the number and 
kind of shares of capital stock issuable upon exercise of the Rights after 
such date, shall be proportionately adjusted so that the holder of any Right 
exercised after such time shall be entitled to receive the aggregate number 
and kind of shares of capital stock which, if such Right had been exercised 
immediately prior to such date and at a time when the Preferred Shares 
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; PROVIDED, that in no event 
shall the consideration to be paid upon the exercise of any Right be less 
than the aggregate par value of the shares of capital stock of the Company 
issuable upon exercise of such Right.

       (ii) Subject to Section 24 of this Agreement, if any Person becomes an 
Acquiring Person, each holder of a Right shall thereafter have a right to 
receive, upon exercise thereof at a price equal to the then current Purchase 
Price multiplied by the number of one one-hundredths of a Preferred Share for 
which a Right is then exercisable, in accordance with the terms of this 
Agreement and in lieu of Preferred Shares, such number of Common Shares of 
the Company as shall equal the result obtained by (x) multiplying the then 
current Purchase Price by the number of one one-hundredths of a Preferred 
Share for which a Right is then exercisable and dividing that product by (y) 
50% of the then Current Per Share Market Price of the Common Shares on the 
date of the occurrence of such event.  

       (iii) If any Person shall become an Acquiring Person and the Rights 
shall then be outstanding, the Company shall not take any action which would 
eliminate or diminish the benefits intended to be afforded by the Rights.  
Notwithstanding anything to the contrary set forth in this Agreement, from 
and after the occurrence of such event, any Rights that are or were acquired 
or beneficially owned by any Acquiring Person (or any Associate or Affiliate 
of such Acquiring Person) shall be void and any holder of such Rights shall 
thereafter have no right to exercise such Rights under 

                                      -8-

<PAGE>

any provision of this Agreement.  No Right Certificate shall be issued 
pursuant to Section 3 that represents Rights beneficially owned by an 
Acquiring Person whose Rights would be void pursuant to the preceding 
sentence or any Associate or Affiliate thereof.  No Right 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 Affiliate.  Any Right Certificate delivered to the Rights Agent 
for transfer 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 Affiliate shall be cancelled.

       (iv) If there shall not be sufficient Common Shares issued but not 
outstanding or authorized but unissued to permit the exercise in full of the 
Rights in accordance with subparagraph (ii) of this Section 11(a), the 
Company shall take all such action as may be necessary to authorize 
additional Common Shares for issuance upon exercise of the Rights.  In the 
event the Company shall, after good faith effort, be unable to authorize such 
additional Common Shares, the Company shall substitute, for each Common Share 
that would otherwise be issuable upon exercise of a Right, a number of 
Preferred Shares or fraction thereof such that the Current Per Share Market 
Price of one Preferred Share multiplied by such number or fraction is equal 
to the Current Per Share Market Price of one Common Share as of the date of 
issuance of such Preferred Shares or fraction thereof.

       (b)  If the Company shall fix a record date for the issuance of 
rights, options or warrants to all holders of Preferred Shares entitling them 
(for a period expiring within 45 calendar days after such record date) to 
subscribe for or purchase Preferred Shares (or shares having the same rights, 
privileges and preferences as the Preferred Shares ("equivalent preferred 
shares")) or securities convertible into Preferred Shares or equivalent 
preferred shares at a price per Preferred Share or equivalent preferred share 
(or having a conversion price per share, if a security convertible into 
Preferred Shares or equivalent preferred shares) less than the then Current 
Per Share Market Price of the Preferred Shares on such record date, the 
Purchase Price to be in effect after such record date shall be determined by 
multiplying the Purchase Price in effect immediately prior to such record 
date by a fraction, the numerator of which shall be the number of Preferred 
Shares outstanding on such record date plus the number of Preferred Shares 
that the aggregate offering price of the total number of Preferred Shares 
and/or equivalent preferred shares so to be offered (and or the aggregate 
initial conversion price of the convertible securities so to be offered) 
would purchase at such current market price and the denominator of which 
shall be the number of Preferred Shares outstanding on such record date plus 
the number of additional Preferred Shares and/or equivalent preferred shares 
to be offered for subscription or purchase (or into which the convertible 
securities so to be offered are initially convertible); PROVIDED, that in no 
event shall the consideration to be paid upon the exercise of any Right be 
less than the aggregate par value of the shares of capital stock of the 
Company issuable upon exercise of such Right.  In case such subscription 
price may be paid in a consideration part or all of which shall be in a form 
other than cash, the value of such consideration shall be as determined in 
good faith by the Board of Directors, whose determination shall be described 
in a statement filed with the Rights Agent.  Preferred Shares owned by or 
held for the account of the Company shall not be deemed outstanding for the 
purpose of any such computation. Such adjustment shall be made successively 
whenever such a record date is fixed; and in the event that such rights, 
options or warrants are not so issued, the Purchase Price shall be adjusted 
to be the Purchase Price which would then be in effect if such record date 
had not been fixed.

       (c)  In case the Company shall fix a record date for the making of a 
distribution to all holders of the Preferred Shares (including any such 
distribution made in connection with a consolidation or merger in which the 
Company is the continuing or surviving corporation) of evidences of 
indebtedness or assets (other than a regular quarterly cash dividend or a 
dividend payable in Preferred Shares) or subscription rights or warrants 
(excluding those referred to in Section 11(b)), the Purchase Price to be in 
effect after such record date shall be determined by multiplying the Purchase 
Price in effect immediately prior to such record date by a fraction, the 
numerator of which shall be the then Current Per Share Market Price of the 
Preferred Shares on such record date, less the fair market 

                                      -9-

<PAGE>

value (as determined in good faith by the Board of Directors of the Company, 
whose determination shall be described in a statement filed with the Rights 
Agent) of the portion of the assets or evidences of indebtedness so to be 
distributed or of such subscription rights or warrants applicable to one 
Preferred Share and the denominator of which shall be such Current Per Share 
Market Price of the Preferred Shares; PROVIDED, that in no event shall the 
consideration to be paid upon the exercise of any Right be less than the 
aggregate par value of the shares of capital stock of the Company to be 
issued upon exercise of such Right.  Such adjustments shall be made 
successively whenever such a record date is fixed; and in the event that such 
distribution is not so made, the Purchase Price shall again be adjusted to be 
the Purchase Price which would then be in effect if such record date had not 
been fixed.

