Document:

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                                                                     EXHIBIT 4.1

                                RIGHTS AGREEMENT

                                 BY AND BETWEEN

                           MOBILITY ELECTRONICS, INC.

                                       AND

                          COMPUTERSHARE TRUST COMPANY,
                                 AS RIGHTS AGENT

                                  JUNE 11, 2003

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                                TABLE OF CONTENTS
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Section 1.  Definitions and Interpretation.................................................1

Section 2.  Appointment of Rights Agent....................................................6

Section 3.  Issue of Rights Certificates...................................................6

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

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

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

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

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

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

Section 10.  Preferred Stock Record Date..................................................14

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

Section 12.  Certificate of Adjusted Purchase Price or Number of Shares...................23

Section 13.  Consolidation, Merger or Sale or Transfer of Assets or Earning Power.........23

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

Section 15.  Rights of Action.............................................................27
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                                       (i)
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Section 16.  Agreement of Rights Holders..................................................27

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

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

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

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

Section 21.  Change of Rights Agent.......................................................32

Section 22.  Issuance of New Rights Certificates..........................................32

Section 23.  Redemption and Termination...................................................33

Section 24.  Exchange.....................................................................34

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

Section 26.  Notices......................................................................36

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

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

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

Section 30.  Benefits of This Agreement...................................................37

Section 31.  Severability.................................................................38

Section 32.  Governing Law................................................................38
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                                      (ii)
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Section 33.  Counterparts.................................................................38

Section 34.  Descriptive Headings.........................................................38
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                                     (iii)
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                                RIGHTS AGREEMENT

         This Rights Agreement, dated as of June 11, 2003 (the "Agreement"), is
by and between Mobility Electronics, Inc., a Delaware corporation (the
"Company"), and Computershare Trust Company, a Colorado corporation (the "Rights
Agent").

         WHEREAS, effective June 11, 2003 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company (the "Board") authorized and
declared a distribution of one Right (each, a "Right") for each share of Common
Stock (as hereinafter defined) outstanding as of the Close of Business (as
hereinafter defined) on June 23, 2003 (the "Record Date"), each Right initially
representing the right to purchase one one-thousandth of a share (a "Unit") of
Preferred Stock (as hereinafter defined) upon the terms and subject to the
conditions in this Agreement, and has further authorized and directed the
issuance of one Right with respect to each share of Common Stock of the Company
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).

         NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements in set forth, the parties hereto, intending to be legally bound,
hereby agree as follows:

         Section 1.   Definitions and Interpretation.

                 (a)  For purposes of this Agreement, the following terms have
the meanings indicated:

                      "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 15% or more of the shares of
Common Stock then outstanding, but shall not include the Company, any Subsidiary
(as such term is hereinafter defined) of the Company, any employee benefit plan
of the Company or any Subsidiary of the Company, or any entity holding shares of
Common Stock for or pursuant to the terms of any such plan.

         Notwithstanding the foregoing:

                      (i) no Person shall become an "Acquiring Person" as the
                 result of an acquisition of shares of Common Stock by the
                 Company which, by reducing the number of shares outstanding,
                 increases the proportionate number of shares beneficially owned
                 by such Person to 15% or more of the shares of Common Stock
                 then outstanding; provided, however, that if a Person shall
                 become the Beneficial Owner of 15% or more of the shares of
                 Common Stock then outstanding as a result of any such
                 acquisition of shares of Common Stock by the Company and shall,
                 after such acquisition of shares by the Company, become the
                 Beneficial Owner of any additional shares of Common Stock
                 (other than as a result of a stock dividend, stock split or
                 similar transaction effected by the

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                 Company in which all holders of Common Stock are treated
                 equally), then such Person shall be deemed to be an "Acquiring
                 Person" hereunder;

                      (ii) no Person who, alone or together with all Affiliates
                 and Associates of such Person, was, at the time of the public
                 announcement by the Company of the declaration by its Board of
                 Directors on June 11, 2003 of the dividend distribution of the
                 Rights, the Beneficial Owner of 15% or more of the Common Stock
                 then outstanding shall be deemed to have become an Acquiring
                 Person unless and until such time as such Person or any
                 Affiliate or Associate of such Person thereafter becomes the
                 Beneficial Owner of any additional Common Stock (other than as
                 a result of a stock dividend, stock split or similar
                 transaction effected by the Company in which all holders of
                 Common Stock are treated equally); and

                      (iii) if the Board determines in good faith that a Person
                 who would otherwise be an "Acquiring Person" (as defined above)
                 pursuant to the provisions of subparagraph (i) above, has
                 become such inadvertently, and such Person has divested or
                 divests as promptly as practicable a sufficient number of
                 shares of Common Stock so that such Person would no longer be
                 an "Acquiring Person," then such Person shall not be deemed to
                 be or to have become an "Acquiring Person" for any purpose of
                 this Agreement.

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

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

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

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

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

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                 accepted for purchase or exchange; or (B) the right to vote
                 pursuant to any agreement, arrangement or understanding;
                 provided further, however, that a Person shall not be deemed
                 the "Beneficial Owner" of, or to "beneficially own," any
                 security under this subparagraph (ii) as a result of any
                 agreement, arrangement or understanding to vote such security
                 if such agreement, arrangement or understanding: (x) arises
                 solely from a revocable proxy given in response to a public
                 proxy or consent solicitation made pursuant to, and in
                 accordance with, the applicable provisions of the Exchange Act
                 and the Exchange Act Regulations, and (y) is not reportable by
                 such Person on Schedule 13D under the Exchange Act (or any
                 comparable or successor report); or

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

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

                      "Board" shall mean the Board of Directors of the Company.

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

                      "Close of Business" on any given date shall mean 5:00
p.m., New York City time, on such date; provided, however, 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.

                      "Common Stock" when used with reference to the Company
shall mean the shares of common stock, par value $0.01 per share, of the
Company; provided, however, that

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"Common Stock" when used with reference to any Person other than the Company
shall mean the capital stock (or other 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" shall have the meaning set forth in the forepart
of this Agreement.

                      "Current Per Share Market Price" shall have the meaning
set forth in Section 11(d)(i).

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

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

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

                      "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any successor statute.

                      "Exchange Act Regulations" shall mean the Rules and
Regulations under the Exchange Act, as amended from time to time (including any
successor rules).

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

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

                      "Nasdaq" shall have the meaning set forth in Section
11(d).

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

                      "Preferred Stock" shall mean shares of Series G Junior
Participating Preferred Stock, par value $0.01 per share, of the Company, having
the rights and preferences set forth in the Form of Certificate of Designation
attached to this Agreement as Exhibit A.

                      "Principal Party" shall have the meaning set forth in
Section 13.

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

                      "Record Date" shall have the meaning set forth in the
recitals to this Agreement.

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

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

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                      "Right" shall have the meaning set forth in the recitals
to this Agreement.

                      "Rights Agent" shall have the meaning set forth in the
forepart of this Agreement and shall include any Person that shall become a
successor Rights Agent pursuant to the terms of this Agreement.

                      "Rights Certificate" shall have the meaning set forth in
Section 3(a).

                      "Rights Dividend Declaration Date" shall have the meaning
set forth in the recitals to this Agreement.

                      "Section 11(a)(ii) Event" shall mean any event described
in Section 11(a)(ii)(A), (B) or (C).

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

                      "Section 13 Event" shall have the meaning set forth in
Section 13.

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

                      "Securities Act" shall mean the Securities Act of 1933, as
amended, or any successor statute.

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

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

                      "Subsidiary" of any Person shall mean 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.
"Summary of Rights" shall have the meaning set forth in Section 3(b).

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

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

                      "Unit" shall have the meaning set forth in the recitals to
this Agreement.

         (b) Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."

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         (c) The words "hereof," "herein" and "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement, and article,
section, paragraph, exhibit and schedule references are to the articles,
sections, paragraphs, exhibits and schedules of and to this Agreement unless
otherwise specified.

         (d) The plural of any defined term shall have a meaning correlative to
such defined term, and words denoting any gender shall include both genders and
the neuter. Where a word or phrase is defined herein, each of its other
grammatical forms shall have a corresponding meaning.

         (e) A reference to any party to this Agreement or any other agreement
or document shall include such party's successors and permitted assigns.

         (f) A reference to any legislation or to any provision of any
legislation shall include any modification, amendment or re-enactment thereof,
any legislative provision substituted therefor and all rules, regulations and
statutory instruments issued thereunder or pursuant thereto.

         (g) The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.

         (h) No prior draft nor any course of performance or course of dealing
shall be used in the interpretation or construction of this Agreement.

         (i) The descriptive headings in this Agreement are intended for
reference purposes only and shall not be used in the interpretation or
construction of this Agreement.

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

    Section 3. Issue of Rights Certificates.

         (a) Until the earlier of (i) the Close of Business on the tenth day
after the Share Acquisition Date or (ii) the Close of Business on the tenth day
(or such later date as may be determined by action of the Board prior to such
time as any Person becomes an Acquiring Person and of which later date the
Company will give the Rights Agent prompt written notice) after the date that a
tender or exchange offer by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of any Subsidiary of
the Company or any Person holding shares of Common Stock for or pursuant to the
terms of any

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such plan) is commenced within the meaning of Rule 14d-2(a) of the Exchange Act
Regulations or of the first public announcement of the intention of any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or any entity holding
shares of Common Stock for or pursuant to the terms of any such plan) to
commence a tender or exchange offer, if upon consummation thereof such Person
would be the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding (the earlier of the events described in (i) and (ii) above being the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b)) by the certificates for shares of Common Stock
registered in the names of the holders thereof (which certificates shall also be
deemed to be Rights Certificates) and not by separate Rights Certificates, and
(y) the right to receive Rights Certificates will be transferable only in
connection with the transfer of shares of Common Stock. As soon as practicable
after the Distribution Date, the Company will notify the Rights Agent of the
occurrence of the Distribution Date and 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 and provided with all necessary
information, send) by first-class, insured, postage-prepaid mail, to each record
holder of shares of Common Stock as of the Close of Business on the Distribution
Date, at the address of such holder shown on the records of the Company, a
Rights Certificate, in substantially the form of Exhibit B (a "Rights
Certificate"), evidencing one Right for each share of Common Stock so held. From
and after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates. The Rights Agent shall have no duty or obligation to take
any action under any section of this Agreement which requires the payment by a
Rights holder of applicable taxes and governmental charges unless and until the
Rights Agent is satisfied that all such taxes and/or charges have been paid.

         (b) On the Record Date, or as soon as practicable thereafter, the
Company will send, or cause to be sent, a copy of a Summary of Rights to
Purchase Preferred Stock, in substantially the form of Exhibit C (the "Summary
of Rights"), by first-class, postage-prepaid mail, to each record holder of
shares of Common Stock as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company. Until the earlier of
the Distribution Date or the Expiration Date, the surrender for transfer of any
certificate for shares of Common Stock shall also constitute the transfer of the
Rights associated with the shares of Common Stock represented thereby.

         (c) Certificates evidencing shares of Common Stock which become
outstanding (whether originally issued or delivered from the Company's treasury)
or are otherwise transferred after the Record Date but prior to the earlier of
the Distribution Date and the Expiration Date shall have impressed on, printed
on, written on or otherwise affixed to them the following legend (or such other
legend as the Company may deem appropriate that is not inconsistent with the
provisions of this Agreement but which does not affect the rights, duties or
indemnities of the Rights Agent):

    THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN
    RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN MOBILITY ELECTRONICS,
    INC., AND COMPUTERSHARE TRUST COMPANY, DATED AS OF JUNE 11, 2003 (THE
    "RIGHTS AGREEMENT"), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY
    REFERENCE AND A COPY OF WHICH IS

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    ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF MOBILITY ELECTRONICS, 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. MOBILITY ELECTRONICS, 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), WHETHER CURRENTLY
    HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BECOME
    NULL AND VOID.

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

    Section 4. Form of Rights Certificates.

         (a) The Rights Certificates (and the forms of election to purchase
Units and of assignment to be printed on the reverse thereof) shall be
substantially the same as Exhibit B and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate (but which do not affect the rights, duties,
responsibilities or immunities of the Rights Agent) and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or transaction reporting system on
which the Rights may from time to time be listed or traded, or to conform to
usage. Subject to the provisions of Sections 11 and 22, the Rights Certificates
shall entitle the holders thereof to purchase the number of Units as shall be
set forth therein at the price per Unit set forth therein, but the number of
such Units and the Purchase Price shall be subject to adjustment as provided
herein.

         (b) Any Rights Certificate issued pursuant to this Agreement that
represents Rights beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person; (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such; or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) that becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of Section 7(e); shall in
each case contain (to the extent the Rights Agent has notice thereof and to the
extent feasible) the following legend:

                                       8
<PAGE>

    THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
    OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
    ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
    AGREEMENT BY AND BETWEEN MOBILITY ELECTRONICS, INC. AND COMPUTERSHARE TRUST
    COMPANY, AS RIGHTS AGENT, DATED AS OF MAY 21, 2003 (THE "RIGHTS
    AGREEMENT")). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
    REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
    IN SECTION 7(e) OF THE RIGHTS AGREEMENT.

    Section 5. Countersignature and Registration.

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

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

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

         (a) Subject to the provisions of Sections 4(b), 7(e) and 14, at any
time after the Close of Business on the Distribution Date, and at or prior to
the Close of Business on the Expiration Date, any Rights Certificate or Rights
Certificates (other than Rights Certificates representing Rights that are not
exercisable pursuant to Section 7(e) or that have been exchanged pursuant to
Section 24) may be transferred, split up, combined or

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exchanged for another Rights Certificate or Rights Certificates evidencing
exercisable Rights, entitling the registered holder to purchase a like number of
Units (or, following a Triggering Event, other securities, cash or other assets,
as the case may be) as the Rights Certificate or Rights Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or Rights
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose. The Rights Certificates are transferable only on
the registry books of the Rights Agent. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Rights Certificate or Rights Certificates until the
registered holder shall have properly completed and signed the certificate
contained in the form of assignment on the reverse side of such Rights
Certificate or Rights Certificates and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof, and the Rights evidenced thereby, as the
Company or the Rights Agent shall reasonably request. Thereupon the Rights Agent
shall, subject to Sections 4(b), 7(e) and 14, countersign and deliver to the
Person entitled thereto a Rights Certificate or Rights Certificates, as the case
may be, as so requested registered in such name or names as may be designated by
the surrendering registered holder. The Company may require payment from holders
of Rights Certificates of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Rights Certificates. The Rights Agent shall promptly
forward any such sum collected by it to the Company or to such Person as the
Company shall specify by written notice. The Rights Agent shall have no duty or
obligation to take any action under any section of this Agreement which requires
the payment by a Rights holder of applicable taxes and governmental charges
unless and until the Rights Agent is satisfied that all such taxes and/or
charges have been paid.

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

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

         (a) The registered holder of any Rights Certificate evidencing
exercisable Rights may exercise the Rights evidenced thereby (except as
otherwise provided in this Agreement) in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the form of
election to purchase and the related certification properly completed and duly
executed, to the Rights Agent at the office of the Rights Agent designated for
such purpose, together with payment of the Purchase Price for each Right being
exercised (as such amount may be reduced (including to zero) pursuant to Section
11(a)(iii)) and an amount equal to any applicable tax or charge required to be
paid by the holder of such Rights Certificate in accordance with Section 9(e) in
cash, certified check, cashier's check, wire transfer, bank draft or money order
payable to the order of the Company), at or prior to the earliest of (i) the
Close of Business on the tenth 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

                                       10
<PAGE>

time at which such Rights are exchanged as provided in Section 24 (the earliest
of (i), (ii) and (iii) being the "Expiration Date").

         (b) The Purchase Price for each Unit pursuant to the exercise of a
Right shall initially be $38.00 and, shall be subject to adjustment from time to
time as provided in Sections 11 and 13 and shall be payable in lawful money of
the United States of America in accordance with paragraph (c) below.

         (c) Upon receipt of a Rights Certificate evidencing exercisable Rights
(with the form of election to purchase and certification properly completed and
duly executed) accompanied by payment as provided in Section 7(a) and an amount
equal to any applicable tax or charge required to be paid under Section 9(e) in
cash, certified check, cashier's check, wire transfer, bank draft, or money
order payable to the order of the Company, the Rights Agent shall, subject to
Section 20(k), thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Stock a certificate or certificates for the number of Units to be
purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests or (B) if the Company shall have elected to
deposit the total number of Units issuable upon exercise of the Rights hereunder
with a depositary agent, requisition from the depositary agent of a depositary
receipt or depositary receipts representing such number of Units as are to be
purchased (in which case certificates for the Units represented by such receipt
or receipts shall be deposited by the transfer agent with the depositary agent)
and the Company hereby directs the depositary agent to comply with such
requests; (ii) 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; (iii) after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder; and (iv) when appropriate, after receipt thereof, deliver such cash
to or upon the order of the registered holder of such Rights Certificate. If the
Company is obligated to issue other securities of the Company, pay cash and/or
distribute other property pursuant to Section 11(a), the Company will make all
arrangements necessary so that such other securities, cash and/or other property
are available for distribution by the Rights Agent, if and when necessary to
comply with the terms of this Agreement.

