Document:

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                          SHAREHOLDER RIGHTS AGREEMENT

                                 by and between

                                  VERSICOR INC.

                                       and

                                 as Rights Agent

                         Dated as of __________ __, 2000

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                                TABLE OF CONTENTS

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SECTION                                                                                                PAGE

<S>                                                                                                  <C>
SECTION 1.                 CERTAIN DEFINITIONS..........................................................1

SECTION 2.                 APPOINTMENT OF RIGHTS AGENT..................................................6

SECTION 3.                 ISSUANCE OF RIGHTS CERTIFICATES..............................................6

SECTION 4.                 FORM OF RIGHTS CERTIFICATES..................................................8

SECTION 5.                 COUNTERSIGNATURE AND REGISTRATION............................................9

SECTION 6.                 TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF
                           RIGHTS CERTIFICATES; MUTILATED, DESTROYED, LOST OR
                           STOLEN RIGHTS CERTIFICATES...................................................9

SECTION 7.                 EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
                           OF RIGHTS...................................................................10

SECTION 8.                 CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES.........................12

SECTION 9.                 RESERVATION AND AVAILABILITY OF CAPITAL STOCK...............................13

SECTION 10.                PREFERRED STOCK RECORD DATE.................................................14
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SECTION 11.                ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF
                           SHARES OR NUMBER OF RIGHTS..................................................14

SECTION 12.                CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
                           OF SHARES...................................................................22

SECTION 13.                CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
                           ASSETS; CASH FLOW 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

SECTION 18.                CONCERNING THE RIGHTS AGENT.................................................28

SECTION 19.                MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
                           RIGHTS AGENT................................................................29

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..................................................33

SECTION 24.                EXCHANGE....................................................................33

SECTION 25.                NOTICE OF CERTAIN EVENTS....................................................35

SECTION 26.                NOTICES.....................................................................36

SECTION 27.                SUPPLEMENTS AND AMENDMENTS..................................................36

SECTION 28.                SUCCESSORS..................................................................37

SECTION 29.                DETERMINATIONS AND ACTIONS BY THE BOARD OF
                           DIRECTORS, ETC. ............................................................37

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                                TABLE OF CONTENTS

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SECTION                                                                                                PAGE
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SECTION 30.                BENEFITS OF THIS AGREEMENT..................................................37

SECTION 31.                SEVERABILITY................................................................37

SECTION 32.                GOVERNING LAW...............................................................38

SECTION 33.                COUNTERPARTS................................................................38

SECTION 34.                DESCRIPTIVE HEADINGS........................................................38

Exhibit A         Form of Certificate of Designations
Exhibit B         Form of Rights Certificate
Exhibit C         Summary of Rights

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                          SHAREHOLDER RIGHTS AGREEMENT

                  THIS SHAREHOLDER RIGHTS AGREEMENT, dated as of _______ __,
2000 (the "Agreement"), is entered into by and between VERSICOR INC., a Delaware
corporation (the "Company"), and ___________________, a ____________________
(the "Rights Agent").

                               W I T N E S S E T H

                  WHEREAS, on _______ __, 2000 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company (a) authorized and declared a
dividend distribution of one Right (as hereinafter defined) for each share of
Common Stock, (as defined in Section 1(g) hereof) outstanding at the Close of
Business on ___________, ____ (the "Record Date"), and (b) authorized the
issuance of one Right (as such number may hereinafter be adjusted pursuant to
the provisions of Section 11(p) hereof) for each share of Common Stock of the
Company issued between the Record Date (whether originally issued or delivered
from the Company's treasury) and the Distribution Date (hereinafter defined),
each Right initially representing the right to purchase one one-hundredth of a
share of Series A Junior Participating Preferred Stock of the Company (the
"Preferred Stock") having the rights, powers and preferences set forth in the
form of Certificate of Designations of Series A Junior Participating Preferred
Stock attached hereto as EXHIBIT A, upon the terms and subject to the conditions
hereinafter set forth (the "Rights").

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

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

                  (a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be, at any
time after the Record Date, the Beneficial Owner of 15% or more of the shares
of Common Stock then outstanding (calculated pursuant to the methodology set
forth in Section 29), but shall NOT include:

                           (i)   the Company;

                           (ii)  any Subsidiary of the Company;

                           (iii) any employee benefit plan of the Company, or of
         any Subsidiary of the Company, or any Person or entity organized,
         appointed or established by the Company for or pursuant to the terms of
         any such plan;

                           (iv)  any Person who becomes the Beneficial Owner of
         fifteen percent (15%) or more of the shares of Common Stock then
         outstanding as a result of a reduction in the number of shares of
         Common Stock outstanding due to

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         the repurchase of shares of Common Stock by the Company unless and
         until such Person, after becoming aware that such Person has become
         the Beneficial Owner of fifteen percent (15%) or more of the then
         outstanding shares of Common Stock, acquires beneficial ownership of
         additional shares of Common Stock representing one percent (1%) or
         more of the shares of Common Stock then outstanding; or

                           (v)   any such Person who has reported or is required
         to report such ownership (but less than twenty percent (20%), on
         Schedule 13G under the Securities and Exchange Act of 1934, as amended
         and in effect on the date of the Agreement (the "Exchange Act") (or any
         comparable or successor report) or on Schedule 13D under the Exchange
         Act (or any comparable or successor report) which Schedule 13D does not
         state any intention to or reserve the right to control or influence the
         management or policies of the Company or engage in any of the actions
         specified in Item 4 of such schedule (other than the disposition of the
         Common Stock) and, within ten (10) Business Days of being requested by
         the Company to advise it regarding the same, certifies to the Company
         that such Person acquired shares of Common Stock in excess of fourteen
         and nine-tenths percent (14.9%) inadvertently or without knowledge of
         the terms of the Rights and who, together with all Affiliates and
         Associates, thereafter does not acquire additional shares of Common
         Stock while the Beneficial Owner of fifteen percent (15%) or more of
         the shares of Common Stock then outstanding; PROVIDED, HOWEVER, that if
         the Person requested to so certify fails to do so within ten (10)
         Business Days, then such Person shall become an Acquiring Person
         immediately after such ten (10)-Business-Day period.

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

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

                  (d) 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 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 such Person
         or any of such Person's Affiliates or Associates until such tendered
         securities are accepted for purchase or exchange, (B) securities
         issuable upon exercise of Rights at any time prior to the occurrence of
         a Triggering Event (hereinafter defined), or (C) securities issuable
         upon exercise of Rights from and after the occurrence of a Triggering
         Event which

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         Rights were acquired by such Person or any of such Person's
         Affiliates or Associates prior to the Distribution Date (hereinafter
         defined) or pursuant to Section 3(a) or Section 22 hereof (the
         "Original Rights") or pursuant to Section 11(i) of this Agreement in
         connection with an adjustment made with respect to any Original
         Rights;

                           (ii) which such Person or any of such Person's
         Affiliates or Associates, directly or indirectly, has the right to vote
         or dispose of or has "beneficial ownership" of (as determined pursuant
         to Rule 13d-3 of the General Rules and Regulations under the Exchange
         Act), including pursuant to any agreement, arrangement or
         understanding, 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 given in
         response to a public proxy or consent solicitation made pursuant to,
         and in accordance with, the applicable provisions of the General Rules
         and Regulations under the Exchange Act, and (B) is not reportable by
         such Person on Schedule 13D under the Exchange Act (or any comparable
         or successor report); or

                           (iii) which are beneficially owned, directly or
         indirectly, by any other Person (or any Affiliate or Associate thereof)
         with which such Person (or any of such Person's Affiliates or
         Associates) has any agreement, arrangement or understanding (whether or
         not in writing), for the purpose of acquiring, holding, voting (except
         pursuant to a revocable proxy as described in the proviso to
         subparagraph (ii) of this paragraph (d)) or disposing of any voting
         securities of the Company; PROVIDED, HOWEVER, that nothing in this
         paragraph (d) 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 forty (40) days after the date of such acquisition, and
         then only if such securities continue to be owned by such Person at
         such expiration of forty (40) days, and PROVIDED FURTHER, HOWEVER, that
         any stockholder of the Company, with Affiliate(s), Associate(s) or
         other Person(s) who may be deemed representatives of it serving as
         director(s) of the Company, shall not be deemed to Beneficially Own
         securities held by other Persons as a result of (A) Persons affiliated
         or otherwise associated with such stockholder serving as directors or
         taking any action in connection therewith, (B) discussing the status of
         its shares with the Company or other stockholders of the Company
         similarly situated or (C) voting or acting in a manner similar to other
         stockholders similarly situated, absent a specific finding by the Board
         of Directors of an express agreement among such stockholders to act in
         concert with one another as stockholders so as to cause, in the good
         faith judgment of the Board of Directors, each such stockholder to be
         the Beneficial Owner of the shares held by the other stockholder(s).