       (d)  No adjustment in the Purchase Price shall be required unless such 
adjustment would require an increase or decrease of at least 1.0% in the 
Purchase Price; PROVIDED, that any adjustments which by reason of this 
Section 11(d) are not required to be made shall be carried forward and taken 
into account in any subsequent adjustment.  All calculations under this 
Section 11 shall be made to the nearest cent or to the nearest one 
one-millionth of a Preferred Share or one ten-thousandth of any other share 
or security as the case may be.  Notwithstanding the first sentence of this 
Section 11(d), any adjustment required by this Section 11 shall be made no 
later than the earlier of (i) three years from the date of the transaction 
which requires such adjustment or (ii) the date of the expiration of the 
right to exercise any Rights.

       (e)  If, as a result of an adjustment made pursuant to Section 11(a) 
hereof, the holder of any Right thereafter exercised shall become entitled to 
receive any shares of capital stock of the Company other than Preferred 
Shares, thereafter the number of such other shares so receivable upon 
exercise of any Right shall be subject to adjustment from time to time in a 
manner and on terms as nearly equivalent as practicable to the provisions 
with respect to the Preferred Shares contained in paragraphs (a) through (c), 
inclusive, of Section 11, and the provisions of Sections 7, 9, 10 and 13 with 
respect to the Preferred Shares shall apply on like terms to any such other 
shares.

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

       (g)  Unless the Company shall have exercised its election as provided 
in Section 11(h), upon each adjustment of the Purchase Price as a result of 
the calculations made in Sections 11(b) and 11(c), each Right outstanding 
immediately prior to the making of such adjustment shall thereafter evidence 
the right to purchase, at the adjusted Purchase Price, that number of one 
one-hundredths of a Preferred Share (calculated to the nearest one 
one-millionth of a Preferred Share) obtained by (i) multiplying (x) the 
number of one one-hundredths of a Preferred Share covered by a Right 
immediately prior to such 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.

       (h)  The Company may elect on or after the date of any adjustment of 
the Purchase Price to adjust the number of Rights, in substitution for any 
adjustment in the number of one one-hundredths of a Preferred Share 
purchasable upon the exercise of a Right.  Each of the Rights outstanding 
after such adjustment of the number of Rights shall be exercisable for the 
number of one one-hundredths of a Preferred Share for which a Right was 
exercisable immediately prior to such adjustment.  Each Right held of record 
prior to such adjustment of the number of Rights shall become that number of 
Rights (calculated to the nearest one ten-thousandth) obtained by dividing 
the Purchase Price in effect immediately prior to adjustment of the Purchase 
Price by the Purchase Price in effect immediately after adjustment of the 
Purchase Price. The Company shall make a public announcement, with 
substantially contemporaneous written notice to the Rights Agent, of its 
election to adjust the number of Rights, indicating the record date for the 
adjustment, and, if known at the time, the amount 

                                      -10-

<PAGE>

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 Right 
Certificates have been issued, shall be at least 10 days later than the date 
of the public announcement.  If Right Certificates have been issued, upon 
each adjustment of the number of Rights pursuant to this Section 11(h), the 
Company shall, as promptly as practicable, cause to be distributed to holders 
of record of Right Certificates on such record date Right Certificates 
evidencing, subject to Section 14 hereof, the additional Rights to which such 
holders shall be entitled as a result of such adjustment, or, at the option 
of the Company, shall cause to be distributed to such holders of record in 
substitution and replacement for the Right Certificates held by such holders 
prior to the date of adjustment, and upon surrender thereof, if required by 
the Company, new Right Certificates evidencing all the Rights to which such 
holders shall be entitled after such adjustment.  Right Certificates so to be 
distributed shall be issued, executed and countersigned in the manner 
provided for herein and shall be registered in the names of the holders of 
record of Right Certificates on the record date specified in the public 
announcement.

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

       (j)  Before taking any action that would cause an adjustment reducing 
the Purchase Price below one one-hundredth of the then par value, if any, of 
the Preferred Shares 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 fully paid 
and nonassessable Preferred Shares at such adjusted Purchase Price.

       (k)  If an adjustment in the Purchase Price would be required to be 
made effective as of a record date for a specified event in accordance with 
this Section 11, the Company may elect to defer until the occurrence of such 
event the issuing to the holder of any Right exercised after such record date 
of the Preferred Shares and other capital stock or securities of the Company, 
if any, issuable upon such exercise over and above the Preferred Shares 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, that the Company shall deliver to such holder a due 
bill or other appropriate instrument evidencing such holder's right to 
receive such additional shares upon the occurrence of the event requiring 
such adjustment,

       (l)  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 it in its sole discretion shall determine to be advisable 
in order that any consolidation or subdivision of the Preferred Shares, 
issuance wholly for cash of any Preferred Shares at less than the Current Per 
Share Market Price thereof, issuance wholly for cash of Preferred Shares or 
securities which by their terms are convertible into or exchangeable for 
Preferred Shares, dividends on Preferred Shares payable in Preferred Shares 
or issuance of rights, options or warrants referred to in Section 11(b) 
hereafter made by the Company to holders of its Preferred Shares shall not be 
taxable to such stockholders.

       (m)  If at any time after the date of this Agreement and prior to the 
Distribution Date, the Company shall (i) declare or pay any dividend on the 
Common Shares payable in Common Shares or (ii) effect a subdivision, 
combination or consolidation of the Common Shares (by reclassification or 
otherwise than by payment of dividends in Common Shares) into a greater or 
lesser number of Common Shares, then in any such case (A) the number of one 
one-hundredths of a Preferred Share purchasable after such event upon proper 
exercise of each Right shall be determined by multiplying the number of one 
one-hundredths of a Preferred Share so purchasable immediately prior to such 
event by a fraction, the numerator of which is the number of Common Shares 
outstanding 

                                      -11-

<PAGE>

immediately before such event and the denominator of which is the number of 
Common Shares outstanding immediately after such event, and (B) each Common 
Share outstanding immediately after such event shall have issued with respect 
to it that number of Rights which each Common Share outstanding immediately 
prior to such event had issued with respect to it.  The adjustments provided 
for in this Section 11(m) shall be made successively whenever such a dividend 
is declared or paid or such a subdivision, combination or consolidation is 
effected.