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

         (e) Notwithstanding anything in this Agreement to the contrary and
without any further action, from and after the first occurrence of a Triggering
Event, any Rights beneficially owned by (i) an Acquiring Person or an Associate
or Affiliate of an Acquiring Person; (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate thereof) who becomes a transferee after
the Acquiring Person becomes such; (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate thereof) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of

                                       11
<PAGE>

equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e); or (iv) any
subsequent transferee; shall, in any of the above cases, not be exercisable
without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights or any Rights Certificate which formerly
evidenced such Rights, and neither the Company nor the Rights Agent shall have
any obligations whatsoever with respect to such Rights or any Rights
Certificate, whether under any provision of this Agreement or otherwise. The
Company shall use all commercially reasonable efforts to ensure that the
provisions of Section 4(b) and this Section 7(e) are complied with, but neither
the Company nor the Rights Agent shall have any liability to any holder of
Rights Certificates or to any other Person as a result of its making or failing
to make any determinations with respect to an Acquiring Person or any of such
Acquiring Person's Affiliates, Associates or transferees or taking or failing to
take any actions with respect any Rights or Rights Certificates of any such
Person.

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

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

    Section 9. Reservation and Availability of Preferred Stock.

         (a) The Company covenants and agrees that it will use its best efforts
to cause to be reserved and kept available out of, and to the extent of, its
authorized and unissued Preferred Stock not reserved for another purpose a
number of shares that will be sufficient to permit the exercise in full of all
outstanding Rights pursuant to this Agreement and, after the occurrence of a
Section 11(a)(ii) Event, shall, to the extent reasonably practicable, so reserve
and keep available a sufficient number of shares of Common Stock of the Company
(and/or other

                                       12
<PAGE>

securities) which may be required to permit an exercise in full of the Rights
pursuant to this Agreement.

         (b) If the Units to be issued and delivered upon the exercise of the
Rights are at any time listed on a national securities exchange, or quoted on
Nasdaq, the Company shall during the period from the Distribution Date to the
Expiration Date use its best efforts to cause all shares reserved for such
issuance to be listed on such exchange, or quoted on Nasdaq, upon official
notice of issuance upon such exercise.

         (c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event in which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section
11(a)(iii), or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Securities Act, with respect
to the securities purchasable upon exercise of the Rights on an appropriate
form, (ii) cause such registration statement to become effective as soon as
reasonably practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities and (B) the
Expiration Date. The Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction, unless the requisite qualification
of the offering made upon exercise of the Rights in such jurisdiction shall have
been obtained, or an exemption therefrom shall be available and until a
registration statement has been declared effective.

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

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

                                       13
<PAGE>

    Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for Units (or, following the occurrence of a Triggering Event, other
securities that may be delivered upon exercise of Rights) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of the Units (or, following the occurrence of a Triggering Event other
securities that may be delivered upon the exercise of the Rights) represented
thereby on, and such certificate shall be dated, at the Close of Business on the
date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer taxes
or charges) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Stock (or, following the occurrence
of a Triggering Event, other securities that may be delivered upon the exercise
of the Rights) transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares at the Close of Business
on, and such certificate shall be dated, the next succeeding Business Day on
which such transfer books are open; provided further, however, that if delivery
of Units (or following the occurrence of a Triggering Event, other securities
that may be delivered upon the exercise of the Rights) is delayed pursuant to
Section 9(c), such Persons shall be deemed to have become the record holders of
such Units (or following the occurrence of a Triggering Event, other securities
that may be delivered upon the exercise of the Rights) only when such Units
first become deliverable. Prior to the exercise of the Rights evidenced thereby,
the holder of a Rights Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to securities for which the Rights shall
be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as expressly provided in this Agreement.

    Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number and kinds of securities covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.

            (a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable in shares
of Preferred Stock, (B) subdivide the outstanding shares of Preferred Stock, (C)
combine the outstanding Preferred Stock into a smaller number of shares
Preferred Stock, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this Section 11(a),
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 for which the Rights shall be
exercisable, shall be proportionately adjusted so that the holder of any Rights
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares of
capital stock which, if such Rights had been exercised immediately prior to such
date and at a time when the applicable transfer books were open, such holder
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock
issuable upon exercise of one Right. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the
adjustment

                                       14
<PAGE>

provided for in this Section 11(a)(i) shall be in addition, and shall be made
prior, to any adjustment required pursuant to Section 11(a)(ii).

            (i) Subject to Section 24, if:

                  (A)      any Person shall become an Acquiring Person, unless
                           the event causing the Person to become an Acquiring
                           Person is a transaction to which the provisions of
                           Section 13(a) apply;

                  (B)      any Acquiring Person or any Associate or Affiliate of
                           any Acquiring Person, at any time after the date of
                           this Agreement, directly or indirectly, shall (1)
                           merge into the Company or otherwise combine with the
                           Company and the Company shall be the continuing or
                           surviving corporation of such merger or combination
                           and shares of Common Stock shall remain outstanding
                           and unchanged, (2) in one transaction or a series of
                           transactions, transfer any assets to the Company or
                           any of its Subsidiaries in exchange (in whole or in
                           part) for shares of Common Stock, for other equity
                           securities of the Company or any of its Subsidiaries,
                           or for securities exercisable for or convertible into
                           shares of equity securities of the Company or any of
                           its Subsidiaries (whether shares of Common Stock or
                           otherwise) or otherwise obtain from the Company or
                           any of its Subsidiaries, with or without
                           consideration, any additional shares of such equity
                           securities or securities exercisable for or
                           convertible into such equity securities (other than
                           pursuant to a pro rata distribution to all holders of
                           shares of Common Stock), (3) sell, purchase, lease,
                           exchange, mortgage, pledge, transfer or otherwise
                           acquire or dispose of, in one transaction or a series
                           of transactions, to, from or with the Company or any
                           of its Subsidiaries or any employee benefit plan
                           maintained by the Company or any of its Subsidiaries
                           or any trustee or fiduciary with respect to such plan
                           acting in such capacity, assets (including
                           securities) on terms and conditions less favorable to
                           the Company or such Subsidiary, plan, trustee or
                           fiduciary than those that could have been obtained in
                           arm's-length negotiations with an unaffiliated third
                           party, other than pursuant to a transaction set forth
                           in Section 13(a), (4) sell, purchase, lease,
                           exchange, mortgage, pledge, transfer or otherwise
                           acquire or dispose of, in one transaction or a series
                           of transactions, to, from or with the Company or any
                           of its Subsidiaries or any employee benefit plan
                           maintained by the Company or any of its Subsidiaries
                           or any trustee or fiduciary with respect to such plan
                           acting in such capacity

                                       15
<PAGE>

                           (other than transactions, if any, consistent with
                           those engaged in, as of the date hereof, by the
                           Company and such Acquiring Person or such Associate
                           or Affiliate thereof), assets (including securities
                           or intangible assets) having an aggregate fair market
                           value of more than $5,000,000, other than pursuant to
                           a transaction set forth in Section 13(a), (5)
                           receive, or any designee, agent or representative of
                           such Acquiring Person or any Affiliate or Associate
                           of such Acquiring Person shall receive, any
                           compensation from the Company or any of its
                           Subsidiaries other than compensation for full-time
                           employment as a regular employee at rates in
                           accordance with the Company's (or its Subsidiaries')
                           past practices, or (6) receive the benefit, directly
                           or indirectly (except proportionately as a holder of
                           shares of Common Stock or as required by law or
                           governmental regulation), of any loans, advances,
                           guarantees, pledges or other financial assistance or
                           any tax credits or other tax advantages provided by
                           the Company or any of its Subsidiaries or any
                           employee benefit plan maintained by the Company or
                           any of its Subsidiaries or any trustee or fiduciary
                           with respect to such plan acting in such capacity; or

                  (C)      during such time as there is an Acquiring Person,
                           there shall be any reclassification of securities
                           (including any reverse stock split), or
                           recapitalization of the Company, or any merger or
                           consolidation of the Company with any of its
                           Subsidiaries or any other transaction or series of
                           transactions involving the Company or any of its
                           Subsidiaries, other than a transaction or
                           transactions to which the provisions of Section 13(a)
                           apply (whether or not with or into or otherwise
                           involving an Acquiring Person), which has the effect,
                           directly or indirectly, of increasing by more than
                           one percent the proportionate share of the
                           outstanding shares of any class of equity securities
                           of the Company or any of its Subsidiaries that is
                           directly or indirectly beneficially owned by any
                           Acquiring Person or any Person or any Associate or
                           Affiliate of any Acquiring Person;

         then promptly following the occurrence of an event described in Section
         11(a)(ii)(A), (B) or (C) (each being a "Section 11(a)(ii) Event"), the
         Company and the Rights Agent shall make proper provision so that each
         holder of a Right, except as otherwise provided in Section 7(e), shall
         thereafter have the right to receive for each Right, upon exercise
         thereof in accordance with the terms of this Agreement and payment of
         the then-current Purchase Price, shares of Common Stock of the Company
         (or at the discretion of the Board, such number of Units)

                                       16
<PAGE>

         obtained by multiplying the then-current Purchase Price by the then
         number of Units for which a Right was exercisable (or would have been
         exercisable if the Distribution Date had occurred) immediately prior to
         the first occurrence of a Triggering Event, and dividing that product
         by 50% of the Current Per Share Market Price for shares of Common Stock
         of the Company on the date of occurrence of the most recent Triggering
         Event (such number of shares of the Company being hereinafter referred
         to as the "Adjustment Shares"). Upon the occurrence of a Section 13
         Event, any Rights that shall not have been previously exercised
         pursuant to this Section 11(a)(ii) shall thereafter be exercisable only
         pursuant to Section 13 and not pursuant to this Section 11(a)(ii). The
         Company shall notify the Rights Agent when this Section 11(a)(ii)
         applies and shall use all commercially reasonable efforts to ensure
         that the provisions of this Section 11(a)(ii) are complied with, but
         neither the Company nor the Rights Agent shall have any liability to
         any holder of Rights Certificates or other Person as a result of the
         Company's failure to make any determinations with respect to any
         Acquiring Person or its Affiliates, Associates or transferees
         hereunder.

                  (ii) In the event that the number of shares of Common Stock of
         the Company which are authorized by the Company's Certificate of
         Incorporation but not outstanding or reserved for issuance for purposes
         other than upon exercise of the Rights are not sufficient to permit the
         exercise in full of the Rights, or if any necessary regulatory approval
         for such issuance has not been obtained by the Company, the Company
         shall, in lieu of issuing Adjustment Shares in accordance with Section
         11(a)(ii): (A) determine the excess of (1) the value of the Adjustment
         Shares issuable upon the exercise of a Right, as determined by the
         Board in good faith, which determination shall be conclusive (the
         "Current Value") over (2) the Purchase Price (such excess being
         referred to as the "Spread") and (B) with respect to each Right, make
         adequate provision to substitute for such Adjustment Shares, upon
         exercise of the Rights: (1) cash, (2) a reduction in the Purchase
         Price, (3) other equity securities of the Company (including, without
         limitation, Preferred Stock), (4) debt securities of the Company,
         except to the extent that the Company has not obtained any necessary
         regulatory approval for such issuance, (5) other assets, or (6) any
         combination of the foregoing, having an aggregate value equal to the
         Current Value, as determined by the Board based upon the advice of a
         nationally recognized investment banking firm selected by the Board
         (which determination shall be described in a statement filed with the
         Rights Agent and shall be conclusive and binding on the Rights Agent,
         the holders of the Rights and all other persons); provided, however, if
         the Company shall not have made adequate provision to deliver value
         pursuant to clause (B) above within 30 days following the later of (x)
         occurrence of a Section 11(a)(ii) Event, and (y) the date on which the
         Company's right of redemption pursuant to Section 23(a) expires (the
         later of (x) and (y) being referred to herein as the "Section
         11(a)(iii) Trigger Date"), then the Company shall be obligated to
         deliver, upon the surrender for exercise of a Right and without
         requiring payment of the Purchase Price, Common Stock of the Company
         (to the extent available), except to the extent that the Company has
         not obtained any necessary regulatory approval for such issuance, and
         then, if necessary, cash or Preferred Stock, having an aggregate

                                       17
<PAGE>

         value equal to the Spread. If the Board shall determine in good faith
         that it is likely that sufficient additional Common Stock of the
         Company could be authorized for issuance upon exercise in full of the
         Rights, the 30-day period set forth above may be extended to the extent
         necessary, but not more than 120 days following the date of the
         occurrence of the earliest of the events described in clauses (A), (B)
         and (C) of Section 11(a)(ii) above, in order that the Company may seek
         stockholder approval for the authorization of such additional shares
         (such period, as it may be extended, hereinafter referred to as the
         "Substitution Period"). To the extent that the Company determines that
         action need be taken pursuant to the first and/or second sentences this
         Section 11(a)(iii), the Company (x) shall provide, subject to Section
         11(a)(ii) hereof, that such action shall apply uniformly to all
         outstanding Rights, and (y) may suspend the exercisability of the
         Rights until the expiration of the Substitution Period in order to seek
         any authorization of additional shares and/or to decide the appropriate
         form of distribution to be made pursuant to such first sentence and to
         determine the value thereof. In the event of any such suspension, the
         Company shall issue a public announcement stating that the
         exercisability of the Rights has been temporary suspended, as well as a
         public announcement at such time as the suspension is no longer in
         effect. For purposes of this Section 11(a)(iii), the value of the
         Common Stock of the Company shall be the Current Per Share Market Price
         as determined pursuant to Section 11(d) below.

         (b) If the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Stock entitling them (for a
period expiring within forty five calendar days after such record date) to
subscribe for or purchase Preferred Stock (or shares having the same rights,
privileges and preferences as the Preferred Stock ("Equivalent Preferred
Stock")) or securities convertible into Preferred Stock or Equivalent Preferred
Stock at a price per Unit of Preferred Stock or Equivalent Preferred Stock (or
having a conversion price per Unit, if a security convertible into Units or
Equivalent Preferred Stock) less than the then Current Per Share Market Price
(as determined pursuant to Section 11(d)) of a Unit 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 sum of the number of Units
outstanding on such record date plus the number of Units which the aggregate
offering price of the total number of Units and/or Equivalent Preferred Stock so
to be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Current Per Share Market
Price and the denominator of which shall be the sum of the number of Units
outstanding on such record date plus the number of additional Units and/or
Equivalent Preferred Stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). If
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, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive and binding on
the Rights Agent and the holders of the Rights. Units 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 if such rights, options or warrants are not so issued,
the Purchase Price

                                       18
<PAGE>

shall be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.

         (c) If the Company shall fix a record date for a distribution to all
holders of Units (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, cash (other than a regular quarterly
cash dividend), assets (other than a dividend payable in Units or Equivalent
Preferred Stock but including any dividend payable in equity securities other
than Preferred Stock or Equivalent Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(d)), 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 Stock on such record date, less the fair market value (as determined
in good faith by the Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive and binding on the
Rights Agent and the holders of the Rights) of the cash, assets or evidences of
indebtedness to be distributed or of such subscription rights or warrants
distributable in respect of a share of Preferred Stock, and the denominator of
which shall be such Current Per Share Market Price of a share of Preferred
Stock. 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.

         (c) For the purpose of any computation hereunder, the "Current Per
Share Market Price" of any security on any date shall be deemed to be the
average of the daily closing prices per share of such security for the thirty
consecutive Trading Days (as such term is hereinafter defined) ending on and
including the Trading Day immediately prior to such date; provided, however,
that in the event that the Current Per Share Market Price of the security is
determined during a period following the announcement by the issuer of such
security of (A) a dividend or distribution on such security payable in shares of
such security or securities convertible into such security, or (B) any
subdivision, combination or reclassification of such security and prior to the
expiration of thirty Trading Days after and not including the ex-dividend date
for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the Current Per
Share Market Price shall be appropriately adjusted to reflect the current market
price per share equivalent of such security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the Nasdaq
Stock Market ("Nasdaq") or, if the security is not listed or admitted to trading
on the Nasdaq, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the security is listed or admitted to trading or, if the
security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
Nasdaq or such other system then in use, or, if on any such date the security is
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
security selected by the Board. If on any such date no market maker is making a
market in the security, the Current Per Share Market Price of

                                       19
<PAGE>

such security on such date shall mean the fair value per share or other trading
unit as determined in good faith by the Board as provided for above (which
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive and binding on the Rights Agent, the holders of the Rights
and all other Persons). The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the security is listed or
admitted to trading is open for the transaction of business or, if the security
is not listed or admitted to trading on any national securities exchange, a
Business Day.