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

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

                  (g) "Common Stock" shall mean when used with reference to the
Company, the common stock, par value $0.01 per share, of the Company, except
that "Common Stock" when used with reference to any Person other than the
Company shall mean the capital stock of such Person with the greatest voting
power, or the equity securities or other equity interest having power to control
or direct the management, of such Person.

                  (h) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) of this Agreement.

                  (i) "Current Market Price" shall have the meaning set forth in
Section 11(d)(i) of this Agreement.

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

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

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

                  (m) "Exchange Act" shall mean the Securities and Exchange Act
of 1934, as amended.

                  (n) "Exchange Ratio" shall have the meaning set forth in
Section 24 of this Agreement.

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

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

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

                  (r) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, par value $0.01 per share, of the Company, and,
to the extent that there are not a sufficient number of shares of Series A
Junior Participating

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Preferred Stock authorized to permit the full exercise of the Rights, any
other series of preferred stock of the Company designated for such purpose
containing terms substantially similar to the terms of the Series A Junior
Participating Preferred Stock.

                  (s) "Principal Party" shall have the meaning set forth in
Section 13(b) of this Agreement.

                  (t) "Purchase Price" shall have the meaning set forth in
Section 4(a) of this Agreement.

                  (u) "Qualified Offer" shall mean a tender offer or an exchange
offer for all outstanding shares of Common Stock at a price and on terms
determined by at least a majority of the members of the Board of Directors who
are not officers of the Company and who are not representatives, nominees,
Affiliates or Associates of an Acquiring Person, after receiving advice from one
or more investment banking firms, to be (i) at a price which is fair and not
inadequate (taking into account all factors which such members of the Board deem
relevant, including, without limitation, prices which could reasonably be
achieved if the Company or its assets were sold on an orderly basis designed to
realize maximum value) and (ii) otherwise in the best interests of the Company
and its stockholders.

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

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

                  (x) "Rights Agent" shall have the meaning set forth in the
parties clause at the beginning of this Agreement.

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

                  (z) "Rights Dividend Declaration Date" shall have the meaning
set forth in the WHEREAS clause at the beginning of this Agreement.

                  (aa) "Section 11(a)(ii) Event" shall mean any event described
in Section 11(a)(ii) of this Agreement.

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

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

                  (dd) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed or amended pursuant to Section 13(d) under
the Exchange Act) by the

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Company or an Acquiring Person that an Acquiring Person has become such other
than pursuant to a Qualified Offer.

                  (ee) "Subsidiary" shall mean, with reference to any Person,
any corporation of which an amount of voting securities sufficient to elect at
least a majority of the directors of such corporation is Beneficially Owned,
directly or indirectly, by such Person, or otherwise controlled by such Person.

                  (ff) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) of this Agreement.

                  (gg) "Summary of Rights" shall have the meaning set forth in
Section 3(b) of this Agreement.

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

                  (ii) "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 in accordance with the
terms and conditions of this Agreement, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-rights agents as
it may deem necessary or desirable.

                  Section 3. ISSUANCE OF RIGHTS CERTIFICATES.

                  (a) Until the earlier of (i) the Close of Business on the
tenth Business Day after the Stock Acquisition Date, or (ii) the Close of
Business on the tenth Business Day (or such later date as the Board shall
determine) after the date that a tender or exchange offer by any Person is first
published or sent or given within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act, if upon consummation thereof, such
Person would become an Acquiring Person, in either instance other than pursuant
to a Qualified Offer (the earlier of (i) and (ii) being herein referred to as
the "Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for the
Common Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company). The Company must promptly
notify the Rights Agent and request the transfer agent to provide a shareholders
list. As soon as practicable after the Rights Agent receives such notice and
list, the Rights Agent will send by first-class, insured, postage-prepaid mail,
to each record holder of the Common Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, one or more right certificates, in substantially the form of EXHIBIT B
hereto (the "Rights Certificates"), evidencing one Right for each share of
Common Stock so held, subject to adjustment as

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provided in this Agreement. In the event that an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section 11(p) of
this Agreement, at the time of distribution of the Rights Certificates, the
Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) of this Agreement) so that Rights Certificates
representing only whole numbers of Rights are distributed and cash is paid in
lieu of any fractional Rights. As of and after the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates.

                  (b) The Company will make available, as promptly as
practicable following the Record Date, a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit C (the "Summary of Rights") to
any holder of Rights who may so request from time to time prior to the
Expiration Date. With respect to certificates for the Common Stock outstanding
as of the Record Date or issued subsequent to the Record Date, unless and until
the Distribution Date shall occur, the registered holders of the Common Stock
shall also be the registered holders of the associated Rights. Until the earlier
of the Distribution Date or the Expiration Date (as such term is defined in
Section 7(a) of this Agreement), the transfer of any certificates representing
shares of Common Stock in respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with such shares of Common
Stock.

                  (c) Rights shall be issued in respect of all shares of Common
Stock which are issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date. Certificates representing such shares of Common
Stock shall also be deemed to be certificates for Rights, and shall bear
substantially the following legend if such certificates are issued after the
Record Date but prior to the earlier of the Distribution Date or the Expiration
Date:

         This certificate also evidences and entitles the holder hereof to
         certain Rights as set forth in the Shareholder Rights Agreement between
         Versicor Inc. and the [RIGHTS AGENT] (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 Versicor Inc.. Under
         certain circumstances, as set forth in the Rights Agreement, such
         Rights will be evidenced by separate certificates and will no longer be
         evidenced by this certificate. Versicor Inc. or [RIGHTS AGENT] will
         mail to the holder of this certificate a copy of the Rights Agreement,
         as in effect on the date of mailing, without charge, promptly after
         receipt of a written request therefor. Under certain circumstances set
         forth in the Rights Agreement, Rights issued to, or held by, any Person
         who is, was or becomes an Acquiring Person or any Affiliate or
         Associate thereof (as such terms are defined in the Rights Agreement),
         whether currently held by or on behalf of such Person or by any
         subsequent holder, may become null and void.

With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates

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alone and registered holders of Common Stock shall also be the registered
holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates.

                  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 which do not affect the
duties or responsibilities of the Rights Agent and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 11
and Section 22 of this Agreement, the Rights Certificates, whenever distributed,
shall be dated as of the Record Date and on their face 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.

                  (b) Any Rights Certificate issued pursuant to Section 3(a),
Section 11(i) or Section 22 of this Agreement that represents Rights
Beneficially Owned by: (i) an Acquiring Person or any Associate or Affiliate of
an Acquiring Person; (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such; or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
such Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of an agreement, arrangement or
understanding which has as a primary purpose or effect avoidance of Section 7(e)
of this Agreement, and PROVIDED THAT the Company shall have notified the Rights
Agent that this Section 4(b) applies, any Rights Certificate issued pursuant to
Section 6 or Section 11 of this Agreement 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 the Rights Agreement.

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                  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 Vice President,
either manually or by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be countersigned by the Rights Agent,
either manually or by facsimile signature, 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 Shareholder
Rights Agreement any such Person was not such an officer.

                  (b) Following the Distribution Date and receipt by the Rights
Agent of the notice and list of record holders of Rights referred to in Section
3(a), the Rights Agent will keep, or cause to be kept, at its office or offices
designated pursuant to Section 26 hereof as the appropriate place for surrender
of Rights Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights Certificates 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 of this Agreement, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the Expiration
Date, any Rights Certificate or Certificates (other than Rights Certificates
representing Rights that may have been exchanged pursuant to Section 24 of this
Agreement) 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 entitles
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 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

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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 or the Rights Agent shall request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e),
Section 14 of this Agreement and Section 24 of this Agreement, 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. The Rights Agent shall not have to process any
transaction until it receives evidence that all taxes and charges have been
paid.

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

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

                  (a) Subject to Section 7(e) of this Agreement, at any time
after the Distribution Date the registered holder of any Rights Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability set forth in
Section 9(c), Section 11(a)(iii) and Section 23(a) of this Agreement) in whole
or in part upon surrender of the Rights Certificate, with the form of election
to purchase and the certificate on the reverse side thereof duly executed, to
the Rights Agent at the office or offices of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase Price with respect
to the total number of one one-hundredths of a share (or other securities, cash
or other assets, as the case may be) as to which such surrendered Rights are
then exercisable, at or prior to the earlier of (i) the Close of Business, on
__________ __, 2010, or such later date as may be established by the Board of
Directors prior to the expiration of the Rights (such date, as it may be
extended by the Board, the ("Final Expiration Date"), or (ii) the time at which
the Rights are redeemed or exchanged as provided in Section 23 and Section 24 of
this Agreement (the earlier of (i) and (ii) 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 $[75.00], and shall be subject to adjustment from time to time as provided
in Section 11 and Section 13(a) hereof and shall be payable in accordance
with paragraph (c) below.