       Section 12.  CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF 
SHARES. Whenever an adjustment is made as provided in Section 11 or 13 
hereof, the Company shall promptly (a) prepare a certificate setting forth 
such adjustment, and a brief statement of the facts accounting for such 
adjustment, (b) file with the Rights Agent and with each transfer agent for 
the Common Shares or the Preferred Shares a copy of such certificate and (c) 
mail a brief summary thereof to each holder of a Right Certificate in 
accordance with Section 25 hereof.  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 such adjustment unless and until 
it shall have received such certificate.

       Section 13.  CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR 
EARNING POWER.  In the event, directly or indirectly, at any time after a 
Person has become an Acquiring Person, (a) the Company shall consolidate 
with, or merge with and into, any other Person, (b) any Person shall 
consolidate with the Company, or merge with and into the Company and the 
Company shall be the continuing or surviving corporation of such merger and, 
in connection with such merger, all or part of the Common Shares shall be 
changed into or exchanged for stock or other securities of any other Person 
(or the Company) or cash or any other property, or (c) the Company shall sell 
or otherwise transfer (or one or more of its Subsidiaries shall sell or 
otherwise transfer), in one or more transactions, assets or earning power 
aggregating 50% or more of the assets or earning power of the Company and its 
Subsidiaries (taken as a whole) to any other Person other than the Company or 
one or more of its wholly owned Subsidiaries, then, and in each such case, 
proper provision shall be made so that (i) each holder of a Right (except as 
otherwise provided herein) shall thereafter have the right to receive, upon 
the exercise thereof at a price equal to the then current Purchase Price 
multiplied by the number of one one-hundredths of a Preferred Share for which 
a Right is then exercisable, in accordance with the terms of this Agreement 
and in lieu of Preferred Shares, such number of Common Shares of such other 
Person (including the Company as successor thereto or as the surviving 
corporation) as shall equal the result obtained by (A) multiplying the then 
current Purchase Price by the number of one one-hundredths of a Preferred 
Share for which a Right is then exercisable and dividing that product by (B) 
50% of the then Current Per Share Market Price of the Common Shares of such 
other Person on the date of consummation of such consolidation, merger, sale 
or transfer; (ii) the issuer of such Common Shares shall thereafter be liable 
for, and shall assume, by virtue of such consolidation, merger, sale or 
transfer, all the obligations and duties of the Company pursuant to this 
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to 
such issuer; and (iv) such issuer shall take such steps (including the 
reservation of a sufficient number of its Common Shares in accordance with 
Section 9 hereof) in connection with such consummation as may be necessary to 
assure that the provisions hereof shall thereafter be applicable, as nearly 
as reasonably may be, in relation to the Common Shares thereafter deliverable 
upon the exercise of the Rights.  The Company shall not consummate any such 
consolidation, merger, sale or transfer unless prior thereto the Company and 
such issuer shall have executed and delivered to the Rights Agent a 
supplemental agreement so providing.  Notwithstanding anything in this 
Agreement to the contrary, the prior written consent of the Rights Agent must 
be obtained in connection with any supplemental agreement that alters the 
rights or duties of the Rights Agent, except that the substitution of another 
party in place of the Company under this Agreement or the lowering of the 
thresholds set forth in the definitions of "Acquiring Person" and 
"Distribution Date" in accordance with Section 27 shall not be deemed to 
alter the rights or duties of the Rights Agent hereunder.  The Company shall 
not enter into any transaction of the kind referred to in this Section 13 if 
at the time of such transaction there are any rights, warrants, instruments 
or securities outstanding or any agreements or arrangements which, as a 
result of the consummation of such transaction, would 

                                      -12-

<PAGE>

eliminate or substantially diminish the benefits intended to be afforded by 
the Rights.  The provisions of this Section 13 shall similarly apply to 
successive mergers or consolidations or sales or other transfers.

       Section 14.  FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company 
shall not be required to issue fractions of Rights or to distribute Right 
Certificates which evidence fractional Rights.  In lieu of such fractional 
Rights, there shall be paid to the registered holders of the Right 
Certificates with regard to which such fractional Rights would otherwise be 
issuable, an amount in cash equal to the same fraction of the current market 
value of a whole Right.  For the purposes of this Section 14(a), the current 
market value of a whole Right shall be the Closing Price of the Rights for 
the Trading Day immediately prior to the date on which such fractional Rights 
would have been otherwise issuable.

       (b)  The Company shall not be required to issue fractions of Preferred 
Shares (other than fractions which are integral multiples of one 
one-hundredth of a Preferred Share) upon exercise of the Rights or to 
distribute certificates which evidence fractional Preferred Shares (other 
than fractions which are integral multiples of one one-hundredth of a 
Preferred Share).  Fractions of Preferred Shares in integral multiples of one 
one-hundredth of a Preferred Share may, at the election of the Company, be 
evidenced by depositary receipts, pursuant to an appropriate agreement 
between the Company and a depositary selected by it; PROVIDED, that such 
agreement shall provide that the holders of such depositary receipts shall 
have all the rights, privileges and preferences to which they are entitled as 
beneficial owners of the Preferred Shares represented by such depositary 
receipts.  In lieu of fractional Preferred Shares that are not integral 
multiples of one one-hundredth of a Preferred Share, the Company shall pay to 
the registered holders of Right 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 Preferred Share.  For the purposes of this 
Section 14(b), the current market value of a Preferred Share shall be the 
Closing Price of a Preferred Share for the Trading Day immediately prior to 
the date of such exercise.

       (c)  The holder of a Right by the acceptance thereof expressly waives 
his right to receive any fractional Rights or any fractional shares upon 
exercise of a Right (except as provided in Section 14(b)).

       Section 15.  RIGHTS OF ACTION.  All rights of action in respect of 
this Agreement, excepting the rights of action given to the Rights Agent 
under Section 18, are vested in the respective registered holders of the 
Right Certificates and, prior to the Distribution Date, the registered 
holders of the Common Shares.  Any registered holder of any Right Certificate 
(or, prior to the Distribution Date, of the Common Shares), without the 
consent of the Rights Agent or of the holder of any other Right Certificate 
(or, prior to the Distribution Date, of the Common Shares), 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 Right 
Certificate in the manner provided in such Right Certificate and in this 
Agreement.  Without limiting the foregoing or any remedies available to the 
holders of Rights, it is specifically acknowledged that the holders of Rights 
would not have an adequate remedy at law for any breach of this Agreement and 
will be entitled to specific performance of the obligations under, and 
injunctive relief against actual or threatened violations of the obligations 
of any Person subject to, this Agreement.