                  (i) For the purpose of any computation hereunder, the Current
         Per Share Market Price of the Preferred Stock shall be determined in
         accordance with the method set forth in Section 11(d)(i). If the
         Current Per Share Market Price of the Preferred Stock cannot be
         determined in the manner provided above or if the Preferred Stock is
         not publicly held or listed or traded in a manner described in Section
         11(d)(i), the Current Per Share Market Price of the Preferred Stock
         shall be conclusively deemed to be an amount equal to the product of
         $1,000 (as such amount may be appropriately adjusted for such events as
         stock splits, stock dividends and recapitalizations with respect to
         shares of Common Stock occurring after the date of this Agreement)
         multiplied by the Current Per Share Market Price of Common Stock of the
         Company. If no shares of the Common Stock or Preferred Stock are
         publicly held or so listed or traded, "Current Per Share Market Price"
         of the Preferred Stock shall mean the fair value per share as
         determined in good faith by the Board, whose determination shall be
         described in a statement filed with the Rights Agent and shall be
         conclusive and binding on the Rights Agent and the holders of the
         Rights for all purposes.

         (e) No adjustment in the Purchase Price under this Section 11 shall be
required unless such adjustment would require an increase or decrease of at
least one percent in the Purchase Price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or to the
nearest one-hundred-thousandth (1/100,000) of a share of Preferred Stock or
one-hundredth (1/100) of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the Expiration Date.

         (f) If as a result of an adjustment made pursuant to Section 11(a)(ii),
the holder of any Rights thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Units, thereafter the
number of such other shares so receivable upon exercise of any Rights and the
Purchase Price thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11(a), (b), (c), (d), (e),
(g), (h), (i), (j), (k), (l) and (m), and the provisions of Sections 7, 9, 10,
13 and 14 with respect to the Preferred Stock shall apply on like terms to any
such other shares.

         (g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price shall evidence the right to purchase, at
the adjusted Purchase Price,

                                       20
<PAGE>

the number of Units purchasable from time to time upon exercise of the Rights,
all subject to further adjustment as provided in this Agreement.

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

         (i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Units 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 Units 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-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. The Company shall give the Rights
Agent a copy of such announcement. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten days later than the date of
the public announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates to be so 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 Rights Certificates
on the record date specified in the public announcement.

         (j) Irrespective of any adjustment or change in the Purchase Price or
the number of Units issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per Unit and the number of Units which were expressed in the
initial Rights Certificates issued hereunder.

         (k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value of the number of Units issuable upon
exercise of the Rights, the Company shall take any corporate action which may,
in the opinion of its counsel, be

                                       21
<PAGE>

necessary in order that the Company may validly and legally issue fully paid and
nonassessable number of Units at such adjusted Purchase Price.

         (l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer, until the occurrence of such
event, issuing to the holder of any Rights exercised after such record date that
number of Units and other capital stock or securities of the Company, if any,
issuable upon such exercise that is over and above the Units and other capital
stock or securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) upon the occurrence of the event requiring such
adjustment. The Company shall give the Rights Agent prompt written notice of its
election under this Section 11(l).

         (m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any Unit at less than the Current Per Share Market
Price, (iii) issuance wholly for cash of Preferred Stock or securities which by
their terms are convertible into or exchangeable for Preferred Stock, (iv)
dividends on Preferred Stock payable in Preferred Stock, or (v) issuance of
rights, options or warrants referred to in this Section 11, hereafter made by
the Company to holders of Units of its Preferred Stock, shall not be taxable to
such stockholders.

         (n) The Company shall not, at any time after the Distribution Date, (i)
consolidate with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o)), (ii) merge with or into any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o)), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o)), if (x)
at the time of or immediately after such consolidation, merger or sale there are
any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the
Person which constitutes, or would constitute, the Principal Party shall have
distributed or otherwise transferred to its stockholders or other persons
holding an equity interest in such Person, Rights previously owned by such
Person or any of its Affiliates and Associates; provided, however, this Section
11(n) shall not affect the ability of any Subsidiary of the Company to
consolidate with, merge with or into, or sell or transfer assets or earning
power to, any other Subsidiary of the Company.

         (o) After the Distribution Date, the Company shall not, except as
permitted by Section 23 or Section 27, take (or permit any of its Subsidiaries
to take) any action if at the time

                                       22
<PAGE>

such action is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by the
Rights.

         (p) 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
outstanding shares of Common Stock payable in shares of Common Stock or (ii)
effect a subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in any
such case the number of Units purchasable after such event upon proper exercise
of each Right shall be determined by multiplying the number of Units so
purchasable immediately prior to such event by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
before such event and the denominator of which shall be the number of shares of
Common Stock outstanding immediately after such event. The adjustments provided
for in this Section 11(p) 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, the Company
shall promptly (a) prepare a certificate setting forth such adjustment, and a
brief statement of the computations and facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the shares of
Common Stock or Units a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Rights Certificate in accordance with Section 25
hereof. Notwithstanding the foregoing sentence, the failure by the Company to
make such certification or give such notice shall not affect the validity of or
the force or effect of the requirement for such adjustment. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment or statement contained therein and shall have no duty or liability
with respect to, shall not be deemed to have knowledge of, and adjustment or any
such event unless and until it shall have received such certificate.

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

         (a) In the event that, following a Share Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o)), and the Company shall not be the continuing or
surviving corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o)) shall consolidate with the Company, or merge with and into the Company
and the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other property, or
(z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer) to any Person or Persons (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o)), in one or more transactions, directly or indirectly, assets or earning
power aggregating 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole), (any such event being a "Section 13
Event"), then, and in each such case, the Company and the Rights Agent shall
make proper provision so that: (i) each holder of a Right, except as provided in
Section 7(e),

                                       23
<PAGE>

shall thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price, such number of validly authorized and issued, fully
paid and non-assessable shares of Common Stock of the Principal Party, which
shares shall not be subject to any liens, encumbrances, rights of first refusal,
transfer restrictions or other adverse claims, as shall be equal to the product
obtained by (1) multiplying the then current Purchase Price by the number of
Units for which a Right is exercisable immediately prior to the first occurrence
of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to
the first occurrence of a Section 13 Event, multiplying the number of such Units
for which a Right would be exercisable hereunder but for the occurrence of such
Section 11(a)(ii) Event by the Purchase Price which would be in effect hereunder
but for such first occurrence) and (2) dividing that product (which, following
the first occurrence of a Section 13 Event, shall be the "Purchase Price" for
all purposes of this Agreement) by 50% of the Current Per Share Market Price of
the shares of Common Stock of such Principal Party on the date of consummation
of such Section 13 Event; (ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such Section 13 Event, all the obligations
and duties of the Company pursuant to this Agreement; (iii) the term "Company"
shall, for all purposes of this Agreement, thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of Section
11 shall apply only to such Principal Party following the first occurrence of a
Section 13 Event; (iv) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of shares of its
Common Stock) in connection with the consummation of any such transaction as may
be necessary to ensure that the provisions of this Agreement shall thereafter be
applicable to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section 11(a)(ii) shall be of
no further effect following the first occurrence of any Section 13 Event.

         (b) "Principal Party" shall mean:

                  (i) in the case of any transaction described in clause (x) or
         (y) of the first sentence of Section 13(a), (A) the Person that is the
         issuer of any securities into which shares of Common Stock of the
         Company are converted in such merger or consolidation, or, if there is
         more than one such issuer, the issuer whose outstanding shares of
         Common Stock have the greatest aggregate Current Per Share Market Price
         and (B) if no securities are so issued, the Person that is the other
         party to such merger or consolidation, or, if there is more than one
         such Person, the Person whose outstanding shares of Common Stock have
         the greatest aggregate Current Per Share Market Price; and

                  (ii) in the case of any transaction described in clause (z) of
         the first sentence of Section 13(a), the Person that is the party
         receiving the largest portion of the assets or earning power
         transferred pursuant to such transaction or transactions, or, if each
         Person that is a party to such transaction or transactions receives the
         same portion of the assets or earning power transferred pursuant to
         such transaction or transactions or if the Person receiving the largest
         portion of the assets or earning power cannot be determined, whichever
         Person whose outstanding shares of Common Stock have the greatest
         aggregate Current Per Share Market Price; provided, however, that in
         any such case, (1) if the Common Stock of such Person is not at such
         time and has not been continuously over the

                                       24
<PAGE>

         preceding twelve-month period registered under Section 12 of the
         Exchange Act ("Registered Common Stock"), or such Person is not a
         corporation, and such Person is a direct or indirect Subsidiary of
         another Person that has Registered Common Stock outstanding, "Principal
         Party" shall refer to such other Person; (2) if the Common Stock of
         such Person is not Registered Common Stock or such Person is not a
         corporation, and such Person is a direct or indirect Subsidiary of
         another Person but is not a direct or indirect Subsidiary of another
         Person which has Registered Common Stock outstanding, "Principal Party"
         shall refer to the ultimate parent entity of such first-mentioned
         Person; (3) if the Common Stock of such Person is not Registered Common
         Stock or such Person is not a corporation, and such Person is directly
         or indirectly controlled by more than one Person, and one or more of
         such other Persons has Registered Common Stock outstanding, "Principal
         Party" shall refer to whichever of such other Persons is the issuer of
         the Registered Common Stock having the highest aggregate Current Per
         Share Market Price; and (4) if the Common Stock of such Person is not
         Registered Common Stock or such Person is not a corporation, and such
         Person is directly or indirectly controlled by more than one Person,
         and none of such other Persons has Registered Common Stock outstanding,
         "Principal Party" shall refer to whichever ultimate parent entity is
         the corporation having the greatest stockholders' equity or, if no such
         ultimate parent entity is a corporation, shall refer to whichever
         ultimate parent entity is the entity having the greatest net assets.

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

                  (i) (A) file on an appropriate form, as soon as practicable
         following the execution of such agreement, a registration statement
         under the Securities Act with respect to the shares of Common Stock of
         such Principal Party that may be acquired upon exercise of the Rights,
         (B) cause such registration statement to remain effective (and to
         include a prospectus complying with the requirements of the Securities
         Act) until the Expiration Date, and (C) as soon as practicable
         following the execution of such agreement take such action as may be
         required to ensure that any acquisition of such shares of Common Stock
         of such Principal Party upon the exercise of the Rights complies with
         any applicable state securities or "blue sky" laws; and

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

                                       25
<PAGE>

         (d) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has a provision in any of its authorized
securities or in its certificate of incorporation, bylaws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than in the Current Per Share
Market Price or securities exercisable for, or convertible into, shares of
Common Stock of such Principal Party at less than in the Current Per Share
Market Price (other than to holders of Rights pursuant to this Section 13) or
(ii) providing for any special payment, tax or similar provisions in connection
with the issuance of the shares of Common Stock of such Principal Party pursuant
to the provisions of this Section 13, then, in such event, the Company shall not
consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been cancelled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.

         (e) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights that have not theretofore been exercised
shall thereafter be exercisable in any manner provided in Section 13(a).

    Section 14. Fractional Rights and Fractional Shares.

         (a) The Company shall not be required to issue fractions of Rights or
to distribute Rights Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the Current Per
Share Market Price of a whole Right. For purposes of this Section 14(a), the
Current Per Share Market Price of a whole Right shall be the closing price per
share of a whole Right on 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
Stock (other than fractions which are integral multiples of one one-thousandth
of a share of Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Stock (other than fractions
which are integral multiples of one one-thousandth of a share of Preferred
Stock). Fractions of Preferred Stock in integral multiples of one one-thousandth
of a share of Preferred Stock may, at the election of the Company, be evidenced
by depositary receipts, pursuant to an appropriate agreement between the Company
and a depositary selected by it; provided, however, 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 Stock represented by such depositary receipts. In lieu of
fractional shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share of Preferred Stock, the Company shall pay to the
registered holders of Rights Certificates

                                       26
<PAGE>

at the time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the Current Per Share Market Price of one share of
Preferred Stock.

         (c) The holder of a Right by the acceptance of the Right expressly
waives such holder's right to receive any fractional Rights or any fractional
shares upon exercise of a Right (except as provided above).

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

    Section 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 Rights
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing shares of Common Stock); and any registered holder of
any Rights Certificate (or, prior to the Distribution Date, a certificate
representing shares of Common Stock of the Company), without the consent of the
Rights Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of a certificate representing shares of Common Stock), may,
in such holder's own behalf and for such holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to exercise the
Rights evidenced by such Rights Certificate or, prior to the Distribution Date,
in the manner provided in such Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations hereunder, and injunctive relief against actual
or threatened violations of the obligations of any Person subject to this
Agreement.

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

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

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

                                       27
<PAGE>

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

         (d) such holder expressly waives any right to receive any fractional
Rights and any fractional securities upon exercise or exchange of a Right,
except as otherwise provided in Section 14; and

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

    Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Rights Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Units or any other securities of
the Company which may at any time be issuable upon the exercise of the Rights
represented thereby, nor shall anything contained in this Agreement or in any
Rights Certificate be construed (a) to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, (b) 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), (c) to receive dividends or
subscription rights, or (d) to confer any other rights as a stockholder
otherwise, until the Right or Rights evidenced by such Rights Certificate shall
have been exercised in accordance with this Agreement.

    Section 18. Concerning the Rights Agent. The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it under this
Agreement and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the preparation,
negotiation, execution, delivery, amendment and administration of this Agreement
and the exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against, any
loss, damage, judgment, fine, penalty, claim, demand, settlement, cost,
liability or expense (including, without limitation, the reasonable fees and
disbursements of counsel), incurred without gross negligence or willful
misconduct on the part of the Rights Agent, for any action taken, suffered or
omitted by the Rights Agent in connection with the execution, acceptance and
administration of this Agreement and the exercise and performance of its duties,
including, without limitation, the costs and expenses of defending against and
appealing any claim of

                                       28
<PAGE>

liability arising therefrom, directly or indirectly. This indemnity shall
survive the termination of this Agreement and the expiration of the Rights. The
costs and expenses incurred in enforcing this right of indemnification shall be
paid by the Company.

         In the absence of gross negligence or willful misconduct, the Rights
Agent is authorized and 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 and the exercise and performance of its
duties hereunder, in reliance upon any Rights Certificate or certificate for
Units or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons, or otherwise upon the advice of
counsel as set forth in Section 20.

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

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

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

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

                                       29
<PAGE>

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

         (b) Whenever in the administration, exercise and performance of its
duties under this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the Company prior
to taking, suffering or omitting to take any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any officer of the Company and delivered to the Rights
Agent; and such certificate shall be full and complete authorization and
protection to the Rights Agent for or in respect of any action taken, suffered
or omitted 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 or willful misconduct.

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

         (e) The Rights Agent shall not be under any responsibility or have any
liability in respect of the legality, validity or enforceability of this
Agreement or the execution and delivery hereof (except the due execution by the
Rights Agent) or in respect of the legality, validity or enforceability or the
execution of any Rights Certificate (except its countersignature); nor shall it
be liable or responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming un-exercisable pursuant to Section 7(a)(e) or Section 11(a)(ii))
or any change or 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 Rights
Certificates after receipt of the certificate described in Section 12, upon
which the Rights Agent may rely); nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of
any Units or other securities to be issued upon the exercise of any Rights or as
to whether any such security will, when issued, be validly authorized and
issued, fully paid and nonassessable.

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

                                       30
<PAGE>

         (g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the administration, exercise and performance of its
duties hereunder from any one officer of the Company, and to apply to such
officers for advice or instructions in connection with its duties under this
Agreement, and such instructions shall be full authorization and protection to
the Rights Agent and the Rights Agent shall not be responsible or liable for, or
in respect of, any action taken, suffered or omitted to be taken by it in good
faith in accordance with instructions of any such officer or for any delay in
acting while waiting for those instructions. The Rights Agent shall be fully
authorized and protected in relying upon the most recent instructions received
from such officers. 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, suffered or omitted by the Rights Agent under
this Agreement and the date on and/or after which such action shall be taken or
such omission shall be effective. The Rights Agent shall not be liable for any
action taken or suffered by, or omission of, the Rights Agent in accordance with
a proposal included in any such application on or after the date specified in
such application (which date shall not be less than five Business Days after the
date any officer of the Company actually received such application, unless any
such officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions in response to such
application specifying the action to be taken, suffered or omitted.

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

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

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

         (k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise, transfer, split up, combination or exchange, the
certification on the form of assignment or form of election to purchase, as the
case may be, that has been completed to certify the holder is an Acquiring
Person (or an Affiliate or Associate thereof) has either not been completed or
in any manner indicates any other response thereto, the Rights Agent shall not
take

                                       31
<PAGE>

any further action with respect to such requested exercise, transfer, split up,
combination or exchange, without first consulting with the Company.

    Section 21. Change of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon
thirty days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock or Preferred Stock (as to which the Rights Agent has
received prior written notice) by registered or certified mail, and the Company
shall mail notice thereof to the holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock or Preferred Stock (as to which the Rights Agent has received prior
written notice) by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit such holder's Rights
Certificate for inspection by the Company), then the registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a Person organized and doing
business under the laws of the United States or of any state of the United
States, in good standing, authorized under such laws to exercise corporate trust
or stock transfer powers, and 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 Stock or Preferred Stock, and mail a
notice thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.

    Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by the Board to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares or other securities or property
purchasable under the Rights Certificates made in accordance with the provisions
of this Agreement. In addition, in connection with the issuance or sale of
shares of Common Stock of the Company following the Distribution Date and prior
to the Expiration Date, the Company (a) shall, with respect to shares of Common
Stock of the Company so issued or sold pursuant to the exercise of stock options
or under any employee benefit plan or arrangement or upon the exercise,
conversion or exchange of securities of the

                                       32
<PAGE>

Company currently outstanding or issued at any time in the future by the Company
and (b) may, in any other case, if deemed necessary or appropriate by the Board
issue Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i) no such
Rights Certificate shall be issued and this sentence shall be un-exercisable ab
initio if, and to the extent that, such issuance or this sentence would create a
significant risk of or result in material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued or would
create a significant risk of or result in such options' or employee plans' or
arrangements' failing to qualify for otherwise available special tax treatment
and (ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.

    Section 23. Redemption and Termination.

         (a) The Company may, at its option, upon approval by the Board, at any
time on or prior to the Close of Business (or such later date as may be
determined by the Board) on the earlier of (i) the Distribution Date or (ii) the
Final Expiration Date redeem all but not less than all of the then outstanding
Rights at a redemption price of $0.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date of this Agreement (such redemption price being hereinafter referred to
as the "Redemption Price"), and the Company may, at its option, pay the
Redemption Price either in cash, shares of Common Stock (based on the Current
Per Share Market Price thereof at the time of redemption), or any other form of
consideration deemed appropriate by the Board. The redemption of the Rights by
the Board may be made effective at such time on such basis and with such
conditions as the Board in its sole discretion may establish. Any such
redemption will be effective immediately upon the action of the Board ordering
the same, unless such action of the Board expressly provides that such
redemption will be effective at a subsequent time or upon the occurrence or
nonoccurrence of one or more specified events (in which case such redemption
will be effective in accordance with the provisions of such action of the
Board).

         (b) Immediately upon the effectiveness of the redemption of the Rights
pursuant to Section 23(a), without any further action or notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. The Company shall promptly
give public notice of any such redemption (with a copy to the Rights Agent);
provided, however, that the failure to give, or any defect in, any such notice
shall not affect the legality or validity of such redemption. Within 10 days
after the effectiveness of the redemption of the Rights, the Company shall give
notice of such redemption to the Rights Agent and 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 Stock. Any notice which is mailed in such manner shall be deemed given,
whether or not the holder receives the notice. Each 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 or other than in
connection with the purchase of shares of Common Stock prior to the Distribution
Date.

                                       33
<PAGE>

         (c) Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable pursuant to Section 7(a) at any
time when the Rights are redeemable hereunder.

    Section 24. Exchange.

         (a) The Company, at its option, upon approval by the Board, at any time
after any Person becomes an Acquiring Person, may exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become un-exercisable pursuant to the provisions of Section 7(e) hereof)
for Common Stock of the Company at an exchange ratio per Right equal to, subject
to adjustment to reflect stock splits, stock dividends and similar transactions
occurring after the date hereof, that number obtained by dividing the Purchase
Price by the then Current Per Share Market Price per share of Common Stock on
the earlier of (i) the date on which any Person becomes an Acquiring Person and
(ii) the date on which a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan maintained by
the Company or any of its Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity) is commenced within the meaning of Rule
14d-2(a) of the Exchange Act Regulations or any successor rule, if upon
consummation thereof such Person would be the Beneficial Owner of 15% or more of
the shares of Common Stock of the Company then outstanding (such exchange ratio
being hereinafter referred to as the "Section 24(a) Exchange Ratio").
Notwithstanding the foregoing, the Company may not effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan maintained by the Company or any of its Subsidiaries,
or any trustee or fiduciary with respect to such plan acting in such capacity),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the shares of Common Stock of the Company
then outstanding.

         (b) Immediately upon the action of the Board ordering the exchange of
any Rights pursuant to subsection (a) of this Section 24 without any further
action or 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
shares of Common Stock of the Company equal to the number of such Rights held by
such holder multiplied by the Section 24(a) Exchange Ratio. The Company shall
promptly give public notice of any such exchange (with a copy provided to the
Rights Agent); provided, however, that the failure to give, or any defect in,
such notice shall not affect the legality or 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 provided in this
Agreement 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
shares of Common Stock of the Company for Rights will be effected and, in the
event of any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become un-exercisable pursuant to the provisions of
Section 7(e)) held by each holder of Rights.

         (c) In the event that the number of shares of Common Stock of the
Company authorized by the Company's Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights is not sufficient to permit any

                                       34
<PAGE>

exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock of the Company for issuance upon exchange of the Rights
or make adequate provision to substitute (1) cash, (2) Preferred Stock or other
equity securities of the Company, (3) debt securities of the Company, (4) other
assets, or (5) any combination of the foregoing, having an aggregate value equal
to the aggregate Current Per Share Market Price of one share of Common Stock
(determined pursuant to Section 11(d) hereof) that would otherwise be issuable
in such exchange, all as determined by the Board (which determination shall be
described in a statement filed with the Rights Agent and shall be conclusive and
binding on the Rights Agent, the holders of the Rights and all other Persons).
To the extent that the Company determines that some action need be taken
pursuant to Section 24(a), the Board may temporarily suspend the exercisability
of the Rights for a period of up to sixty days following the date on which the
event described in Section 24(a) shall have occurred, in order to seek any
authorization of additional shares of Common Stock and/or to decide the
appropriate form of distribution to be made pursuant to the above provision and
to determine the value thereof. Upon any such suspension, the Company shall
notify the Rights Agent thereof and issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the supervision is no longer in effect (a copy of
which shall be provided to the Rights Agent).

    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 Stock or to make any other
distribution to the holders of its Preferred Stock (other than a regular cash
dividend), (ii) to offer to the holders of its Preferred Stock rights or
warrants to subscribe for or to purchase any additional Units or shares of stock
of any class or any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification involving
only the subdivision of outstanding Preferred Stock), (iv) to effect any
consolidation or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o)), 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
Stock payable in shares of Common Stock or to effect a subdivision, combination
or consolidation of the shares of Common Stock (by reclassification or otherwise
than by payment of dividends in shares of Common Stock), then, in each such
case, the Company shall give to the Rights Agent and each holder of a Rights
Certificate, in accordance with Section 26, a notice of such proposed action,
which shall specify the record date for the purposes of such stock dividend or
other distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Common Stock and/or shares of Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least ten days prior
to the record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least ten
days prior to the earlier of (x) the date of the

                                       35
<PAGE>

taking of such proposed action and (y) the date of participation therein by the
holders of the shares of Common Stock and/or shares of Preferred Stock.

         (b) In case any of the events set forth in Section 11(a)(ii) shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Rights 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). In the
event any Person becomes an Acquiring Person, the Company will promptly notify
the Rights Agent thereof.

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

      To the Company:                  Mobility Electronics, Inc.
                                       17800 N. Perimeter Drive, Suite 200
                                       Scottsdale, Arizona  85255
                                       Attention:  Chief Financial Officer

      With a copy to:                  Jackson Walker L.L.P.
      (which shall not                 2435 N. Central Expressway, Suite 600
      constitute notice)               Richardson, Texas  75080
                                       Attention:  Richard F. Dahlson, Esq.

         Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Rights Certificate to or on the Rights Agent shall be sent by registered
or certified mail and shall be deemed given upon receipt and addressed (until
another address is filed in writing by the Rights Agent with the Company) as
follows:

      To the Rights Agent:             Computershare Trust Company
                                       350 Indiana Street, Suite 800
                                       Golden, Colorado  80401
                                       Attention:  John Harmann

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

    Section 27. Supplements and Amendments. Prior to the Distribution Date, the
Company may supplement or amend this Agreement in any respect, without the
approval of any holders of Rights, by action of the Board. From and after the
Distribution Date, the Company may from time to time supplement or amend this
Agreement without the approval of any holders of Rights, by action of the Board
in order (i) to cure any ambiguity, (ii) to correct or supplement

                                       36
<PAGE>

any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period hereunder,
or (iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person), including, without
limitation, to change the Purchase Price, the Redemption Price, any time periods
herein specified, and any other term hereof, any such supplement or amendment to
be evidenced by a writing signed by the Company and the Rights Agent; provided,
however, 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. Upon receipt of a certificate
from an appropriate officer of the Company that the proposed supplement or
amendment is consistent with this Section 27 and, after such time as any Person
has become an Acquiring Person, that the proposed supplement or amendment does
not adversely affect the interests of the holders of Rights, the Rights Agent
shall execute such supplement or amendment.

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

    Section 29. Determinations and Actions by the Board. For all purposes of
this Agreement, any calculation of the number of shares of Common Stock
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock of which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the Exchange Act Regulations (or if such Rule
is superseded, such provision of the rule, regulation or statute that replaces
such sentence). The Board shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board, or the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations or calculations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing), which are done or made by the
Board in good faith, shall (x) be final, conclusive and binding on the Company,
the Rights Agent, the holders of the Rights Certificates and all other Persons
and (y) not subject the Board to any liability to the holders of the Rights. The
Rights Agent shall be entitled to assume that the Board acted in good faith and
shall be fully protected and incur no liability in reliance thereon.

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

                                       37
<PAGE>
    Section 31. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or authority
to be invalid, void or unenforceable and the Board determines in its good faith
judgment that severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement and the right of redemption set
forth in Section 23 shall have expired, such right shall be reinstated and shall
not expire until the tenth Business Day following the date of such determination
by the Board.

    Section 32. Governing Law. This Agreement and each Rights Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed in accordance
with the internal laws of the State of Delaware applicable to contracts to be
made and performed entirely within such state, without regard to the
choice-of-law or conflict-of-laws principles of any jurisdiction.

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

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

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

                                                 MOBILITY ELECTRONICS, INC.

                                                 By: /s/ JOAN BRUBACHER
                                                     -----------------------
                                                     Joan Brubacher,
                                                     Chief Financial Officer and
                                                     Executive Vice President

                                                 COMPUTERSHARE TRUST
                                                 COMPANY

                                                 By: /s/ KELLIE GWINN
                                                     --------------------------
                                                 Printed Name: Kellie Gwinn
                                                               ----------------
                                                 Title: Vice President
                                                        -----------------------

                                                 By: /S/ THERESA HENSHAW
                                                     --------------------------
                                                 Printed Name: Theresa Henshaw
                                                               ----------------
                                                 Title: Trust Officer/
                                                        -----------------------
                                                        Operations Manager
                                                        -----------------------

                                       38

<PAGE>

              CERTIFICATE OF THE DESIGNATIONS, PREFERENCES, RIGHTS
                               AND LIMITATIONS OF
                  SERIES G JUNIOR PARTICIPATING PREFERRED STOCK

                                       OF

                           MOBILITY ELECTRONICS, INC.,

                                   ----------

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

                                   ----------

         Mobility Electronics, Inc. (the "Corporation"), a corporation organized
and existing under the General Corporation Law of the State of Delaware (the
"DGCL"),

         DOES HEREBY CERTIFY:

         That, pursuant to the authority expressly vested in the Board of
Directors by Article Fourth of the Certificate of Incorporation of the
Corporation, and pursuant to the provisions of Section 151 of the DGCL, the
Board of Directors duly adopted by unanimous consent dated as of June 11, 2003,
a resolution providing for the issuance of up to fifty thousand (50,000) shares
of Series G Junior Participating Preferred Stock, which resolution is as
follows:

         RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation by the provisions of Article
Fourth of the Certificate of Incorporation of the Corporation, this Board of
Directors hereby creates a series of the Preferred Stock, $0.01 par value, of
the Corporation to consist of fifty thousand (50,000) shares, and this Board of
Directors hereby fixes the designations and the powers, preferences and rights,
and the qualifications, limitations or restrictions thereon, of the shares of
such series (in addition to the powers, preferences and rights, and the
qualifications, limitations or restrictions thereon, set forth in the
Certificate of Incorporation, as amended, which are applicable to all series of
the Preferred Stock, $0.01 par value, of the Corporation, as follows:

Series G Junior Participating Preferred Stock:

         Section 1. Designation and Amount. The shares of such series shall be
designated as "Series G Junior Participating Preferred Stock" (the "Series G
Preferred Stock") and the number of shares constituting the Series G Preferred
Stock shall be fifty thousand (50,000). Such number of shares may be increased
or decreased by resolution of the Board of Directors of the Corporation (the
"Board"); provided, that no decrease shall reduce the number of shares of Series
G 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 G Preferred Stock.

                                       A-1
<PAGE>

         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 G Preferred Stock with respect to dividends, each holder of a share
of Series G Preferred Stock, in preference to the holders of shares of common
stock, par value $0.01 per share (the "Common Stock"), of the Corporation, and
of any other junior stock, shall be entitled to receive, when declared by the
Board out of funds legally available for the purpose, dividends in an amount per
share (rounded to the nearest cent) equal to, subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share amount of
all cash dividends, and 1,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock.
In the event the Corporation shall, at any time after June 23, 2003 (the "Rights
Declaration Date"), 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 (and an equivalent dividend is not declared on
the Series G Preferred Stock or the Series G Preferred Stock is not similarly
subdivided or combined), then in each such case the amount to which holders of
shares of Series G Preferred Stock were entitled immediately prior to such event
under 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 shares of Series G Preferred Stock as provided in Section 2(a) immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided, however, that, in no
event shall a dividend or distribution be declared by the Board on the Common
Stock for which it does not declare and pay the dividend required to be declared
on the Preferred Stock pursuant to Section 2(a).

                (c) Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series G Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board may fix a record date for the
determination of holders of shares of Series G Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than sixty days prior to the date fixed for the payment
thereof.

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

                (a) Subject to the provision for adjustment hereinafter set
forth, each share of Series G Preferred Stock shall entitle the holder thereof
to 1,000 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall, at any time

                                      A-2
<PAGE>

after the Rights Declaration Date, 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 (and an equivalent dividend
is not declared on the Series G Preferred Stock or the Series G Preferred Stock
is not similarly subdivided or combined), then in each such case the number of
votes per share to which holders of shares of Series G 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 the Certificate of
Incorporation, in any other Certificate of Designation creating a series of
Preferred Stock or any similar stock, or by law, the holders of shares of Series
G 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 G 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 dividends or distributions payable on the Series G
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 G 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 G 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 G
                            Preferred Stock, except dividends paid ratably on
                            the shares of Series G 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 G Preferred
                            Stock; provided, that the Corporation may at any
                            time redeem,

                                      A-3
<PAGE>

                            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 G Preferred Stock; or

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

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

    Section 5. Reacquired Shares. Any shares of Series G 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 Designation
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.

    Section 6. Liquidation, Dissolution or Winding Up.

         (a) Upon any liquidation, dissolution or winding up of the Corporation,
no distribution shall be made (i) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series G Preferred Stock unless, prior thereto, the holders of shares of
Series G Preferred Stock shall have received the greater of (x) $1,000 per
share, plus an amount equal to accrued and unpaid dividends and distributions
thereon to the date of such payment and (y) an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to the
product of 1,000 times the aggregate amount to be distributed per share to
holders of shares of Common Stock (the "Series G Liquidation Preference"), or
(ii) 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 G
Preferred Stock, except distributions made ratably on the Series G 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 after the Rights
Declaration Date 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

                                      A-4
<PAGE>

Common Stock) into a greater or lesser number of shares of Common Stock (and an
equivalent dividend is not declared on the Series G Preferred Stock or the
Series G Preferred Stock is not similarly subdivided or combined), then in each
such case the aggregate amount to which holders of shares of Series G Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(i) 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) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series G Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any,
which rank on a parity with the Series G Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of Series G Preferred Stock
and such parity shares in proportion to their respective liquidation
preferences.

    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 converted or changed into other
stock or securities, cash and/or any other property (or into the right to
receive any of the foregoing), then in any such case each share of Series G
Preferred Stock shall at the same time be similarly exchanged, converted or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is converted, changed or
exchanged. In the event the Corporation shall, at any time after the Rights
Declaration Date 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 (and an equivalent dividend is not declared on
the Series G Preferred Stock or the Series G Preferred Stock is not similarly
subdivided or combined), then in each such case the amount set forth in the
preceding sentence with respect to the conversion, exchange or change of shares
of Series G Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

    Section 8. No Redemption. The shares of Series G Preferred Stock shall not
be redeemable.

    Section 9. Rank. The Series G Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets (including, without
limitation, any distribution pursuant to Section 6 above), junior to all series
of any other class of the Corporation's Preferred Stock.

    Section 10. Amendment. The Certificate of Incorporation shall not be
amended, including any amendment through consolidation, merger, combination or
other transaction, in any manner which would materially alter or change the
powers, preferences or special rights of

                                      A-5
<PAGE>

the Series G Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of at least a majority of the outstanding shares
of Series G Preferred Stock, voting together as a single class.

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

    IN WITNESS WHEREOF, this Certificate of Designation is executed on behalf of
the Corporation as of the date first written above.

                                                 MOBILITY ELECTRONICS, INC.