                  (c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed,

                                      10
<PAGE>

accompanied by payment, with respect to each Right so exercised, of the
Purchase Price per one one-hundredth of a share of Preferred Stock (or other
shares, securities, cash or other assets, as the case may be) to be purchased
as set forth below and an amount equal to any applicable tax or governmental
charge, the Rights Agent shall, subject to Section 20(k) of this Agreement,
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 such
requests, or (B) if the Company shall have elected to deposit the total
number of shares of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-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) requisition from the
Company the amount of cash, if any, to be paid in lieu of fractional shares
in accordance with Section 14 of this Agreement, (iii) after receipt of such
certificates or depositary receipts, cause the same to be delivered to or,
upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder, and
(iv) after receipt thereof, deliver such cash, if any, to or upon the order
of the registered holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii)
of this Agreement) 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 to issue other securities (including Common Stock) of the Company,
pay cash and/or distribute other property pursuant to Section 11(a) of this
Agreement, the Company will make all arrangements necessary so that such
other securities, cash and/or other property are available for distribution
by the Rights Agent, if and when necessary to comply with this Agreement. 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.

                  (d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the order of,
the registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, subject to the provisions of
Section 6 and Section 14 of this Agreement.

                  (e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event,
any Rights Beneficially Owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to

                                      11
<PAGE>

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 of the Company have determined is part of and agreement,
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 notify the Rights Agent that this Section 7(e)
applies and shall use all reasonable efforts to insure that the provisions of
this Section 7(e) and Section 4(b) of this Agreement are complied with, but
neither the Company nor the Rights Agent shall have any liability to any
holder of Rights Certificates or any other Person as a result of the
Company's failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.

                  (f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence
of any purported exercise as set forth in this Section 7 unless such
registered holder shall have (i) properly 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 or the Rights Agent shall reasonably request.

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

                  Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.

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

                                      12
<PAGE>

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

                  (c) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first occurrence of
a Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) of this Agreement, 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) 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 by issuing a public announcement 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 has been rescinded. 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. The Company shall notify the Rights Agent whenever it makes a
public announcement pursuant to this Section 9(c), and give the Rights Agent
a copy of the announcement. 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.

                  (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, Common Stock and/or other securities) delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable.

                  (e) The Company further covenants and agrees that it will
pay when due and payable any and all taxes and governmental 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 Common Stock and/or

                                      13
<PAGE>

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 Common Stock and/or other
securities, as the case may be) in respect of a name other than that of the
registered holder of the Rights Certificates evidencing Rights surrendered
for exercise or to issue or deliver any certificates for a number of one
one-hundredths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid
(any such tax being payable by the holder of such Rights Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.

                  Section 10. PREFERRED STOCK RECORD DATE. Each Person in
whose name any certificate for a number of one one-hundredths of a share of
Preferred Stock (or 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 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 taxes and governmental charges) was
made; PROVIDED, HOWEVER, that if the date of such surrender and payment is a
date upon which the Preferred Stock (or Common Stock and/or other securities,
as the case may be) transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such shares (fractional
or otherwise) on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are open. Prior
to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a stockholder of the
Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or
other distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company, except as
provided in this Agreement.

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

                  (a) (i) In the event the Company shall at any time after the
         date of this Agreement (A) declare a dividend on the Preferred Stock
         payable in shares of Preferred Stock, (B) subdivide the outstanding
         Preferred Stock, (C) combine the outstanding Preferred Stock into a
         smaller number of shares, or (D) issue any shares of its capital stock
         in a reclassification of the Preferred Stock (including any such
         reclassification in connection with a consolidation or merger in which
         the Company is the continuing or surviving corporation), except as
         otherwise provided in this Section 11(a) and Section 7(e) of this
         Agreement, the Purchase

                                      14
<PAGE>

         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. If an event occurs which would
         require an adjustment under both this Section 11(a)(i) and Section
         11(a)(ii) of this Agreement, 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) of this
         Agreement.

                           (ii) In the event that any Person shall, at any time
         after the Record Date, become an Acquiring Person, unless the event
         causing the Person to become an Acquiring Person is a transaction set
         forth in Section 13(a) of this Agreement or is an acquisition of shares
         of Common Stock pursuant to a Qualified Offer, then, promptly following
         the occurrence of such event, proper provision shall be made so that
         each holder of a Right (except as provided below and in Section 7(e) of
         this Agreement) shall thereafter have the right to receive, upon
         exercise thereof at the then current Purchase Price in accordance with
         the terms of this Agreement, in lieu of a number of one one-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 (y) dividing that product (which, following such first occurrence,
         shall thereafter be referred to as the "Purchase Price" for each Right
         and for all purposes of this Agreement) by 50% of the Current Market
         Price (determined pursuant to Section 11(d) of this Agreement) per
         share of Common Stock on the date of such first occurrence (such number
         of shares, the "Adjustment Shares").

                           (iii) In the event that the number of shares of
         Common Stock which are authorized by the Company's Certificate of
         Incorporation, as amended and/or restated through such date, but which
         are not outstanding or reserved for issuance for purposes other than
         upon exercise of the Rights, are not sufficient to permit the exercise
         in full of the Rights in accordance with the foregoing subparagraph
         (ii) of this Section 11(a), the Company shall (A) determine the value
         of the Adjustment Shares issuable upon the exercise of a Right (the
         "Current Value"), and (B) with respect to each Right (subject to
         Section 7(e) of this Agreement), 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

                                      15
<PAGE>

         equity securities of the Company (including, without limitation,
         shares, or units of shares, of preferred stock, such as the Preferred
         Stock, which the Board has deemed to have essentially the same value
         or economic rights as shares of 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
         based upon the advice of a nationally recognized investment banking
         firm selected by the Board; 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 later of (x)
         the first occurrence of a Section 11(a)(ii) Event and (y) the date on
         which the Company's right of redemption pursuant to Section 23(a) of
         this Agreement expires (the later of (x) and (y) being referred to
         herein as the "Section 11(a)(ii) Trigger Date"), then the Company
         shall be obligated to deliver, upon the surrender for exercise of a
         Right and without requiring payment of the Purchase Price, shares of
         Common Stock (to the extent available) and then, if necessary, cash,
         which shares and/or cash have an aggregate value equal to the Spread.
         For purposes of the preceding sentence, the term "Spread" shall mean
         the excess of (i) the Current Value over (ii) the Purchase Price. If
         the Board determines in good faith that it is likely that sufficient
         additional shares of Common Stock could be authorized for issuance
         upon exercise in full of the Rights, the thirty (30) day period set
         forth above may be extended to the extent necessary, but not more
         than ninety (90) days after the Section 11(a)(ii) Trigger Date, in
         order that the Company may seek shareholder approval for the
         authorization of such additional shares (such 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
         third sentences of this Section 11(a)(iii), the Company (1) shall
         provide, subject to Section 7(e) of this Agreement, 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 shareholder 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. The Company shall notify the Rights Agent of such
         suspension and its termination and shall provide the Rights Agent
         with a copy of each public announcement. For purposes of this Section
         11(a)(iii), the value of each Adjustment Share shall be the current
         market price per share of the 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 Common Stock on such date.

                  (b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record

                                      16
<PAGE>

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) of this Agreement) per share
of Preferred Stock on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price
in effect immediately prior to such record date by a fraction, the numerator
of which shall be the number of shares of Preferred Stock outstanding on such
record date, plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock and/or
Equivalent Preferred Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such Current Market Price, and the denominator of which shall be
the number of shares of Preferred Stock outstanding on such record date, plus
the number of additional shares of Preferred Stock and/or Equivalent
Preferred Stock to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case
such subscription price may be paid by delivery of consideration, part or all
of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors of the
Company, 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 corporation), cash (other than a regular quarterly cash dividend out
of the earnings or retained earnings of the Company), assets (other than a
dividend payable in Preferred Stock, but including any dividend payable in stock
other than Preferred Stock) or evidences of indebtedness, or of subscription
rights or warrants (excluding those referred to in Section 11(b) of this
Agreement), 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) of this Agreement) per share of
Preferred Stock on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent) of the portion of
the cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Preferred Stock, and
the denominator of which shall be such Current Market Price (as determined
pursuant to Section 11(d) hereof) per share of Preferred Stock. Such adjustments
shall be made successively whenever such a record date is fixed, and in the
event that such distribution