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

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


                                      -13-

<PAGE>

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

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

   (d)  notwithstanding anything to the contrary contained in this Agreement, 
neither the Company nor the Rights Agent shall have any liability to any 
holder of a Right or other Person as a result of the Company's or the Rights 
Agent's 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 that the Company shall use its reasonable efforts to 
have any such order, decree or ruling lifted or otherwise overturned as soon 
as possible.

   Section 17.  RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.  No 
holder, as such, of any Right Certificate shall be entitled to vote, receive 
dividends or be deemed for any purpose the holder of the Preferred Shares or 
any other securities of the Company which may at any time be issuable on the 
exercise of the Rights represented thereby, nor shall anything contained 
herein or in any Right Certificate be construed to confer upon the holder of 
any Right Certificate, as such, any of the rights of a stockholder of the 
Company or any right to vote for the election of directors or upon any matter 
submitted to stockholders at any meeting thereof, or to give or withhold 
consent to any corporate action, or to receive notice of meetings or other 
actions affecting stockholders (except as provided in Section 25), or to 
receive dividends or subscription rights, or otherwise, until the Right or 
Rights evidenced by such Right 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 such compensation as shall be agreed in writing between 
the Company and the Rights Agent for all services rendered by it hereunder 
and, from time to time, on demand of the Rights Agent, its reasonable 
expenses and counsel fees and other disbursements incurred in the 
administration and execution of this Agreement and the exercise and 
performance of its duties hereunder.  The Company also agrees to indemnify 
the Rights Agent for, and to hold it harmless against, any and all loss, 
liability, damage, claim or expense incurred without gross negligence, bad 
faith or willful misconduct on the part of the Rights Agent, for anything 
done or omitted by the Rights Agent in connection with the acceptance and 
administration of this Agreement, including the costs and expenses of 
defending against any claim of liability in the premises.  The provisions of 
this Section 18(a) shall survive the expiration of the Rights and the 
termination of this Agreement.

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

                                     -14-


<PAGE>

   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 all 
or substantially all the stock transfer or corporate trust powers of the 
Rights Agent or any successor Rights Agent, shall be the successor to the 
Rights Agent under this Agreement without the execution or filing of any 
paper or any further act on the part of any of the parties hereto; PROVIDED, 
that such corporation would be eligible for appointment as a successor Rights 
Agent under the provisions of Section 21 hereof.  In case at the time such 
successor Rights Agent shall succeed to the agency created by this Agreement, 
any of the Right Certificates shall have been countersigned but not 
delivered, any such successor Rights Agent may adopt the countersignature of 
the predecessor Rights Agent and deliver such Right Certificates so 
countersigned; and in case at that time any of the Right Certificates shall 
not have been countersigned, any successor Rights Agent may countersign such 
Right Certificates either in the name of the predecessor Rights Agent or in 
the name of the successor Rights Agent; and in all such cases such Right 
Certificates shall have the full force provided in the Right Certificates and 
in this Agreement.

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

   Section 20.  DUTIES OF RIGHTS AGENT.  The Rights Agent undertakes only the 
duties and obligations expressly imposed by this Agreement and no implied 
duties or obligations shall be read into this Agreement against the Rights 
Agent upon the following terms and conditions, by all of which the Company 
and the holders of Rights, by their acceptance thereof, shall be bound:

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

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

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

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

                                     -15-


<PAGE>

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

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

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

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

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

   (j)  No provision of this Agreement shall require the Rights Agent to 
expend or risk its own funds or otherwise incur any financial liability in 
the performance of any of its duties 

                                     -16-


<PAGE>

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 Right 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 Rights Agent shall not take any further action with respect to 
such requested exercise or transfer without first consulting with the Company.

   (l)  In addition to the foregoing, the Rights Agent shall be protected and 
shall incur no liability for, or in respect of, any action taken or omitted 
by it in connection with its administration of this Agreement if such acts or 
omissions are in reliance upon (i) the proper execution of the certification 
concerning beneficial ownership appended to the form of assignment and the 
form of election to purchase attached hereto unless the Rights Agent shall 
have actual knowledge that, as executed, such certification is untrue, or 
(ii) the non-execution of such certification including, without limitation, 
any refusal to honor any otherwise permissible assignment or election by 
reason of such non-execution.

   (m)  The Company agrees to give the Rights Agent prompt written notice of 
any event or ownership of which the Company has knowledge that would prohibit 
the exercise or transfer of the Right Certificates.

   Section 21.  CHANGE OF RIGHTS AGENT. The Rights Agent or any successor 
Rights Agent may resign and be discharged from its duties under this 
Agreement upon 30 days' notice in writing mailed to the Company and to each 
transfer agent of the Common Shares or Preferred Shares by registered or 
certified mail.  The Company may remove the Rights Agent or any successor 
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or 
successor Rights Agent, as the case may be, and to each transfer agent of the 
Common Shares or Preferred Shares by registered or certified mail.  If the 
Rights Agent shall resign or be removed or shall otherwise become incapable 
of acting, the Company shall appoint a successor to the Rights Agent.  If the 
Company shall fail to make such appointment within a period of 30 days after 
giving notice of such removal or after it has been notified in writing of 
such resignation or incapacity by the resigning or incapacitated Rights Agent 
or by the holder of a Right Certificate (who shall, with such notice, submit 
his Right Certificate for inspection by the Company), then the Rights Agent 
or the registered holder of any Right Certificate may apply to any court of 
competent jurisdiction for the appointment of a new Rights Agent.  Any 
successor Rights Agent, whether appointed by the Company or by such a court, 
shall be a corporation organized and doing business under the laws of the 
United States or of the State of New York (or of any other state of the 
United States so long as such corporation is authorized to do business as a 
banking institution in the State of New York, in good standing, having an 
office in the State of New York, which is authorized under such laws to 
exercise corporate trust or stock transfer powers and is subject to 
supervision or examination by federal or state authority and which has at the 
time of its appointment as Rights Agent a combined capital and surplus of at 
least $50 million.  After appointment, the successor Rights Agent shall be 
vested with 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 Shares or Preferred Shares, and mail a notice 
thereof in writing to the registered holders of the Right Certificates.  
Failure to give any notice provided for in this Section 21, however, or any 
defect therein, shall not affect the legality or validity of the resignation 
or removal of the Rights Agent or the appointment of the successor Rights 
Agent, as the case may be.