                                                 By: /s/ JOAN BRUBACHER
                                                    ----------------------------
                                                    Joan Brubacher,
                                                    Chief Financial Officer

                                      A-6

<PAGE>

                           FORM OF RIGHTS CERTIFICATE

Certificate No. R-______                                         ________Rights

NOT EXERCISABLE AFTER JUNE 23, 2013 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS.
THE RIGHTS ARE SUBJECT TO REDEMPTION AT THE OPTION OF THE COMPANY AT $.01 PER
RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID AND WILL NO LONGER BE TRANSFERABLE.

                               RIGHTS CERTIFICATE

                           MOBILITY ELECTRONICS, 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 June 11, 2003 (the "Rights Agreement"), between Mobility
Electronics, Inc., a Delaware corporation (the "Company"), and Computershare
Trust Company, 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 June 23, 2013
at the office of the Rights Agent designated for such purpose, or at the office
of its successor as Rights Agent, one one-thousandth (a "Unit") of a fully paid
non-assessable share of Series G Junior Participating Preferred Stock, par value
$0.01 per share (the "Series G Preferred Stock") of the Company, at a purchase
price of $______ per Unit of Series G Preferred Stock (the "Purchase Price"),
upon presentation and surrender of this Rights Certificate with the Form of
Election to Purchase and certification duly executed and properly completed. The
number of Rights evidenced by this Rights Certificate (and the number of Units
of Series G Preferred Stock which may be purchased upon exercise hereof) set
forth above, and the Purchase Price set forth above, are the number and Purchase
Price as of June 23, 2003 based on the Series G Preferred Stock as constituted
at such date. As provided in the Rights Agreement, the Purchase Price and the
number of Units of Series G Preferred Stock which may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events.

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

                                      B-1
<PAGE>

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

         Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (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 shares of Series
G Preferred Stock or shares of Common Stock of the Company.

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

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

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

                                      B-2
<PAGE>

         WITNESS the signature of the proper officers of the Company and its
corporate seal. Dated as of ____________.

                                              MOBILITY ELECTRONICS, INC.

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

ATTEST:

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

COUNTERSIGNED:

COMPUTERSHARE TRUST COMPANY,
as Rights Agent

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

Print Name:
           --------------------------------

                                      B-3
<PAGE>

                   Form of Reverse Side of Rights Certificate

                               FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer the
rights certificate.)

         FOR VALUE RECEIVED ______________________________ hereby sells, assigns
and transfers unto __________________________ (Please print name and address of
transferee) ____ Rights represented by this Rights Certificate, together with
all right, title and interest therein, and does hereby irrevocably constitute
and appoint _________________ Attorney, to transfer the said Rights on the books
of the within-named Company, with full power of substitution.

DATED: ___________________
                                            ------------------------------------
                                             Signature

Signature Guaranteed:

         Signatures must be guaranteed by a bank, trust company, broker, dealer
or other eligible institution participating in a recognized signature guarantee
medallion program.

                         -------------------------------------------------------
                          (To be completed)

                                   CERTIFICATE

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

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

                                     NOTICE

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

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

                                      B-4
<PAGE>

                          FORM OF ELECTION TO PURCHASE
     (To be executed if holder desires to exercise Rights represented by the
                              Rights Certificate.)

To Mobility Electronics, Inc.

         The undersigned hereby irrevocably elects to exercise _____ Rights
represented by this Rights Certificate to purchase the Units of Series G
Preferred Stock issuable upon the exercise of such Rights and requests that
certificates for such Series G Preferred Stock be issued in the name of:

            Please insert social security or other identifying number

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

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

            Please insert social security or other identifying number

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

Dated:_________________                     ------------------------------------
                                             Signature

Signature Guaranteed:

         Signatures must be guaranteed by a bank, trust company, broker, dealer
or other eligible institution participating in a recognized signature guarantee
medallion program.

                                      B-5
<PAGE>

                                   CERTIFICATE

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

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

                                     NOTICE

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

         In the event the certification set forth above in 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 Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (each
as defined in the Rights Agreement) and such Election to Purchase will not be
honored.

                                      B-6

<PAGE>

                UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE
             RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY
         PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE
   RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL NOT BE EXERCISABLE

                          SUMMARY OF RIGHTS TO PURCHASE
             SHARES OF SERIES G JUNIOR PARTICIPATING PREFERRED STOCK
                          OF MOBILITY ELECTRONICS, INC.

         On June 11, 2003, the board of directors (the "Board") of Mobility
Electronics, Inc. (the "Company") declared a dividend of one right (a "Right")
for each outstanding share of the Company's common stock, par value $0.01 per
share (the "Common Stock"), to stockholders of record at the close of business
on June 23, 2003 (the "Record Date"). Each Right entitles the registered holder
to purchase from the Company one Unit consisting of one one-thousandth of a
share of the Company's Series G Junior Participating Preferred Stock, par value
$0.01 per share (the "Preferred Stock"), at a purchase price of $38.00, subject
to adjustment (the "Purchase Price"). The description and terms of the Rights
are set forth in a Rights Agreement, dated as of June 11, 2003 (the "Rights
Agreement"), between the Company and Computershare Trust Company, as Rights
Agent.

         Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights certificates will
be distributed (the "Distribution Date"). The Distribution Date will occur on
the earlier of (i) ten days following a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person") has (subject
to certain exceptions) acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding shares of our common stock (the
"Share Acquisition Date"), other than as a result of repurchases of stock by the
Company, or (ii) ten days (or a later date that the Board shall determine)
following the commencement of, or public announcement of an intention to make, a
tender offer or exchange offer that would result in a person or group
beneficially owning 15% or more of the outstanding shares of the Common Stock.

         Until the Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and only with the Common
Stock certificates, (ii) new Common Stock certificates issued after the record
date will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.

         The Rights can not be exercised until the Distribution Date and will
expire at the close of business on June 23, 2013, unless earlier redeemed by the
Company as described below.

         Shortly after the Distribution Date, Rights certificates would be
mailed to record holders of Common Stock as of the close of business on the
Distribution Date and, thereafter, the

                                      C-1
<PAGE>

separate Rights certificates alone will represent the Rights. Unless the Board
decides differently, only shares of Common Stock issued before the Distribution
Date will be issued with Rights.

         Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to an aggregate
dividend of 1,000 times the dividend declared per share of Common Share. In the
event of liquidation, each share of Preferred Stock will be entitled to a
minimum aggregate payment of $1,000 per share, but will be entitled to an
aggregate payment of 1,000 times the payment made per share of Common Stock.
Each share of Preferred Stock will have 1,000 votes, voting together with the
Common Stock. Finally, in the event of any merger, consolidation or other
transaction in which Common Stock is exchanged, each share of Preferred Stock
will be entitled to receive 1,000 times the amount received per share of Common
Stock. These rights are protected by customary antidilution provisions.

         Because of the nature of the dividend, liquidation and voting rights,
the value of each unit of Preferred Stock purchasable upon exercise of each
Right should approximate the value of one share of Common Stock.

         If an Acquiring Person becomes (subject to certain exceptions) the
beneficial owner of 15% or more of the then outstanding shares of Common Stock
(other than pursuant to an offer for all the outstanding shares of Common Stock
that our Board determines to be fair to and otherwise in the best interests of
the Company and its stockholders), each holder of a Right will thereafter have
the right to receive, that number of shares of Common Stock (or, at the
discretion of the Board, Units or, in certain circumstances, cash, property or
other securities of the company) having a value equal to two times the exercise
price of the Right. If, at any time after the Share Acquisition Date, (i) we are
acquired in a merger or other business combination transaction in which we are
not the surviving corporation, other than a merger that results from an offer
for all the outstanding shares of Common Stock that the Board decides is fair
and in the best interests of the Company and its stockholders, or (ii) 50% or
more of our assets or earning power is sold or transferred, each holder of a
Right, except Rights which previously have been voided, will have the right to
receive, after exercise of the Right, common stock of the company that acquires
us having a value equal to two times the exercise price of the Right. The events
described in this paragraph are "Triggering Events."

         All Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person will not be
exercisable. At any time after a person becomes an Acquiring Person and prior to
the acquisition by such person or group of 50% or more of the outstanding Common
Stock, the Board may exchange the Rights (other than Rights owned by the person
or group which will not be exercisable), in whole or in part, for shares of
Common Stock at a per Right exchange ratio equal to that number obtained by
dividing the Purchase Price by the then current per share market price per share
of Common Stock on the earlier of (a) the date on which any person becomes an
acquiring person and (b) the date on which a tender or exchange offer is
announced that would result in the bidder's beneficial ownership of 15% or more
of the shares of Common Stock outstanding, subject to adjustment.

         At any time until ten days following the Share Acquisition Date, the
Board may redeem the Rights in whole, but not in part, at a price of $0.01 per
Right (payable in cash, common stock or other consideration deemed appropriate
by the Board). Immediately upon the action of the

                                      C-2
<PAGE>

Board ordering redemption of the Rights, the Rights will terminate and the only
right of the holders of Rights will be to receive the $0.01 redemption price.

         Until a Right is exercised, the holder of a Right will have no rights
by virtue of ownership as a stockholder of the Company, such as the right to
vote or to receive dividends.

         Any of the provisions of the Rights Agreement may be amended by the
Board prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in order to cure
any ambiguity, to make changes which do not adversely affect the interests of
holders of Rights, or to shorten or lengthen any time period under the Rights
Agreement, but no amendment may be made at such time as the Rights are not
redeemable.

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

                                      C-3<PAGE>
                                                                   EXHIBIT 10.36

                                    INTERVAL
                                  INTERNATIONAL
                      THE QUALITY VACATION EXCHANGE NETWORK

                          RESORT AFFILIATION AGREEMENT

AGREEMENT made and entered into by and between INTERVAL INTERNATIONAL, INC., a
corporation duly organized and existing under the laws of the State of Florida,
with its principal place of business at 6262 Sunset Drive, Penthouse One, Miami,
Florida 33143, hereinafter referred to as "INTERVAL," and
Beartown Development Inc.
--------------------------------------------------------------------------------
                       (Exact Name of Development Entity)
a/an Pennsylvania Corporation
     ---------------------------------------------------------------------------
                   (Type of Entity and State of Registration)

with a principal place of business at Box 4402, RR#4, Stroudsburg, PA 18360
                                      ------------------------------------------

hereinafter referred to as "AFFILIATE" AND
                                           -------------------------------------

a/an
     ---------------------------------------------------------------------------
                   (Type of Entity and State of Registration)

with its principal place of business at
                                        ----------------------------------------

hereinafter referred to as "ASSOCIATION." INTERVAL, AFFILIATE and ASSOCIATION
are sometimes collectively referred to as the "Parties."

    WHEREAS, INTERVAL is engaged in the business of providing and operating a
vacation exchange service to facilitate the exchange of accommodations between
owners of Vacation Interests (as defined herein) at participating resorts,
hereinafter referred to as the "INTERVAL NETWORK;" and

    WHEREAS, AFFILIATE is developing or has developed a resort vacation
ownership program known as Oak 'n Spruce Resort
                           -----------------------------------------------------
                                             (NAME OF PROGRAM)

located at Meadow Street, South Lee, MA 01260
           ---------------------------------------------------------------------

to consist, or consisting, of the units and amenities as described herein, and
to be no less than 12 studios, 90 one-bedroom, 29. two-bedroom, and 0
three-bedroom units, hereinafter collectively referred to as the "PROJECT;" and

    WHEREAS, ASSOCIATION is an association of owners comprised of individuals
who own Vacation Interests at the PROJECT, and ASSOCIATION is or will be
responsible for the management of the PROJECT; and

    WHEREAS, AFFILIATE and ASSOCIATION desire to include the PROJECT as a
participant in the INTERVAL NETWORK.

    NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Parties agree
as follows:

A. DEFINITIONS.

    Unless a different meaning clearly appears from the context, the following
capitalized terms when used in this Agreement shall have the meaning set forth
below:

<PAGE>

       1.    "Confirmation" or "Confirmed Exchange" means a written or oral
             acknowledgment that an exchange request has been fulfilled by
             INTERVAL.

       2.    "Effective Date" means the date this Agreement was executed by
             INTERVAL.

       3.    "Exchange Guest" means the individual who has been issued a
             Confirmed Exchange to the PROJECT by INTERVAL

       4.    "Individual Member" means any purchaser/owner of a Vacation
             Interest at the PROJECT properly enrolled in the INTERVAL NETWORK
             (whether by AFFILIATE, transfer of membership, acceptance of a
             membership offer from INTERVAL, or otherwise) and "Individual
             Membership" shall be construed accordingly. An Individual Member
             who is current in the payment of membership fees prescribed by
             INTERVAL and who is in compliance with all terms and conditions
             then in effect is referred to as an Individual Member in good
             standing.

       5.    "Individual Membership Application" means the form or agreement
             prescribed by INTERVAL, from time to time, for the enrollment of
             Individual Members.

       6.    "Marks" mean the following, registered or unregistered, trademarks,
             service marks or trade names: "Five Star Logo," "Flexchange,"
             "Interval Logo," "Interval International," "Interval International
             and Logo," "Interval International Five Star Award Program,"
             "Interval International Traveler," "Worldex," "WorldCard,"
             "WorldCard Preferred," and such other trademarks, service marks
             and/or trade names, as may at any time be owned or claimed by
             INTERVAL or any associated or affiliated company.

       7.    "Member Resort" means any resort which has entered into a written
             agreement with INTERVAL to participate in the INTERVAL NETWORK

       8.    "Resort Membership Application" means the form completed by
             AFFILIATE and/or ASSOCIATION, or on behalf of AFFILIATE and/or
             ASSOCIATION, for application to the INTERVAL NETWORK, and includes
             all documents and exhibits and any and all representations or
             undertakings, whether written or oral, given or provided by
             AFFILIATE, ASSOCIATION, or on behalf of AFFILIATE or ASSOCIATION,
             to INTERVAL in connection with this Agreement, whether before or
             after the Effective Date of this Agreement.

       9.    "Unit" means each apartment, villa, suite, or other unit of
             accommodation designed for occupancy.

       10.   "Unit Week" means the use and occupancy of a Unit for a one-week
             period. Each Unit, therefore, has available for use and occupancy
             up to fifty-two (52) Unit Weeks per year.

       11.   "Vacation Interest" means the ownership of or the tight to use a
             Unit and the amenities and facilities of a Vacation Ownership
             Resort for at least one week during any given year, but not
             necessarily consecutive years, and which extends for a period of at
             least three years.

       12.   "Vacation Ownership Resort" means one or more Units subject to the
             same time share or other vacation ownership plan, together with any
             other property, or rights to property, appurtenant to those Units.

B. TERM AND RENEWALS.

     The initial term of this Agreement is for six (6) years from the Effective
Date. Thereafter, this Agreement will automatically renew for additional periods
often (10) years each unless a Party gives to the other Parties written notice,
at least ninety (90) days prior to the expiration of the initial term of this
Agreement or any subsequent renewal term, of its intent not to renew. In the
event any Party chooses not to renew this Agreement, said notice of non-renewal
shall apply only to the Party giving said notice, and the Agreement shall
continue and be in full force and effect as it relates to all Parties who did
not serve a notice of non-renewal.

C. AFFILIATION FEE.

     AFFILIATE agrees to pay an affiliation fee of $ 0 on or before
______________________. Upon execution of this Agreement by INTERVAL, such fee
is non-refundable.

<PAGE>

D. INTERVAL NETWORK

       1.   INTERVAL'S DUTIES.

            INTERVAL will provide:

            (a)   resort membership for the PROJECT in the INTERVAL NETWORK upon
                  such terms and conditions as are set forth in this Agreement;

            (b)   an exchange program for use by Individual Members in
                  accordance with the Terms and Conditions of Individual
                  Membership and Exchange, as amended from time to time by
                  INTERVAL;

            (c)   promotional materials for use by AFFILIATE in accordance with
                  this Agreement, and thereafter, such additional materials as
                  INTERVAL may make available from time to time at such rates as
                  INTERVAL may establish for such materials;

            (d)   such other benefits, privileges and/or discounts as INTERVAL
                  may have available from time to time to Individual Members in
                  good standing.

       2.   INDIVIDUAL MEMBERSHIP.

            (a)   For all sales of Vacation Interests at the PROJECT subsequent
                  to the Effective Date of this Agreement, AFFILIATE shall
                  provide INTERVAL with a completed Individual Membership
                  Application executed by each purchaser of a Vacation Interest
                  at the PROJECT and the applicable 1 year membership fee
                  prescribed by INTERVAL or its designated representative. Such
                  Individual Membership Application and fee shall be provided to
                  INTERVAL no later than thirty (30) days after the execution of
                  a purchase agreement by said purchaser, regardless of the
                  actual date of dosing or escrow requirements for said
                  purchase.

            (b)   All Individual Membership fees due under this Agreement shall
                  be delivered to INTERVAL in accordance with the fees schedule
                  then in effect, without set-off or deduction. In the event
                  AFFILIATE or ASSOCIATION receive renewal fees for Individual
                  Membership, said funds shall be forwarded to INTERVAL without
                  set-off or deduction upon receipt of such fees by AFFILIATE or
                  ASSOCIATION.

