8-B12B

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                     SECURITIES AND EXCHANGE COMMISSION
                            Washington, DC 20549

                                  FORM 8-A

             FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
                 PURSUANT TO SECTION 12(b) OR 12(g) OF THE
                      SECURITIES EXCHANGE ACT OF 1934


                           U.S. HOME CORPORATION
           (Exact name of registrant as specified in its charter)

 
                    Delaware                                 21-0718930
      State of incorporation or organization)              (I.R.S. Employer
                                                        Identification No.)





                 1800 West Loop South, Houston, Texas 77027
            (Address of principal executive offices) (Zip Code)

         If this  Form  relates  to the  registration  of a  class  of debt
securities  and is effective  upon filing  pursuant to General  Instruction
A(c)(1), please check the following box. |_|

         If this  Form  relates  to the  registration  of a  class  of debt
securities and is to become effective simultaneously with the effectiveness
of a concurrent  registration  statement  under the  Securities Act of 1933
pursuant to General  Instruction  A(c)(2),  please check the following box.
|_|

         Securities to be registered pursuant to Section 12(b) of the Act:

             Title of each class           Name of each exchange on which
             to be so registered           each class is to be registered

        Preferred Stock Purchase Rights       New York Stock Exchange



     Securities to be registered pursuant to Section 12(g) of the Act:

                                    None
                              (Title of Class)

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Item 1.  Description of Registrant's Securities to be Registered.

                  On November 7, 1996,  the Board of Directors  (the "Board
of Directors") of U.S. Home Corporation (the "Company") declared a dividend
distribution  of one  preferred  stock  purchase  right  ("Right") for each
outstanding  share of the Company's Common Stock,  $.01 par value per share
("Common Stock"),  and each outstanding share of the Company's  Convertible
Redeemable  Preferred  Stock,  $.10 par value per share  (the  "Convertible
Preferred  Stock" and,  collectively  with the Common Stock,  the "Stock"),
held by stockholders  of  record on December 4, 1996. Each Right,  when it
becomes  exercisable,  entitles the registered  holder to purchase from the
Company at any time following the Distribution  Date (as defined below) and
prior to the  occurrence  of a Triggering  Event (as defined  below) a unit
consisting  of one  one-hundredth  of a share (a "Unit")  of the  Company's
Series A Junior  Non-Cumulative  Preferred Stock,  $.10 par value per share
(the  "Preferred  Stock"),  at a price  of  $80.00  per  Unit,  subject  to
adjustment (the "Purchase Price").  The description and terms of the Rights
are set  forth in a Rights  Agreement,  dated as of  November  7, 1996 (the
"Rights Agreement"), between the Company and First Chicago Trust Company of
New York, as Rights Agent.

                  Until the  earlier to occur of (i) 10 days after the date
on  which  there  is a public  announcement  that (a) a person  or group of
affiliated or associated  persons (other than a person who is and continues
at all times to be eligible under Rule 13d-1 under the Securities  Exchange
Act of 1934 as in  effect  on the date of the  Rights  Agreement  to file a
Schedule  13G  with  respect  to its  ownership  of the  Common  Stock  (an
"Institutional  Stockholder"))  has acquired,  or has the right to acquire,
beneficial  ownership  of 15% or more of the  outstanding  shares of Common
Stock or (b) an  Institutional  Stockholder,  including its  affiliates and
associates,  has acquired or has the right to acquire beneficial  ownership
of 20% or more of the  outstanding  shares  of  Common  Stock  (any  person
described in clause (a) or (b) being referred to as an "Acquiring Person"),
or (ii) 10  business  days (or such  later  date as the Board of  Directors
shall  determine  prior to such time as any  person or group of  affiliated
persons  becomes an Acquiring  Person)  following the  commencement  of, or
announcement  of an  intention  to make,  a tender  or  exchange  offer the
consummation  of which  would  result  in a person  or group of  affiliated
persons  beneficially  owning 15% or more of the then outstanding shares of
Common Stock (including any such date which is after the date of the Rights
Agreement  and prior to the  issuance  of the  Rights;  the earlier of such
dates being called the "Distribution  Date"),  the Rights,  with respect to
any share of Stock  outstanding as of the Record Date,  will be attached to
the  certificate  for such Stock and no separate  Rights  Certificates  (as
defined below) will be distributed.


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                  Until the  Distribution  Date (or earlier  redemption  or
expiration of the Rights), (i) the Rights will be transferred with and only
with the  shares of Stock,  (ii) new Stock  certificates  issued  after the
Record Date upon  transfer  or  issuance  of Stock will  contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Stock outstanding will also constitute the
transfer  of the  Rights  associated  with the  Stock  represented  by such
certificate.  As soon  as  practicable  following  the  Distribution  Date,
separate certificates evidencing the Rights ("Rights Certificates") will be
mailed to holders of record of the Stock as of the close of business on the
Distribution  Date  and  such  separate  Rights   Certificates  alone  will
represent  the  Rights.  Pursuant  to the  Rights  Agreement,  the  Company
reserves the right to require prior to the occurrence of a Triggering Event
(as defined below) that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock will be issued.

                  The Rights  are not  exercisable  until the  Distribution
Date and will  expire at the close of  business  on  November  7, 2006 (the
"Final Expiration  Date"),  unless the Final Expiration Date is extended or
unless the Rights are earlier redeemed or exchanged by the Company, in each
case, as described below.

                  In the event that a person or group of affiliated persons
becomes an Acquiring  Person,  each holder of a Right (the "Flip-In Right")
will  thereafter  have the right to receive,  upon exercise,  the number of
shares of Common  Stock or of  one-one-hundredths  of a share of  Preferred
Stock (or, in certain circumstances,  cash, property or other securities of
the  Company)  having  a value  equal  to two  times  the  Purchase  Price.
Notwithstanding any of the foregoing,  following the occurrence of any such
event,  all Rights that are, or (under certain  circumstances  specified in
the Rights Agreement) were,  beneficially owned by any Acquiring Person (or
any affiliate or associate thereof) will be null and void.

                  For example,  at an exercise price of $80 per Right, each
Right not owned by an  Acquiring  Person (or by any  affiliate or associate
thereof)  following  an event set forth in the  preceding  paragraph  would
entitle  its  holder  to  purchase  $160  worth of  Common  Stock (or other
consideration,  as noted above) for $80. Assuming that the Common Stock had
a per share value of $20 at such time, the holder of each valid Right would
be entitled to purchase eight shares of Common Stock for $80.

                  In the event that, at any time after a person or group of
affiliated  persons  has become an  Acquiring  Person,  (i) the  Company is
acquired in a merger or other business combination  transaction or (ii) 50%
or more of the Company's  assets or earning  power is sold or  transferred,
each holder of a Right (except Rights which  previously have been voided as
set forth above) shall thereafter have the right (the "Flip-Over Right") to
receive,  upon  exercise,  common stock of the acquiring  company  having a
value  equal to two times the  Purchase  Price.  The holder of a Right will
continue to have the Flip-Over  Right whether or not such holder  exercises
or surrenders the Flip-In Right. The events set forth in this paragraph and
in the  second  preceding  paragraph  are  referred  to as the  "Triggering
Events."


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                  The Purchase  Price  payable,  and the number of Units of
Preferred  Stock,  shares of Common Stock or other  securities  or property
issuable,  upon exercise of the Rights are subject to adjustment  from time
to time to prevent  dilution (i) in the event of a stock  dividend on, or a
subdivision,  combination or reclassification of, the Preferred Stock, (ii)
if holders of the Preferred Stock are granted certain rights or warrants to
subscribe for Preferred  Stock or  convertible  securities at less than the
current market price of the Preferred Stock, or (iii) upon the distribution
to holders of the Preferred  Stock of evidences of  indebtedness  or assets
(excluding  regular quarterly cash dividends) or of subscription  rights or
warrants (other than those referred to above).

                  With certain  exceptions,  no  adjustment in the Purchase
Price will be required until cumulative  adjustments  amount to at least 1%
of the  Purchase  Price.  No  fractional  Units will be issued and, in lieu
thereof,  an  adjustment  in cash will be made based on the market price of
the Preferred Stock on the last trading date prior to the date of exercise.

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

                  Shares of the Preferred Stock  purchasable  upon exercise
of the  Rights  are not  redeemable.  Each  share of  Preferred  Stock will
entitle  its holder to  dividends  as, when and if declared by the Board of
Directors  of $1 per share per quarter but will be entitled to an aggregate
dividend of 100 times the dividend  declared on a share of Common Stock. In
the event of  liquidation,  the  holders  of the  Preferred  Stock  will be
entitled to a minimum  preferential  liquidation payment of $100 per share,
plus  accrued and unpaid  dividends,  but will be entitled to an  aggregate
payment of 100 times the payment made per share of Common Stock. Each share
of Preferred  Stock will have 100 votes,  voting  together  with the Common
Stock and Convertible Preferred Stock. Finally, in the event of any merger,
consolidation or other  transaction in which the Common Stock is exchanged,
each share of the Preferred Stock will be entitled to receive 100 times the
amount  received per share of the Common Stock.  These rights are protected
by customary antidilution provisions.

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


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                  The shares of the Preferred Stock will rank, with respect
to the  payment of  dividends  and as to the  distribution  of assets  upon
liquidation,  dissolution or winding up of the Company, junior to all other
series of preferred stock of the Company,  including,  without  limitation,
the  Convertible  Preferred  Stock,  unless the Board of  Directors  should
specifically  determine  otherwise  in fixing the powers,  preferences  and
relative, participating, optional and other special rights of the shares of
any such other series in the  qualifications,  limitations and restrictions
thereof.

                  At any time  after any person or group of  affiliated  or
associated persons becomes an Acquiring Person and prior to the acquisition
by such  person  or group  of  beneficial  ownership  of 50% or more of the
outstanding  Common  Stock,  the Board of Directors may exchange the Rights
(other than Rights  owned by the  Acquiring  Person  which will have become
void),  in whole or in part,  at an  exchange  ratio of one share of Common
Stock or one Unit (or of a share  of a class  or  series  of the  Company's
preferred stock having equivalent  rights,  preferences and privileges) per
Right (subject to adjustment).

                  At any time  prior to such time as any person or group of
affiliated or associated  persons becomes an Acquiring Person,  the Company
may  redeem the  Rights in whole,  but not in part,  at a price of $.01 per
Right (the  "Redemption  Price")  (payable in cash,  Common  Stock or other
consideration  deemed  appropriate by the Board of Directors).  Immediately
upon the  action  of the  Board of  Directors  ordering  redemption  of the
Rights,  the Rights  will  terminate  and the only right of the  holders of
Rights will be to receive the Redemption Price.

                  Until a Right is exercised,  the holder thereof, as such,
will have no rights as a  stockholder  of the Company,  including,  without
limitation,   the  right  to  vote  or  to  receive  dividends.  While  the
distribution  of the Rights will not be taxable to  stockholders  or to the
Company,  stockholders  may,  depending upon the  circumstances,  recognize
taxable income in the event that the Rights become  exercisable  for Common
Stock (or other  consideration)  of the Company or for common  stock of the
acquiring company as set forth above.

                  The terms of the  Rights  may be  amended by the Board of
Directors  without the  consent of the holders of Rights,  except that from
and after  such time as any  person or group of  affiliated  or  associated
persons becomes an Acquiring Person, no such amendment may adversely affect
the interests of the holders of Rights.

                  As of October 31, 1996,  there were 11,448,205  shares of
Common Stock and 122,863 shares of Convertible Preferred Stock outstanding,
122,863  shares of Common Stock  issuable upon  conversion of the shares of
Convertible Preferred Stock, 2,253,521 shares of Common Stock issuable upon
conversion of the Company's Convertible  Subordinated  Debentures due 2005,
1,884,773  shares of Common Stock  issuable  upon exercise of the Company's
Class B  Warrants  and  537,500  shares  issuable  upon  exercise  of stock
options. At such time, no shares of Common Stock were held in the Company's
treasury.  Each outstanding share of Common Stock and Convertible Preferred
Stock on the Record Date will receive one Right.  As long as the Rights are
attached  to shares of Stock,  the  Company  will  issue one Right for each

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share  which   becomes   outstanding   between  the  Record  Date  and  the
Distribution  Date so that all shares  will have  attached  Rights  and, in
certain cases described in the Rights Agreement,  the Company may issue one
Right for each share which becomes outstanding after the Distribution Date.
The Board of  Directors  has reserved  for  issuance  upon  exercise of the
Rights 500,000 shares of Preferred Stock.

                  The Rights have certain anti-takeover effects. The Rights
will  cause  substantial  dilution  to a person or group that  attempts  to
acquire  the  Company in a manner or on terms not  approved by the Board of
Directors unless the offer is conditional on a substantial number of Rights
being  acquired.  The Rights,  however,  should not affect any  prospective
offeror  willing to make an offer at a fair price and otherwise in the best
interests of the Company and its stockholders as determined by the Board of
Directors or willing to negotiate  with the Board of Directors.  The Rights
should not interfere with any merger or other business combination approved
by the Board of Directors  since the Board of Directors may, at its option,
at any time  until a  person  or group of  affiliated  persons  becomes  an
Acquiring  Person,  redeem  all but not less than all the then  outstanding
Rights at the Redemption Price.

                  The Rights  Agreement  between the Company and the Rights
Agent  specifying the terms of the Rights (which  includes as Exhibit A the
Certificate of Designations,  Preferences and Rights, as Exhibit B the Form
of Rights  Certificate  and as  Exhibit C the Form of  Summary of Rights to
Purchase  Preferred  Stock)  is  attached  hereto  as  an  exhibit  and  is
incorporated herein by reference.  The foregoing  description of the Rights
does not  purport  to be  complete  and is  qualified  in its  entirety  by
reference to such exhibits.


Item 2.  Exhibits.

1                                   Rights  Agreement,  dated as of
                                    November  7,  1996,  between  U.S.  Home
                                    Corporation  and First  Chicago  Trust
                                    Company of New York,  and  exhibits
                                    thereto,   including  as  Exhibit  A
                                    the   Certificate  of   Designations,
                                    Preferences and Rights, as Exhibit B
                                    the Form of Rights  Certificate and as
                                    Exhibit C the Form of Summary of
                                    Rights to Purchase Preferred Stock.






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                                 SIGNATURE

                  Pursuant  to  the  requirements  of  Section  12  of  the
Securities  Exchange  Act of 1934,  the  Registrant  has duly  caused  this
registration  statement  to be  signed on its  behalf  by the  undersigned,
thereto duly authorized.

                           U.S. HOME CORPORATION


                           By:   /s/ Chester P. Sadowski
                                 ------------------------------------------
                                 Name:   Chester P. Sadowski
                                 Title:     Vice President - Controller and
                                 Chief Accounting Officer

Date: November 8, 1996


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                               EXHIBIT INDEX


                                                             Sequential
Exhibit                                                       Page No.
- - -------                                                      -----------


1        Rights Agreement, dated as of November 7, 1996,
         between U.S. Home Corporation and First Chicago
         Trust   Company  of  New  York,   and  exhibits
         thereto, including as Exhibit A the Certificate
         of  Designations,  Preferences  and Rights,  as
         Exhibit B the Form of Rights Certificate and as
         Exhibit  C the Form of  Summary  of  Rights  to
         Purchase Preferred Stock                                   9

EX-1

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                                                            EXHIBIT 1




                           U.S. HOME CORPORATION


                                    and


                  FIRST CHICAGO TRUST COMPANY OF NEW YORK

                                Rights Agent



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


                              Rights Agreement
                        Dated as of November 7, 1996




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                              RIGHTS AGREEMENT


                  RIGHTS AGREEMENT,  dated as of November 7, 1996,  between
U.S. Home Corporation,  a Delaware  corporation (the "Company"),  and First
Chicago Trust Company of New York (the "Rights Agent").