                                     -17-


<PAGE>

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

   Section 23.  REDEMPTION.  (a)  The Board of Directors may, at its option, 
at any time prior to such time as any Person becomes an Acquiring Person, 
redeem all but not less than all of the then outstanding Rights at a 
redemption price of $.01 per Right, appropriately adjusted to reflect any 
stock split, stock dividend or similar transaction occurring after the date 
hereof (such redemption price being hereinafter referred to as the 
"Redemption Price").  The redemption of the Rights by the Board of Directors 
may be made effective at such time, on such basis and with such conditions as 
the Board of Directors in its sole discretion may establish.

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

   Section 24.  EXCHANGE.  (a)  The Board of Directors may, at its option, at 
any time after any Person becomes an Acquiring Person, exchange all or part 
of the then outstanding and exercisable Rights (which shall not include 
Rights that have become void pursuant to the provisions of Section 11(a)(ii) 
hereof) for Common Shares at an exchange ratio of one Common Share per Right, 
appropriately adjusted to reflect any stock split, stock dividend or similar 
transaction occurring after the date hereof (such exchange ratio being 
hereinafter referred to as the "Exchange Ratio").  Notwithstanding the 
foregoing, the Board of Directors shall not be empowered to effect such 
exchange at any time after any Person (other than the Company or any Company 
Entity), together with all Affiliates and Associates of such Person, becomes 
the Beneficial Owner of 50% or more of the Common Shares then outstanding.

   (b)  Immediately upon the action of the Board of Directors ordering the 
exchange of any Rights pursuant to Section 24(a) and without any further 
action and without any notice, the right to exercise such Rights shall 
terminate and the only right thereafter of a holder of such Rights shall be 
to receive that number of Common Shares equal to the number of such Rights 
held by such holder multiplied by the Exchange Ratio.  The Company shall 
promptly give public notice, with substantially contemporaneous written 
notice to the Rights Agent, of any such exchange; PROVIDED, 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 will state the method by 
which the exchange of the Common Shares for Rights 

                                     -18-


<PAGE>

will be effected and, in the event of any partial exchange, the number of 
Rights which will be exchanged.  Any partial exchange shall be effected pro 
rata based on the number of Rights (other than Rights which have become void 
pursuant to the provisions of Section 11(a)(iii)) held by each holder of 
Rights.

   (c)  If there shall not be sufficient Common Shares issued but not 
outstanding or authorized but unissued to permit any exchange of Rights as 
contemplated in accordance with this Section 24, the Company shall take all 
such action as may be necessary to authorize additional Common Shares for 
issuance upon exchange of the Rights.  If the Company shall, after good faith 
effort, be unable to authorize such additional Common Shares, the Company 
shall substitute, for each Common Share that would otherwise be issuable upon 
exchange of a Right, a number of Preferred Shares or fraction thereof such 
that the Current Per Share Market Price of one Preferred Share multiplied by 
such number or fraction is equal to the Current Per Share Market Price of one 
Common Share as of the date of issuance of such Preferred Shares or fraction 
thereof.

   (d)  The Company shall not be required to issue fractions of Common Shares 
or to distribute certificates which evidence fractional Common Shares.  In 
lieu of such fractional Common Shares, the Company shall pay to the 
registered holders of the Right Certificates with regard to which such 
fractional Common Shares would otherwise be issuable an amount in cash equal 
to the same fraction of the current market value of a whole Common Share.  
For the purposes of this paragraph (d), the current market value of a whole 
Common Share shall be the Closing Price of a Common Share 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 (i) to pay any dividend payable in stock of any class to the holders 
of its Preferred Shares or to make any other distribution to the holders of 
its Preferred Shares (other than a regular quarterly cash dividend), (ii) to 
offer to the holders of its Preferred Shares rights or warrants to subscribe 
for or to purchase any additional Preferred Shares or shares of stock of any 
class or any other securities, rights or options, (iii) to effect any 
reclassification of its Preferred Shares (other than a reclassification 
involving only the subdivision of outstanding Preferred Shares), (iv) to 
effect any consolidation or merger into or with, or to effect any sale or 
other transfer (or to permit one or more of its Subsidiaries to effect any 
sale or other transfer), in one or more transactions, of 50% or more of the 
assets or earning power of the Company and its Subsidiaries (taken as a 
whole) to, any other Person, (v) to effect the liquidation, dissolution or 
winding up of the Company, or (vi) to declare or pay any dividend on the 
Common Shares payable in Common Shares or to effect a subdivision, 
combination or consolidation of the Common Shares (by reclassification or 
otherwise than by payment of dividends in Common Shares), then, in each such 
case, the Company shall give to the Rights Agent and each holder of a Right 
Certificate, in accordance with Section 26, a notice of such proposed action. 
 Such notice shall specify the record date for the purposes of such stock 
dividend or 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 Common Shares and/or Preferred Shares, if any 
such date is to be fixed.  Such notice shall be so given, in the case of any 
action covered by clause (i) or (ii) above, at least 10 days prior to the 
record date for determining holders of the Preferred Shares for purposes of 
such action and, in the case of any such other action, at least 10 days prior 
to the earlier of the taking of such proposed action or the date of 
participation therein by the holders of the Common Shares or Preferred 
Shares, as the case may be.

   (b)  If the event set forth in Section 11(a)(ii) shall occur, then the 
Company shall as soon as practicable thereafter give to the Rights Agent and 
each holder of a Right Certificate, in accordance with Section 26, a notice 
of the occurrence of such event, which notice shall describe such event and 
the consequences of such event to holders of Rights under Section 11(a)(ii).