                                      17
<PAGE>

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) of this
         Agreement, the Current Market Price per share of Common Stock on any
         date shall be deemed to be the average of the daily closing prices per
         share of such Common Stock for the thirty (30) consecutive Trading Days
         immediately prior to and not including such date, and for purposes of
         computations made pursuant to Section 11(a)(iii) of this Agreement, 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 and not including 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 thirty (30)
         Trading Day or ten (10) Trading Day period, as set forth above, then,
         and in each such case, the Current Market Price shall be properly
         adjusted to 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 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 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. 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 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

                                      18
<PAGE>

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

                           (ii) For the purpose of any computation hereunder,
         the Current Market Price per share of Preferred Stock shall be
         determined in the same manner as set forth above for the Common Stock
         in clause (i) of this Section 11(d) (other than the last sentence
         thereof). If the Current Market Price per share of Preferred Stock
         cannot be determined in the manner provided above or if the Preferred
         Stock is not publicly held or listed or traded in a manner described in
         clause (i) of this Section 11(d), the Current Market Price per share of
         Preferred Stock shall be conclusively deemed to be an amount equal to
         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. If neither the
         Common Stock nor the Preferred Stock is publicly held or so listed or
         traded, Current Market Price per share of the Preferred Stock shall
         mean the fair value per share as determined in good faith by the Board,
         whose determination shall be described in a statement filed with the
         Rights Agent and shall be conclusive for all purposes. For all purposes
         of this Agreement, the Current Market Price of one one-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)(ii) or Section 13(a) of this Agreement, 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
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 of this Agreement 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 under this Agreement shall evidence
the right to

                                      19
<PAGE>

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

                                      20
<PAGE>

                  (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-hundredth 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 (with notice to the Rights Agent) 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 their good faith judgment the Board of
Directors of the Company shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for
cash of any shares of Preferred Stock at less than the Current Market Price,
(iii) issuance wholly for cash of shares of Preferred Stock or securities which
by their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of its
Preferred Stock, shall not be taxable to such stockholders.

                  (n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) of this Agreement), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o) of
this Agreement), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets, cash
flow or earning power aggregating more than 50% of the assets

                                      21

<PAGE>

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) of this Agreement), if
(x) at the time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or securities outstanding
or agreements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale,
the shareholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) of this Agreement shall have
received a distribution of Rights previously owned by such Person or any of
its Affiliates and Associates.

                  (o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section
26 of this Agreement, 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 a dividend on the outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of Common
Stock, or (iii) combine the outstanding shares of Common Stock into a smaller
number of shares, the number of Rights associated with each share of Common
Stock then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any
such event shall equal the result obtained by multiplying the number of
Rights associated with each share of Common Stock immediately prior to such
event by a fraction the numerator which shall be the total number of shares
of Common Stock outstanding immediately prior to the occurrence of the event
and the denominator of which shall be the total number of shares of Common
Stock outstanding immediately following the occurrence of such event.

                  Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Section 11 or Section
13 of this Agreement, the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief, reasonably detailed statement of the
facts, computations and methodology accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Preferred Stock
and the Common Stock, a copy of such certificate and (c) if a Distribution Date
has occurred, mail a brief summary thereof to each holder of a Rights
Certificate (or, if prior to the Distribution Date, to each holder of a
Certificate representing shares of Common Stock) in accordance with Section 27
of this Agreement. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained.

                                      22
<PAGE>

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

                  (a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate with, or
merge with and into, any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o) of this Agreement) 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) of this Agreement)
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 Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other property
or (z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, assets, cash flow or earning power
aggregating more than fifty percent (50%) of the assets, cash flow 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) of this
Agreement), then, and in each such case (except as may be contemplated by
Section 13(d) of this Agreement), proper provision shall be made so that: (i)
each holder of a Right, except as provided in Section 7(e) of this Agreement,
shall thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price in accordance with the terms of this Agreement,
such number of validly authorized and issued, fully paid, non-assessable and
freely tradable shares of Common Stock of the Principal Party (as such term
is hereinafter defined), 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 (2) dividing that product
(which, following the first occurrence of a Section 13 Event, shall be
referred to as the "Purchase Price" for each Right and for all purposes of
this Agreement) by fifty percent (50%) of the Current Market Price
(determined pursuant to Section 11(d)(i) of this Agreement) 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 of this Agreement
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

                                      23
<PAGE>

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) of this
Agreement 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, cash flow or
         earning power transferred pursuant to such transaction or transactions;

PROVIDED, HOWEVER, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act and such Person is
a direct or indirect Subsidiary of another Person, the Common Stock of which is
and has been so registered, then "Principal Party" shall refer to such other
Person, and (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, then "Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Stock having the greatest aggregate market
value.

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

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

                           (ii) take such all such other action as may be
         necessary to enable the Principal Party to issue the securities
         purchasable upon exercise of the Rights,

                                      24
<PAGE>

         including but not limited to the registration or qualification of such
         securities under all requisite securities laws of jurisdictions of the
         various states and the listing of such securities on such exchanges and
         trading markets 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.

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).

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

                  Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

                  (a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(p) of
this Agreement, or to distribute Rights Certificates which evidence fractional
Rights. In lieu of such fractional Rights, the Company shall pay 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

                                      25
<PAGE>

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 of the Company. 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
of the Company 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). In lieu of 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) of this Agreement) for the Trading Day immediately prior to
the date of such exercise.

                  (c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of Common Stock upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of fractional shares of Common Stock, the
Company 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) of this Agreement) 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
shares upon exercise of a Right, except as permitted by this Section 14.

                  Section 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his

                                      26
<PAGE>

right to exercise the Rights evidenced by such Rights Certificate in the
manner provided in such Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and shall be entitled
to specific performance of the obligations hereunder and injunctive relief
against actual or threatened violations of the obligations hereunder of any
Person subject to this Agreement.

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

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

                  (b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the 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) of this
Agreement, the Company and the Rights Agent may deem and treat the Person in
whose name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Rights Certificates or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) of this Agreement, shall be required to be affected by
any notice to the contrary; and

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

                  Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the number of
one one-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

                                      27
<PAGE>

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 of this
Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Rights Certificate shall have
been exercised in accordance with the provisions hereof.

                  Section 18. CONCERNING THE RIGHTS AGENT.

                  (a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the preparation, delivery,
amendment, 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, damage,
judgment, fine, penalty, claim, demand, settlement cost or expense, incurred
without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent, for any action taken, suffered or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
without limitation the costs and expenses of defending against any claim of
liability in the premises. The indemnity provided herein shall survive the
termination of this Agreement and the termination and the expiration of the
Rights. The costs and expenses incurred in enforcing this right of
indemnification shall be paid by the Company. Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, consequential or incidental loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage. Any liability of the
Rights Agent under this Rights Agreement will be limited to the amount of fees
paid by the Company to the Rights Agent.

                  (b) The Rights Agent shall be authorized and protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with the acceptance and administration of this
Agreement in reliance upon any Rights Certificate or certificate for Common
Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons. The Rights Agent shall be fully
protected in relying on any such paper or document and on any information or
instructions therein contained. The Rights Agent shall not be deemed to have a
duty to act on any notice of public announcement by the Company unless and until
the Company has actually provided the Rights Agent with such notice or with a
copy of such public announcement, as applicable.

                                      28
<PAGE>

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

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

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

                  Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations, and only the duties and obligations,
expressly imposed by this Agreement (and no implied duties or obligations) 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 advice or opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent as
to, and the Rights Agent shall incur no liability for or in respect of, any
action taken, suffered or omitted by it in good faith and in accordance with
such advice or opinion.

                  (b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (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, suffering or omitting 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

                                      29
<PAGE>

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 and protection
to the Rights Agent and the Rights Agent shall incur no liability for or in
respect of any action taken, suffered or omitted in good faith by it under
the provisions of this Agreement in reliance upon such certificate.

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

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

                  (e) The Rights Agent shall not be under any liability
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11, Section 13 or Section 24 of this Agreement
or responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Rights Certificates
after 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 such instruction shall be full authorization and protection to the
Rights Agent and the Rights Agent shall incur no liability for or in respect of
any action taken, suffered or omitted to be taken by it in good faith in
accordance with instructions of any such officer. The Rights Agent may
conclusively rely on the most recent instructions given by any such officer.

                                      30
<PAGE>

                  (h) The Rights Agent and any stockholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other Person
or 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; absent gross negligence, bad faith or
willful misconduct 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 it believes that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.

                  (k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise 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 Common Stock and Preferred Stock,
by registered or certified mail, and, if such resignation occurs after the
Distribution Date, to the registered holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock and Preferred Stock, by registered or certified
mail, and, if such removal occurs after the Distribution Date, 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, then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a Person organized
and doing business under the laws of the United States or one of the United
States, in good standing, having an office in the State of New York, which is

                                      31
<PAGE>

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 $10,000,000 or (b) an affiliate of a legal business
entity described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall deliver
and transfer to the successor Rights Agent any property at the time held by
it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any
such appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and the
Preferred Stock and, if such appointment occurs after the Distribution Date,
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. 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.