                            W I T N E S S E T H

                  WHEREAS,   on  November  7,  1996,  the  Rights  Dividend
Declaration  Date (as hereinafter  defined),  the Board of Directors of the
Company  (the  "Board of  Directors")  authorized  and  declared a dividend
distribution  of one Right (as  hereinafter  defined) for each share of the
Company's Common Stock (as hereinafter  defined) and Convertible  Preferred
Stock (as  hereinafter  defined)  outstanding  at the Close of Business (as
hereinafter defined) on the Record Date (as hereinafter  defined),  and has
authorized  and directed the issuance of one such Right (as such number may
hereinafter be adjusted) for each share of Stock (as  hereinafter  defined)
that shall become outstanding  between the Record Date (whether  originally
issued or delivered from the Company's  treasury) and the Distribution Date
(as hereinafter defined),  and in certain circumstances provided in Section
22  hereof,   after  the  Distribution  Date,  each  such  Right  initially
representing the right to purchase one one-hundredth of a share of Series A
Junior  Non-Cumulative  Preferred Stock of the Company,  having the rights,
powers  and   preferences   set  forth  in  the  form  of   Certificate  of
Designations, Preferences and Rights attached hereto as Exhibit A, upon the
terms and subject to the conditions hereinafter set forth (the "Rights");

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

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


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            1.1   "Acquiring Person" shall  mean  any (i) Person (other than
an Institutional Stockholder)  who or which,  together  with  all Affiliates
and Associates of such Person,  shall be the Beneficial Owner of 15% or more
of the shares of the Company's  Common Stock then outstanding or  was such a
Beneficial  Owner  at  any  time after the date hereof,  whether or not such
Person continues to be the Beneficial  Owner of 15% or more of the Company's
then  outstanding  Common  Stock, or (ii)  Institutional  Stockholder who or
which, together with all Affiliates and  Associates  of  such  Institutional
Stockholder,  shall be the Beneficial  Owner  of  20%  or more of the shares
of the Company's  Common Stock then outstanding  or was  such  a  Beneficial
Owner at any time after the date hereof, whether or  not  such Institutional
Stockholder continues to be the  Beneficial  Owner  of 20% or  more  of  the
Company's  then  outstanding Common Stock, but  shall  not  include (a)  the
Company,  (b) any  Subsidiary of  the  Company,  (c)  any  employee  benefit
plan of the  Company  or  of  any  Subsidiary  of  the  Company  or (d)  any
Person organized,  appointed  or  established by the Company for or pursuant
to the terms of any such plan;  provided,  that "Acquiring Person" shall not
include any Person who becomes an  Acquiring  Person  solely as a  result of
a reduction in the number of shares of the Company's Common Stock outstanding
due to the repurchase of shares of Common Stock by the  Company,  unless and
until such Person or an Affiliate  or Associate  thereof  shall  purchase or
otherwise  become  the  Beneficial   Owner of  additional  shares  of Common
Stock of  the  Company.  Notwithstanding  the  foregoing, if  the  Board  of
Directors determines in good faith that a Person who would otherwise  be  an
"Acquiring Person" as defined pursuant to the  foregoing  provisions of this
Section 1.1, has become  such  inadvertently,  and such  Person  divests  as
promptly as practicable a sufficient number of shares of the Company's Common
Stock  so  that such  Person  would no longer be an  "Acquiring  Person," as
defined  pursuant to this Section 1.1,  then such Person shall not be deemed
to be an "Acquiring Person" for any purposes of this Agreement.

            1.2  "Act" shall mean the Securities Act of 1933, as amended.

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

            1.4  "Affiliate" shall have the meaning ascribed to such term in
Rule 12b-2 under the Exchange Act as in effect on the date of this Agreement.

            1.5  "Agreement" shall mean this Rights Agreement, as the same may
be amended, supplemented or modified from time to time.

            1.6  "Associate" shall have the meaning ascribed to such term in
Rule 12b-2 under the Exchange Act as in effect on the date of this Agreement.

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

          (i) which  such  Person  or any of such  Person's  Affiliates  or
     Associates,  directly or indirectly, has the right to acquire (whether
     such right is  exercisable  immediately  or only after the  passage of
     time) pursuant to any agreement, arrangement or understanding (whether

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     or not in writing) or upon the exercise of conversion rights, exchange
     rights, rights, warrants or options, or otherwise;  provided, however,
     that a Person  shall not be deemed  the  "Beneficial  Owner" of, or to
     "beneficially  own," (A) securities  tendered  pursuant to a tender or
     exchange  offer  made by or on  behalf  of such  Person or any of such
     Person's  Affiliates or Associates until such tendered  securities are
     accepted for purchase or exchange,  or (B)  securities  issuable  upon
     exercise of Rights at any time prior to the occurrence of a Triggering
     Event,  or (C)  securities  issuable  upon exercise of Rights from and
     after the occurrence of a Triggering  Event which Rights were acquired
     by such Person or any of such Person's  Affiliates or Associates prior
     to the  Distribution  Date or pursuant  to Section  3(a) or Section 22
     hereof (the "Original  Rights") or pursuant to Section 11(i) hereof in
     connection  with an  adjustment  made  with  respect  to any  Original
     Rights;

          (ii)  which such  Person or any of such  Person's  Affiliates  or
     Associates,  directly or indirectly,  has the right to vote or dispose
     of or has  "beneficial  ownership" of (as determined  pursuant to Rule
     13d-3  under  the  Exchange  Act as in  effect  on the  date  hereof),
     including  pursuant to any agreement,  arrangement  or  understanding,
     whether or not in writing; provided,  however, that a Person shall not
     be deemed the  "Beneficial  Owner" of, or to  "beneficially  own," any
     security  under this  subparagraph  (ii) as a result of an  agreement,
     arrangement or  understanding to vote such security if such agreement,
     arrangement or understanding: (A) arises solely from a revocable proxy
     or  consent  given to such  Person in  response  to a public  proxy or
     consent  solicitation  made pursuant to, and in accordance  with,  the
     applicable  provisions  of the Exchange  Act, and (B) is not also then
     reportable  by such Person on Schedule  13D under the Exchange Act (or
     any  comparable  or  successor  schedule  or  report);  or

          (iii)  which are beneficially owned,  directly or indirectly,  by
     any other Person (or any  Affiliate or Associate  thereof)  with which
     such Person (or any of such Person's Affiliates or Associates) has any
     agreement,  arrangement or understanding  (whether or not in writing),
     for the purpose of acquiring,  holding, voting (except as described in
     the proviso to the preceding  subparagraph) or disposing of any voting
     securities  of the Company;  provided,  however,  that nothing in this
     subparagraph   shall  cause  a  Person   engaged  in  business  as  an
     underwriter  of  securities  to be the  "Beneficial  Owner"  of, or to
     "beneficially  own," any  securities  acquired  through such  Person's
     participation  in good faith in a firm commitment  underwriting  until
     the expiration of 40 days after the date of such acquisition.

            Notwithstanding  anything  in  this  definition  of  Beneficial
Ownership to the contrary,  the phrase "then  outstanding,"  when used with
reference to a Person's Beneficial Ownership  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.


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            1.8  "Board of Directors" shall have the meaning set forth in the
WHEREAS clause hereof.

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

           1.10  "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.

           1.11  "Common Stock" when used with reference to the Company shall
mean the common stock,  $.01 par value per  share,  of the Company,  or, in
the event of a subdivision,  combination or  consolidation  with respect to
such shares of common stock,  the shares resulting  from such  subdivision,
combination or consolidation.  "Common Stock" when used with reference to any
Person  other  than   the  Company  shall mean the capital stock (or equity
interest) with the greatest voting power of such other Person,  or, if such
other Person is a Subsidiary  of  another  Person,  the  Person or  Persons
which  ultimately control such first-mentioned Person.

           1.12  "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.

           1.13  "Company" shall have the meaning set forth in the
introductory paragraph hereof.

           1.14  "Convertible Preferred Stock"  shall  mean the convertible
redeemable preferred  stock,  $.10 par value  per  share,  of  the  Company,
or, in the event of a subdivision, combination or consolidation with respect
to  such  shares  of  convertible  redeemable  preferred  stock,  the shares
resulting from such subdivision, combination or consolidation.

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

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

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

           1.18  "equivalent preferred shares" shall have the meaning set
forth in Section 11(b) hereof.

           1.19  "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.

           1.20  "Exchange Ratio" shall have the meaning set forth in
Section 24 hereof.


 14

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

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

           1.23  "Institutional Stockholder" shall mean any Person who is
and continues to be eligible under Rule 13d-1 under the Exchange Act as in
effect on the date hereof to file a Schedule  13G with respect to such
Person's  ownership of the Common Stock.

           1.24  "NASDAQ" shall have the meaning set forth in Section 11
(d)(i) hereof.

           1.25  "Original Rights" shall have the meaning set forth in
Section 1.7(i) hereof.

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

           1.27  "Preferred Stock" shall mean shares of Series A Junior
Non-Cumulative Preferred  Stock, $.10 par value per share,  of the Company
having the relative  rights,  preferences and limitations set forth in the
Certificate of Designations attached to this Agreement as Exhibit A, and,
to the extent that there are not a sufficient number of shares of Series A
Junior Non-Cumulative  Preferred  Stock  authorized to permit the full
exercise of the Rights,  any other series of Preferred Stock, $.10 par value
per share, of the Company designated for such purpose containing terms
substantially similar to the terms of the Series A Junior Non-Cumulative
Preferred Stock.

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

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

           1.30  "Record Date" shall be December 4, 1996.

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

           1.32  "Rights" shall have the meaning set forth in the WHEREAS
clause hereof.

           1.33  "Rights Agent" shall have the meaning set forth in the
introductory paragraph hereof.

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

           1.35  "Rights Dividend Declaration Date" shall mean November 7,
1996.
 15

           1.36  "Section 11(a)(ii) Event" shall mean any event described
in Section 11(a)(ii) hereof.

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

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

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

           1.40  "Stock" shall mean the shares of the Company's Common Stock
and Convertible Preferred Stock.

           1.41  "Stock 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 the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.

           1.42  "Subsidiary" of any Person shall mean any corporation or
other Person of which a majority of the voting  power of the voting  equity
securities  or equity  interest  is  owned,  directly  or  indirectly,  by
such  Person or otherwise controlled by such Person.

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

           1.44  "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.

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

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

     Section 2.  Appointment of Rights Agent.  The Company hereby  appoints
the Rights  Agent to act as agent for the  Company  and the  holders of the
Rights  (who,  in  accordance  with  Section 3 hereof,  shall  prior to the
Distribution  Date also be the holders of the Stock) in accordance with the
terms and  conditions  hereof,  and the Rights  Agent  hereby  accepts such
appointment.  The  Company  may from time to time  appoint  such  co-Rights
Agents as it may deem necessary or desirable.

     Section 3.  Issue of Rights Certificates.  (a) Until the earlier of (i)
the Close of  Business  on the tenth day after the Stock  Acquisition  Date
(or, if the tenth day after the Stock  Acquisition  Date occurs  before the
Record  Date,  the Close of Business on the Record Date) and (ii) the Close
of Business on the tenth  Business  Day (or such later date as the Board of
Directors  shall  determine  prior to such time as any  Person  becomes  an
Acquiring  Person) after the date of the  commencement by any Person (other

 16

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 or entity
organized,  appointed or  established by the Company for or pursuant to the
terms of any such  plan)  of, or of the first  public  announcement  of the
intention of any Person  (other than the  Company,  any  Subsidiary  of the
Company,  any employee  benefit plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan) to  commence,  a
tender or exchange  offer the  consummation  of which  would  result in any
Person becoming an Acquiring Person (including any such date which is after
the date of this  Agreement  and prior to the  issuance of the Rights;  the
earlier  of (i) and (ii)  being  herein  referred  to as the  "Distribution
Date"),  (x) the Rights will be evidenced  (subject to Section 3(b) hereof)
by the  certificates  for the Stock  registered in the names of the holders
thereof  and not by  separate  Rights  Certificates,  and (y) the  right to
receive Rights  Certificates  will be transferable  only in connection with
the transfer of the underlying shares of Stock (including a transfer to the
Company).  As soon as practicable after the Distribution  Date, the Company
will  prepare  and  execute,  the Rights  Agent will  countersign,  and the
Company will send or cause to be sent by first-class, postage-prepaid mail,
to each  record  holder  of the Stock as of the  Close of  Business  on the
Distribution  Date,  at the address of such holder  shown on the records of
the Company,  one or more right certificates,  in substantially the form of
Exhibit B hereto (the "Rights Certificates"), evidencing one Right for each
share of Stock so held, subject to adjustment as provided herein. As of and
after the  Distribution  Date, the Rights will be evidenced  solely by such
Rights Certificates.

     (b)  On the Record Date or as promptly as practicable  thereafter,  the
Company will send a copy of a Summary of Rights,  in substantially the form
of  Exhibit  C  hereto  (the   "Summary  of   Rights"),   by   first-class,
postage-prepaid mail, to each record holder of the Stock as of the Close of
Business on the Record  Date,  at the  address of such holder  shown on the
records  of the  Company.  With  respect  to  certificates  for  the  Stock
outstanding as of the Record Date, until the Distribution  Date, the Rights
will be evidenced by such certificates for Stock registered in the names of
the  holders  thereof  and  together  with a copy of the  Summary of Rights
attached  hereto,  the  registered  holders of the Stock  shall also be the
registered  holders  of the  associated  Rights.  Until the  earlier of the
Distribution Date or the Expiration Date, the surrender for transfer of any
certificate  for shares of Stock  outstanding  on the Record Date,  with or
without  a copy of the  Summary  of Rights  attached  thereto,  shall  also
constitute the transfer of the Rights  associated with such shares of Stock
represented thereby.

     (c)  Certificates  for  Stock  which  become  outstanding  (including,
without  limitation,  reacquired  Stock referred to in the last sentence of
this  Section  3(c))  after the Record Date but prior to the earlier of the
Distribution  Date or the  Expiration  Date,  or, in certain  circumstances
provided in Section 22 hereof,  after the Distribution Date shall be deemed
to be certificates for Rights, and shall bear the following legend:


 17

               This  certificate  also  evidences  and  entitles the holder
          hereof to  certain  Rights as set forth in the  Rights  Agreement
          between U.S. Home  Corporation  (the "Company") and First Chicago
          Trust  Company  of New York  (the  "Rights  Agent"),  dated as of
          November  7, 1996 (as the same may be amended  from time to time,
          the   "Rights   Agreement"),   the  terms  of  which  are  hereby
          incorporated  herein by reference  and a copy of which is on file
          at  the   principal   offices  of  the  Company.   Under  certain
          circumstances,  as set forth in the Rights Agreement, such Rights
          will be evidenced by separate  certificates and will no longer be
          evidenced  by this  certificate.  The  Company  will  mail to the
          holder of this certificate a copy of the Rights Agreement,  as in
          effect on the date of mailing,  without charge after receipt of a
          written request therefor.  Under certain  circumstances set forth
          in the Rights Agreement, Rights issued to, or held by, any Person
          who is, was or becomes an  Acquiring  Person or any  Affiliate or
          Associates  thereof  (as such  terms are  defined  in the  Rights
          Agreement), whether currently held by or on behalf of such Person
          or by any  subsequent  holder,  may  become  null and void.

With  respect  to  such  certificates  containing   the  foregoing  legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration Date,
the Rights associated with the Stock represented by such certificates shall
be evidenced by such certificates  alone, and the surrender for transfer of
any such  certificate  shall also  constitute  the  transfer  of the Rights
associated  with the Stock  represented  thereby.  In the event the Company
purchases  or  acquires  any Stock  (including,  without  limitation,  upon
conversion or redemption of any share of Convertible Preferred Stock) after
the Record Date but prior to the Distribution  Date, any Rights  associated
with such Stock shall be deemed  cancelled  and retired so that the Company
shall not be entitled to exercise any Rights associated with the Stock
which is no longer outstanding.