   Section 26.  NOTICES.  Notices or demands authorized by this Agreement to 
be given or made by the Rights Agent or by the holder of any Right 
Certificate to or on the Company shall be 

                                     -19-


<PAGE>

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:

     Cross-Continent Auto Retailers, Inc.
     1201 South Taylor Street
     Amarillo, Texas  79101
     Telecopy:  (806) 374-3818
     Attention:  Robert W. Hall

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

     The Bank of New York
     101 Barclay Street, Floor 12W
     New York, New York  10286
     Telecopy:  (212) 815-3201
     Attention:  Stock Transfer Administration


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

   Section 27.  SUPPLEMENTS AND AMENDMENTS.  The Company may from time to 
time supplement or amend this Agreement without the approval of any holders 
of Right Certificates in order to cure any ambiguity, to correct or 
supplement any provision contained herein which may be defective or 
inconsistent with any other provisions herein, or to make any other 
provisions with respect to the Rights which the Company may deem necessary or 
desirable, any such supplement or amendment to be evidenced by a writing 
signed by the Company and the Rights Agent; PROVIDED, that from and after 
such time as any Person becomes an Acquiring Person, this Agreement shall not 
be amended in any manner which would adversely affect the interests of the 
holders of Rights.  Without limiting the foregoing, the Company may at any 
time prior to such time as any Person becomes an Acquiring Person amend this 
Agreement to lower the thresholds set forth in the definitions of "Acquiring 
Person" and "Distribution Date" in Section 1(a) to not less than the greater 
of (i) the sum of .001% and the largest percentage of the outstanding Common 
Shares then known by the Company to be beneficially owned by any Person 
(other than the Company or any Company Entity) and (ii) 10%. Notwithstanding 
any other provision hereof, the Rights Agent's consent must be obtained 
regarding any amendment or supplement pursuant to this Section 27 which 
alters the Rights Agent's rights or duties, except that the substituting of 
another party in place of the Company under this Agreement or the lowering of 
the thresholds as aforesaid shall not be deemed to alter the rights or duties 
of the Rights Agent hereunder.

   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.  Upon the delivery of a certificate from an executive officer or 
the secretary of the Company which states that the proposed supplement or 
amendment is in compliance with the terms of this Section, the Rights Agent 
shall execute such supplement or amendment.  

   Section 29.  BENEFITS OF THIS AGREEMENT.  Nothing in this Agreement shall 
be construed to give to any person or corporation other than the Company, the 
Rights Agent and the registered 

                                     -20-


<PAGE>

holders of the Right Certificates (and, prior to the Distribution Date, the 
Common Shares) any legal or equitable right, remedy or claim under this 
Agreement.  This Agreement shall be for the sole and exclusive benefit of the 
Company, the Rights Agent and the registered holders of the Right 
Certificates (and, prior to the Distribution Date, the Common Shares).

   Section 30.  SEVERABILITY.  If any term, provision, covenant or 
restriction of this Agreement is held by a court of competent jurisdiction or 
other authority to be invalid, void or unenforceable, the remainder of the 
terms, provisions, covenants and restrictions of this Agreement shall remain 
in full force and effect and shall in no way be affected, impaired or 
invalidated.

   SECTION 31.  GOVERNING LAW  THIS AGREEMENT AND EACH RIGHT CERTIFICATE 
ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE 
STATE OF NEW YORK AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN 
ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO BE MADE AND 
PERFORMED ENTIRELY WITHIN SUCH STATE.

   Section 32.  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 33.  DESCRIPTIVE HEADINGS.  Descriptive headings of the several 
Sections of this Agreement are inserted for convenience only and shall not 
control or affect the meaning or construction of any of the provisions hereof.

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

                              CROSS-CONTINENT AUTO RETAILERS, INC.
                             
                              By 
                                 ---------------------------------
                                 Name:
                                 Title:


                             
                             
                              THE BANK OF NEW YORK, as Rights Agent

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

                                     -21-


<PAGE>


                                                                EXHIBIT A
                                     FORM
                                      of
                         CERTIFICATE OF DESIGNATIONS
                                      of
                SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
                                      of
                     CROSS-CONTINENT AUTO RETAILERS, INC.
                       (Pursuant to Section 151 of the
                      Delaware General Corporation Law)

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

   Cross-Continent Auto Retailers, Inc., Inc., a corporation organized and 
existing under the General Corporation Law 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 as 
required by Section 151 of the General Corporation Law by unanimous written 
consent on September 3, 1996:

   RESOLVED, that pursuant to the authority granted to and vested in the 
Board of Directors of this Corporation (hereinafter called the "Board of 
Directors" or the "Board") in accordance with the provisions of the 
Certificate of Incorporation, the Board of Directors hereby creates a series 
of Preferred Stock, par value $ .01 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 250,000.  Such number of shares may be increased or 
decreased by resolution of the Board of Directors; provided, that no decrease 
shall reduce the number of shares of Series A 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 of Directors out of funds legally available for the purpose, 
quarterly dividends 

                                        A-1


<PAGE>

payable in cash on the first day of March, June, September and December in 
each year (each such date being referred to herein as a "Quarterly Dividend 
Payment Date"), commencing on the first Quarterly Dividend Payment Date after 
the first issuance of a share or fraction of a share of Series A Preferred 
Stock, in an amount per share (rounded to the nearest cent) equal to the 
greater of (a) $1 or (b) subject to the provision for adjustment hereinafter 
set forth, 100 times the aggregate per share amount of all cash dividends, 
and 100 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 or 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.

   (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); 
provided that, if no dividend or distribution shall have been declared 
on the Common Stock during the period between any Quarterly Dividend 
Payment Date and the next subsequent Quarterly Dividend Payment Date, a 
dividend of $1 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 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 of Directors 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 100 
votes on all matters submitted to a vote of the stockholders of the 
Corporation.  If the Corporation shall at any time declare or 

                                        A-2


<PAGE>

pay any dividend on the Common Stock payable in shares of Common Stock, or 
effect a subdivision or combination or consolidation of the outstanding 
shares of Common Stock (by reclassification or otherwise 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.

   (B)  Except as otherwise provided herein, in any other Certificate of 
Designations creating a series of Preferred Stock or any similar stock, 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)  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.

   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 of Directors) to all holders of such 
     shares upon such terms as the Board of Directors, after 
     consideration of the respective annual dividend rates and other 
     relative rights and preferences of the respective series and 

                                      A-3


<PAGE>

     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.

   Section 6.  LIQUIDATION, DISSOLUTION OR WINDING UP.  Upon any liquidation, 
dissolution or winding up of the Corporation, no distribution shall be made 
(A) to the holders of shares of stock ranking junior (either as to dividends 
or 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 $100 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 100 
times the aggregate amount to be distributed per share to holders of shares 
of Common Stock, or (B) 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.  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 or 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 (A) 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.