                  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 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 of the Company, 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.

                                      32
<PAGE>

                  Section 23. REDEMPTION AND TERMINATION.

                  (a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the Close of Business on the
tenth Business Day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the Close of
Business on the tenth Business Day following the Record Date) or (ii) the
Close of Business on the Final Expiration Date, redeem all but not less than
all of the then outstanding Rights at a redemption price of $0.01 per Right,
as such amount may be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price").
Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of redemption
hereunder has expired. 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
of the Company ordering the redemption of the Rights, 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. Promptly after the
action of the Board of Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by (in the case of notice to holders)
mailing such notice to all such holders at each holder's last address as it
appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of redemption will state the method by which the payment of the Redemption
Price will be made.

                  Section 24. EXCHANGE.

                  (a) The Board of Directors of the Company 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 null and void pursuant to the provisions of
Section 7(e) hereof) for Common Stock at an exchange ratio of one share of
Common Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors of the Company 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 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 Common Stock then outstanding.

                                      33

<PAGE>

                  (b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to subsection (a)
of this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter
of the holders of such Rights shall be to receive that number of shares of
Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public
notice and notice to the Rights Agent 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 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) of this Agreement) held by each
holder of Rights.

                  (c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Stock (or Equivalent
Preferred Stock, as such term is defined in paragraph (b) of Section 11 of
this Agreement) for Common Stock exchangeable for Rights, at the initial rate
of one one-hundredth of a share of Preferred Stock (or Equivalent Preferred
Stock) for each share of Common Stock, as appropriately adjusted to reflect
stock splits, stock dividends and other similar transactions after the date
hereof.

                  (d) In the event that there shall not be sufficient shares
of 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 Board of Directors of the Company shall take all such actions as may
be necessary to authorize additional shares of Common Stock for issuance upon
exchange of the Rights.

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

                                      34
<PAGE>

Preferred Stock or to make any other distribution to the holders of Preferred
Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any reclassification
of its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
of this Agreement), 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 fifty percent
(50%) of the assets, cash flow 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) of this Agreement), or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to the Rights Agent and to each holder of a
Rights Certificate, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Preferred Stock, if any such date is
to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least twenty (20) days prior to the
record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such proposed action or
the date of participation therein by the holders of the shares of Preferred
Stock whichever shall be the earlier.

                  (b) In case any of the events set forth in Section
11(a)(ii) of this Agreement 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
of this Agreement, 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) of this Agreement, and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed thereafter to refer to
Common Stock and/or, if appropriate, other securities.

                  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 by the Company with the Rights Agent) as follows:

                  Versicor Inc.
                  34790 Ardentech Ct.
                  Fremont, California  94555
                  Attention:  George F. Horner III

                                      35
<PAGE>

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

                  [RIGHTS AGENT]
                  [Address]
                  Attention:  [General Counsel]

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

                  Section 27. SUPPLEMENTS AND AMENDMENTS. Prior to the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Common Stock.
From and after the Distribution Date, the Company and the Rights Agent shall,
if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder or (iv) to change or supplement
the provisions hereunder in any manner which the Company may deem necessary
or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); PROVIDED, HOWEVER, that this
Agreement may not be supplemented or amended, pursuant to clause (iii) of
this sentence, so as to lengthen (A) a time period relating to when the
Rights may be redeemed at such time as the Rights are not then redeemable, or
(B) any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to,
the holders of Rights; and PROVIDED, FURTHER, that the Company may not
require the Rights Agent to change or increase its duties or obligations
under this Agreement without the Rights Agent's consent. Upon the delivery of
a certificate from an appropriate officer of the Company which states that
the proposed supplement or amendment is in compliance with the terms of this
Section 27, and if requested by the Rights Agent an opinion of counsel, the
Rights Agent shall execute such supplement or amendment unless the Rights
Agent shall have determined in good faith that such supplement or amendment
would increase its duties or obligations or limit its rights or benefits
under this Agreement. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock. Notwithstanding anything herein to the contrary,
this Agreement may not be amended at a time when the Rights are not
redeemable.

                                      36
<PAGE>

                  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. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding shares of Common Stock of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or as may be necessary
or advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or
not redeem the Rights or to amend this Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done
or made by the Board in good faith shall (x) be final, conclusive and binding
on the Company, the Rights Agent, the holders of the Rights and all other
Persons and (y) not subject the Board, or any of the directors on the Board
to any liability to the holders of the Rights.

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

                  Section 31. SEVERABILITY. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated; PROVIDED, HOWEVER, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board of Directors of the Company determines in its
good faith judgment (with notice to the Rights Agent) that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23
hereof shall be reinstated and shall not expire until the Close of Business
on the tenth Business Day following the date of such determination by the
Board of Directors. Without limiting the foregoing, if any provision
requiring the approval of certain members of the Board of Directors of the
Company is held to by any court of competent jurisdiction or other authority
to be invalid, void or unenforceable, such determination shall then be

                                      37
<PAGE>

made by the Board of Directors of the Company in accordance with applicable
law and the Company's Certificate of Incorporation and Bylaws.

                  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 Maryland 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; except that the rights, duties
and obligations of the Rights Agent shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed 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.

                                      38
<PAGE>

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

                                       VERSICOR INC., a Delaware corporation

                                       By:______________________________________
                                           George F. Horner III
                                           President and Chief Executive Officer
Attest:

By:____________________________________
     Barclay J. Kamb
     Secretary

                                       [RIGHTS AGENT], a _______________________

                                       By:______________________________________
                                       Name:____________________________________
                                       Title:___________________________________

Attest:

By:____________________________________
Name:__________________________________
Title:_________________________________

                                      39
<PAGE>

                                                                       EXHIBIT A

                           CERTIFICATE OF DESIGNATIONS

                                  VERSICOR INC.

               Establishing a Series of Preferred Stock Designated
                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                  Versicor Inc., a Delaware corporation (the "Corporation"),
hereby certifies to the Delaware Secretary of State (the "Secretary of State")
that:

                  FIRST: Pursuant to authority expressly vested in the Board
of Directors of the Corporation by the Fourth Restated Certificate of
Incorporation of the Corporation, filed with the Secretary of State on
__________ __, 2000 (the "Certificate"), the Board of Directors of the
Corporation (the "Board of Directors"), by resolution duly adopted at a
meeting duly called held on __________ __, 2000, classified and designated
1,000,000 shares (the "Shares") of the Company's Preferred Stock (as such
term is used in the Certificate) as shares of Series A Junior Participating
Preferred Stock, with the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends and other distributions,
qualifications and terms and conditions of redemption as set forth below.

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                  Section 1. DESIGNATION AND AMOUNT. A class of Preferred
Stock designated the "Series A Junior Participating Preferred Stock," par
value $0.01 per share, is hereby established. The number of authorized shares
of such Series A Preferred Stock shall be One Million (1,000,000). The Series
A Junior Participating Preferred Stock shall constitute a separate class of
capital stock of the Corporation.

                  Section 2. DIVIDENDS AND DISTRIBUTIONS.

                  (A) Subject to the prior and superior rights of the holders
of any shares of any series of Preferred Stock ranking prior and superior to
the shares of Series A Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Junior Participating Preferred
Stock shall be entitled to receive, when, as and if authorized and declared
by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the [15th day of January, April, July
and October] [1st day of March, June, September and December] in each year,
or the next following business day, if such day is not a business day (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 Participating
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to
the greater of (a) $1 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions other than a dividend payable in
shares of Common Stock or a

                                      A-1
<PAGE>

subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, par value $0.01 per share, of the
Corporation (the "Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series A Junior Participating Preferred Stock. In the event the Corporation
shall at any time after _______ __, 2000 (the "Rights Record Date") (i)
authorize and 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
Participating 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 authorize and declare a dividend
or distribution on the Series A Junior Participating Preferred Stock as
provided in Paragraph (A) above immediately after it authorizes and declares
a dividend or distribution on the Common Stock (other than a dividend payable
in shares of Common Stock); provided that, in the event no dividend or
distribution shall have been authorized and declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the
Series A Junior Participating Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.

                  (C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such
shares of Series A Junior Participating Preferred Stock, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is
a Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Junior Participating Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin
to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Junior Participating Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series A Junior
Participating Preferred Stock entitled to receive payment of a dividend or
distribution authorized and declared thereon, which record date shall be no
more than 30 days prior to the date fixed for the payment thereof.

                                      A-2
<PAGE>

                  Section 3. VOTING RIGHTS. The holders of shares of Series A
Junior Participating Preferred Stock shall have the following voting rights:

                  (A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred Stock shall entitle
the holder thereof to 100 votes on all matters submitted to a vote of the
holders of the Common Stock of the Corporation. In the event the Corporation
shall at any time after the Rights Record Date (i) authorize and 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 Participating Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.