     Section 4.  Form of Rights Certificates.  (a) The Rights  Certificates
(and the forms of election to purchase and of  assignment  to be printed on
the reverse  thereof) shall each be  substantially in the form set forth in
Exhibit B hereto and may have such marks of  identification  or designation
and such legends,  summaries or endorsements printed thereon as the Company
may deem  appropriate  and as are not  inconsistent  with the provisions of
this Agreement,  or as may be required to comply with any applicable law or
with any  rule or  regulation  made  pursuant  thereto  or with any rule or
regulation of any stock  exchange on which the Rights may from time to time
be listed, or to conform to usage.  Subject to the provisions of Section 22
hereof,  the Rights  Certificates  shall  entitle  the  holders  thereof to
purchase such number of one one-hundredths of a share of Preferred Stock as
shall be set forth therein at the price set forth  therein  (such  exercise
price per one  one-hundredth  of a share,  the "Purchase  Price"),  but the
amount and type of securities  purchasable  upon the  exercise of each Right
and the Purchase Price thereof shall be subject to adjustment as provided
herein.


 18



     (b) Any Rights  Certificate issued pursuant to Section 3(a) or Section
22  hereof  that  represents  Rights  which are null and void  pursuant  to
Section 7(e) of this Agreement,  and any Rights Certificate issued pursuant
to Section 6 or Section 11 hereof upon transfer,  exchange,  replacement or
adjustment of any other Rights  Certificate  referred to in this  sentence,
shall contain (to the extent feasible) the following legend:

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

Provisions of Section 7(e) of this Agreement shall be operative whether or
not the foregoing legend is contained on any Rights Certificate.

     Section  5.   Countersignature   and  Registration.   (a)  The  Rights
Certificates  shall be executed on behalf of the Company by its Chairman of
the Board, its President or any of its Vice Presidents,  either manually or
by facsimile  signature,  and 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 so  countersigned.  In
case any  officer of the  Company  who shall have  signed any of the Rights
Certificates  shall  cease  to  be  such  officer  of  the  Company  before
countersignature  by the Rights  Agent and  issuance  and  delivery  by the
Company,  such Rights Certificates,  nevertheless,  may be countersigned by
the Rights  Agent and issued and  delivered  by the  Company  with the same
force and effect as though the Person who signed such  Rights  Certificates
had  not  ceased  to be  such  officer  of  the  Company;  and  any  Rights
Certificates  may be signed on behalf of the  Company by any Person who, at
the actual date of the  execution  of such Rights  Certificate,  shall be a
proper officer of the Company to sign such Rights Certificate,  although at
the date of the execution of this Rights  Agreement any such Person was not
such an officer.


 19


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

     Section 6.  Transfer,  Split Up,  Combination  and  Exchange of Rights
Certificates;  Mutilated, Destroyed, Lost or Stolen Rights Certificates. (a)
Subject to the  provisions  of Section  4(b),  Section  7(e) and Section 14
hereof,  at any time after the Close of Business on the Distribution  Date,
and at or prior to the Close of Business on the Expiration Date, any Rights
Certificate  or  Certificates   (except  as  otherwise   provided   herein,
including, without limitation, Rights Certificates representing Rights that
have become null and void and  nontransferable  pursuant to Section 7(e) of
this Agreement or that have been  exchanged  pursuant to Section 24 hereof)
may be  transferred,  split up,  combined or exchanged  for another  Rights
Certificate or Certificates,  entitling the registered holder to purchase a
like  number  of one  one-hundredths  of a share of  Preferred  Stock  (or,
following a Triggering Event, Common Stock, other securities, cash or other
assets,  as the  case may be) as the  Rights  Certificate  or  Certificates
surrendered  then  entitled  such holder (or former holder in the case of a
transfer) to purchase.  Any registered  holder desiring to transfer,  split
up, combine or exchange any Rights  Certificate or Certificates  shall make
such request in writing  delivered to the Rights Agent, and shall surrender
the  Rights  Certificate  or  Certificates  to be  transferred,  split  up,
combined  or  exchanged  at the  principal  office or offices of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be  obligated  to take any  action  whatsoever  with  respect  to the
transfer of any such surrendered  Rights  Certificate  until the registered
holder shall have  completed  and signed the  certificate  contained in the
form of assignment on the reverse side of such Rights Certificate and shall
have provided such  additional  evidence of the identity of the  Beneficial
Owner (or former Beneficial  Owner) or Affiliates or Associates  thereof as
the Company  shall  reasonably  request.  Thereupon the Rights Agent shall,
subject to Section  4(b),  Section 7(e) and Section 14 hereof,  countersign
and deliver to the Person entitled  thereto a Rights  Certificate or Rights
Certificates,  as the case may be, as so requested. The Company may require
payment of a sum  sufficient to cover any tax or  governmental  charge that
may be imposed in connection  with any transfer,  split up,  combination or
exchange of Rights Certificates.


 20



      (b)  Upon   receipt  by  the Company and the Rights Agent of evidence
reasonably  satisfactory  to  them  of  the  loss,  theft,  destruction  or
mutilation  of a  Rights  Certificate,  and,  in case  of  loss,  theft  or
destruction, of indemnity or security reasonably satisfactory to them, and,
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 execute 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) Subject to Section 7(e) hereof,  the registered  holder of any
Rights  Certificate  may exercise the Rights  evidenced  thereby (except as
otherwise  provided  herein),  in whole or in part,  at any time  after the
Distribution Date upon surrender of the Rights  Certificate,  with the form
of election to purchase  and the  certificate  on the reverse  side thereof
duly  executed,  to the Rights Agent at the principal  office or offices of
the Rights Agent designated for such purpose,  together with payment of the
aggregate  Purchase Price (as adjusted in accordance with the terms of this
Agreement)  with  respect to the total  number of one  one-hundredths  of a
share of Preferred Stock (or other securities, cash or other assets, as the
case may be) as to which such surrendered Rights are exercised, at or prior
to the earlier of (i) the Close of Business on November 7, 2006 (the "Final
Expiration  Date"),  (ii) the time at which  the  Rights  are  redeemed  as
provided  in  Section  23 hereof or (iii) the time at which the  Rights are
exchanged as provided in Section 24 hereof (the  earliest of (i),  (ii) and
(iii) being herein referred to as the "Expiration Date").

     (b)   The Purchase Price for each one one-hundredth of a share of
Preferred  Stock  pursuant to the  exercise of a Right shall  initially  be
$80.00,  shall be subject to  adjustment  from time to time as  provided in
Section  11 or 13 or 24 hereof  and shall be  payable  in  accordance  with
Section 7(c) hereof.

     (c)   Upon receipt of a Rights Certificate representing exercisable
Rights,  with the form of  election to purchase  and the  certificate  duly
executed,  accompanied by payment, with respect to each Right so exercised,
of the Purchase Price for the shares to be purchased as set forth below and
an amount equal to any  applicable  transfer tax required to be paid by the
holder of such Rights  Certificate,  in accordance with Section 6 hereof by
certified check, cashier's check or money order payable to the order of the
Company, the Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly  (i) (A)  requisition  from any  transfer  agent of the  shares of
Preferred  Stock (or make  available,  if the Rights  Agent is the transfer
agent  for  such  shares)   certificates   for  the  total  number  of  one
one-hundredths  of a share  of  Preferred  Stock  to be  purchased  and the
Company hereby irrevocably authorizes its transfer agent to comply with all

 21

such requests,  or (B) if the Company,  in its sole discretion,  shall have
elected to deposit the total number of shares of Preferred  Stock  issuable
upon exercise of the Rights  hereunder into a depositary,  requisition from
the depositary agent depositary  receipts  representing  such number of one
one-hundredths  of a share of Preferred  Stock as are to be  purchased  (in
which case  certificates  for the shares of Preferred Stock  represented by
such receipts  shall be deposited by the transfer agent with the depositary
agent) and the Company will direct the depositary agent to comply with such
request, (ii) when appropriate,  requisition from the Company the amount of
cash,  if any, to be paid in lieu of fractional  shares in accordance  with
Section 14 hereof,  (iii) after receipt of such  certificates or depositary
receipts,  cause  the  same to be  delivered  to or upon  the  order of the
registered  holder of such Rights  Certificate,  registered in such name or
names as may be designated by such holder, and (iv) when appropriate, after
receipt  thereof,  deliver  such cash,  if any, to or upon the order of the
registered holder of such Rights  Certificate.  The payment of the Purchase
Price (as such amount may be reduced  pursuant to Section  11(a)(iii) or 24
hereof)  shall be made in cash or by  certified  bank  check or bank  draft
payable  to the order of the  Company.  In the event  that the  Company  is
obligated or elects to issue other securities  (including  Common Stock) of
the Company,  pay cash and/or distribute other property pursuant to Section
11(a) or 24 hereof,  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  appropriate.  The Company
reserves the right to require prior to the occurrence of a Triggering Event
that, upon any exercise of Rights,  a number of Rights be exercised so that
only whole shares of Preferred Stock would be issued.  In addition,  in the
case of an  exercise of Rights by a holder  pursuant to Section  11(a)(ii),
the Rights Agent shall  return such Rights  Certificate  to the  registered
holder thereof after imprinting,  stamping or otherwise  indicating thereon
that the Rights  represented  thereby no longer include the Rights provided
by  Section  11(a)(ii)  of the  Rights  Agreement  and if less than all the
Rights represented by such Rights Certificate were so exercised, the Rights
Agent  shall  indicate  on the  Rights  Certificate  the  number  of Rights
represented  thereby  which  continue  to include  the rights  provided  by
Section 11(a)(ii).

     (d)   In case the registered holder of any Rights Certificate shall
exercise  less  than  all  the  Rights  evidenced  thereby,  a  new  Rights
Certificate   evidencing   Rights   equivalent  to  the  Rights   remaining
unexercised  shall be issued by the Rights Agent and  delivered to, or upon
the order of, the registered holder of such Rights Certificate or to his or
her duly  authorized  assigns,  subject  to the  provisions  of  Section 14
hereof,  or the Rights  Agent  shall place an  appropriate  notation on the
Rights Certificate with respect to those Rights exercised.

     (e)   Notwithstanding anything in this Agreement to the contrary, from
and after the first  occurrence of a Section  11(a)(ii)  Event,  any Rights
beneficially  owned by (i) an Acquiring Person or an Associate or Affiliate
of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any

 22

such Associate or Affiliate)  who becomes a transferee  after the Acquiring
Person  becomes such,  or (iii) a transferee of an Acquiring  Person (or of
any such  Associate  or  Affiliate)  who becomes a  transferee  prior to or
concurrently  with the  Acquiring  Person  becoming  such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring  Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring  Person has any  continuing
agreement, arrangement or understanding regarding the transferred Rights or
(B) a transfer  which the Board of Directors  has  determined  is part of a
plan, arrangement or understanding which has as a primary purpose or effect
the avoidance of this Section 7(e),  shall become null and void without any
further  action  and no  holder  of  such  Rights  shall  have  any  rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or  otherwise.  The Company shall use all  reasonable  efforts to
insure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied  with,  but  shall  have no  liability  to any  holder  of  Rights
Certificates  or  other  Person  as a  result  of its  failure  to make any
determinations  with  respect  to an  Acquiring  Person or its  Affiliates,
Associates or transferees hereunder.  The Company may require (or cause the
Rights  Agent or any  transfer  agent of the Company to require) any Person
who submits a Rights Certificate (or a certificate  representing  shares of
Stock that evidences,  or but for the provisions of this Section 7(e) would
evidence,  Rights) for  transfer on the  registry  books or to exercise the
Rights represented  thereby to establish to the satisfaction of the Company
in its sole  discretion  that such  Rights  have not  become  null and void
pursuant to the provisions of this Section 7(e).

     (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) completed and signed 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 as the Company shall
reasonably request.

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


 23

     Section 9.  Reservation  and  Availability  of Capital Stock.  (a) The
Company  covenants  and agrees that it will cause to be  reserved  and kept
available  out of its  authorized  and unissued  shares of Preferred  Stock
(and, following the occurrence of a Triggering Event, out of its authorized
and unissued  shares of Common Stock and/or other  securities or out of its
authorized and issued shares held in its treasury), the number of shares of
Preferred  Stock (and,  following  the  occurrence  of a Triggering  Event,
Common Stock and/or other  securities) that, as provided in this Agreement,
including  Section  11(a)(iii)  hereof,  will be  sufficient  to permit the
exercise in full of all outstanding Rights.

     (b)   So  long  as  the shares  of Preferred Stock (and, following the
occurrence  of a Triggering  Event,  shares of the  Company's  Common Stock
and/or other  securities)  issuable  upon the exercise of the Rights may be
listed on any national securities exchange,  the Company shall use its best
efforts to cause, from and after such time as the Rights become exercisable
(but only to the extent that it is  reasonably  likely that the Rights will
be exercised),  all shares  reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.

     (c)   If  required  by  applicable law, the Company shall use its best
efforts to (i) file,  as soon as  practicable  following  the earliest date
after  the  first  occurrence  of a  Section  11(a)(ii)  Event on which the
consideration  to be delivered  by the Company upon  exercise of the Rights
has been determined in accordance with Section  11(a)(iii) hereof or Rights
are to be exchanged in accordance  with Section 24 hereof,  a  registration
statement  under the Act, with respect to the securities  purchasable  upon
exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii)  cause  such  registration  statement  to  remain  effective  (with a
prospectus at all times meeting the  requirements  of the Act and the rules
and regulations  thereunder)  until the earlier of (A) the date as of which
the Rights are no longer exercisable for such securities,  and (B) the date
of the expiration of the Rights.  The Company will also take such action as
may be appropriate  under, or to ensure  compliance with, the securities or
"blue sky" laws of the various states in connection with the exercisability
of the Rights.  The Company may temporarily  suspend,  for a period of time
not to exceed  ninety  (90) days  after the date set forth in clause (i) of
the first sentence of this Section 9(c), the  exercisability  of the Rights
in order to prepare and file such  registration  statement and permit it to
become  effective.  Upon any such  suspension,  the  Company  shall issue a
public announcement  stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension  is no longer in  effect.  In  addition,  if the  Company  shall
determine  that  a  registration   statement  is  required   following  the
Distribution  Date, the Company may temporarily  suspend the exercisability
of the Rights until such time as a registration statement has been declared
effective. Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be  exercisable in any  jurisdiction  if the requisite
qualification  in such  jurisdiction  shall  not have  been  obtained,  the
exercise  thereof  shall  not  be  permitted  under  applicable  law  or  a
registration statement shall not have been declared effective.


 24

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

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

    Section 10.  Preferred Stock Record Date. Each Person in whose name any
certificate  for a number  of one  one-hundredths  of a share of  Preferred
Stock (or shares of the Company's Common Stock and/or other securities,  as
the case may be) is  issued  upon the  exercise  of  Rights  shall  for all
purposes be deemed to have  become the holder of record of such  fractional
shares of Preferred  Stock (or shares of the Company's  Common Stock and/or
other  securities,  as the case may be)  represented  thereby  on, and such
certificate  shall be dated,  the date upon  which the  Rights  Certificate
evidencing  such Rights was duly  surrendered  and payment of the  Purchase
Price (and all applicable transfer taxes) was made; provided, however, that
if the  date of  such  surrender  and  payment  is a date  upon  which  the
Preferred  Stock (or shares of the  Company's  Common  Stock  and/or  other
securities,  as the case may be) transfer  books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be dated, the next
succeeding  Business  Day on which the  Preferred  Stock (or  shares of the
Company's  Common  Stock  and/or  other  securities,  as the  case  may be)
transfer books of the Company are open.