            (c)   [intentionally omitted]

            (d)   For each quarter, commencing with the quarter following the
                  expiration of the second anniversary of the Effective Date of
                  this Agreement, in which there are less than two hundred (200)
                  Individual Members in good standing with INTERVAL, INTERVAL
                  may assess AFFILIATE a service fee of five hundred dollars
                  ($500.00) per quarter. INTERVAL shall invoice AFFILIATE at the
                  end of each three month period in which the service fee is
                  payable. AFFILIATE agrees to pay INTERVAL within fifteen (15)
                  days after receipt of such statement.

            (e)   AFFILIATE agrees to provide each purchaser of a Vacation
                  Interest at the PROJECT with a then current version of the
                  INTERVAL Resort Directory. Such Resort Directory shall be
                  provided to the purchaser at the time of execution of a
                  purchase agreement. AFFILIATE agrees to purchase such Resort
                  Directories from INTERVAL, in minimum quantities of fifty (50)
                  directories per order, at the price prescribed by INTERVAL,
                  plus applicable postage and shipping charges and taxes. Such
                  Resort Directories shall be shipped to AFFILIATE C.O.D.,
                  unless otherwise agreed to by INTERVAL. AFFILIATE shall be
                  entitled to deduct from the membership fee payable to INTERVAL
                  pursuant to sub-paragraph (a) above the per unit cost paid by
                  AFFILIATE (excluding any applicable shipping charges and
                  taxes) for a Resort Directory.

<PAGE>

       3.   PRECONSTRUCTION OR RENOVATION.

            (a)   In the event the PROJECT's Units, amenities or facilities are
                  unavailable for occupancy due to construction or renovation,
                  AFFILIATE will advise each purchaser of a Vacation Interest at
                  the PROJECT, prior to enrollment with INTERVAL, that said
                  purchaser will not be entitled to utilize the INTERVAL NETWORK
                  until his/her Unit Week and the PROJECT are available for
                  occupancy as reasonably determined by INTERVAL The PROJECT
                  shall be deemed "unavailable for occupancy" until such time as
                  INTERVAL determines in its good faith judgment that the
                  PROJECT is sufficiently complete to be desirable for exchange
                  (e.g., Units complete and fully furnished, amenities available
                  for use, and remaining construction does nor interfere with
                  the use and enjoyment of completed Units, amenities and
                  facilities). An Individual Member in good standing who is
                  unable to use the exchange privilege due to construction
                  and/or renovation at the PROJECT shall be entitled to use such
                  other benefits, privileges and discounts as may be afforded to
                  Individual Members from time to time.

            (b)   In the event a portion of the PROJECT is. under construction
                  or renovation, AFFILIATE and/or ASSOCIATION agree that
                  Exchange Guests will be accommodated only in completely
                  renovated and fully furnished Units, and in Units where use
                  and enjoyment by the Exchange Guest will not be impaired by
                  the ongoing construction or renovation at the PROJECT.

            (c)   Notwithstanding the PROJECT's Units, amenities, or facilities
                  being unavailable for occupancy due to construction or
                  renovation, AFFILIATE'S obligation to enroll all purchasers
                  pursuant to Section D. Paragraph 2(a) of this Agreement shall
                  not be waived.

       4.   TERMS AND CONDITIONS.

            (a)   The terms and conditions of the INTERVAL NETWORK, including
                  but not limited to, the Terms and Conditions of Individual
                  Membership and Exchange, may be changed by INTERVAL from time
                  to time in its sole discretion.

            (b)   AFFILIATE and/or ASSOCIATION agree to comply with all
                  procedures reasonably established by INTERVAL, from time to
                  time, for the operation of the INTERVAL NETWORK.

       5.   EXCHANGE ACTIVITY.

            (a)   AFFILIATE and/or ASSOCIATION agree to honor all Confirmations
                  made by INTERVAL utilizing Unit Weeks relinquished by
                  Individual Members, as well as Unit Weeks provided by
                  AFFILIATE to INTERVAL in accordance with Section E, Paragraph
                  4 and such other Unit Weeks at the PROJECT as may be provided
                  by AFFILIATE and/or ASSOCIATION to INTERVAL from time to time.
                  If an Exchange Guest arrives at the PROJECT and the Unit
                  confirmed by INTERVAL is not available, AFFILIATE and/or
                  ASSOCIATION agree to provide at their expense substitute
                  accommodations (of the same or superior size and quality) at
                  the PROJECT, or they shall provide such substitute
                  accommodations (of the same or superior size and quality) at a
                  similar location of comparable quality with amenities and
                  facilities similar to that available at the PROJECT for the
                  same time period as that originally confirmed. Additionally,
                  AFFILIATE and/or ASSOCIATION shall be responsible for all
                  expenses incurred by the Exchange Guest or INTERVAL as a
                  result of the confirmed Unit not being available at the
                  PROJECT, including, without limitation, relocation expenses
                  and INTERVAL's standard administrative charge which is
                  currently one hundred U.S. dollars ($100.00). The provisions
                  of this Paragraph shall survive the expiration or termination
                  of this Agreement.

            (b)   In the event it is necessary for AFFILIATE or ASSOCIATION to
                  change the particular Unit into which an Exchange Guest has
                  been Confirmed, AFFILIATE and ASSOCIATION agree that the
                  replacement Unit shall be comparable or superior in all
                  respects (including, without limitation, the size of the Unit,
                  view from the Unit and amenities available in the Unit) to the
                  Unit into which INTERVAL issued the Confirmation.

            (c)   AFFILIATE agrees not to require any Exchange Guests to attend
                  a sales presentation regarding the PROJECT.

            (d)   AFFILIATE and ASSOCIATION agree not to participate in any
                  system or arrangement of exchange with any other Vacation
                  Ownership Resort during the term of this Agreement and any
                  renewals thereof

<PAGE>

            (e)   AFFILIATE agrees that during the term of this Agreement or any
                  renewals thereof, the INTERVAL NETWORK will be the only
                  exchange program represented to prospective purchasers of
                  Vacation Interests at the PROJECT. AFFILIATE and ASSOCIATION
                  further agree that the INTERVAL NETWORK will be the only
                  exchange program recommended or otherwise promoted to owners
                  of Vacations Interests at the PROJECT. Additionally, AFFILIATE
                  and ASSOCIATION agree that the INTERVAL NETWORK shall be
                  utilized for all exchange requests, both internal and
                  external. Notwithstanding the foregoing~ this Paragraph shall
                  not be construed to prohibit an owner of a Vacation Interest
                  at the PROJECT from utilizing an exchange program other than
                  the INTERVAL NETWORK, if such individual had been previously
                  enrolled in another exchange program prior to the PROJECT's
                  initial affiliation with INTERVAL.

E.     AFFILIATE'S PROGRAM.

       1.   PHASING AND AMENITIES.

            (a)   The PROJECT is included as a Member Resort with the mutual
                  understanding that a material condition for the PROJECT's
                  continued participation in the INTERVAL NETWORK is AFFILIATE's
                  strict adherence to the completion and availability of Units
                  and amenities as set forth in the attached Addendum.

            (b)   This Agreement encompasses all of the Units, buildings or
                  phases now or hereafter constructed where the PROJECT is
                  located or adjacent thereto. The inclusion of any additional
                  Units, buildings or phases, however, shall be subject to
                  adherence to the standards and criteria for resort membership
                  in effect at the time of inclusion.

       2.   REPRESENTATIONS AND WARRANTIES.

            (a)   AFFILIATE represents and warrants that it owns the real estate
                  and improvements constituting the PROJECT, or that AFFILIATE
                  has the contractual right to convey use tights in the PROJECT;
                  that the legal structure of the PROJECT is in compliance with
                  all applicable laws and that the marketing of the PROJECT is
                  in compliance with all applicable laws; that all monies paid
                  by an individual to purchase a Vacation Interest at the
                  PROJECT are placed in escrow or guaranteed by an independent
                  third party of standing until such time as the purchaser is
                  granted actual occupancy rights; that the legal structure of
                  the PROJECT guarantees the purchaser the undisturbed use of
                  the Units, amenities and facilities comprising the PROJECT for
                  the duration of the Vacation Interest purchased; that there
                  are no proceedings pending or threatened against or affecting
                  AFFILIATE or individuals or entities related thereto in any
                  court or before any governmental authority which involves the
                  possibility of adversely affecting the business or financial
                  condition of AFFILIATE or the PROJECT; that execution of this
                  Agreement and its performance hereunder is binding upon
                  AFFILIATE and will not conflict with or result in a breach of
                  any provision of any other agreement, charter, bylaw or other
                  instrument to which AFFILIATE or the PROJECT may be bound; and
                  that AFFILIATE has and will continue to comply with all
                  applicable laws and regulations of any jurisdiction where
                  compliance is required.

            (b)   ASSOCIATION represents and warrants that there are no
                  proceedings pending or threatened against or affecting
                  ASSOCIATION or individuals related thereto in any court or
                  before any governmental authority which involves the
                  possibility of adversely affecting the business or financial
                  condition of ASSOCIATION or the PROJECT; that execution of
                  this Agreement with INTERVAL and its performance hereunder is
                  binding upon ASSOCIATION and will not conflict with or result
                  in a breach of any provision of any other agreement, charter,
                  by-law or other instrument to which ASSOCIATION may be bound;
                  and that ASSOCIATION has and will continue to comply with all
                  applicable laws and regulations of any jurisdiction where
                  compliance is required.

            (c)   AFFILIATE and/or ASSOCIATION, as the case may be, represent
                  and warrant that they currently maintain and will continue to
                  maintain, at their sole cost and expense, a protection and
                  indemnity liability policy, including coverage for bodily
                  injury, property damage, personal and advertising injury
                  occurring on or about the PROJECT or in connection with the
                  PROJECT. Said policy shall afford minimum protection of not
                  less than One Million Dollars ($1,000,000) combined single
                  limit coverage for each occurrence. AFFILIATE and/or
                  ASSOCIATION shall cause INTERVAL and its officers, directors,
                  employees, agents and representatives to be named insureds
                  under the policy. A certificate showing such insurance in
                  force shall be delivered to INTERVAL within thirty (30) days
                  of the Effective Date of this Agreement, and upon any renewal
                  or replacement of the policy. Said certificate shall further
                  provide that not less than thirty (30) days prior written
                  notice be given to INTERVAL in the event of cancellation,
                  material change, alteration or amendment of the policy.

<PAGE>

            (d)   AFFILIATE agrees to provide INTERVAL with an opinion letter
                  from a licensed independent attorney coveting those items set
                  forth in Exhibit "A", attached hereto and made a part hereof,
                  upon execution of this Agreement by AFFILIATE. AFFILIATE
                  further understands and agrees that it will not be entitled to
                  represent its participation in the INTERVAL NETWORK until
                  INTERVAL has received a satisfactory opinion letter from such
                  licensed independent attorney and has notified AFFILIATE of
                  same. Failure to provide such opinion letter, or any material
                  misrepresentation of the representations and warranties set
                  forth above or any information set forth in this Agreement,
                  the Resort Membership Application or any supporting documents,
                  shall be grounds for immediate termination of this Agreement
                  by INTERVAL.

            (e)   The Parties represent and warrant that the individuals
                  executing this Agreement on behalf of INTERVAL, AFFILIATE and
                  ASSOCIATION, are officers of their respective organizations
                  and duly authorized to execute this Agreement on behalf of
                  INTERVAL, AFFILIATE or ASSOCIATION, as the case may be.

       3.   DISCLOSURE.

            (a)   AFFILIATE agrees to provide either INTERVAL's most recent
                  disclosure statement and/or the INTERVAL Resort Directory, or
                  such other publication which contains the complete and then
                  current Terms and Conditions of Individual Membership and
                  Exchange, to all prospective purchasers of Vacation Interests
                  at the PROJECT prior to their execution of any contract for
                  purchase. Notwithstanding the foregoing~ AFFILIATE shall
                  provide INTERVAL's most recent disclosure statement if
                  required by law to do so.

            (b)   AFFILIATE further agrees to conspicuously include the
                  following statement, or a statement substantially similar to
                  the following, in its sales documents:

                  "This Resort has an agreement with Interval International,
                  Inc. ("Interval") of Miami, Florida, wherein Interval has
                  agreed to provide its Exchange Program to owners of vacations
                  interests at this Resort. Interval is an independently owned
                  and operated service company. The developer! marketer of this
                  Resort is not an agent for Interval and no representations or
                  promises made by such developer/marketer, or their agents, are
                  binding on Interval. Interval's responsibility for
                  representations regarding Interval's Exchange Program, as well
                  as Interval's current or future services, is limited to those
                  made in written materials furnished by Interval."

       4.   RESERVE ACCOMMODATIONS.

            (a)   AFFILIATE agrees to make available as reserve accommodations
                  for INTERVAL's exclusive use _____ studios, ____ one-bedroom,
                  1 two-bedroom, and ____ three-bedroom Units at the PROJECT
                  each week of the year commencing within one hundred twenty
                  (120) days after INTERVAL determines that the PROJECT is
                  available for occupancy and continuing thereafter for a period
                  of two years.

            (b)   AFFILIATE shall provide INTERVAL with a schedule of the Unit
                  Weeks reserved for INTERVAL's exclusive use for the current
                  calendar year no later than thirty (30) days after the
                  Effective Date of this Agreement. Additionally, AFFILIATE
                  agrees to provide INTERVAL on a yearly basis, on or before
                  October 1 of each year, with a schedule of the Unit Weeks
                  reserved for INTERVAL's exclusive use for the following year
                  in accordance with subparagraph (a) above.

            (c)   If for any reason AFFILIATE is unable to provide the reserve
                  accommodations delineated above, AFFILIATE shall be obligated
                  to provide comparable accommodations at a location which is
                  agreed upon by INTERVAL, at AFFILIATE's sole cost and expense.

            (d)   Additionally, if for any reason INTERVAL is unable to utilize
                  the reserve accommodations set forth above due to reasons
                  attributable to AFFILIATE (e.g. incomplete affiliation file,
                  construction delays) and AFFILIATE has not provided alternate
                  accommodations satisfactory to INTERVAL as set forth in
                  subparagraph (c) above, AFFILIATE shall be obligated to
                  provide an equal number of comparable accommodations at the
                  PROJECT after elimination of the deficiency which prevented
                  INTERVAL from utilizing such reserve accommodations at such
                  dates as are reasonably specified by INTERVAL.

<PAGE>

       5.   MAINTENANCE OF STANDARDS.

            (a)   AFFILIATE and ASSOCIATION acknowledge the necessity for and
                  agree to establish and maintain a comprehensive program in
                  order to assure the continued high standards of service,
                  appearance, cleanliness, quality and management as evidenced
                  at the time of the PROJECT's initial acceptance by INTERVAL or
                  as reflected in the plans and supporting documents in the
                  event the PROJECT is under construction or renovation.
                  AFFILIATE and/or ASSOCIATION further agree to establish a
                  comprehensive program for the major renovations of the Units,
                  amenities, facilities, common elements and exterior of the
                  PROJECT.

            (b)   If it should be deemed necessary by INTERVAL as a result of
                  consumer complaints to inspect the PROJECT, AFFILIATE and/or
                  ASSOCIATION shall pay the actual cost of travel to the PROJECT
                  for one INTERVAL representative. AFFILIATE and/or ASSOCIATION
                  further agree to provide, without charge, suitable
                  accommodations at the PROJECT for such INTERVAL
                  representative, subject to availability.

            (c)   While INTERVAL may inspect as often as it deems necessary,
                  AFFILIATE and/or ASSOCIATION shall pay such expenses no more
                  than once in any calendar year, except in the event the
                  PROJECT is under construction or renovation, in which event
                  AFFILIATE may also be required to pay such expenses for one
                  additional inspection during such construction or renovation
                  period. AFFILIATE would only be required to pay for inspection
                  if in default.

            (d)   It shall be considered prima facie evidence of failure to
                  maintain standards if INTERVAL receives resort evaluations
                  from Exchange Guests which rate the PROJECT, Units, facilities
                  and/or amenities below an acceptable level as reasonably
                  determined by INTERVAL. AFFILIATE and/or ASSOCIATION will be
                  advised in writing of such evaluations.

       6.   SALES REPRESENTATIONS.

            (a)   AFFILIATE agrees to incorporate promotional materials
                  furnished by INTERVAL into the sales program at the PROJECT.
                  Additionally, AFFILIATE agrees to fully and accurately
                  describe the use of the INTERVAL NETWORK to all prospective
                  purchasers at the PROJECT.

            (b)   AFFILIATE acknowledges and agrees that it will not rely upon
                  the INTERVAL NETWORK as the primary motivation for its sales.
                  Individual Membership in INTERVAL shall be represented as an
                  adjunct service to purchasers of Vacation Interests at the
                  PROJECT.

            (c)   AFFILIATE further acknowledges and agrees that membership in
                  INTERVAL will not be offered as an investment interest or in
                  conjunction with the sale of a security.