                  (B) Except as otherwise provided herein, the holders of shares
of Series A Junior Participating Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a vote
of holders of the Common Stock of the Corporation.

                  (C) (i) If at any time dividends on any Series A Junior
         Participating Preferred Stock shall be in arrears in an amount equal to
         six (6) quarterly dividends thereon, the occurrence of such contingency
         shall mark the beginning of a period (herein called a "default period")
         which shall extend until such time when all accrued and unpaid
         dividends for all previous quarterly dividend periods and for the
         current quarterly dividend period on all shares of Series A Junior
         Participating Preferred Stock then outstanding shall have been
         authorized and declared and paid or set apart for payment. During each
         default period, all holders of Preferred Stock (including holders of
         the Series A Junior Participating Preferred Stock) with dividends in
         arrears in an amount equal to six (6) quarterly dividends thereon,
         voting as a class, irrespective of series, shall have the right to
         elect two (2) directors.

                           (ii) During any default period, such voting right of
         the holders of Series A Junior Participating Preferred Stock may be
         exercised initially at a special meeting called pursuant to
         subparagraph (iii) of this Section 3(C) or at any annual meeting of
         stockholders, and thereafter at annual meetings of stockholders,
         provided that neither such voting right nor the right of the holders of
         any other series of Preferred Stock, if any, to increase, in certain
         cases, the authorized number of directors shall such voting right shall
         not be exercised unless the holders of ten percent (10%) in number of
         shares of Preferred Stock outstanding shall be present in person or by
         proxy. The absence of a quorum of the holders of Common Stock shall not
         affect the exercise by the holders of Preferred Stock of such voting
         right. At any meeting at which the holders of Preferred Stock shall
         exercise such voting right initially during an existing default period,
         they shall have the right, voting as a class, to elect directors to
         fill such vacancies, if any, in

                                      A-3
<PAGE>

         the Board of Directors as may then exist up to two (2) directors or,
         if such right is exercised at an annual meeting, to elect two (2)
         directors. If the number which may be so elected at any special
         meeting does not amount to the required number, the holders of the
         Preferred Stock shall have the right to make such increase in the
         number of directors as shall be necessary to permit the election by
         them of the required number. After the holders of the Preferred Stock
         shall have exercised their right to elect directors in any default
         period and during the continuance of such period, the number of
         directors shall not be increased or decreased except by vote of the
         holders of Preferred Stock as herein provided or pursuant to the
         rights of any equity securities ranking senior to or PARI PASSU with
         the Series A Junior Participating Preferred Stock.

                           (iii) Unless the holders of Preferred Stock shall,
         during an existing default period, have previously exercised their
         right to elect directors, the Board of Directors may order, or any
         stockholder or stockholders owning in the aggregate not less than ten
         percent (10%) of the total number of shares of Preferred Stock
         outstanding, irrespective of series, may request, the calling of a
         special meeting of the holders of Preferred Stock, which meeting shall
         thereupon be called by the President, a Vice-President or the Secretary
         of the Corporation. Notice of such meeting and of any annual meeting at
         which holders of Preferred Stock are entitled to vote pursuant to this
         Paragraph (C)(iii) shall be given to each holder of record of Preferred
         Stock by mailing a copy of such notice to him at his last address as
         the same appears on the books of the Corporation. Such meeting shall be
         called for a time not earlier than 20 days and not later than 60 days
         after such order or request or in default of the calling of such
         meeting within 60 days after such order or request, such meeting may be
         called on similar notice by any stockholder or stockholders owning in
         the aggregate not less than ten percent (10%) of the total number of
         shares of Preferred Stock outstanding. Notwithstanding the provisions
         of this Paragraph (C)(iii), no such special meeting shall be called
         during the period within 60 days immediately preceding the date or the
         first day of the period, as the case may be, fixed by the Bylaws of the
         Corporation for the next annual meeting of the stockholders.

                           (iv) In any default period, the holders of Common
         Stock, and other classes of stock of the Corporation if applicable,
         shall continue to be entitled to elect the whole number of directors
         until the holders of Preferred Stock shall have exercised their right
         to elect two (2) directors voting as a class, after the exercise of
         which right (x) the directors so elected by the holders of Preferred
         Stock shall continue in office until their successors shall have been
         elected by such holders or until the expiration of the default period,
         whichever happens first, and (y) any vacancy in the Board of Directors
         may (except as provided in Paragraph (C)(ii) of this Section 3) be
         filled by vote of a majority of the remaining directors theretofore
         elected by the holders of the class of stock which elected the director
         whose office shall have become vacant. References in this Paragraph (C)
         to directors elected by the holders of a particular class of stock
         shall include directors elected by such directors to fill vacancies as
         provided in clause (y) of the foregoing sentence.

                                      A-4
<PAGE>

                           (v) Immediately upon the expiration of a default
         period, (x) the right of the holders of Preferred Stock as a class to
         elect directors shall cease, (y) the term of any directors elected by
         the holders of Preferred Stock as a class shall terminate, and (z) the
         number of directors shall be such number as may be provided for in the
         Certificate or Bylaws irrespective of any increase made pursuant to the
         provisions of Paragraph (C)(ii) of this Section 3 (such number being
         subject, however, to change thereafter in any manner provided by law or
         in the Certificate or Bylaws). Any vacancies in the Board of Directors
         effected by the provisions of clauses (y) and (z) in the preceding
         sentence may be filled by a majority of the remaining directors.

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

                  Section 4. CERTAIN RESTRICTIONS.

                  (A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not authorized or declared, on
shares of Series A Junior Participating Preferred Stock outstanding shall have
been paid in full, the Corporation shall not

                           (i) authorize or declare or pay dividends on, make
         any other distributions on, or redeem or purchase or otherwise acquire
         for consideration any shares of stock ranking junior (either as to
         dividends or upon liquidation, dissolution or winding up) to the Series
         A Junior Participating Preferred Stock;

                           (ii) authorize or 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 Participating Preferred Stock, except
         dividends paid ratably on the Series A Junior Participating 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 on a parity (either as to
         dividends or upon liquidation, dissolution or winding up) with the
         Series A Junior Participating Preferred Stock, provided that the
         Corporation may at any time redeem, purchase or otherwise acquire
         shares of any such parity 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
         Participating Preferred Stock; or

                           (iv) purchase or otherwise acquire for consideration
         any shares of Series A Junior Participating Preferred Stock, or any
         shares of stock ranking on

                                      A-5
<PAGE>

         a parity with the Series A Junior Participating 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.

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

                  Section 5. REACQUIRED SHARES. Any shares of Series A Junior
Participating 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 to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.

                  Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP.

                  (A) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Corporation, no distribution shall be made 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 Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received an amount equal to $100 per share of Series
A Participating Preferred Stock, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not authorized or declared, to
the date of such payment (the "Series A Liquidation Preference"). Following the
payment of the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph
(C) below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the Series
A Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series A Junior Participating Preferred Stock and Common Stock,
respectively, holders of Series A Junior Participating Preferred Stock and
holders of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the Adjustment
Number to l with respect to such Preferred Stock and Common Stock, on a per
share basis, respectively. The merger or consolidation of the Corporation,
regardless of whether the Corporation is the

                                      A-6
<PAGE>

surviving entity in such merger or consolidation, shall not be deemed to be
the liquidation, dissolution or winding up of the Corporation.

                  (B) 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 Participating
Preferred Stock, then such remaining assets shall be distributed ratably in the
same proportion as the respective amounts that would be payable on such Series A
Junior Participating Preferred Stock and any such other parity stock if all
amounts payable thereon were paid in full. In the event, however, that there are
not sufficient assets available to permit payment in full of the Common
Adjustment, then such remaining assets shall be distributed ratably to the
holders of Common Stock.

                  (C) In the event the Corporation shall at any time after the
Rights Record 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 Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment 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.

                  Section 7. CONSOLIDATION, MERGER, ETC. If the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are 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 Participating 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
Record 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 Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

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

                                      A-7
<PAGE>

                  Section 9. RANKING.

                  (a) The Series A Junior Participating Preferred Stock shall
rank junior to all other series of the Corporation's Preferred Stock as to
the payment of dividends and the distribution of assets, unless the terms of
any such series shall provide otherwise.

                  (b) The liquidation preference of the outstanding shares of
Series A Junior Participating Preferred Stock will not be added to the
liabilities of the Corporation for the purpose of determining whether under
the Maryland General Corporation Law a distribution may be made to
stockholders of the Corporation whose preferential rights upon dissolution of
the Corporation are junior to those of holders of Series A Junior
Participating Preferred Stock.