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

 25

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

           (ii)  Subject to Section 24 of this Agreement, in the event 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 or entity organized,  appointed or established by the Company for or
pursuant  to the  terms  of any  such  plan)  alone  or  together  with its
Affiliates and  Associates,  shall become an Acquiring  Person,  unless the
event  causing such Person to become an Acquiring  Person is a  transaction
set forth in  Section  13(a)  hereof,  each  holder of a Right  (except  as
provided below and in Section 7(e) hereof) shall  thereafter have the right
to receive,  upon  exercise  thereof at a price  equal to the then  current
Purchase Price multiplied by the number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior to such
event  regardless  of  whether  or not the Right was then  exercisable,  in
accordance  with the terms of this Agreement and in lieu of a number of one
one-hundredths  of a share of  Preferred  Stock,  such  number of shares of
Common  Stock of the  Company  as shall  equal the result  obtained  by (x)
multiplying  the then  current  Purchase  Price by the then  number  of one
one-hundredths  of a share  of  Preferred  Stock  for  which  a  Right  was
exercisable  immediately  prior  to  the  first  occurrence  of  a  Section
11(a)(ii)  Event,  and dividing that product  (which,  following such first
occurrence,  shall  thereafter be referred to as the  "Purchase  Price" for
each  Right  and for all  purposes  of  this  Agreement)  by (y) 50% of the
Current  Market Price  (determined  pursuant to Section  11(d)  hereof) per
share of the  Company's  Common Stock on the date of such first  occurrence
(such number of shares, the "Adjustment Shares").
 26

          (iii)  In the event that there shall not be sufficient treasury
shares or authorized but unissued (and reserved) shares of the Company's
Common Stock to permit the exercise in full of the Rights in accordance with
the foregoing  subparagraph  (ii) of this Section ll(a),  the Company shall
(A) determine  the excess of (1) the value of the Adjustment Shares issuable
upon the exercise of a Right  determined  as set forth below (the  "Current
Value") over (2) the Purchase Price (such excess,  the  "Spread"),  and (B)
with respect to each Right  (subject to Section 7(e) hereof) make  adequate
provision to substitute for the Adjustment  Shares,  upon the exercise of a
Right and  payment  of the  applicable  Purchase  Price,  (1)  cash,  (2) a
reduction  in  the  Purchase  Price,  (3)  Common  Stock  or  other  equity
securities of the Company (including,  without limitation, shares, or units
of shares, of preferred stock, such as the Preferred Stock, which the Board
of  Directors  has deemed to have  essentially  the same value or  economic
rights as shares of the  Company's  Common  Stock (such shares of preferred
stock  being  referred  to  as  "Common  Stock  Equivalents")),   (4)  debt
securities of the Company,  (5) other assets, or (6) any combination of the
foregoing,  having an aggregate  value equal to the Current Value (less the
amount of any reduction in the Purchase  Price) where such aggregate  value
has been  determined  by the Board of Directors  based upon the advice of a
nationally  recognized  investment  banking  firm  selected by the Board of
Directors;  provided,  however,  that if the  Company  shall  not have made
adequate  provision  to deliver  value  pursuant to clause (B) above within
thirty (30) days following the occurrence of a Section 11(a)(ii) Event (the
"Section  11(a)(ii) Trigger Date"),  then the Company shall be obligated to
deliver,  upon the surrender for exercise of a Right and without  requiring
payment of the Purchase Price, shares of the Company's Common Stock (to the
extent  available) and then, if necessary,  cash,  which shares and/or cash
have an  aggregate  value  equal to the Spread.  If the Board of  Directors
determines  in good  faith  that it is likely  that  sufficient  additional
shares of the Company's  Common Stock could be authorized for issuance upon
exercise in full of the Rights,  the thirty (30) day period set forth above
may be extended to the extent necessary, but not more than ninety (90) days
after the Section  11(a)(ii)  Trigger  Date,  in order that the Company may
seek stockholder  approval for the  authorization of such additional shares
(such thirty (30) day period,  as it may be extended,  is herein called the
"Substitution  Period").  To the extent that action is to be taken pursuant
to the first  and/or  second  sentences  of this  Section  11(a)(iii),  the
Company (1) shall provide, subject to Section 7(e) hereof, that such action
shall apply  uniformly to all outstanding  Rights,  and (2) may suspend the
exercisability  of the  Rights  until the  expiration  of the  Substitution
Period in order to seek such stockholder approval for such 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
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the Current  Value of each  Adjustment  Share  shall be the Current  Market
Price per share of the  Company's  Common  Stock on the  Section  11(a)(ii)
Trigger  Date  and the per  share or per unit  value  of any  Common  Stock
Equivalent  shall be deemed to equal the Current  Market Price per share of
the Company's Common Stock on such date.
 27

     (b)   In case the Company shall fix a record  date for the issuance of
rights,  options or warrants to all holders of  Preferred  Stock  entitling
them to subscribe for or purchase (for a period expiring within  forty-five
(45)  calendar  days after such  record  date)  Preferred  Stock (or shares
having  the same  rights,  privileges  and  preferences  as the  shares  of
Preferred Stock ("equivalent  preferred stock")) or securities  convertible
into Preferred Stock or equivalent  preferred stock at a price per share of
Preferred  Stock or per share of  equivalent  preferred  stock (or having a
conversion price per share, if a security  convertible into Preferred Stock
or  equivalent  preferred  stock)  less than the Current  Market  Price (as
determined  pursuant to Section 11(d) hereof) per share of Preferred  Stock
on such record date,  the Purchase  Price to be in effect after such record
date  shall be  determined  by  multiplying  the  Purchase  Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock outstanding on such record
date  plus the  number of shares of  Preferred  Stock  which the  aggregate
offering  price of the total  number of shares of  Preferred  Stock  and/or
equivalent  preferred stock so to be offered (and/or the aggregate  initial
conversion  price of the  convertible  securities  so to be offered)  would
purchase at such Current Market Price,  and the  denominator of which shall
be the number of shares of Preferred Stock  outstanding on such record date
plus the number of additional  shares of Preferred Stock and/or  equivalent
preferred  stock to be offered for  subscription or purchase (or into which
the  convertible  securities so to be offered are  initially  convertible);
provided, however, that in no event shall the consideration to be paid upon
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company  issuable upon exercise of one Right.  In case
such  subscription  price may be paid by delivery of consideration  part or
all of  which  may  be in a  form  other  than  cash,  the  value  of  such
consideration  shall  be as  determined  in  good  faith  by the  Board  of
Directors, whose determination shall be described in a statement filed with
the Rights  Agent and shall be binding on the Rights  Agent and the holders
of the Rights.  Shares of Preferred  Stock owned by or held for the account
of the Company shall not be deemed  outstanding for the purpose of any such
computation.  Such adjustment  shall be made  successively  whenever such a
record date is fixed; and in the event that such rights or warrants are not
so issued,  the Purchase  Price shall be adjusted to be the Purchase  Price
which would then be in effect if such record date had not been fixed.

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

 28

faith by the Board of Directors,  whose determination shall be described in
a statement  filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights) of the portion of the cash,  assets or
evidences of  indebtedness  so to be  distributed  or of such  subscription
rights  or  warrants  applicable  to one share of  Preferred  Stock and the
denominator  of which shall be such  Current  Market  Price (as  determined
pursuant  to  Section  11(d)  hereof)  per  share of the  Preferred  Stock;
provided,  however,  that in no event shall the consideration paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company to be issued upon exercise of one Right.  Such
adjustments  shall be made  successively  whenever  such a  record  date is
fixed, and in the event that such distribution is not so made, the Purchase
Price shall be adjusted to be the  Purchase  Price which would have been in
effect if such record date had not been fixed.

      (d)  (i)   For the  purpose  of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price (as  defined  below)  per share of Common  Stock on any date shall be
deemed to be the  average  of the daily  closing  prices  per share of such
Common  Stock for the thirty  (30)  consecutive  Trading  Days (as  defined
below)  immediately  prior to such date,  and for purposes of  computations
made pursuant to Section  11(a)(iii)  hereof,  the Current Market Price per
share of Common  Stock on any date shall be deemed to be the average of the
daily  closing  prices  per  share of such  Common  Stock  for the ten (10)
consecutive  Trading  Days  immediately   following  such  date;  provided,
however,  that in the event that the Current  Market Price per share of the
Common Stock is determined  during a period  following the  announcement by
the issuer of such Common Stock of (A) a dividend or  distribution  on such
Common  Stock  payable  in  shares  of  such  Common  Stock  or  securities
convertible into shares of such Common Stock (other than the Rights) or (B)
any subdivision,  combination or reclassification of such Common Stock, and
the ex-dividend date for such dividend or distribution,  or the record date
for  such  subdivision,  combination  or  reclassification  shall  not have
occurred prior to the  commencement  of the requisite 30 Trading Day or ten
Trading Day period,  as set forth above,  then,  and in each such case, the
Current Market Price shall be appropriately adjusted to reflect the Current
Market  Price per share  equivalent  if such Common Stock take into account
ex-dividend  trading. The closing price for each day shall be the last sale
price,  regular  way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal  consolidated  transaction  reporting system with
respect to  securities  listed or admitted to trading on the New York Stock
Exchange  or, if the shares of Common  Stock are not listed or  admitted to
trading  on the New York  Stock  Exchange,  as  reported  in the  principal
consolidated transaction reporting system with respect to securities listed
on the principal national securities exchange on which the shares of Common
Stock are listed or admitted  to trading or, if the shares of Common  Stock
are not listed or admitted to trading on any national securities  exchange,
the last quoted price or, if not so quoted, the average of the high bid and
low  asked  prices  in the  over-the-counter  market,  as  reported  by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ")  or such other  system then in use,  or, if on any such date the
shares of Common Stock are not quoted by any such organization, the average

 29

of the closing bid and asked prices as furnished by a  professional  market
maker  making  a  market  in the  Common  Stock  selected  by the  Board of
Directors.  If on any such date no  market  maker is making a market in the
Common  Stock,  the fair value of such shares on such date as determined in
good faith by the Board of Directors  shall be used. The term "Trading Day"
shall mean a day on which the  principal  national  securities  exchange on
which the shares of Common  Stock are listed or admitted to trading is open
for the  transaction  of business or, if the shares of Common Stock are not
listed or  admitted  to  trading on any  national  securities  exchange,  a
Business  Day. If the Common Stock is not publicly held or not so listed or
traded,  Current Market Price per share shall mean the fair value per share
as determined in good faith by the Board of Directors,  whose determination
shall be described in a statement  filed with the Rights Agent and shall be
conclusive for all purposes.

           (ii)  For the purpose of any computation hereunder,  the Current
Market  Price per  share of  Preferred  Stock (or any other  security,  for
which the Current Market Price must be determined) shall be determined in the
same manner as set forth above for the Common Stock in  clause  (i) of this
Section 11(d) (other than (solely in the case of the  Preferred  Stock) the
last sentence thereof).  If the Current Market Price per share of Preferred
Stock cannot be determined in the manner provided above or if the Preferred
Stock is not  publicly  held or listed or traded in a manner  described  in
clause (i) of this  Section  11(d),  the Current  Market Price per share of
Preferred Stock shall be  conclusively  deemed to be an amount equal to 100
(as such  number may be  appropriately  adjusted  for such  events as stock
splits,  stock dividends and  recapitalizations  with respect to the Common
Stock occurring after the date of this Agreement) multiplied by the Current
Market Price per share of the Common  Stock (as  determined  in  accordance
with Section 11(d)(i)). If neither the Common Stock nor the Preferred Stock
is publicly held or so listed or traded,  Current Market Price per share of
the  Preferred  Stock shall mean the fair value per share as  determined in
good  faith  by the  Board  of  Directors,  whose  determination  shall  be
described  in a  statement  filed  with  the  Rights  Agent  and  shall  be
conclusive  and  binding  for  all  purposes.  For  all  purposes  of  this
Agreement,  the Current  Market  Price of one  one-hundredth  of a share of
Preferred  Stock shall be equal to the Current Market Price of one share of
Preferred Stock divided by 100.

     (e)   Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such  adjustment  would require
an increase or decrease of at least one percent (1%) in the Purchase Price;
provided,  however,  that any  adjustments  which by reason of this Section
11(e) are not  required to be made shall be carried  forward and taken into
account in any subsequent  adjustment.  All calculations under this Section
11 shall be made to the nearest cent or to the nearest  ten-thousandth of a
share  of  Common  Stock  or other  share  or  one-millionth  of a share of
Preferred Stock, 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 (3) years from the date of the
transaction which mandates such adjustment, or (ii) the Expiration Date.

     (f)   If as a result of an adjustment made pursuant to Section 11(a)
or  Section  13(a)  hereof,  the holder of any Right thereafter exercised
shall become entitled  to  receive any shares of capital stock other than
Preferred  Stock,  thereafter the number of such other shares so receivable

 30

upon exercise of any Right and the Purchase Price thereof shall be  subject
to adjustment from time to time in a manner and on terms as nearly equivalent
as  practicable  to the  provisions  with respect to the Preferred Stock
contained in Sections 11(a),  (b), (c), (e), (g), (h), (i), (j), (k) and (m)
and the  provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to
the  Preferred  Stock shall apply on like terms to any such other shares.

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

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

     (i)   The Company may elect on or after the date of any  adjustment of
the  Purchase  Price  to  adjust  the  number  of  Rights,  in  lieu of any
adjustment  in the  number of one  one-hundredths  of a share of  Preferred
Stock  purchasable  upon  the  exercise  of a  Right.  Each  of the  Rights
outstanding  after  the  adjustment  in  the  number  of  Rights  shall  be
exercisable  for the number of one  one-hundredths  of a share of Preferred
Stock  for  which  a  Right  was  exercisable  immediately  prior  to  such
adjustment.  Each  Right  held of record  prior to such  adjustment  of the
number of Rights  shall  become  that number of Rights  (calculated  to the
nearest  one-ten-thousandth)  obtained by dividing  the  Purchase  Price in
effect  immediately  prior  to  adjustment  of the  Purchase  Price  by the
Purchase  Price in effect  immediately  after  adjustment  of the  Purchase
Price.  The Company  shall make a public  announcement  of its  election to
adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time,  the amount of the  adjustment to be made.  This
record date may be the date on which the Purchase  Price is adjusted or any
day thereafter,  but, if the Rights Certificates have been issued, shall be
at least ten (10) days later than the date of the public  announcement.  If
Rights Certificates have been issued, upon each adjustment of the number of
Rights  pursuant to this Section 11(i),  the Company shall,  as promptly as
practicable,  cause to be  distributed  to  holders  of  record  of  Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof,  the  additional  Rights to which such holders  shall be

 31

entitled as a result of such adjustment,  or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights  Certificates  held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company,
new Rights  Certificates  evidencing  all the Rights to which such  holders
shall be  entitled  after such  adjustment.  Rights  Certificates  so to be
distributed  shall be  issued,  executed  and  countersigned  in the manner
provided  for  herein  (and may bear,  at the  option of the  Company,  the
adjusted  Purchase  Price)  and  shall be  registered  in the  names of the
holders of record of Rights  Certificates  on the record date  specified in
the public announcement.

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

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

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

     (m)   Anything in this Section 11 to the contrary notwithstanding,  the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the  extent  that  in its  sole  discretion  it  shall  determine  to be
advisable  in  order  that  any (i)  consolidation  or  subdivision  of the
Preferred  Stock,  (ii) issuance wholly for cash of any shares of Preferred
Stock at less than the current market price, (iii) issuance wholly for cash
of  shares  of  Preferred  Stock or  securities  which by their  terms  are
convertible into or exchangeable for shares of Preferred Stock,  (iv) stock

 32

dividends  or (v)  issuance of rights,  options or warrants  referred to in
this Section 11,  hereafter made by the Company to holders of its Preferred
Stock shall not be taxable to such stockholders.

     (n)   The Company covenants  and agrees that it shall not, at any time
after the  Distribution  Date, (i) consolidate with any other Person (other
than a  Subsidiary  of the Company in a  transaction  which  complies  with
Section 11(o) hereof), (ii) merge with or into any other Person (other than
a Subsidiary  of the Company in a transaction  which  complies with Section
11(o) hereof),  or (iii) sell or transfer (or permit any Subsidiary to sell
or  transfer),  in one  transaction,  or a series of related  transactions,
assets or earning power  aggregating more than 50% of the assets or earning
power of the Company and its  Subsidiaries  (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its Subsidiaries in
one or more transactions each of which complies with Section 11(o) hereof),
if (x) at the time of or immediately after such consolidation, merger, sale
or  transfer  there are any  charter or by-law  provisions  or 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 shareholders of the Person who constitutes,  or would constitute,
the  "Principal  Party" for  purposes of Section  13(a)  hereof  shall have
received a distribution of Rights previously owned by such Person or any of
its  Affiliates and  Associates.  The Company shall not consummate any such
consolidation,  merger,  sale or transfer  unless prior thereto the Company
and such other Person shall have executed and delivered to the Rights Agent
a supplemental agreement evidencing compliance with this Section 11(n).