   Section 7.  CONSOLIDATION, MERGER, ETC.  In case the Corporation shall 
enter into any consolidation, merger, combination or other transaction in 
which the shares of Common Stock are exchanged for or changed into other 
stock or securities, cash and/or any other property, then in any such case 
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 100 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. If the Corporation shall at any time declare or pay any dividend 
on the Common Stock payable in shares of Common Stock, or effect a 
subdivision or combination or consolidation of the outstanding shares of 
Common Stock (by reclassification or otherwise 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 

                                          A-4


<PAGE>

of which is the number of shares of Common Stock that were outstanding 
immediately prior to 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 Corporation's Preferred Stock.

   Section 10.  AMENDMENT.  The Certificate of Incorporation of the 
Corporation shall not be amended in any manner which would materially alter 
or change the powers, preferences 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.

   IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf 
of the Corporation by its Chairman of the Board and attested by its Secretary 
this [___] day of September, 1996.


                                 -------------------------------------
                                         Chairman of the Board
Attest:


-------------------------------------
Secretary 





                                       A-5
<PAGE>

                                                                EXHIBIT B

                           Form of Right Certificate

Certificate No. R-                                         ______________ Rights

     NOT EXERCISABLE AFTER SEPTEMBER 20, 2006 OR EARLIER IF REDEMPTION OR 
     EXCHANGE OCCURS.  THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT 
     AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.

                               Right Certificate

                      CROSS-CONTINENT AUTO RETAILERS, INC.

     This certifies that ____________________ or registered assigns, is the 
registered owner of the number of Rights set forth above, each of which 
entitles the owner thereof, subject to the terms, provisions and conditions 
of the Rights Agreement, dated as of September 20, 1996 (the "Rights 
Agreement"), between Cross-Continent Auto Retailers, Inc., a Delaware 
corporation (the "Company"), and The Bank of New York, as rights agent (the 
"Rights Agent"), to purchase from the Company at any time after the 
Distribution Date (as such term is defined in the Rights Agreement) and prior 
to 5:00 p.m.., (New York City time), on September 20, 2006 at the designated 
office of the Rights Agent, or at the office of its successor as Rights 
Agent, one one-hundredth of a fully paid non-assessable share of Series A 
Junior Participating Preferred Stock, par value $ .01 per share (the 
"Preferred Shares"), of the Company, at a purchase price of $100.00 per one 
one-hundredth of a Preferred Share (the "Purchase Price"), upon presentation 
and surrender of this Right Certificate with the Form of Election to Purchase 
duly executed.  The number of Rights evidenced by this Right Certificate (and 
the number of one one-hundredths of a Preferred Share which may be purchased 
upon exercise hereof) set forth above, and the Purchase Price set forth 
above, are the number and Purchase Price as of September 20, 1996, based on 
the Preferred Shares as constituted at such date.  As provided in the Rights 
Agreement, the Purchase Price and the number of one one-hundredths of a 
Preferred Share which may be purchased upon the exercise of the Rights 
evidenced by this Right Certificate are subject to modification and 
adjustment upon the happening of certain events.

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

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

                                     B-1
<PAGE>

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

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

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

     This Right Certificate shall not be 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:                                     CROSS-CONTINENT AUTO RETAILERS, INC.


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

Countersigned:

THE BANK OF NEW YORK, as Rights Agent

By 
   ---------------------------------
        Authorized Signatory

Date of authorization:
                       -------------






                                     B-2
<PAGE>

                Form of Reverse Side of Right Certificate

                           FORM OF ASSIGNMENT

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

      FOR VALUE RECEIVED ___________________________________________ hereby 
sells, assigns and transfers unto _____________________________________________
_______________________________________________________________________________

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

Dated: 
       ------------------------------

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

Signature Guaranteed:

     Signatures must be guaranteed by an "eligible guarantor institution" 
meeting the requirements of the Rights Agent, which requirements include 
membership or participation in STAMP or such other "signature guarantee 
program" as may be determined by the Rights Agent in addition to, or in 
substitution for, STAMP, all in accordance with the Securities Exchange Act 
of 1934, as amended.

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

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

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

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





                                     B-3
<PAGE>

          Form of Reverse Side of Right Certificate -- continued

                      FORM OF ELECTION TO PURCHASE

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

To:  CROSS-CONTINENT AUTO RETAILERS, INC.

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

Please insert social security 
or other taxpayer identifying number

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

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

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

Please insert social security 
or other taxpayer identifying number

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

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

Dated:                       
      -----------------------, ------

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

Signature Guaranteed:

     Signatures must be guaranteed by an "eligible guarantor institution" 
meeting the requirements of the Rights Agent, which requirements include 
membership or participation in STAMP or such other "signature guarantee 
program" as may be determined by the Rights Agent in addition to, or in 
substitution for, STAMP, all in accordance with the Securities Exchange Act 
of 1934, as amended.




                                     B-4
<PAGE>

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

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

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

                                    NOTICE

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

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















                                     B-5
<PAGE>

                                                                       EXHIBIT C

                        SUMMARY OF RIGHTS TO PURCHASE 
                               PREFERRED SHARES


     On September 3, 1996, the Board of Directors of Cross-Continent Auto 
Retailers, Inc. (the "Company") declared a dividend of one preferred share 
purchase right (a "Right") for each outstanding share of common stock, par 
value $.01 per share (the "Common Shares"), of the Company.  The dividend is 
payable on September 20, 1996 (the "Record Date") to the stockholders of 
record on that date.  Each Right entitles the registered holder to purchase 
from the Company one one-hundredth of a share of Series A Junior 
Participating Preferred Stock, par value $.01 per share (the "Preferred 
Shares"), of the Company at a price of $100 per one one-hundredth of a 
Preferred Share (the "Purchase Price"), subject to adjustment. The 
description and terms of the Rights are set forth in a Rights Agreement (the 
"Rights Agreement") between the Company and The Bank of New York as rights 
agent (the "Rights Agent").