                  Section 10. AMENDMENT. At any time when any shares of Series A
Junior Participating Preferred Stock are outstanding, neither the Certificate
nor these Certificate of Designations shall be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Junior Participating 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 Participating Preferred Stock, voting
separately as a class; provided that none of (i) the creation or issuance of (A)
additional shares of Series A Junior Participating Preferred Stock or (B) shares
of any class or series of Preferred Stock ranking junior to or on parity with
the Series A Junior Participating Preferred Stock as to the payment of dividends
and the distribution of assets, (ii) a merger or consolidation in which the
Corporation is the surviving entity and the Series A Junior Participating
Preferred Stock remains outstanding with no material adverse change in its
powers, preferences and special rights, or (iii) a merger or consolidation in
which the Corporation is not the surviving entity and the holders of the Series
A Junior Participating Preferred Stock receive in exchange therefor a
substantially identical security of the surviving entity, shall be considered to
materially adversely alter or change the powers, preferences or special powers
of the Series A Junior Participating Preferred Stock.

                  Section 11. FRACTIONAL SHARES. Series A Junior Participating
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 Participating Preferred Stock.

                  Section 12. CERTIFICATE LEGENDS. The Board of Directors may
authorize the issue of some or all of the shares (including fractional shares)
of Series A Junior Participating Preferred Stock without certificates. If issued
in certificated form, each share (including each fractional share) of Series A
Junior Participating Preferred Stock shall bear substantially the following
legends in addition to any legends required to comply with federal and state
securities laws:

                                      A-8
<PAGE>

                                CLASSES OF STOCK

         THE CORPORATION IS AUTHORIZED TO ISSUE CAPITAL STOCK OF MORE THAN ONE
         CLASS, CONSISTING OF COMMON STOCK AND ONE OR MORE CLASSES OF PREFERRED
         STOCK. THE BOARD OF DIRECTORS IS AUTHORIZED TO DETERMINE THE
         PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF ANY CLASS OF PREFERRED
         STOCK BEFORE THE ISSUANCE OF SHARES OF SUCH CLASS OF PREFERRED STOCK.
         THE CORPORATION WILL FURNISH, WITHOUT CHARGE, TO ANY STOCKHOLDER MAKING
         A WRITTEN REQUEST THEREFORE, A COPY OF THE CORPORATION'S CERTIFICATE
         AND A WRITTEN STATEMENT OF THE DESIGNATIONS, RELATIVE RIGHTS,
         PREFERENCES, CONVERSION OR OTHER RIGHTS, VOTING POWERS, RESTRICTIONS,
         LIMITATIONS AS TO THE DIVIDENDS AND OTHER DISTRIBUTIONS, QUALIFICATIONS
         AND TERMS AND CONDITIONS OF REDEMPTION OF THE STOCK OF EACH CLASS WHICH
         THE CORPORATION HAS THE AUTHORITY TO ISSUE AND, IF THE CORPORATION IS
         AUTHORIZED TO ISSUE ANY PREFERRED OR SPECIAL CLASS IN SERIES, (i) THE
         DIFFERENCES IN THE RELATIVE RIGHTS AND PREFERENCES BETWEEN THE SHARES
         OF EACH SERIES TO THE EXTENT SET, AND (ii) THE AUTHORITY OF THE BOARD
         OF DIRECTORS TO SET SUCH RIGHTS AND PREFERENCES OF SUBSEQUENT SERIES.
         REQUESTS FOR SUCH WRITTEN STATEMENT MAY BE DIRECTED TO THE SECRETARY OF
         THE CORPORATION AT ITS PRINCIPAL OFFICE.

                     RESTRICTIONS ON OWNERSHIP AND TRANSFER

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
         RESTRICTIONS ON OWNERSHIP AND TRANSFER FOR THE PURPOSE OF THE
         CORPORATION'S MAINTENANCE OF ITS STATUS AS A REAL ESTATE INVESTMENT
         TRUST UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE `CODE').
         EXCEPT AS OTHERWISE PROVIDED PURSUANT TO THE CERTIFICATE OF THE
         CORPORATION, NO PERSON MAY BENEFICIALLY OWN OR CONSTRUCTIVELY OWN (1)
         COMMON SHARES OF THE CORPORATION IN EXCESS OF 9.8% OF THE LESSER OF THE
         TOTAL NUMBER OR VALUE OF THE OUTSTANDING COMMON SHARES OF THE
         CORPORATION, (2) PREFERRED SHARES OF THE CORPORATION IN EXCESS OF 9.8%
         OF THE LESSER OF THE TOTAL NUMBER OF VALUE OF THE OUTSTANDING PREFERRED
         SHARES OF THE CORPORATION, (3) EQUITY SHARES THAT WOULD RESULT IN THE
         TRUST BEING "CLOSELY HELD" UNDER SECTION 856(h) OF THE CODE, (4) EQUITY
         SHARES THAT WOULD RESULT IN THE EQUITY

                                      A-9
<PAGE>

         SHARES BEING BENEFICIALLY OWNED BY FEWER THAN 100 PERSONS (DETERMINED
         WITHOUT REFERENCE TO ANY RULES OF ATTRIBUTION) OR (5) EQUITY SHARES
         THAT WOULD CAUSE THE CORPORATION TO CONSTRUCTIVELY OWN 10% OR MORE OF
         THE OWNERSHIP INTERESTS IN A TENANT OF THE REAL PROPERTY OF THE
         CORPORATION, WITHIN THE MEANING OF SECTION 856(d)(2)(B) OF THE CODE,
         WITH FURTHER RESTRICTIONS AND EXCEPTIONS SET FORTH IN THE
         CORPORATION'S CERTIFICATE. ANY PERSON WHO ATTEMPTS OR PROPOSES TO
         BENEFICIALLY OWN OR CONSTRUCTIVELY OWN SHARES OF EQUITY SHARES IN
         EXCESS OF THE ABOVE LIMITATIONS MUST IMMEDIATELY NOTIFY THE
         CORPORATION IN WRITING. IF AN ATTEMPT IS MADE TO VIOLATE OR THERE IS
         A VIOLATION OF THESE RESTRICTIONS (I) ANY PURPORTED TRANSFER WILL BE
         VOID AB INITIO AND WILL NOT BE RECOGNIZED BY THE CORPORATION. ALL
         TERMS USED IN THIS LEGEND AND DEFINED IN THE CORPORATION'S
         CERTIFICATE OF INCORPORATION HAVE THE MEANINGS DEFINED IN THE
         CORPORATION'S CERTIFICATE, AS THE SAME MAY BE AMENDED FROM TIME TO
         TIME, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON OWNERSHIP AND
         TRANSFER, WILL BE SENT WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO
         REQUESTS.

                  SECOND: The Shares have been classified and designated by the
Board of Directors under authority contained in the Certificate.

                  THIRD: This Certificate of Designations have been approved by
the Board of Directors in the manner and by the vote required by law.

                  FOURTH: The undersigned President and Chief Executive Officer
of the Corporation acknowledges these Certificate of Designations to be the
corporate act of the Corporation and, as to all matters or facts required to be
verified under oath, the undersigned President and Chief Executive Officer of
the Corporation acknowledges that to the best of his knowledge, information and
belief, these matters and facts are true in all material respects and that this
statement is made under the penalties for perjury.

                            [Signature page follows.]

                                      A-10
<PAGE>

                  IN WITNESS WHEREOF, the Corporation has caused these
Certificate of Designations to be executed under seal in its name and on its
behalf by its President and attested to by its Secretary on this [__] day of
[_____], 2000.

                                       VERSICOR INC.

                                       By:______________________________________
                                           George F. Horner
                                           President and Chief Executive Officer
Attest:

By:____________________________________
     Barclay J. Kamb
     Secretary

                  CERTIFICATE OF THE PRESIDENT OF VERSICOR INC.

                  THE UNDERSIGNED, President of Versicor Inc., who executed on
behalf of the Corporation the Certificate of Designations of which this
Certificate is made a part, hereby acknowledges in the name and on behalf of
said Corporation the foregoing Certificate of Designations to be the corporate
act of said Corporation and hereby certifies that the matters and facts set
forth herein with respect to the authorization and approval thereof are true in
all material respects under the penalties of perjury.

                                       _________________________________________
                                       George F. Horner
                                       President

(SEAL)

                                      A-11
<PAGE>

                                                                       EXHIBIT B

                          [Form of Rights Certificate]

Certificate No.  R-____________                      ____________________ Rights

NOT EXERCISABLE AFTER _________ __, 2010, UNLESS EXTENDED PRIOR THERETO BY THE
BOARD OF DIRECTORS OR EARLIER IF REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT
TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT)
AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.](1)

                               RIGHTS CERTIFICATE

                                  VERSICOR INC.