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

     (p)   Anything in this Agreement to the contrary notwithstanding, in the
event  that the  Company  shall  at any  time  after  the  Rights  Dividend
Declaration  Date and prior to the  Distribution  Date (i) declare or pay a
dividend on its outstanding shares of Common Stock or Convertible Preferred
Stock payable in shares of its Common Stock or (ii)  subdivide,  combine or
consolidate its outstanding shares of Common Stock or Convertible Preferred
Stock (by  reclassification or otherwise other than by payment of dividends
in its Common Stock),  into a greater or smaller number of shares,  then in
any such  case,  the  number of Rights  associated  with each  share of its
Common Stock or Convertible Preferred Stock then outstanding,  or issued or
delivered   thereafter  but  prior  to  the  Distribution  Date,  shall  be
proportionately adjusted so that the number of Rights thereafter associated
with each such  share  following  any such  event  shall  equal the  result
obtained  by  multiplying  the number of Rights  associated  with each such
share  immediately  prior to such event by a fraction the  numerator  which
shall be the total number of shares,  in the case of the Common  Stock,  of

 33

Common  Stock,  and, in the case of the  Convertible  Preferred  Stock,  of
Convertible   Preferred  Stock,   outstanding   immediately  prior  to  the
occurrence  of the event and the  denominator  of which  shall be the total
number of, in the case of the Common Stock, shares of Common Stock, and, in
the case of the  Convertible  Preferred  Stock,  of  Convertible  Preferred
Stock, outstanding immediately following the occurrence of such event.

     (q)   The exercise of Rights under Section 11(a)(ii) shall only result
in the loss of rights  under  Section  11(a)(ii) to the extent so exercised
and shall not otherwise  affect the rights  represented by the Rights under
this Agreement, including the rights represented by Section 13.

     Section  12.  Certificate  of  Adjusted  Purchase  Price or  Number of
Shares.  Whenever  an  adjustment  is made as  provided  in  Section 11 and
Section 13 hereof,  the Company  shall (a) promptly  prepare a  certificate
setting  forth  such  adjustment,  and  a  brief  statement  of  the  facts
accounting  for such  adjustment,  (b) promptly file with the Rights Agent,
and with each transfer agent for the Preferred  Stock, the Company's Common
Stock and the Convertible Preferred Stock, a copy of such certificate,  and
(c) mail a brief  summary  thereof to each  holder of a Rights  Certificate
(or, if prior to the  Distribution  Date,  to each holder of a  certificate
representing shares of the Stock) in accordance with Section 25 hereof. The
Rights Agent shall be fully  protected  in relying on any such  certificate
and on any  adjustment  therein  contained  and shall not be deemed to have
knowledge of such  adjustment  unless and until it shall have received such
certificate.

     Section  13.  Consolidation,  Merger or Sale or  Transfer of Assets or
Earning  Power.  In the event that,  directly or  indirectly,  at any time
after a Person  has  become an  Acquiring  Person,  (x) the  Company  shall
consolidate  with,  or merge with and into,  any other Person (other than a
Subsidiary  of the Company in a  transaction  which  complies  with Section
11(o)  hereof) and the Company  shall not be the  continuing  or  surviving
corporation of such  consolidation or merger,  (y) any Person (other than a
Subsidiary  of the Company in a  transaction  which  complies  with Section
11(o) hereof) shall  consolidate  with, or merge with or into, the Company,
and the Company shall be the  continuing or surviving  corporation  of such
consolidation  or merger  and, in  connection  with such  consolidation  or
merger, all or part of the outstanding shares of the Stock shall be changed
into or exchanged for stock or other securities of any other Person or cash
or any other property,  or (z) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise  transfer),  in
one  transaction  or a series of  related  transactions,  assets or earning
power  aggregating  more  than 50% of the  assets or  earning  power of the
Company  and its  Subsidiaries  (taken as a whole) to any Person or Persons
(other  than the  Company or any  Subsidiary  of the Company in one or more
transactions  each of which complies with Section 11(o) hereof),  then, and
in each such case  (except as provided  by Section  13(d)  hereof),  proper
provision  shall be made so that:  (i) each  holder  of a Right,  except as
provided  in  Section  7(e)  hereof,  shall  thereafter  have the  right to
receive,  upon the  exercise  thereof at the then  current  Purchase  Price
multiplied  by the  number of one  one-hundredths  of a share of  Preferred

 34

Stock for which a Right was  exercisable  immediately  prior to such  event
regardless of whether or not the Right was then exercisable,  in accordance
with  the  terms  of  this  Agreement  and  in  lieu  of a  number  of  one
one-hundredths  of a share of  Preferred  Stock,  such  number  of  validly
authorized  and issued,  fully paid,  non-assessable  and freely  tradeable
shares of Common  Stock of the  Principal  Party (as  hereinafter  defined,
(including,  without  limitation,  the Company as successor  thereto or the
surviving corporation)) not subject to any liens,  encumbrances,  rights of
first  refusal  or other  adverse  claims,  as shall be equal to the result
obtained by (1) multiplying  the then current  Purchase Price by the number
of one  one-hundredths  of a share of Preferred  Stock for which a Right is
exercisable immediately prior to the first occurrence of a Section 13 Event
(or,  if a  Section  11(a)(ii)  Event  has  occurred  prior  to  the  first
occurrence  of a  Section  13  Event,  multiplying  the  number of such one
one-hundredths  of a share for which a Right  was  exercisable  immediately
prior to the first occurrence of a Section  11(a)(ii) Event by the Purchase
Price in effect immediately prior to such first  occurrence),  and dividing
that product (which,  following the first occurrence of a Section 13 Event,
shall be  referred  to as the  "Purchase  Price" for each Right and for all
purposes  of  this  Agreement)  by  (2)  50% of the  Current  Market  Price
(determined  pursuant to Section  11(d)(i)  hereof) per share of the Common
Stock of such Principal  Party on the date of  consummation of such Section
13 Event;  (ii) such  Principal  Party shall  thereafter be liable for, and
shall assume,  by virtue of such Section 13 Event,  all the obligations and
duties of the Company pursuant to this Agreement;  (iii) the term "Company"
shall  thereafter  be deemed  to refer to such  Principal  Party,  it being
specifically  intended that the provisions of Section 11 hereof shall apply
only to such Principal Party following the first occurrence of a Section 13
Event; (iv) such Principal Party shall take such steps (including,  but not
limited to, the reservation of a sufficient  number of shares of its Common
Stock) in connection with the  consummation of any such  transaction as may
be  necessary to assure that the  provisions  hereof  shall  thereafter  be
applicable,  as nearly as  reasonably  may be, in relation to its shares of
Common Stock thereafter  deliverable  upon the exercise of the Rights;  and
(v) the  provisions  of  Section  11(a)(ii)  hereof  shall be of no  effect
following the first occurrence of any Section 13 Event.

      (b)  "Principal Party" shall mean

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

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


 35

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

     (c)   The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient  number
of  authorized  shares of its Common  Stock  which have not been  issued or
reserved  for  issuance  to permit  the  exercise  in full of the Rights in
accordance  with this Section 13 and unless  prior  thereto the Company and
such Principal  Party shall have executed and delivered to the Rights Agent
a  supplemental  agreement  providing  for the terms set forth in  Sections
13(a) and (b) and further  providing that, as soon as practicable after the
date of any  consolidation,  merger or sale of assets  mentioned in Section
13(a), the Principal Party will
      
                    (i) prepare and file a registration statement under the
               Act,   with  respect  to  the  Rights  and  the   securities
               purchasable  upon  exercise of the Rights on an  appropriate
               form,   and  will  use  its  best   efforts  to  cause  such
               registration  statement  to (A) become  effective as soon as
               practicable after such filing and (B) remain effective (with
               a prospectus  at all times meeting the  requirements  of the
               Act) until the Expiration Date;

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

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


 36

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 which have not theretofore been exercised shall
thereafter  become  exercisable  in the manner  described in Section 13(a).

     Section 14. Fractional Rights and Fractional  Shares.  (a) The Company
shall not be required to issue  fractions  of Rights,  except  prior to the
Distribution  Date as provided in Section  11(p)  hereof,  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 market value of a whole Right.  For purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights  for the  Trading  Day  immediately  prior to the date on which such
fractional Rights would have been otherwise issuable.  The closing price of
the Rights for any day shall be the last sale price,  regular  way,  or, in
case no such sale takes  place on such day,  the average of the closing bid
and asked prices,  regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the Rights are
not  listed or  admitted  to trading  on the New York  Stock  Exchange,  as
reported in the principal  consolidated  transaction  reporting system with
respect to securities listed on the principal national  securities exchange
on which the Rights are listed or admitted to trading, or if the Rights are
not listed or admitted to trading on any national securities exchange,  the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter  market, as reported by NASDAQ or such
other  system then in use or, if on any such date the Rights are not quoted
by any such  organization,  the average of the closing bid and asked prices
as furnished by a  professional  market maker making a market in the Rights
selected  by the Board of  Directors.  If on any such  date no such  market
maker is making a market in the Rights the fair value of the Rights on such
date as determined in good faith by the Board of Directors shall be used.

     (b)   The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions  which are integral  multiples of one
one-hundredth of a share of Preferred Stock) upon exercise of the Rights or
to distribute  certificates  which evidence  fractional shares of Preferred
Stock  (other  than   fractions   which  are  integral   multiples  of  one
one-hundredth  of a share of  Preferred  Stock).  Fractions  of  shares  of
Preferred Stock in integral  multiples of one  one-hundredth  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 that such agreement shall
provide that the holders of such depositary receipts shall have 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

 37

fractional shares of Preferred Stock that are not integral multiples of one
one-hundredth  of a share of  Preferred  Stock,  the Company may pay to the
registered  holders  of Rights  Certificates  at the time such  Rights  are
exercised as herein  provided an amount in cash equal to the same  fraction
of the current  market value of one  one-hundredth  of a share of Preferred
Stock.  For purposes of this Section 14(b), the current market value of one
one-hundredth  of a share of Preferred Stock shall be one  one-hundredth of
the closing price of a share of Preferred Stock (as determined  pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date
of such exercise.

     (c)   Following the occurrence of a Triggering Event, the Company shall
not be  required  to issue  fractions  of shares of its  Common  Stock upon
exercise  of  the  Rights  or to  distribute  certificates  which  evidence
fractional  shares of its Common  Stock.  In lieu of  fractional  shares of
Common  Stock,  the  Company  may pay to the  registered  holders of Rights
Certificates  at the time such Rights are  exercised as herein  provided an
amount in cash equal to the same  fraction of the current  market  value of
one (1) share of Common  Stock.  For  purposes of this Section  14(c),  the
current  market  value of one share of Common  Stock  shall be the  closing
price of one  share of Common  Stock (as  determined  pursuant  to  Section
11(d)(i) hereof) for the Trading Day immediately  prior to the date of such
exercise.

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

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

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

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

 38

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

     (c)   subject to Section 6(a) and Section 7(f) hereof, the Company and
the  Rights  Agent  may deem and treat  the  Person in whose  name a Rights
Certificate  (or, prior to the  Distribution  Date,  the  associated  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 Stock certificate made by anyone
other than the Company or the Rights  Agent) for all  purposes  whatsoever,
and neither the Company nor the Rights Agent,  subject to the last sentence
of Section 7(e)  hereof,  shall be required to be affected by any notice to
the contrary; and

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

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


 39

     Section 18. Concerning the Rights Agent. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder  and,  from  time to time,  on demand of the  Rights  Agent,  its
reasonable  expenses and counsel fees and other  disbursements  incurred in
the  administration  and  execution of this  Agreement and the exercise and
performance of its duties  hereunder.  The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
or expense, incurred without negligence, bad faith or willful misconduct on
the part of the Rights  Agent,  for anything  done or omitted by the Rights
Agent  in  connection  with  the  acceptance  and  administration  of  this
Agreement, including the reasonable costs and expenses of defending against
any claim of liability in the premises.  The indemnity  provided for herein
shall  survive the  expiration  of the Rights and the  termination  of this
Agreement.

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

     Section 19.  Merger or Consolidation or Change of Name of Rights Agent.
(a) Any  corporation  into which the Rights Agent or any  successor  Rights
Agent  may  be  merged  or  with  which  it  may  be  consolidated,  or any
corporation  resulting from any merger or consolidation to which the Rights
Agent or any successor  Rights Agent shall be a party,  or any  corporation
succeeding to the 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,
however,  that such  corporation  would be eligible  for  appointment  as a
successor  Rights Agent under the provisions of Section 21 hereof.  In case
at the time such successor Rights Agent shall succeed to the agency created
by  this  Agreement,  any  of  the  Rights  Certificates  shall  have  been
countersigned but not delivered,  any such successor Rights Agent may adopt
the  countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so  countersigned;  and in case at that time any of the Rights
Certificates shall not have been countersigned,  any successor Rights Agent
may  countersign  such  Rights  Certificates  either  in  the  name  of the
predecessor or in the name of the successor  Rights Agent;  and in all such
cases such Rights  Certificates  shall have the full force  provided in the
Rights Certificates and in this Agreement.


 40

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

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

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

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

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

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

     (e)   The Rights Agent shall not be under any responsibility in respect
of the validity of this  Agreement  or the  execution  and delivery  hereof
(except the due execution  hereof by the Rights Agent) or in respect of the
validity   or   execution   of   any   Rights   Certificate   (except   its
countersignature  thereof);  nor shall it be responsible  for any breach by
the Company of any covenant or condition  contained in this Agreement or in
any Rights  Certificate;  nor shall it be responsible for any change in the
exercisability  of Rights  (including the Rights  becoming void pursuant to
Section 7(e) hereof) or any  adjustment  required  under the  provisions of
Section 11 or Section 13 hereof or  responsible  for the manner,  method or

 41

amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the exercise
of Rights evidenced by Rights  Certificates after actual notice of any such
adjustment);  nor  shall  it by any act  hereunder  be  deemed  to make any
representation  or warranty as to the  authorization  or reservation of any
shares of Common  Stock or  Preferred  Stock to be issued  pursuant to this
Agreement or any Rights  Certificate  or as to whether any shares of Common
Stock or Preferred  Stock will, when so issued,  be validly  authorized and
issued, fully paid and nonassessable.

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

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

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

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

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


 42

     (k)   If,  with  respect to any Right Certificate  surrendered  to the
Rights Agent for exercise or transfer, the certificate attached to the form
of  assignment  or form of  election to  purchase,  as the case may be, has
either not been completed or indicates an affirmative  response to clause 1
and/or 2 thereof,  the Rights Agent shall not take any further  action with
respect to such  requested  exercise or transfer  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 (30) days' notice in writing  mailed to the Company,
and to each transfer agent of the Company's  Common Stock,  the Convertible
Preferred  Stock and the Preferred  Stock, by registered or certified mail,
and to the holders of the Rights  Certificates  by  first-class  mail.  The
Company  may remove the Rights  Agent or any  successor  Rights  Agent upon
thirty  (30)  days'  notice  in  writing,  mailed  to the  Rights  Agent or
successor  Rights Agent,  as the case may be, and to each transfer agent of
the  Company's  Common  Stock,  the  Convertible  Preferred  Stock  and the
Preferred Stock, 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  (30) days  after  giving
notice of such  removal  or after it has been  notified  in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Rights Certificate (who shall, with such notice,  submit
his Rights Certificate for inspection by the Company),  then any registered
holder  of any  Rights  Certificate  may  apply to any  court of  competent
jurisdiction  for the  appointment  of a new Rights  Agent.  Any  successor
Rights Agent, whether appointed by the Company or by such a court, shall be
a  corporation  organized and doing  business  under the laws of the United
States or of the State of  Delaware  (or of any other  state of the  United
States  so long as such  corporation  is  authorized  to do  business  as a
banking  institution in the State of New York) in good  standing,  having a
principal  office in the State of New York,  which is authorized under such
laws to exercise corporate trust or stock transfer powers and is subject to
supervision or  examination by federal or state  authority and which has at
the time of its appointment as Rights Agent a combined  capital and surplus
of at least  $50,000,000.  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 Company's  Common
Stock, the Convertible  Preferred Stock and the Preferred Stock, and mail a
notice  thereof  in  writing  to  the  registered  holders  of  the  Rights
Certificates.  Failure to give any notice  provided for in this Section 21,
however,  or any defect therein,  shall not affect the legality or validity
of the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.