            (d)   AFFILIATE further agrees that all sales and marketing relating
                  to the PROJECT shall be the responsibility of AFFILIATE.
                  AFFILIATE shall provide INTERVAL with thirty (30) days prior
                  written notice if any individual or entity other than
                  AFFILIATE is marketing the PROJECT. INTERVAL may, in the
                  exercise of its reasonable business judgment, prohibit such
                  other individual or entity from representing membership in
                  INTERVAL in conjunction with the marketing of the PROJECT.
                  Additionally, Interval reserves the right to suspend,
                  indefinitely, AFFILIATE's authority to represent the INTERVAL
                  NETWORK to prospective purchasers in the event that repeated
                  complaints arise regarding sales practices at or relating to
                  the PROJECT.

            (e)   AFFILIATE further agrees to immediately indemnify and hold
                  INTERVAL harmless against all actions, suits, demands, losses,
                  expenses, costs and fees, including attorneys' fees, of
                  whatever kind and nature incurred by INTERVAL arising out of
                  or in connection with the sale or marketing of Vacation
                  Interests at the PROJECT. The provisions of this subparagraph
                  (e) shall survive the expiration or termination of this
                  Agreement.

       7.   COLLATERAL MATERIALS.

            (a)   The Resort Membership Application, plans, renderings,
                  blueprints, models, designs, documents, addenda or other
                  exhibits submitted by, or on behalf of, AFFILIATE and/or
                  ASSOCIATION, to INTERVAL contain representations of the
                  current or future design, configuration, legal structure and
                  marketing of the PROJECT. Said representations are
                  specifically incorporated into and made a part of this
                  Agreement.

<PAGE>

            (b)   AFFILIATE and/or ASSOCIATION agree to immediately notify
                  INTERVAL of any change in the information set forth in the
                  Resort Membership Application, plans, renderings, blueprints,
                  models, designs, documents, addenda, or such other exhibits
                  submitted to INTERVAL with respect to the PROJECT, including,
                  without limitation, any change in the projected marketing
                  areas. INTERVAL shall have the right to terminate this
                  Agreement upon thirty (30) days prior written notice if there
                  is any material change in such information. Additionally,
                  AFFILIATE acknowledges and agrees that it shall be required to
                  submit a legal opinion from a licensed independent attorney,
                  in a form satisfactory to INTERVAL, in the event the PROJECT
                  will be marketed in areas not specifically addressed in the
                  legal opinion letter provided pursuant to Section E. Paragraph
                  2(d).

       8.   AUDIT INFORMATION.

            (a)   AFFILIATE and/or ASSOCIATION shall provide INTERVAL with the
                  names, permanent addresses and telephone numbers, the type of
                  accommodations, Unit and week number purchased, including the
                  date of sale, for all owners of Vacation Interests at the
                  PROJECT on an annual basis as of December 31 of each year or
                  as requested by INTERVAL during the term of this Agreement.
                  Such information shall be provided within twenty (20) days of
                  the above-referenced date or within twenty (20) days of
                  INTERVAL's written request for said information. AFFILIATE
                  and/or ASSOCIATION further agree to provide, within twenty
                  (20) days of INTERVAL's written request, a list of all unit
                  numbers in the PROJECT, as well as the sleeping capacity for
                  each such unit and a yearly calendar for the PROJECT and such
                  other information about the PROJECT as may be reasonably
                  requested by INTERVAL.

            (b)   AFFILIATE and/or ASSOCIATION further agree to provide INTERVAL
                  with written notice of any resale, foreclosure or
                  other-transfer of ownership of any Vacation Interest at the
                  PROJECT as soon as AFFILIATE or ASSOCIATION become aware of
                  any such resale, foreclosure, or other transfer of ownership.
                  Additionally, AFFILIATE and/or ASSOCIATION agree to provide
                  INTERVAL with prompt written notice in the event any
                  Individual Member rescinds his/her purchase of a Vacation
                  Interest at the PROJECT.

            (c)   INTERVAL shall have the right to inspect the PROJECT's sales
                  and ownership records upon reasonable notice during normal
                  business hours at the PROJECT or such other place as these
                  records may be kept.

       9.   CHARGES.

            (a)   AFFILIATE and/or ASSOCIATION agree to impose the
                  responsibility to pay any bed tax, transient occupancy tax or
                  similar tax levied by any governmental body on the owner of
                  the Unit Week at the PROJECT which is to be occupied by an
                  Exchange Guest.

            (b)   AFFILIATE and ASSOCIATION acknowledge and agree that the
                  Exchange Guest shall be responsible for all personal charges
                  (e.g., telephone calls and meals), as well as for any damage
                  to the Unit, the PROJECT and/or the PROJECT's amenities or
                  facilities caused by an Exchange Guest or his invitees.
                  Consequently, INTERVAL shall not be liable, and AFFILIATE and
                  ASSOCIATION hereby release INTERVAL from liability, for any
                  loss incurred or damage to the Unit, the PROJECT, or the
                  PROJECT's amenities or facilities which may be caused by an
                  Exchange Guest or his invitees.

            (c)   AFFILIATE and/or ASSOCIATION agree to provide all Exchange
                  Guests with the same tights and privileges as those afforded
                  to owners of Vacation Interests at the PROJECT. Additionally,
                  AFFILIATE and ASSOCIATION agree that there shall be no fees
                  charged to Exchange Guests for use of any of the amenities or
                  facilities of the PROJECT or for any services relating to the
                  use and occupancy of the Unit Week including, but not limited
                  to. surcharges for electricity or air--conditioning or fees
                  for the weekly cleaning of the Unit or for gratuities, other
                  than as specifically set forth herein or as approved in
                  writing by INTERVAL.

F.     USE OF NAME. LOGOS, SERVICE MARKS, AND MATERIALS.

       1.   USE IN PROMOTIONAL MATERIALS.

            (a)   AFFILIATE and ASSOCIATION shall have the right to indicate in
                  their promotional materials that the PROJECT is a Member
                  Resort of INTERVAL. Additionally, AFFILIATE and ASSOCIATION
                  shall be entitled to use in their promotional materials the
                  INTERVAL name and logo and such other Marks that INTERVAL has

<PAGE>

                  indicated in writing that AFFILIATE or ASSOCIATION may use.
                  INTERVAL, however, expressly prohibits the use of any material
                  describing or offering the services of INTERVAL without first
                  obtaining its prior written approval. INTERVAL expressly
                  reserves the right to prohibit the making of representations
                  or the use of material which, in the judgment of INTERVAL, do
                  not accurately reflect INTERVAL or the INTERVAL NETWORK.

            (b)   AFFILIATE and ASSOCIATION acknowledge and agree that INTERVAL
                  is the owner of the Marks. AFFILIATE and ASSOCIATION further
                  agree to observe such reasonable requirements with respect to
                  service mark and trademark registrations as INTERVAL may
                  require from time to time, including without limitation,
                  affixing an "(R)" adjacent to all such registered marks in any
                  and all uses thereof.

            (c)   Any use of the INTERVAL name and logo or any other Marks which
                  INTERVAL has authorized AFFILIATE or ASSOCIATION to use in
                  writing must fully and prominently disclose that AFFILIATE or
                  ASSOCIATION, as the case may be, is an independent
                  organization and not affiliated with INTERVAL except as
                  provided by this Agreement. AFFILIATE and ASSOCIATION further
                  acknowledge and agree that any goodwill associated with the
                  use of the INTERVAL name and logo or any other Marks shall
                  inure directly and exclusively to INTERVAL.

       2.   RESTRICTIONS ON USE.

            (a)   The rights arising under this Agreement are exclusive to the
                  PROJECT. AFFILIATE and ASSOCIATION shall not use the INTERVAL
                  name and logo or any other Mark or otherwise make any
                  reference to its participation in the INTERVAL NETWORK in
                  their promotional material in conjunction with any other
                  Vacation Ownership Resort other than that specifically
                  designated in this Agreement. AFFILIATE and ASSOCIATION
                  further agree not to use the names or photographs of other
                  Member Resorts in AFFILIATE's or ASSOCIATION's promotional
                  material without obtaining the prior written consent of
                  INTERVAL and such other resort.

            (b)   AFFILIATE and ASSOCIATION agree that they will not, directly
                  or indirectly, register or attempt to register any of the
                  Marks or any name or mark which is similar or likely to be
                  confused with the Marks.

G.     SALE, LEASE OR ASSIGNMENT.

       1.   AFFILIATE agrees to provide INTERVAL with sixty (60) days prior
            written notice of its intent to sell or lease the PROJECT (or a
            portion thereof in bulk), or to assign this Agreement to any third
            party.

       2.   Within thirty (30) days after receipt by INTERVAL of such written
            notice from AFFILIATE, INTERVAL shall have the option to either:

            (a)   Consent to the assignment of this Agreement to such third
                  party if such sale or lease is in fact consummated. Concurrent
                  with the consummation of such sale or lease, AFFILIATE shall
                  cause such third party to agree in writing, in form and
                  substance satisfactory to INTERVAL, to perform under this
                  Agreement. An executed copy of such assumption agreement shall
                  be promptly delivered to INTERVAL. Notwithstanding the
                  foregoing, the sale or lease of the PROJECT or the assignment
                  of this Agreement, and the agreement of such third party to
                  perform under the terms of this Agreement, shall not relieve
                  AFFILIATE of its obligation to perform under the terms of this
                  Agreement as it relates to any portion of the PROJECT not
                  subject to the sale, lease or assignment.

            (b)   Notify AFFILIATE of its intent to terminate this Agreement,
                  which notice of termination shall establish the date of
                  termination ninety (90) days after the date of receipt by
                  INTERVAL of AFFILIATE's original notice. If AFFILIATE shall
                  not have consummated such sale, lease or assignment by the
                  established termination date to the third party named in the
                  original notice to INTERVAL, then the termination notice sent
                  to AFFILIATE shall be null and void, and this Agreement shall
                  continue in full force and effect.

       3.   The voluntary or involuntary sale, assignment, transfer or other
            disposition of a controlling interest in AFFILIATE or the PROJECT
            (i.e., the possession, directly or indirectly, of the power to
            direct the management and sales of the PROJECT, whether through
            ownership of stock, by contract or otherwise) shall be deemed a sale
            or lease and shall be subject to the provisions set forth in
            Paragraphs 1 and 2 of this Section G.

       4.   Subject to the foregoing paragraphs of this Section G, this
            Agreement shall inure to the benefit of and be binding upon the
            Parties hereto and their respective successors and assigns.

<PAGE>

H.     COVENANTS.

       1.   AFFILIATE and ASSOCIATION agree that they will at all times refrain
            from interfering with or otherwise impairing the relationship
            between INTERVAL and its members, including, but not limited to
            Individual Members and Member Resorts.

       2.   So long as INTERVAL continues to provide exchange services to
            Individual Members, AFFILIATE and ASSOCIATION agree not to solicit,
            directly or indirectly, nor to assist any third party, directly or
            indirectly, in the solicitation of, Individual Members for
            membership or participation in any exchange program or system of
            exchange other than the INTERVAL NETWORK Notwithstanding the
            foregoing, this paragraph shall not be construed to allow AFFILIATE
            or ASSOCIATION to solicit Individual Members or to assist in the
            solicitation of Individual Members for membership or participation
            in any other exchange program or system of exchange in the event
            INTERVAL is required to suspend exchange privileges due to
            AFFILIATE's or ASSOCIATION's failure to comply with the provisions
            of Section D, Paragraph 5(a) of this Agreement.

       3.   AFFILIATE and ASSOCIATION agree that during the term of this
            Agreement and for a period of one (1) year after this Agreement
            expires or is terminated for any reason, neither AFFILIATE nor
            ASSOCIATION shall, directly or indirectly, without INTERVAL's prior
            written consent, hire, employ or pay any person who was employed or
            paid by INTERVAL during the term of this Agreement; or directly or
            indirectly induce any such person to terminate or alter his/her
            relationship with INTERVAL.

       4.   The provisions of this Section H shall survive the expiration or
            termination of this Agreement.

I.     SUSPENSION AND TERMINATION.

       1.   SUSPENSION.

            (a)   In the event that AFFILIATE and/or ASSOCIATION is in violation
                  of any provision of this Agreement, INTERVAL shall have the
                  right, without prejudice to its right to terminate this
                  Agreement, to:

                  (1)   immediately suspend processing of new memberships,
                        Individual Membership renewals, the use of the INTERVAL
                        NETWORK by Individual Members, and the right of
                        AFFILIATE to represent the INTERVAL NETWORK to
                        prospective purchasers of Vacation Interests at the
                        PROJECT; and/or

                  (2)   impose such other conditions as INTERVAL deems
                        reasonably necessary.

            (b)   If INTERVAL determines, in the exercise of its reasonable
                  business judgment, that the continued operation of AFFILIATE,
                  ASSOCIATION and/or the PROJECT are in jeopardy, INTERVAL shall
                  have the right to suspend further performance under this
                  Agreement until such time as INTERVAL receives satisfactory
                  written assurances that the continued operation of the
                  PROJECT, AFFILIATE or ASSOCIATION is not in jeopardy.

            (c)   If bankruptcy proceedings are filed by or against a Party,
                  then AFFILIATE and/or ASSOCIATION (in the case bankruptcy
                  proceedings are filed by or against INTERVAL) or INTERVAL (in
                  the case bankruptcy proceedings are filed by or against
                  AFFILIATE or ASSOCIATION) may suspend all further performance
                  of this Agreement until such bankrupt Party assumes or rejects
                  this Agreement and adequate assurance of future performance by
                  the bankrupt Party is provided to the non-bankrupt Parry. Any
                  such suspension of further performance by the non-bankrupt
                  Party pending the bankrupt Party's assumption or rejection
                  will not be a breach of this Agreement and will not affect the
                  non-bankrupt Party's rights to pursue or enforce any of its
                  tights under this Agreement or otherwise.

            (d)   Notwithstanding the foregoing, in the event AFFILIATE and the
                  PROJECT regain active status with INTERVAL, AFFILIATE shall be
                  obligated to enroll all individuals, who purchased Vacation
                  Interests at the PROJECT while AFFILIATE was in a suspended
                  status, as Individual Members of INTERVAL.

<PAGE>

       2.   TERMINATION.

            (a)   This Agreement may be terminated immediately upon notice in
                  writing by INTERVAL if:

                  (1)   AFFILIATE and/or ASSOCIATION shall become insolvent; or

                  (2)   AFFILIATE and/or ASSOCIATION shall make an assignment
                        for the benefit of creditors.

            (b)   This Agreement may be terminated immediately upon notice in
                  writing by AFFILIATE and/or ASSOCIATION if:

                 (1)   INTERVAL shall become insolvent; or

                 (2)   INTERVAL shall make an assignment for the benefit of
                       creditors.

            (c)   In the event that AFFILIATE and/or ASSOCIATION defaults in the
                  performance of any of the provisions of this Agreement and
                  fails to rectify such default within thirty (30) days after
                  receipt of written notice specifying such default, or such
                  additional period of time as is reasonably required to correct
                  such default, this Agreement may be terminated by INTERVAL
                  upon written notice to AFFILIATE and ASSOCIATION.

            (d)   In the event that INTERVAL defaults in the performance of any
                  of the provisions of this Agreement and fails to rectify such
                  default within thirty (30) days after receipt of written
                  notice specifying such default, or such additional period of
                  time as is reasonably required to correct such default, this
                  Agreement may be terminated by AFFILIATE and/or ASSOCIATION
                  upon written notice to INTERVAL.

            (e)   INTERVAL shall have the right to terminate this Agreement upon
                  thirty (30) days prior written notice to AFFILIATE and
                  ASSOCIATION, in the event that less than one hundred
                  twenty-five (125) Individual Members are enrolled within one
                  year of the Effective Date of this Agreement, or less than two
                  hundred fifty (250) Individual Members are enrolled within two
                  years of the Effective Date of this Agreement.

            (f)   INTERVAL shall have the right to terminate this Agreement as
                  it relates to AFFILIATE, without being obligated to terminate
                  this Agreement as it relates to ASSOCIATION. ASSOCIATION
                  hereby acknowledges and agrees that it will continue to be
                  bound by the terms of this Agreement in such event.

       3.   EFFECT OF TERMINATION.

            (a)   In the event that this Agreement is terminated due to
                  AFFILIATE's and/or ASSOCIATION's failure to maintain the
                  standards of INTERVAL in accordance with Section E, Paragraph
                  5 hereof, which failure in INTERVAL's judgment will impair the
                  desirability or availability of the PROJECT to Exchange
                  Guests, INTERVAL may suspend the exchange privileges of
                  Individual Members but shall not be responsible for the
                  reimbursement of any Individual Membership fees previously
                  paid to INTERVAL.

            (b)   In the event this Agreement is terminated for any cause which
                  in INTERVAL's judgment will not impair the desirability or
                  availability of the PROJECT, INTERVAL may continue to provide
                  its exchange services to Individual Members until the
                  expiration of the current year of each such membership. All
                  such Individual Members in good standing shall be entitled to
                  full benefits of Individual Membership during that year. At
                  the expiration of said year, INTERVAL shall have the option of
                  whether to allow renewals of said Individual Memberships.