     Until the earlier to occur of (i) 10 days following a public 
announcement that a person or group of affiliated or associated persons (an 
"Acquiring Person") have acquired beneficial ownership of 19.9% or more of 
the outstanding Common Shares or (ii) 10 business days (or such later date as 
may be determined by action of the Board of Directors prior to such time as 
any person or group of affiliated persons becomes an Acquiring Person) 
following the commencement of, or announcement of an intention to make, a 
tender offer or exchange offer the consummation of which would result in the 
beneficial ownership by a person or group of 19.9% or more of the outstanding 
Common Shares (the earlier of such dates being called the "Distribution 
Date"), the Rights will be evidenced, with respect to any of the Common Share 
certificates outstanding as of the Record Date, by such Common Share 
certificate with a copy of this Summary of Rights attached thereto.

     The Rights Agreement provides that, until the Distribution Date (or 
earlier redemption or expiration of the Rights), the Rights will be 
transferred with and only with the Common Shares.  Until the Distribution 
Date (or earlier redemption or expiration of the Rights), new Common Share 
certificates issued after the Record Date upon transfer or new issuance of 
Common Shares will contain a notation incorporating the Rights Agreement by 
reference.  Until the Distribution Date (or earlier redemption or expiration 
of the Rights), the surrender for transfer of any certificates for Common 
Shares outstanding as of the Record Date, even without such notation or a 
copy of this Summary of Rights being attached thereto, will also constitute 
the transfer of the Rights associated with the Common Shares represented by 
such certificate.  As soon as practicable following the Distribution Date, 
separate certificates evidencing the Rights ("Right Certificates") will be 
mailed to holders of record of the Common Shares as of the close of business 
on the Distribution Date and such separate Right Certificates alone will 
evidence the Rights.

     The Rights are not exercisable until the Distribution Date.  The Rights 
will expire on September 20, 2006 (the "Final Expiration Date"), unless the 
Final Expiration Date is extended or unless the Rights are earlier redeemed 
or exchanged by the Company, in each case, as described below.

     The Purchase Price payable, and the number of Preferred Shares 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 Shares, (ii) upon the grant to holders of the Preferred Shares of 
certain rights or warrants to subscribe for or purchase Preferred Shares at a 
price, or securities convertible into Preferred Shares with a conversion 
price, less than the then-current market price of the Preferred Shares or 
(iii) upon the distribution to holders of the Preferred Shares of evidences 
of indebtedness or assets (excluding regular 

                                     C-1

<PAGE>

periodic cash dividends paid out of earnings or retained earnings or 
dividends payable in Preferred Shares) or of subscription rights or warrants 
(other than those referred to above).

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

     Preferred Shares purchasable upon exercise of the Rights will not be 
redeemable. Each Preferred Share will be entitled to a minimum preferential 
quarterly dividend payment of $1 per share but will be entitled to an 
aggregate dividend of 100 times the dividend declared per Common Share.  In 
the event of liquidation, the holders of the Preferred Shares will be 
entitled to a minimum preferential liquidation payment of $100 per share but 
will be entitled to an aggregate payment of 100 times the payment made per 
Common Share.  Each Preferred Share will have 100 votes, voting together with 
the Common Shares. Finally, it the event of any merger, consolidation or 
other transaction in which Common Shares are exchanged, each Preferred Share 
will be entitled to receive 100 times the amount received per Common Share.  
These rights are protected by customary antidilution provisions.

     Because of the nature of the Preferred Shares, dividend, liquidation and 
voting rights, the value of the one one-hundredth interest in a Preferred 
Share purchasable upon exercise of each Right should approximate the value of 
one Common Share.

     If the Company is acquired in a merger or other business combination 
transaction or 50% or more of its consolidated assets or earning power are 
sold after a person or group has become an Acquiring Person, proper provision 
will be made so that each holder of a Right will thereafter have the right to 
receive, upon the exercise thereof at the then current exercise price of the 
Right, that number of shares of common stock of the acquiring company which 
at the time of such transaction will have a market value of two times the 
exercise price of the Right.  If any person or group of affiliated or 
associated persons becomes an Acquiring Person, proper provision shall be 
made so that each holder of a Right, other than Rights beneficially owned by 
the Acquiring Person (which will thereafter be void), will thereafter have 
the right to receive upon exercise that number of Common Shares having a 
market value of two times the exercise price of the Right.

     At any time after any person or group becomes an Acquiring Person and 
prior to the acquisition by such person or group of 50% or more of the 
outstanding Common Shares, the Board of Directors of the Company may exchange 
the Rights (other than Rights owned by such person or group, which will have 
become void), in whole or in part, at an exchange ratio of one Common Share, 
or one one-hundredth of a Preferred Share (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).

     With certain exceptions, no adjustment in the Purchase Price will be 
required until cumulative adjustments require an adjustment of at least 1.0% 
in such Purchase Price.

     No fractional Preferred Shares will be issued (other than fractions 
which are integral multiples of one one-hundredth of a Preferred Share, which 
may, at the election of the Company, be evidenced by depositary receipts) and 
in lieu thereof, an adjustment in cash will be made based on the market price 
of the Preferred Shares on the last trading day prior to the date of exercise.

     At any time prior to the acquisition by a person or group 
of affiliated or associated persons of beneficial ownership of 19.9% or more 
of the outstanding Common Shares, the Board of Directors of the Company may 
redeem the Rights in whole, but not in part, at a price of $.01 per Right 
(the "Redemption Price"). The redemption of the Rights may be made effective 
at such time on such 


                                     C-2
<PAGE>

basis with such conditions as the Board of Directors in 
its sole discretion may establish.  Immediately upon any redemption of the 
Rights, the right to exercise the Rights will terminate and the only right of 
the holders of Rights will be to receive the Redemption Price.

     The terms of the Rights may be amended by the Board of Directors of the 
Company without the consent of the holders of the Rights, including an 
amendment to lower certain thresholds described above to not less than the 
greater of (i) the sum of .001% and the largest percentage of the outstanding 
Common Shares then known to the Company to be beneficially owned by any 
person or group of affiliated or associated persons and (ii) 10%, except that 
from and after such time as any person or group of affiliated or associated 
persons becomes an Acquiring Person no such amendment may adversely affect 
the interests of the holders of the Rights.

     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. A copy of the Rights Agreement has 
been filed with the Securities and Exchange Commission as an Exhibit to a 
Registration Statement on S-1, No. 333-06585.  

     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 hereby incorporated herein by reference.
















                                     C-3