 43

     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 of  Directors  to reflect any
adjustment or change in the Purchase  Price and the number or kind or class
of shares or other  securities  or  property  purchasable  under the 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
following the  Distribution  Date and prior to the redemption or expiration
of the  Rights,  the Company  (a) shall,  with  respect to shares of Common
Stock  so  issued  or sold  pursuant  to the  exercise  of  stock  options,
convertible  securities,  or  warrants,   including,   without  limitation,
pursuant  to  the  conversion  of  the  Convertible  Preferred  Stock,  the
conversion of the Company's 4-7/8 Convertible  Subordinated  Debentures due
2005 and the  Company's  Class B Warrants,  or under any  employee  plan or
arrangement,  granted or awarded as of the  Distribution  Date, or upon the
exercise,  conversion or exchange of securities  hereinafter  issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate
by the Board of  Directors,  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 if,
and to the extent that,  the Company  shall be advised by counsel that such
issuance  would  create  a  significant   risk  of  material   adverse  tax
consequences  to the Company or the Person to whom such Rights  Certificate
would be issued,  and (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 Board of Directors
may, at its option, at any time prior to such time as any Person becomes an
Acquiring  Person,  redeem  all but not less than all the then  outstanding
Rights at a redemption price of $.01 per Right,  appropriately  adjusted to
reflect any stock split,  stock dividend or similar  transaction  occurring
after the date hereof (such redemption price being hereinafter  referred to
as the  "Redemption  Price").  The  Company  may,  at its  option,  pay the
Redemption  Price in cash,  shares of Common  Stock  (based on the  Current
Market Price, as defined in Section 11(d)(i) hereof, of the Common Stock at
the  time  of  redemption)  or  any  other  form  of  consideration  deemed
appropriate by the Board of Directors.

     (b)   Immediately upon the action of the Board of Directors ordering the
redemption  of the Rights  pursuant to Section  23(a)  hereof,  evidence of
which  shall have been filed with the Rights  Agent and without any further
action and  without  any  notice,  the right to  exercise  the Rights  will
terminate  and the only right  thereafter of the holders of Rights shall be
to receive the  Redemption  Price for each Right so held. The Company shall
promptly give public notice of any such redemption; provided, however, that
the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption.  Within 10 days after such action of the Board
of  Directors  ordering the  redemption  of the Rights,  the Company  shall
deliver a notice of such  redemption  to the Rights Agent and mail a notice
of such redemption to all holders of the then  outstanding  Rights at their

 44

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 Company's  Common Stock and the Convertible  Preferred Stock.
Any notice which is mailed in the manner  herein  provided  shall be deemed
given,  whether or not the holder receives the notice.  Each such notice of
redemption  will  state the method by which the  payment of the  Redemption
Price  will be made.  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
Section 24 hereof,  and other than in  connection  with the purchase of the
Stock prior to the Distribution Date.

     Section 24.  Exchange.  (a) The Board of Directors may, at its option,
at any time after any Person becomes an Acquiring  Person,  exchange all or
part of the then  outstanding  and  exercisable  Rights  (which  shall  not
include  Rights that have become void pursuant to the provisions of Section
7(e) hereof) for shares of the Company's  Common Stock at an exchange ratio
of one  share  of the  Company's  Common  Stock  per  Right,  appropriately
adjusted to reflect any stock split, stock dividend or similar  transaction
occurring  after the date hereof  (such  exchange  ratio being  hereinafter
referred to as the "Exchange Ratio").  Notwithstanding  the foregoing,  the
Board of Directors  shall not be  empowered to effect such  exchange at any
time  after any Person  (other  than the  Company,  any  Subsidiary  of the
Company,  any employee  benefit plan of the Company or any such Subsidiary,
or any Person or entity organized,  appointed or established by the Company
for or  pursuant  to the  terms  of  any  such  plan),  together  with  all
Affiliates and Associates of such Person,  becomes the Beneficial  Owner of
50% or more of the Company's Common Stock then outstanding.

     (b)   Immediately upon the action of the Board of Directors ordering the
exchange of any Rights  pursuant  to Section  24(a) and without any further
action and  without any notice,  the right to  exercise  such Rights  shall
terminate and the only right thereafter of a holder of such Rights shall be
to receive that number of shares of the Company's Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio.
The  Company  shall  promptly  give  public  notice  of any such  exchange;
provided,  however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange.  The Company promptly shall
mail a notice of any such  exchange to all of the holders of such Rights at
their last  addresses as they appear upon the registry  books of the Rights
Agent.  Any notice which is mailed in the manner herein  provided  shall be
deemed  given,  whether or not the holder  receives  the notice.  Each such
notice of  exchange  will  state the  method by which the  exchange  of the
shares of the  Company's  Common Stock for Rights will be effected  and, in
the event of any  partial  exchange,  the  number of Rights  which  will be
exchanged.  Any partial  exchange  shall be effected  pro rata based on the
number of Rights  (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.


 45

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

     (d)   The Company shall not be required to issue fractions  of a share
of its Common Stock or to distribute certificates which evidence fractional
shares.  In lieu of such  fractional  shares,  the Company shall pay to the
registered  holders of the  Rights  Certificate  with  regard to which such
fractional  shares  would  otherwise be issuable an amount in cash equal to
the same  fraction of the Current  Market Value of a share of Common Stock.
For the purposes of this Section 24(d), the Current Market Value of a share
of Common  Stock shall be the closing  price of a share of Common Stock (as
determined  pursuant  to  Section  11(d)(i)  hereof)  for the  Trading  Day
immediately prior to the date of exchange pursuant to this Section 24.

     Section 25.  Notice of Certain  Events.  (a) In case the Company shall
propose,  at any time after the Distribution  Date, (i) to pay any dividend
payable in stock of any class to the holders of Preferred  Stock or to make
any other  distribution  to the holders of  Preferred  Stock  (other than a
regular quarterly cash dividend), (ii) to offer to the holders of Preferred
Stock  rights or warrants to subscribe  for or to purchase  any  additional
shares  of  Preferred  Stock or  shares  of stock of any class or any other
securities,  rights or options, (iii) to effect any reclassification of its
Preferred  Stock  (other  than  a   reclassification   involving  only  the
subdivision of outstanding  shares of 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) hereof), or to effect any sale or other transfer (or to permit one or
more of its  Subsidiaries  to effect  any sale or other  transfer),  in one
transaction  or a series of related  transactions,  of more than 50% of the
assets or earning  power of the  Company and its  Subsidiaries  (taken as a
whole) to any other Person or Persons (other than the Company and/or any of
its  Subsidiaries in one or more  transactions  each of which complies with
Section 11(o)  hereof),  or (v) to effect the  liquidation,  dissolution or
winding up of the Company,  then, in each such case, the Company shall give
to each  holder of a Rights  Certificate,  to the  extent  feasible  and in
accordance  with Section 26 hereof,  a notice of such  proposed  action and
file a  certificate  with the  Rights  Agent to that  effect,  which  shall
specify  the  record  date  for  the  purposes  of  such  stock   dividend,

 46

distribution   of  rights  or   warrants,   or  the  date  on  which   such
reclassification,   consolidation,  merger,  sale,  transfer,  liquidation,
dissolution,  or winding up is to take place and the date of  participation
therein by the holders of the shares of Preferred  Stock,  if any such date
is to be fixed, and such notice shall be so given in the case of any action
covered  by clause  (i) or (ii)  above at least ten (10) 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 (10) days  prior to the date of the taking of such  proposed  action or
the date of participation therein by the holders of the shares of Preferred
Stock whichever shall be the earlier.

     (b)   In case a Section 11(a)(ii) Event shall occur, then, in any such
case, (i) the Company shall as soon as practicable  thereafter give to each
holder of a Rights  Certificate,  to the extent  feasible and in accordance
with Section 26 hereof,  a notice of the  occurrence  of such event,  which
shall  specify  the event and the  consequences  of the event to holders of
Rights under Section 11(a)(ii)  hereof,  and (ii) all references in Section
25(a)  to  Preferred  Stock  shall  be  deemed  thereafter  to refer to the
Company's  Common Stock and/or,  if  appropriate,  other  securities of the
Company.

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

                    U.S. Home Corporation
                    1800 West Loop South
                    Houston, Texas  77027
                    Attention:  Corporate Secretary

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

                    First Chicago Trust Company of New York
                    Suite 4660,  525 Washington Boulevard
                    Jersey City, New Jersey 07310
                    Attention: Tenders & Exchanges Administration

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


 47

     Section 27.  Supplements and Amendments.  The Company may from time to
time supplement or amend this Agreement without the approval of any holders
of the Rights  Certificates  in order to cure any ambiguity,  to correct or
supplement  any  provision  contained  herein  which  may be  defective  or
inconsistent  with  any  other  provisions  herein,  or to make  any  other
provisions  with respect to the Rights which the Company may deem necessary
or desirable, any such supplement or amendment to be evidenced by a writing
signed by the Company and the Rights Agent;  provided,  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 the Rights.

     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 of Directors, etc.
The Board of  Directors  shall have the  exclusive  power and  authority to
administer   this   Agreement   and  to  exercise  all  rights  and  powers
specifically granted to the Board of Directors or to the Company, or as may
be  necessary  or  advisable  in  the  administration  of  this  Agreement,
including,  without  limitation,  the right and power to (i)  interpret the
provisions  of this  Agreement,  and (ii)  make all  determinations  deemed
necessary or advisable for the administration of this Agreement  (including
a  determination  to  redeem or not  redeem  the  Rights  or to amend  this
Agreement  and  whether  any  proposed  amendment   adversely  affects  the
interests  of the  holders  of  Rights  Certificates).  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 of Directors  in good faith,  shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board of Directors to
any liability to the holders of the Rights.

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

     Section  31.  Severability.   If  any  term,  provision,  covenant  or
restriction of this Agreement is held by a court of competent  jurisdiction
or other authority to be invalid,  void or unenforceable,  the remainder of
the terms,  provisions,  covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be  affected,  impaired
or invalidated.


 48

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

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

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

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


                           U.S. HOME CORPORATION

                           By:   /s/ Kelly F. Somoza
                                ---------------------
                           Name: Kelly F. Somoza
                           Title: Vice President


                           FIRST CHICAGO TRUST COMPANY
                                OF NEW YORK


                           By:  /s/ James Kuzmich
                                ---------------------- 
                           Name: James Kuzmich
                           Title: Operations Officer


 49

                             TABLE OF CONTENTS


                                                                Page No.


          Section 1.          Certain Definitions                     1

          Section 2.          Appointment of Rights Agent             6

          Section 3.          Issue of Rights Certificates            7

          Section 4.          Form of Rights Certificates             8
 
          Section 5.          Countersignature and Registration       9

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

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

          Section 8.          Cancellation and Destruction of
                              Rights Certificates                    12

          Section 9.          Reservation and Availability of
                              Capital Stock                          13

          Section 10.         Preferred Stock Record Date            14

          Section 11          Adjustment of Purchase Price,
                              Number and Kind of Shares or Number
                              of Rights                              15

          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                                 25

          Section 15.         Rights of Action                       27

          Section 16.         Agreement of Rights Holders            27

          Section 17.         Rights Certificate Holder Not
                              Deemed a Stockholder                   28


 50

          Section 18.         Concerning the Rights Agent            28

          Section 19.         Merger or Consolidation or Change
                              of Name of Rights Agent                28

          Section 20.         Duties of Rights Agent                 29

          Section 21.         Change of Rights Agent                 31

          Section 22.         Issuance of New Rights Certificates    32

          Section 23.         Redemption and Termination             32

          Section 24.         Exchange                               33

          Section 25.         Notice of Certain Events               34

          Section 26.         Notices                                35

          Section 27.         Supplements and Amendments             35

          Section 28.         Successors                             36

          Section 29.         Determinations and Actions by
                              the Board of Directors, etc.           36

          Section 30.         Benefits of this Agreement             36

          Section 31.         Severability                           36

          Section 32.         Governing Law                          36

          Section 33.         Counterparts                           36

          Section 34.         Descriptive Headings                   37

 51

                                EXHIBIT 1-A

                                  FORM OF
                CERTIFICATE OF DESIGNATION, PREFERENCES AND
          RIGHTS OF SERIES A JUNIOR NON-CUMULATIVE PREFERRED STOCK

                                     of

                           U.S. HOME CORPORATION

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

                  We, Robert J. Strudler, Chairman and Co-Chief Executive
Officer, and Richard G. Slaughter, Vice President - Planning and Secretary,
of U.S. Home  Corporation,  a corporation  organized and existing under the
General  Corporation Law of the State of Delaware (the  "Corporation"),  in
accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:

                  That  pursuant  to  the  authority   conferred  upon  the
Corporation's Board of Directors (the "Board of Directors") by the Restated
Certificate  of  Incorporation,   as  amended,   of  the  Corporation  (the
"Certificate of Incorporation"), the Board of Directors on November 7, 1996
adopted by resolution this Certificate of Designation  creating a series of
500,000   shares  of  Preferred   Stock   designated  as  Series  A  Junior
Non-Cumulative Preferred Stock:

                  Pursuant  to  the  authority   vested  in  the  Board  of
Directors  in  accordance   with  the  provisions  of  the  Certificate  of
Incorporation,  a series of Preferred  Stock of the  Corporation  be and it
hereby is  created,  and that the  designation  and amount  thereof and the
voting powers, preferences and relative, participating,  optional and other
special  rights  of the  shares  of such  series,  and the  qualifications,
limitations or restrictions thereof are as follows:

1.  Designation  and Amount.  The shares of such  series  shall be
designated as "Series A Junior  Non-Cumulative  Preferred  Stock," $.10 par
value per share, and the number of shares constituting such series shall be
500,000.  Such number of shares may be  increased or decreased by the Board
of Directors;  provided, that no decrease shall reduce the number of shares
of Series A Junior Non-Cumulative Preferred Stock to a number less than the
number of  shares  outstanding  plus the  number  of  shares  reserved  for
issuance upon the exercise of  outstanding  options,  rights or warrants or
upon the conversion of any outstanding securities issued by the Corporation
convertible into Series A Junior Non-Cumulative Preferred Stock.