            (c)   AFFILIATE, ASSOCIATION and INTERVAL agree to continue honoring
                  all Confirmations into the PROJECT made prior to termination
                  of this Agreement, as well as all Confirmations issued to
                  Individual Members prior to termination. Additionally,
                  AFFILIATE and ASSOCIATION agree to honor all Confirmations
                  into the PROJECT (even though such Confirmations are issued
                  after termination of this Agreement) in accordance with
                  Section D, Paragraph 5(a) for so long as Individual Members
                  elect to renew their membership with INTERVAL and INTERVAL
                  continues to provide exchange services to same.

            (d)   AFFILIATE and ASSOCIATION expressly waive any claim or demand
                  they may have for refund of any affiliation fee or Individual
                  Membership fees paid to INTERVAL prior to termination.

<PAGE>

            (e)   Upon termination or expiration of this Agreement, AFFILIATE
                  and/or ASSOCIATION shall immediately discontinue: (1)
                  representing the INTERVAL NETWORK to purchasers; (2) utilizing
                  all INTERVAL materials and equipment and shall return same to
                  INTERVAL within thirty (30) days thereafter; and (3) utilizing
                  all advertising materials which contain the INTERVAL name,
                  logos or any other Marks or which otherwise associate the
                  PROJECT with INTERVAL.

            (f)   The provisions of this Paragraph 3 shall survive the
                  expiration or termination of this Agreement and shall continue
                  to govern the relationship among the Parties.

J.     REMEDIES.

       1.   A Party shall be entitled to damages which it has incurred and
            injunctive or other equitable relief for any violation by any other
            Party of the provisions of this Agreement In no event, however,
            shall INTERVAL be liable to AFFILIATE or ASSOCIATION for incidental,
            special or consequential damages. In addition, the prevailing Party
            may recover all costs, including reasonable attorneys' fees,
            incurred in such action or any appeal thereto or in otherwise
            obtaining compliance with the terms of this Agreement, whether or
            not such matter proceeds to the filing of a complaint. The Parties
            further agree that the time of entitlement as to such fees and costs
            shall be the point at which breach or default by the other occurs.
            The provisions of this Paragraph shall survive the expiration or
            termination of this Agreement, and nothing herein shall be construed
            to restrict the right to institute proceedings at law or equity to
            obtain injunctive or other relief on account of any default
            hereunder, whether or not a Party has exercised its rights to
            terminate this Agreement.

       2.   The remedies set forth in this Agreement are not exclusive, and the
            election of one remedy shall not prohibit the pursuit of other
            available remedies.

K.     INDEMNIFICATION.

       1.   INTERVAL agrees that it will protect, save, keep harmless and
            indemnify AFFILIATE and/or ASSOCIATION, as the case may be, against
            and from any and all claims, demands, judgments, damages, suits,
            losses, penalties, expenses, costs and liabilities of any kind or
            nature whatsoever, including, but not limited to, reasonable
            attorneys' fees, arising directly, or indirectly, out of a breach of
            this Agreement by INTERVAL, its affiliates, officers, directors,
            employees, agents and representatives, or the failure of INTERVAL to
            provide its exchange program to Individual Members in accordance
            with its published terms and conditions. Notwithstanding the
            foregoing, AFFILIATE and ASSOCIATION each acknowledge and agree that
            INTERVAL's total liability pursuant to this Paragraph shall be
            limited to the fees paid to INTERVAL by AFFILIATE and/or ASSOCIATION
            pursuant to this Agreement.

       2.   AFFILIATE agrees that it will protect, save, keep harmless and
            indemnify INTERVAL against and from any and all claims, demands,
            judgments, damages, suits, losses, penalties, expenses, costs and
            liabilities of any kind or nature whatsoever, including, but not
            limited to, reasonable attorneys' fees, arising directly, or
            indirectly, out of or in connection with (a) a breach of this
            Agreement by AFFILIATE, or its officers, directors, representatives,
            agents, brokers, salespersons, associates or employees; (b) the
            negligence or intentional misconduct of AFFILIATE, or its officers,
            directors, representatives, agents, brokers, salespersons,
            associates or employees; or (c) the operation/management of the
            PROJECT, including, but not limited to, any claims made against
            INTERVAL for personal or bodily injury occurring at the PROJECT.

       3.   ASSOCIATION agrees that it will protect, save, keep harmless and
            indemnify INTERVAL against and from any and all claims, demands,
            judgments, damages, suits, losses, penalties, expenses, costs and
            liabilities of any kind or nature whatsoever, including, but not
            limited to, reasonable attorneys' fees, arising directly, or
            indirectly, our of or in connection with: (a) a breach of this
            Agreement by ASSOCIATION, its officers, directors, representatives,
            agents, brokers, salespersons, associates or employees; (b) the
            negligence or intentional misconduct of ASSOCIATION, its officers,
            directors, representatives, agents, brokers, salespersons,
            associates or employees; or (c) the operation/management of the
            PROJECT, including, but not limited to, any claims made against
            INTERVAL for personal or bodily injury occurring at the PROJECT.

       4.   The provisions of this Section K shall survive the expiration or
            termination of this Agreement.

<PAGE>

L. WAIVER.

     The failure of a Party to exercise any power given it hereunder or to
insist upon strict compliance with the terms of this Agreement shall not
constitute a waiver of that Party's right to demand exact compliance with the
terms hereof. Waiver by a Party of any particular default by the other shall not
affect or impair its rights with respect to any subsequent defaults of the same
or of a different kind; nor shall any delay or omission by a Party to exercise
any rights arising from any default affect or impair its right as to such
default or any future default. Further, no custom or course of dealings of the
Parties at variance with the terms hereof shall constitute a waiver of that
Party's right to demand later compliance.

M. MISCELLANEOUS.

       1.   All notices provided for by this Agreement shall be deemed given if
            in writing and delivered by hand, air express, or by registered or
            certified mail, return receipt requested, to the addresses set forth
            on page one of this Agreement or to such other address as may be
            specified in accordance with this procedure.

       2.   Time shall be of the essence as to all provisions of this Agreement.

       3.   Should any part of this Agreement be declared invalid or
            unenforceable for any reason, it shall be adjusted rather than
            voided, if possible, to achieve the intent of the Patties. Any
            invalidity resulting from the length of a period of time shall be
            considered reduced to a period of time which would cure such
            invalidity. In any event, the invalidity of any provision of this
            Agreement, shall not affect any other provision of this Agreement
            which shall be deemed valid and enforceable to the greatest extent
            possible.

       4.   This Agreement shall be construed under the laws of the State of
            Florida. The Parties acknowledge and agree that the Courts of Dade
            County, Florida have proper and exclusive jurisdiction over the
            Parties and the subject matter hereof, unless INTERVAL determines in
            its sole discretion that the action should be brought in the
            jurisdiction in which AFFILIATE, ASSOCIATION or the PROJECT is
            located.

       5.   This Agreement is exclusively between and for the benefit of
            INTERVAL, AFFILIATE, and ASSOCIATION. Nothing herein shall be
            construed to make any purchaser, Exchange Guest, Individual Member
            or other individuals or entities, third party beneficiaries to this
            Agreement.

       6.   All Parties acknowledge and agree that nothing contained in this
            Agreement shall be construed to create a joint venture, partnership,
            franchise or agency and no Party shall have the power or authority
            to bind or obligate any other Party.

       7.   The headings and captions in this Agreement are for convenience only
            and shall not be referred to in the interpretation of this
            Agreement.

       8.   This Agreement may be executed in counterparts, each of which shall
            be deemed an original but all of which taken together shall
            constitute one and the same Agreement.

       9.   If more than one person or entity constitutes AFFILIATE hereunder,
            such persons or entities shall be jointly and severally liable for
            each and every obligation of AFFILIATE under this Agreement. Further
            the failure of an entity to execute this Agreement on behalf of
            ASSOCIATION shall have no effect upon AFFILIATE's obligations
            pursuant to this Agreement.

       10.  This Agreement shall be construed without regard to any presumption
            or other rule requiring construction against the Party causing this
            Agreement to be drafted.

       11.  In the event of doubt or discrepancy between the English text of
            this Agreement and the text of this Agreement in other languages,
            the English text shall prevail. AFFILIATE and ASSOCIATION, by
            signing below, hereby acknowledge receipt of a copy of this
            Agreement in the English language.

       12.  This Agreement contains the entire agreement of the Parties, with
            respect to the subject matter hereof, and supersedes any oral or
            written representation, inducement or promise not contained herein
            and may not be modified, except in writing signed by the Party
            against whom enforcement is sought.

<PAGE>

IN WITNESS WHEREOF, the Parties have hereunto set their hands and seals.

AFFILIATE:

By: /s/ BRUCE HAGEDORN                       Attest:
    ------------------------------------             ---------------------------
            Authorized Officer

Bruce Hagedorn, President
----------------------------------------
              Name and Title

----------------------------------------
                  Date

ASSOCIATION:

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

----------------------------------------
              Name and Title

----------------------------------------
                  Date

Accepted in Miami, Florida this 3 day of October, 1997:

INTERVAL INTERNATIONAL, INC.

By: /s/ CRAIG M. NASH
    ------------------------------------
                  Authorized Officer
    Craig M. Nash

   President & Chief Executive Officer
----------------------------------------
              Name and Title

<PAGE>

                 FIRST ADDENDUM TO RESORT AFFILIATION AGREEMENT

THIS FIRST ADDENDUM TO RESORT AFFILIATION AGREEMENT (this "First Addendum") is
attached to and made a part of that certain Resort Affiliation Agreement with an
effective date of October 3, 1997 (the "Agreement") by and between INTERVAL
INTERNATIONAL, INC., a Florida corporation ("Interval"); and BEARTOWN
DEVELOPMENT, INC., a Pennsylvania corporation ("Affiliate"), for the vacation
ownership resort program known as Oak 'n Spruce Resort (the "Project"). Interval
and Affiliate are sometimes jointly referred to as the "Parties".

The Parties to the Agreement mutually agree as follows:

1.         Each of the Parties acknowledges that SILVERLEAF RESORTS, INC., a
           Texas corporation, is the successor developer for the Project and the
           successor in interest with respect to contracts related to the
           Project, in particular, the Agreement. Each of the Parties
           acknowledges and agrees, therefore, that each reference to Affiliate
           in the Agreement and in each and every addenda thereto and in the
           Resort Membership Application in connection with the Project
           (collectively, the "Affiliation Agreements") shall hereafter be a
           reference to the development entity SILVERLEAF RESORTS, INC.

2.         Where there is a conflict between the terms and conditions of this
           First Addendum and the terms and conditions of the Affiliation
           Agreements, the terms and conditions of this First Addendum control.
           All other terms and conditions and definitions of the Affiliation
           Agreements shall be applied to and made part of this First Addendum.

IN WITNESS WHEREOF, the parties have hereunto set their hands and seals.
SILVERLEAF RESORTS, INC.

By: /s/ ROBERT LEVY                          Attest:  /s/ DANA BOOTH
   --------------------------------------             --------------------------
Print Name: Robert Levy
            -----------------------------
Title: VP Resort Oper.
       ----------------------------------
Date: 9-15-98
      -----------------------------------

<PAGE>

INTERVAL INTERNATIONAL, INC.:

Accepted in Miami, Florida this 6 day of October, 1998.

By: /s/ JEANETTE E. MARBERT
    -----------------------------------
Print Name: Jeanette E. Marbert
            ---------------------------
Title: Executive Vice President
       --------------------------------

<PAGE>

                    ADDENDUM TO RESORT AFFILIATION AGREEMENT

           THIS ADDENDUM (this "Addendum") is attached to and made a part of the
Resort Affiliation Agreement (the "Agreement") with an effective date of October
3, 1997 by and between INTERVAL INTERNATIONAL, INC., a Florida corporation
("INTERVAL"), and SILVERLEAF RESORTS, INC., a Texas corporation ("AFFILIATE"),
for the resort vacation ownership program known as Oak 'n Spruce (the
"PROJECT'). INTERVAL and AFFILIATE are sometimes referred to as the "Parties".

           NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Parties agree
as follows:

1.         Except as expressly indicated to the contrary herein, all capitalized
           terms used herein shall have the same meanings ascribed to them in
           the Agreement.

2.         AFFILIATE may purchase from INTERVAL short notice certificates (the
           "Certificates"), at a price of twenty dollars ($20.00) per
           Certificate, subject to and in accordance with the following terms
           and conditions:

           (a)    Each Certificate shall entitle the recipient to submit a short
                  notice exchange request (30 days or less in advance of the
                  desired travel dates) through the INTERVAL NETWORK under the
                  conditions set forth herein.

           (b)    A Certificate may only be given to an owner of a Vacation
                  Interest at the PROJECT. AFFILIATE may provide only one such
                  Certificate per Vacation Interest sold to each owner.

           (c)    Upon delivering a Certificate to an Individual Member,
                  AFFILIATE shall fill in the Member Name and Membership Number,
                  as appropriate, and issue the Certificate to such Individual
                  Member.

           (d)    Certificates may only be utilized if the owner has an active
                  Individual Membership at time of redemption and through the
                  actual travel dates.

           (e)    Each Certificate shall bear an expiration date of one year
                  from the date of issuance.

           (f)    The Individual Member must travel prior to the stated
                  expiration date of the respective Certificate.

           (g)    All Terms and Conditions of Individual Membership and Exchange
                  which are in existence as of the date of redemption of each
                  certificate shall apply, except that there will be no
                  requirement for an Individual Member to relinquish a week.

           (h)    Individual Members will be required to pay a redemption fee of
                  one hundred forty-nine and no/100 United States Dollars
                  ($149.00 US), plus tax, if applicable, in order to redeem a
                  Certificate. INTERVAL shall have the right to increase the
                  redemption fee for Certificates which have not yet been
                  ordered by AFFILIATE upon prior notice to AFFILIATE.

           (i)    INTERVAL shall not be required to compensate AFFILIATE in the
                  event any Certificates are not delivered by AFFILIATE to the
                  owners or redeemed prior to expiration.

<PAGE>

           (j)    Certificates may not be sold or exchanged for cash, barter or
                  other consideration.

           (k)    Certificates may be redeemed only by the individual named on
                  the Certificate. Guest Certificates may not be purchased in
                  conjunction with the redemption of a Certificate.

           (l)    Certificates may not be redeemed for accommodations at the
                  PROJECT.

           (m)    Each Certificate will contain a "grid" setting forth
                  anticipated available vacation destinations by season, which
                  grid will be revised from time to time by INTERVAL based upon
                  then-anticipated availabilities High demand areas such as
                  Hawaii, Southern California and ski destinations and peak
                  travel times such as Holiday, summer (June, July and August),
                  school vacation and other popular vacation periods, are not
                  likely to be included on said "grid".

           (n)    Certificates may be redeemed only for travel to destinations
                  appearing in the grid. The use of the Certificates is subject
                  to space availability, and INTERVAL cannot guarantee the
                  fulfillment of a specific request.

           (o)    All Certificates may be ordered for an initial period of
                  twelve (12) months from the effective date of this Addendum.
                  Thereafter, AFFILIATE may continue to order Certificates for
                  additional periods of twelve (12) months unless INTERVAL gives
                  AFFILIATE written notice, at least thirty (30) days prior to
                  the expiration of the initial period of this Addendum or of
                  any subsequent renewal period, of its intent not to continue
                  to make Certificates available to AFFILIATE. Orders for
                  Certificates may not be made more than once a month and each
                  such order shall be for at least twenty (20) Certificates. The
                  total number of Certificates which AFFILIATE may order during
                  a twelve month period shall be limited to the total number of
                  new Individual Members enrolled by AFFILIATE during such
                  twelve month period. Notwithstanding the forgoing or anything
                  to the contrary set forth herein, INTERVAL shall have the
                  right after the expiration of the first twelve (12) months
                  from the effective date of this Addendum and upon not less
                  than six (6) months prior written notice to AFFILIATE, to
                  discontinue AFFILIATE's right to receive Certificates in the
                  event that INTERVAL determines, in the exercise of its
                  reasonable business judgment, that issuance of the
                  Certificates will adversely affect the INTERVAL NETWORK,
                  including INTERVAL's ability to fulfill exchange requests
                  placed by INTERVAL's individual members.

           (p)    INTERVAL reserves the right to increase the price at which
                  AFFILIATE may purchase the Certificates after the first six
                  months following the effective date of this Addendum.

3.         Where there is a conflict between the terms and conditions of this
           Addendum and the terms and conditions of the Agreement, the terms and
           conditions of this Addendum control. All other terms and conditions
           and definitions of the Agreement shall be applied to and made a part
           of this Addendum.

<PAGE>

IN WITNESS WHEREOF, the Parties have hereunto set their hands and seals.

SILVERLEAF RESORTS, INC.

By: /s/ ROBERT LEVY
    -----------------------------------------------
Name and Title: Robert Levy, V.P. Resort Operations
                -----------------------------------
Date: 9-15-98
      ---------------------------------------------

Accepted in Miami, Florida, this 6 day of October, 1998.

INTERVAL INTERNATIONAL, INC.

By: /s/ JEANETTE E. MARBERT
    ----------------------------------
Print Name: Jeanette E. Marbert
            --------------------------
Title: Executive Vice President
       -------------------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00053-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00053-of-00352.parquet"}]]