 52

2.  Dividends and Distributions.

     (A)  Subject to the prior and  superior  rights of the  holders of any
shares of any series of Preferred Stock,  including specifically holders of
shares of the Corporation's  Convertible  Redeemable  Preferred Stock, $.10
par value per share (the "Convertible Preferred Stock"),  ranking prior and
superior to the shares of Series A Junior  Non-Cumulative  Preferred  Stock
with  respect  to  dividends,  holders  of  record  of the  Series A Junior
Non-Cumulative Preferred Stock will be entitled to receive if, when, and as
declared by the Board of Directors, but only out of funds legally available
for the payment of cash dividends  under the laws of the State of Delaware,
quarterly  dividends payable on the last day of March, June,  September and
December  in each  year  (each  such  date  being  referred  to herein as a
"Quarterly  Dividend  Payment  Date"),  commencing  on the first  Quarterly
Dividend  Payment Date after the first issuance of a share or fraction of a
share of Series A Junior  Non-Cumulative  Preferred Stock, in an amount per
share  (rounded to the  nearest  cent) equal to the greater of (a) $1.00 or
(b) subject to the  provision for  adjustment  hereinafter  set forth,  100
times the aggregate per share amount of all cash  dividends,  and 100 times
the aggregate per share amount (payable in kind) of all non-cash  dividends
or other  distributions  other than a dividend  payable in shares of Common
Stock, $.01 par value per share ("Common  Stock"),  or a subdivision of the
outstanding shares of Common Stock (by  reclassification or otherwise),  to
be declared on the Common Stock with respect to the  immediately  preceding
Quarterly  Dividend  Payment Date,  or, in the case of the first  Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of
a share of Series A Junior Non-Cumulative Preferred Stock. In the event the
Corporation  shall  at  any  time  after  November  7,  1996  (the  "Rights
Declaration  Date") (i) declare any  dividend  on Common  Stock  payable in
shares of Common  Stock,  (ii)  subdivide the  outstanding  Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the  amount to which  holders  of shares of Series A
Junior  Non-Cumulative  Preferred Stock were entitled  immediately prior to
such event under clause (b) of the preceding  sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding  immediately after such event and the
denominator  of which is the  number of shares  of Common  Stock  that were
outstanding immediately prior to such event.

     (B)   The Corporation shall declare a dividend or  distribution on the
Series A Junior Non-Cumulative Preferred Stock as provided in paragraph (A)
above  immediately  prior  to the  time  when it  declares  a  dividend  or
distribution  on the Common Stock (other than a dividend  payable in shares
of Common Stock) and at no other time.

     (C)   Dividends on outstanding shares of Series A Junior Non-Cumulative
Preferred  Stock will not be  cumulative.  Dividends  paid on the shares of
Series A Junior  Non-Cumulative  Preferred Stock in an amount less than the
total amount of such dividends at the time declared on such shares shall be
allocated pro rata on a  share-by-share  basis among all such shares at the
time  outstanding.  Such  dividends,  if any, will be payable to holders of
record on the date  fixed for such  purpose  by the Board of  Directors  in
advance of the payment of each such dividend.


 53

3.   Voting Rights.

     (A)   The holders of the Series A Junior Non-Cumulative Preferred Stock,
voting  together as a single class (except as otherwise  provided herein or
by law) with the holders of the Convertible Preferred Stock and the holders
of the Common Stock,  will have the right to vote on all matters  requiring
action  of the  stockholders  of  the  Corporation  or  submitted  to  such
stockholders for action, except when otherwise required by law.

     (B)   Subject to the provision for adjustment  hereinafter  set forth,
each share of Series A Junior Non-Cumulative  Preferred Stock shall entitle
the holder  thereof to 100 votes on all matters  submitted to a vote of the
stockholders of the Corporation.  In the event the Corporation shall at any
time after the Rights  Declaration  Date (i) declare any dividend on Common
Stock payable in shares of Common  Stock,  (ii)  subdivide the  outstanding
Common Stock or (iii) combine the  outstanding  Common Stock into a smaller
number of  shares,  then in each such case the number of votes per share to
which holders of shares of Series A Junior  Non-Cumulative  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.

     (C)   In the event the Board of Directors declares a  dividend  on the
Series A Junior  Non-Cumulative  Preferred Stock, and the Corporation fails
to  pay  such  dividend  for  six  consecutive   fiscal  quarters  ("Unpaid
Dividends")  following  the date of such  declaration,  the  holders of the
outstanding  shares  of  Series A Junior  Non-Cumulative  Preferred  Stock,
voting  as a single  class,  will be  entitled,  by  written  notice to the
Corporation  given by the  holders  of a  majority  of the  Series A Junior
Non-Cumulative  Preferred Stock then outstanding or by ordinary  resolution
passed by the holders of a majority  of the Series A Junior  Non-Cumulative
Preferred  Stock  then  outstanding  present  in  person  or by  proxy at a
separate general meeting of such holders convened for the purpose, to elect
two  additional  directors  to the Board of  Directors,  to remove any such
directors from office and to elect persons in place of such  directors.  No
later than 30 days after such  entitlement  arises,  if written notice by a
majority  of the  holders of the Series A Junior  Non-Cumulative  Preferred
Stock then  outstanding has not been given as provided for in the preceding
sentence, the Board of Directors,  or an authorized committee thereof, will
convene a separate general meeting for the foregoing purpose.  In the event
the Board of Directors or such  authorized  committee fails to convene such
meeting within such 30-day period,  the holders of 10 percent of the shares
of the Series A Junior Non-Cumulative Preferred Stock then outstanding will
be entitled to convene such meeting.  The provisions of the  Certificate of
Incorporation relating to the convening and conduct of Special Meetings (as
defined  therein)  will apply with  respect  to any such  separate  general
meeting.  Directors  elected as aforesaid  will serve until the next Annual
Meeting  (as  defined  in  the  Certificate  of  Incorporation).  Upon  the
Corporation  having  paid all  Unpaid  Dividends  in full,  the term of any
directors  elected pursuant to this Section 3(C) will cease, and the number
of directors of the Corporation will automatically be decreased by two.


 54

     (D)   With respect to all matters upon which the holders of the Series A
Junior Non-Cumulative  Preferred Stock, the Convertible Preferred Stock and
Common Stock may be entitled to vote,  voting  together as a single  class,
such matters will require the affirmative vote of the holders of a majority
of the votes  cast by the  holders  of the  Series A Junior  Non-Cumulative
Preferred Stock, the Convertible  Preferred Stock and Common Stock entitled
to vote, voting together as a single class,  except where a higher or lower
vote is  required  by (i)  the  General  Corporation  Law of the  State  of
Delaware,  (ii) the provisions of the Certificate of  Incorporation,  (iii)
the provisions of the  Corporation's  Amended and Restated  By-Laws or (iv)
the provisions of this Certificate of Designation, Preferences and Rights.

     (E)   Except  as  set  forth   herein,   holders of  Series  A  Junior
Non-Cumulative  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 Convertible Preferred Stock and Common Stock as set
forth herein) for taking any corporate action.

4.   Certain Restrictions.

           For so long as any dividend declared on the Series A Junior
Non-Cumulative Preferred Stock is unpaid, the Corporation shall not

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

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

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


 55

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

5.   Liquidation, Dissolution or Winding Up.

     (A)   Upon any liquidation (voluntary or  otherwise),  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  A  Junior
Non-Cumulative Preferred Stock unless, prior thereto, the holders of shares
of Series A Junior Non-Cumulative  Preferred Stock shall have received $100
per  share,  plus an amount  equal to  declared  and unpaid  dividends  and
distributions  thereon  to the  date of such  payment;  provided,  that the
holders of shares of Series A Junior  Non-Cumulative  Preferred Stock shall
be  entitled  to receive  an  aggregate  amount  per share,  subject to the
provision for adjustment as hereinafter  set forth,  equal to 100 times the
aggregate amount to be distributed per share to holders of shares of Common
Stock 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 A Junior  Non-Cumulative  Preferred Stock, except distributions made
ratably on the Series A Junior Non-Cumulative  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
(the "Series A Liquidation Preference").

     (B)   In the event the Corporation  shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares
of Common  Stock,  (ii)  subdivide  the  outstanding  Common Stock or (iii)
combine the outstanding Common Stock into a smaller number of shares,  then
in each such case the aggregate amount to which holders of shares of Series
A Junior Non-Cumulative  Preferred Stock were entitled immediately prior to
such  event  under the  proviso  in clause  (i) of  Section  5(A)  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.

     (C)   In the  event,  however,  that there  are not  sufficient  assets
available to permit payment in full of the Series A Liquidation  Preference
and the liquidation  preferences of all other series of preferred stock, if
any,  which  rank on a  parity  with the  Series  A  Junior  Non-Cumulative
Preferred Stock, then such remaining assets shall be distributed ratably to
the  holders  of such  parity  shares  in  proportion  to their  respective
liquidation preferences.


 56

     (D)   For the purpose  hereof,  the voluntary sale, lease, exchange or
transfer,  whether  for  cash,  stock,  property  or  otherwise,  of all or
substantially all or part of the Corporation's  property or assets to, or a
consolidation  or merger of the Corporation with or into, one or more other
corporations or partnerships, or the reduction of the Corporation's capital
stock, will not be deemed to be a liquidation, dissolution or winding up of
the Corporation.

6.   Ranking

     The Series A Junior  Non-Cumulative  Preferred Stock shall rank junior
to all other series of the Corporation's  Preferred Stock and senior to the
Common  Stock,  as to the  payment of  dividends  and the  distribution  of
assets, unless the terms of any such other stock shall provide otherwise.

7.   Consolidation, Merger, etc.

     In case the Corporation  shall enter into any  consolidation,  merger,
combination  or other  transaction  in which the shares of Common Stock are
exchanged  for or changed into other stock or  securities,  cash and/or any
other  property,  then in any  such  case  the  shares  of  Series A Junior
Non-Cumulative  Preferred  Stock  shall  at  the  same  time  be  similarly
exchanged or changed in an amount per share  (subject to the  provision for
adjustment  hereinafter set forth) equal to 100 times the aggregate  amount
of stock, securities,  cash and/or any other property (payable in kind), as
the case may be,  into  which or for which  each  share of Common  Stock is
changed or exchanged.  In the event the Corporation shall at any time after
the Rights  Declaration  Date (i)  declare  any  dividend  on Common  Stock
payable in shares of Common Stock,  (ii) subdivide the  outstanding  Common
Stock, or (iii) combine the outstanding  Common Stock into a smaller number
of shares,  then in each such case the  amount  set forth in the  preceding
sentence  with  respect  to the  exchange  or  change of shares of Series A
Junior Non-Cumulative 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.

8.    No Redemption.  The shares of Series A Junior Non-Cumulative Preferred
Stock shall not be redeemable.

9.    Reacquired Shares.

     Any shares of Series A Junior Non-Cumulative 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 of the Corporation or any
similar stock or as otherwise required by law.


 57

10.  No Preemptive Rights


11.  Legends

     In  addition  to any  other  legend  required  to be set forth on each
certificate  representing  Series A Junior  Non-Cumulative  Preferred Stock
pursuant  to  the  Certificate  of  Incorporation  or  by  law,  each  such
certificate will bear the following legend:

        "U.S.HOME  CORPORATION  WILL FURNISH  WITHOUT CHARGE TO EACH
        HOLDER OF THE SERIES A JUNIOR NON-CUMULATIVE PREFERRED STOCK
        WHO SO REQUESTS THE POWERS,  DESIGNATIONS,  PREFERENCES  AND
        RELATIVE,  PARTICIPATING,  OPTIONAL, OR OTHER SPECIAL RIGHTS
        OF EACH CLASS OF STOCK OF U.S.  HOME  CORPORATION  OR SERIES
        THEREOF AND THE QUALIFICATIONS,  LIMITATIONS OR RESTRICTIONS
        OF SUCH  PREFERENCES  AND/OR  RIGHTS." 

12.  Amendment.  The  Certificate  of  Incorporation  shall  not be further
amended in any manner  which would  materially  alter or change the powers,
preferences  or  special  rights  of the  Series  A  Junior  Non-Cumulative
Preferred Stock so as to affect them adversely without the affirmative vote
of the holders of a majority or more of the outstanding  shares of Series A
Junior Non-Cumulative Preferred Stock, voting separately as a class.

13.  Fractional Shares.  Series A Junior Non-Cumulative Preferred Stock may 
be issued in fractions of a share, which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights, 
receive dividends, participate in distributions and to have the benefit of
all other rights of holders of Series A Junior Non-Cumulative Preferred Stock.



 58


          IN  WITNESS  WHEREOF,   we  have  executed  and  subscribed  this
Certificate  and do affirm the  foregoing  as true under the  penalties  of
perjury this ____ day of November, 1996.


                      ----------------------------------
                      Robert J. Strudler
                      Chairman and Co-Chief
                      Executive Officer

(Corporate Seal)

Attest:


- - -------------------------
Richard G. Slaughter
Vice President - Planning
and Secretary



 59

                                EXHIBIT 1-B

                        [Form of Rights Certificate]

Certificate No. R-                                         ________ Rights


NOT EXERCISABLE AFTER NOVEMBER 7, 2006 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 (AS SUCH TERM IS DEFINED IN THE RIGHTS  AGREEMENT) AND ANY
SUBSEQUENT  HOLDER OF SUCH  RIGHTS MAY BECOME  NULL AND VOID.  [THE  RIGHTS
REPRESENTED BY THIS RIGHTS  CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN  ACQUIRING  PERSON OR AN AFFILIATE OR ASSOCIATE
OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY,  THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
RIGHTS AGREEMENT.]


                             Rights Certificate

                           U.S. HOME CORPORATION


                  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  November  7,  1996  (the  "Rights
Agreement"),  between U.S. Home  Corporation,  a Delaware  corporation (the
"Company"),  and First  Chicago  Trust  Company  of New York  (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 November 7, 2006,  unless the Rights evidenced
hereby shall have been previously redeemed by the Company or exchanged,  at
the office or offices of the Rights Agent  designated for such purpose,  or
its  successors  as  Rights  Agent,  one  one-hundredth  of a  fully  paid,
nonassessable share of Series A Junior Non-Cumulative Preferred Stock, $.10
par value per share (the "Preferred  Stock"), of the Company, at a purchase
price of $80.00 per one  one-hundredth  of a share (the "Purchase  Price"),
upon presentation and surrender of this Rights Certificate with the Form of
Election to Purchase and related  Certificate  duly executed.  The Purchase
Price may be paid in cash or by certified bank check or money order payable
to the order of the Company.  The number of Rights evidenced by this Rights
Certificate (and the number of one  one-hundredths  of a share of Preferred
Stock which may be purchased upon exercise hereof) set forth above, and the
Purchase Price per share set forth above, are the number and Purchase Price
as of November 7, 1996, based on the Preferred Stock as constituted at such
date.


 60

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

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

                  Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights  Agreement),  if the Rights evidenced by this
Rights  Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate  or  Associate  of any such  Acquiring  Person (as such terms are
defined in the Rights Agreement),  (ii) a transferee of an Acquiring Person
(or any such  Associate or  Affiliate)  who becomes a transferee  after the
Acquiring  Person  become  such,  or  (iii)  under  certain   circumstances
specified in the Rights Agreement,  a transferee of an Acquiring Person (or
any such  Associate  or  Affiliate)  who becomes a  transferee  prior to or
concurrently  with the Acquiring  Person  becoming such,  such Rights shall
become null and void and no holder hereof shall have any right with respect
to such  Rights from and after the  occurrence  of such  Section  11(a)(ii)
Event.

                  This Rights  Certificate,  with or without  other  Rights
Certificates,  upon  surrender  at the  principal  office or offices 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 one
one-hundredths  of a share of Preferred  Stock or other  securities  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  Rights  Certificate  (i) may be redeemed by the
Company at its option at a  redemption  price of $.01 per Right or (ii) may
be  exchanged  in whole or in part for  shares  of  Preferred  Stock or the
Company's Common Stock, $.01 par value per share.


 61

                  No  fractional  shares of Preferred  Stock will be issued
upon the  exercise  of any Right or Rights  evidenced  hereby  (other  than
fractions which are integral  multiples of one  one-hundredth of a share of
Preferred Stock, which may, at the election of the Company, be evidenced by
depositary  receipts),  but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement. The Company reserves the right to require
prior to the  occurrence of a Triggering  Event (as such term is defined in
the Rights  Agreement)  that a number of Rights be  exercised  so that only
whole shares of Preferred Stock will be issued.

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

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

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



Dated as of _________ __, ____



ATTEST:                                     U.S. HOME CORPORATION


______________________                      By:______________________
         Secretary                                         Title:


Countersigned:

FIRST CHICAGO TRUST COMPANY
         OF NEW YORK


By_______________________
  Authorized Signature



 62

                [Form of Reverse Side of Rights Certificate]

                             FORM OF ASSIGNMENT

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

FOR VALUE RECEIVED ______________________________hereby sells, assigns
and transfers unto ______________________________

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


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


Please insert social security
or other identifying number ____________

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

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



Dated:  ___________, __


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

Signature Guaranteed:

                  Signatures  must  be  guaranteed  by a  participant  in a
Securities Transfer Association recognized signature guarantee program.



 63


                                Certificate


                  The   undersigned   hereby   certifies  by  checking  the
appropriate boxes that:

                  (1) the Rights  evidenced by this Rights  Certificate [ ]
are [ ] are not being sold,  assigned or  transferred  by or on behalf of a
Person who is or was an  Acquiring  Person or an  Affiliate or Associate of
any such  Acquiring  Person  (as  such  terms  are  defined  in the  Rights
Agreement); and

                  (2) after due  inquiry and to the best  knowledge  of the
undersigned,  it [ ] did [ ] did not acquire the Rights  evidenced  by this
Rights  Certificate  from any Person who is, was or subsequently  became an
Acquiring  Person or an Affiliate  or Associate of an Acquiring  Person (as
such terms are defined in the Rights Agreement).



Dated:  __________, ___             _______________________
                                                     Signature

Signature Guaranteed:

                  Signature  must  be  guaranteed  by  a  participant  in a
Securities Transfer Association recognized signature guarantee program.


                                   NOTICE

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

                  In the event the  certification  set forth in the Form of
Assignment is not completed, the Company and the Rights Agent will deem the
Beneficial  Owner (as such term is defined in the Rights  Agreement) of the
Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate  or  Associate  thereof  (as such terms are defined in the Rights
Agreement)  and,  in case of an  assignment,  will  affix a legend  to that
effect  on any  Rights  Certificate  issued  in  exchange  for this  Rights
Certificate   and  any  election  to  purchase  Rights  under  such  Rights
Certificate will not be honored.


 64


                        FORM OF ELECTION TO PURCHASE

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

To Rights Agent:

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

Please insert social security
or other identifying number _________________________

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

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

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

Please insert social security
or other identifying number

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

Dated:  __________, ____

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

Signature Guaranteed:

                  Signatures  must  be  guaranteed  by a  participant  in a
Securities Transfer Association recognized signature guarantee program.


 65

                                Certificate

                  The   undersigned   hereby   certifies  by  checking  the
appropriate boxes that:

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

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



Dated:  __________, ____            _______________________
                                                     Signature

Signature Guaranteed:

                  Signatures  must  be  guaranteed  by a  participant  in a
Securities Transfer Association recognized signature guarantee program.

                                   NOTICE

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

                  In the event  the  certification  set forth  above in the
Form of Election to Purchase is not  completed,  the Company and the Rights
Agent will deem the Beneficial Owner (as such term is defined in the Rights
Agreement)  of the Rights  evidenced  by this Rights  Certificate  to be an
Acquiring  Person or an Affiliate  or Associate  thereof (as such terms are
defined in the Rights  Agreement) and such Election to Purchase will not be
honored.



 66

                                EXHIBIT 1-C


                       SUMMARY OF RIGHTS TO PURCHASE
                              PREFERRED STOCK


                  On November 7 , 1996,  the Board of Directors (the "Board
of Directors") of U.S. Home  Corporation  (the "Company")  adopted a rights
plan. In connection with the rights plan, the Board of Directors declared a
dividend  distribution  of one preferred stock purchase right ("Right") for
each outstanding  share of the Company's  Common Stock,  $.01 par value per
share  ("Common  Stock"),  and  each  outstanding  share  of the  Company's
Convertible  Redeemable  Preferred  Stock,  $.10 par value  per share  (the
"Convertible  Preferred Stock" and, collectively with the Common Stock, the
"Stock"). The dividend is payable to holders of Stock of record on December
4, 1996 (the  "Record  Date").  Each  Right,  when it becomes  exercisable,
entitles  the  registered  holder to purchase  from the Company at any time
following  the  Distribution  Date  (as  defined  below)  and  prior to the
occurrence of a Triggering  Event (as defined  below) a unit  consisting of
one  one-hundredth  of a share (a "Unit") of the Company's  Series A Junior
Non-Cumulative  Preferred  Stock,  $.10 par value per share (the "Preferred
Stock"),  at a price  of  $80.00  per  Unit,  subject  to  adjustment  (the
"Purchase Price"). The description and terms of the Rights are set forth in
a Rights Agreement,  dated as of November 7, 1996 (the "Rights Agreement"),
between the Company and First  Chicago Trust Company of New York, as Rights
Agent.

                  Until the  earlier to occur of (i) 10 days after the date
on  which  there  is a public  announcement  that (a) a person  or group of
affiliated or associated  persons (other than a person who is and continues
at all times to be eligible under Rule 13d-1 under the Securities  Exchange
Act of 1934 as in  effect  on the date of the  Rights  Agreement  to file a
Schedule  13G  with  respect  to its  ownership  of the  Common  Stock  (an
"Institutional  Stockholder"))  has acquired,  or has the right to acquire,
beneficial  ownership  of 15% or more of the  outstanding  shares of Common
Stock or (b) an  Institutional  Stockholder,  including its  affiliates and
associates,  has acquired or has the right to acquire beneficial  ownership
of 20% or more of the  outstanding  shares  of  Common  Stock  (any  person
described in clause (a) or (b) being referred to as an "Acquiring Person"),
or (ii) 10  business  days (or such  later  date as the Board of  Directors
shall  determine  prior to such time as any  person or group of  affiliated
persons  becomes an Acquiring  Person)  following the  commencement  of, or
announcement  of an  intention  to make,  a tender  or  exchange  offer the
consummation  of which  would  result  in a person  or group of  affiliated
persons  beneficially  owning 15% or more of the then outstanding shares of
Common Stock (including any such date which is after the date of the Rights
Agreement  and prior to the  issuance  of the  Rights;  the earlier of such
dates being called the "Distribution  Date"), the Rights will be evidenced,
with respect to any share of Stock  outstanding  as of the Record Date,  by
the  certificate  for such  Stock  with a copy of this  Summary  of  Rights
attached thereto.

 67

                  Until the  Distribution  Date (or earlier  redemption  or
expiration of the Rights), (i) the Rights will be transferred with and only
with the  shares of Stock,  (ii) new Stock  certificates  issued  after the
Record Date upon  transfer  or  issuance  of Stock will  contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any  certificates  for Stock  outstanding,  even  without  such
notation or copy of this Summary of Rights  being  attached  thereto,  will
also  constitute  the  transfer  of the  Rights  associated  with the Stock
represented  by such  certificate.  As soon as  practicable  following  the
Distribution  Date,  separate  certificates  evidencing the Rights ("Rights
Certificates")  will be mailed to  holders of record of the Stock as of the
close  of  business  on the  Distribution  Date and  such  separate  Rights
Certificates  alone  will  represent  the  Rights.  Pursuant  to the Rights
Agreement,  the  Company  reserves  the  right  to  require  prior  to  the
occurrence of a Triggering Event (as defined below) that, upon any exercise
of Rights,  a number of Rights be  exercised  so that only whole  shares of
Preferred Stock will be issued.

                  The Rights  are not  exercisable  until the  Distribution
Date and will  expire at the close of  business  on  November  7, 2006 (the
"Final Expiration  Date"),  unless the Final Expiration Date is extended or
unless the Rights are earlier redeemed or exchanged by the Company, in each
case, as described below.

                  In the event that a person or group of affiliated persons
becomes an Acquiring  Person,  each holder of a Right (the "Flip-In Right")
shall  thereafter have the right to receive,  upon exercise,  the number of
shares of Common  Stock or of  one-one-hundredths  of a share of  Preferred
Stock (or, in certain circumstances,  cash, property or other securities of
the  Company)  having  a value  equal  to two  times  the  Purchase  Price.
Notwithstanding any of the foregoing,  following the occurrence of any such
event,  all Rights that are, or (under certain  circumstances  specified in
the Rights Agreement) were,  beneficially owned by any Acquiring Person (or
any affiliate or associate thereof) will be null and void.

                  For example,  at an exercise price of $80 per Right, each
Right not owned by an  Acquiring  Person (or by any  affiliate or associate
thereof)  following  an event set forth in the  preceding  paragraph  would
entitle  its  holder  to  purchase  $160  worth of  Common  Stock (or other
consideration,  as noted above) for $80. Assuming that the Common Stock had
a per share value of $20 at such time, the holder of each valid Right would
be entitled to purchase eight shares of Common Stock for $80.

                  In the event that, at any time after a person or group of
affiliated  persons  has become an  Acquiring  Person,  (i) the  Company is
acquired in a merger or other business combination  transaction or (ii) 50%
or more of the Company's  assets or earning  power is sold or  transferred,
each holder of a Right (except Rights which  previously have been voided as

 68

set forth above) shall thereafter have the right (the "Flip-Over Right") to
receive,  upon  exercise,  common stock of the acquiring  company  having a
value  equal to two times the  Purchase  Price.  The holder of a Right will
continue to have the Flip-Over  Right whether or not such holder  exercises
or surrenders the Flip-In Right. The events set forth in this paragraph and
in the  second  preceding  paragraph  are  referred  to as the  "Triggering
Events."

                  The Purchase  Price  payable,  and the number of Units of
Preferred  Stock,  shares of Common Stock or other  securities  or property
issuable,  upon exercise of the Rights are subject to adjustment  from time
to time to prevent  dilution (i) in the event of a stock  dividend on, or a
subdivision,  combination or reclassification of, the Preferred Stock, (ii)
if holders of the Preferred Stock are granted certain rights or warrants to
subscribe for Preferred  Stock or  convertible  securities at less than the
current market price of the Preferred Stock, or (iii) upon the distribution
to holders of the Preferred  Stock of evidences of  indebtedness  or assets
(excluding  regular quarterly cash dividends) or of subscription  rights or
warrants (other than those referred to above).

                  With certain  exceptions,  no  adjustment in the Purchase
Price will be required until cumulative  adjustments  amount to at least 1%
of the  Purchase  Price.  No  fractional  Units will be issued and, in lieu
thereof,  an  adjustment  in cash will be made based on the market price of
the Preferred Stock on the last trading date prior to the date of exercise.

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

                  Shares of the Preferred Stock  purchasable  upon exercise
of the  Rights  are not  redeemable.  Each  share of  Preferred  Stock will
entitle  its holder to  dividends  as, when and if declared by the Board of
Directors  of $1 per share per quarter but will be entitled to an aggregate
dividend of 100 times the dividend  declared on a share of Common Stock. In
the event of  liquidation,  the  holders  of the  Preferred  Stock  will be
entitled to a minimum  preferential  liquidation payment of $100 per share,
plus  accrued and unpaid  dividends,  but will be entitled to an  aggregate
payment of 100 times the payment made per share of Common Stock. Each share
of Preferred  Stock will have 100 votes,  voting  together  with the Common
Stock and Convertible Preferred Stock. Finally, in the event of any merger,
consolidation or other  transaction in which the Common Stock is exchanged,
each share of the Preferred Stock will be entitled to receive 100 times the
amount  received per share of the Common Stock.  These rights are protected
by customary antidilution provisions.


 69
                  Because of the nature of the Preferred  Stock's dividend,
liquidation and voting rights, the value of the one one-hundredth  interest
in a share of  Preferred  Stock  purchasable  upon  exercise  of each Right
should approximate the value of one share of Common Stock.

                  The  shares  of the  Preferred  Stock  shall  rank,  with
respect to the payment of dividends  and as to the  distribution  of assets
upon liquidation,  dissolution or winding up of the Company,  junior to all
other  series  of  preferred  stock  of  the  Company,  including,  without
limitation,  the Convertible Preferred Stock, unless the Board of Directors
shall specifically  determine  otherwise in fixing the powers,  preferences
and  relative,  participating,  optional  and other  special  rights of the
shares of any such  other  series in the  qualifications,  limitations  and
restrictions thereof.

                  At any time  after any person or group of  affiliated  or
associated persons becomes an Acquiring Person and prior to the acquisition
by such  person  or group  of  beneficial  ownership  of 50% or more of the
outstanding  Common  Stock,  the Board of Directors may exchange the Rights
(other than Rights  owned by the  Acquiring  Person  which will have become
void),  in whole or in part,  at an  exchange  ratio of one share of Common
Stock or one Unit (or of a share  of a class  or  series  of the  Company's
preferred stock having equivalent  rights,  preferences and privileges) per
Right (subject to adjustment).

                  At any time  prior to such time as any person or group of
affiliated or associated  persons becomes an Acquiring Person,  the Company
may  redeem the  Rights in whole,  but not in part,  at a price of $.01 per
Right (the  "Redemption  Price")  (payable in cash,  Common  Stock or other
consideration  deemed  appropriate by the Board of Directors).  Immediately
upon the  action  of the  Board of  Directors  ordering  redemption  of the
Rights,  the Rights  will  terminate  and the only right of the  holders of
Rights will be to receive the Redemption Price.

                  Until a Right is exercised,  the holder thereof, as such,
will have no rights as a  stockholder  of the Company,  including,  without
limitation, the right to vote or to receive dividends. While it is expected
that the  distribution of the Rights will not be taxable to stockholders or
to  the  Company,  stockholders  may,  depending  upon  the  circumstances,
recognize  taxable  income in the event that the Rights become  exercisable
for  Common  Stock (or other  consideration)  of the  Company or for common
stock of the acquiring company as set forth above.

                  The terms of the  Rights  may be  amended by the Board of
Directors  without the  consent of the holders of Rights,  except that from
and after  such time as any  person or group of  affiliated  or  associated
persons becomes an Acquiring Person, no such amendment may adversely affect
the interests of the holders of Rights.


70

                  As of October 31, 1996,  there were 11,448,205  shares of
Common Stock and 122,863 shares of Convertible Preferred Stock outstanding,
122,863  shares of Common Stock  issuable upon  conversion of the shares of
Convertible Preferred Stock, 2,253,521 shares of Common Stock issuable upon
conversion of the Company's Convertible  Subordinated  Debentures due 2005,
1,884,773  shares of Common Stock  issuable  upon exercise of the Company's
Class B  Warrants  and  537,500  shares  issuable  upon  exercise  of stock
options. At such time, no shares of Common Stock were held in the Company's
treasury.  Each outstanding share of Common Stock and Convertible Preferred
Stock on the Record Date will receive one Right.  As long as the Rights are
attached  to shares of Stock,  the  Company  will  issue one Right for each
share  which   becomes   outstanding   between  the  Record  Date  and  the
Distribution  Date so that all shares  will have  attached  Rights  and, in
certain cases described in the Rights Agreement,  the Company may issue one
Right for each share which becomes outstanding after the Distribution Date.
The Board of  Directors  has reserved  for  issuance  upon  exercise of the
Rights 500,000 shares of Preferred Stock.

                  The Rights have certain anti-takeover effects. The Rights
will  cause  substantial  dilution  to a person or group that  attempts  to
acquire  the  Company in a manner or on terms not  approved by the Board of
Directors unless the offer is conditional on a substantial number of Rights
being  acquired.  The Rights,  however,  should not affect any  prospective
offeror  willing to make an offer at a fair price and otherwise in the best
interests of the Company and its stockholders as determined by the Board of
Directors or willing to negotiate  with the Board of Directors.  The Rights
should not interfere with any merger or other business combination approved
by the Board of Directors  since the Board of Directors may, at its option,
at any time  until a  person  or group of  affiliated  persons  becomes  an
Acquiring  Person,  redeem  all but not less than all the then  outstanding
Rights at the Redemption Price.

                  A copy of the  Rights  Agreement  has been filed with the
Securities  and  Exchange   Commission  as  an  Exhibit  to  the  Company's
Registration  Statement on Form 8-A,  dated November 7, 1996. A copy of the
Rights  Agreement is available  free of charge from the Rights Agent.  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.