                  This certifies that _________________________________________,
or registered assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Shareholder Rights Agreement, dated as of
________ __, 2000 (the "Rights Agreement"), between Versicor Inc., a Delaware
corporation (the "Company"), and [RIGHTS AGENT], a _______________ (the "Rights
Agent"), to purchase from the Company at any time prior to 5:00 P.M. (Los
Angeles time) on ________ __, 2010 (unless such date is extended prior thereto
by the Board of Directors) 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, non-assessable share of Series A Junior
Participating Preferred Stock (the "Preferred Stock'.) of the Company, at a
purchase price of $75.00 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 number
of Rights evidenced by this Rights Certificate (and the number of shares which
may be purchased upon exercise thereof) set forth above, and the Purchase Price
per share set forth above, are the number and Purchase

--------------
(1) The portion of the legend in brackets shall be inserted only if
    applicable and shall replace the preceding sentence.

                                      B-1
<PAGE>

Price as of ________ __, 2000, based on the Preferred Stock as constituted at
such date. 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.

                  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 any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void without any further action and no holder
hereof shall have any rights whatsoever with respect to such Rights, whether
under any provision of the Rights Agreement or otherwise, from and after the
occurrence of such Section 11(a)(ii) Event.

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

                  This Rights Certificate is subject to all of the terms,
covenants and restrictions of the Rights Agreement, which terms, covenants and
restrictions 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
above-mentioned office of the Rights Agent and are also available upon written
request to the Rights Agent.

                  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 as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such holder to purchase.
If this Rights Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.

                  Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $0.01 per Right at any time prior to the earlier of the
Close of Business on (i) the tenth Business Day following the Stock Acquisition
Date (as such time period may be

                                      B-2
<PAGE>

extended pursuant to the Rights Agreement), and (ii) the Final Expiration
Date. In addition, under certain circumstances following the Stock
Acquisition Date, the Rights may be exchanged, in whole or in part, for
shares of the Common Stock, or shares of preferred stock of the Company
having essentially the same value or economic rights as such shares.
Immediately upon the action of the Board of Directors of the Company
authorizing any such exchange, and without any further action or any notice,
the Rights (other than Rights which are not subject to such exchange) will
terminate and the Rights will only enable holders to receive the shares
issuable upon such exchange.

                  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), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement. The Company, at its election, may require that a number of Rights be
exercised so that only whole shares of Preferred Stock would be issued.

                  No holder of this Rights Certificate 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 consent to or withhold consent from any corporate
action, or, to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.

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

                                      B-3
<PAGE>

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

Dated as of _____________ ___, _______.

                                       VERSICOR INC.

                                       By:______________________________________
                                           George F. Horner III
                                           President and Chief Executive Officer
Attest:

By:____________________________________
     Barclay J. Kamb
     Secretary

                                                                          [SEAL]

Countersigned:

[RIGHTS AGENT]

By:____________________________________
     Authorized Signature

                                      B-4
<PAGE>

                  [Form of Reverse Side of Rights Certificate]

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

                               FORM OF ASSIGNMENT

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

                  FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
     and transfer(s) unto

  PLEASE INSERT SOCIAL SECURITY OR OTHER
  IDENTIFYING NUMBER OF ASSIGNEE

---------------------------------------
                                       .........................................
---------------------------------------

 ................................................................................
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
                                   ASSIGNEE)

this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably

constitute and appoint..........................................................
Attorney to transfer the within Rights Certificate on the books of the
within-named Company with full power of substitution.

Dated:   .......................          ......................................
                                                       (SIGNATURE)

                                          ......................................
                                                       (PRINT NAME)

                   Signature Guaranteed:  ......................................
                                                       (SIGNATURE)

                                   CERTIFICATE

                  The undersigned hereby certifies by checking the appropriate
boxes that:

                  (1) this Rights Certificate / / is / / is not being sold,
assigned and 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 pursuant to 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.

Dated:   .......................          ......................................
                                                       (SIGNATURE)

                                          ......................................
                                                       (PRINT NAME)

                   Signature Guaranteed:  ......................................
                                                       (SIGNATURE)

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

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

                                      B-5
<PAGE>

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

                          FORM OF ELECTION TO PURCHASE

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

To:  VERSICOR INC.:

                  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 OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
                                   ASSIGNEE)

                  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 OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
                                   ASSIGNEE)

Dated:   .......................          ......................................
                                                       (SIGNATURE)

                                          ......................................
                                                       (PRINT NAME)

                   Signature Guaranteed:  ......................................
                                                       (SIGNATURE)

                                   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 pursuant to 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.

Dated:   .......................          ......................................
                                                       (SIGNATURE)

                                          ......................................
                                                       (PRINT NAME)

                   Signature Guaranteed:  ......................................
                                                       (SIGNATURE)

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

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

                                      B-6
<PAGE>

                                                                       EXHIBIT C

                                SUMMARY OF RIGHTS

                  On ________ __, 2000, the Board of Directors of Versicor Inc.
(the "Company") declared a dividend distribution of one Right for each
outstanding share of Company Common Stock to stockholders of record at the Close
of Business on ________ __, 2000 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Company one one-hundredth of a share of
Series A Junior Participating Preferred Stock, par value $0.01 per share (the
"Preferred Stock"), at a Purchase Price of $75.00, subject to adjustment. The
description and terms of the Rights are set forth in a Shareholder Rights
Agreement (the "Rights Agreement") between the Company and [RIGHTS AGENT], as
Rights Agent.

                  Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. Subject to certain exceptions specified in the
Rights Agreement, the Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 10 business days following
a public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding shares of Common Stock
(the "Stock Acquisition Date"), other than as a result of repurchases of stock
by the Company or certain inadvertent actions by institutional or certain other
stockholders or (ii) 10 business days (or such later date as the Board shall
determine) following the commencement of a tender offer or exchange offer that
would result in a person or group becoming an Acquiring Person. Until the
Distribution Date, (i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after the Record Date
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. 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 5:00 P.M. (Los Angeles time) on ________ __, 2010, unless earlier
redeemed or exchanged by the Company as described below.

                  As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
Close of Business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights.

                  Except as otherwise determined by the Board of Directors, only
shares of Common Stock issued prior to the Distribution Date will be issued with
Rights.

                                      C-1
<PAGE>

                  In the event that a Person becomes an Acquiring Person, except
pursuant to an offer for all outstanding shares of Common Stock which the
independent directors determine to be at a price which is fair and not
inadequate and to otherwise be in the best interests of the Company and its
stockholders, after receiving advice from one or more investment banking firms
(a "`Qualified Offer"), each holder of a Right will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain circumstances, cash,
property or other securities of the Company) having a value equal to two times
the exercise price of the Right. The Exercise Price is the Purchase Price times
the number of shares of Common Stock associated with each Right. Notwithstanding
any of the foregoing, following the occurrence of the event set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person or an
affiliate or associate thereof will be null and void. However, Rights are not
exercisable following the occurrence of the event set forth above until such
time as the Rights are no longer redeemable by the Company as set forth below.

                  For example, at an exercise price of $75 per Right, each Right
not owned by an Acquiring Person (or by certain related parties) following an
event set forth in the preceding paragraph would entitle its holder to purchase
$150 worth of Common Stock (or other consideration, as noted above) for $75.
Assuming that the Common Stock had a per share value of $25 at such time, the
holder of each valid Right would be entitled to purchase 6 shares of Common
Stock for $75.

                  In the event that, at any time following the Stock Acquisition
Date, (i) the Company engages in a merger or other business combination
transaction in which the Company is not the surviving corporation (other than
with an entity which acquired the shares pursuant to a Qualified Offer), (ii)
the Company engages in a merger or other business combination transaction in
which the Company is the surviving corporation and the Common Stock of the
Company is changed or exchanged, or (iii) 50% or more of the Company's assets or
cash flow is sold or transferred, each holder of a Right (except Rights which
have previously been voided as set forth above) shall thereafter have the right
to receive, upon exercise, common stock of the acquiring company (or in certain
circumstances, its parent) having a value equal to two times the exercise price
of the Right. The events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."

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

                  At any time until ten business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at a price of $0.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the

                                      C-2
<PAGE>

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 $0.01 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 or
in the event of the redemption of the Rights as set forth above.

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

                   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.

                                      C-3<PAGE>

                   SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
        A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE ASSURANCE COMPANY OF CANADA

EXECUTIVE OFFICE:             HOME OFFICE:      ANNUITY SERVICE MAILING ADDRESS:
[One Sun Life Executive Park  [Wilmington, DE]  Sun Life of Canada (U.S.)
Wellesley Hills, MA  02481]                     Retirement Products and Services
                                                P.O. Box [ # ]
                                                Boston, MA  [ Zip code ]

      Sun Life Assurance Company of Canada (U.S.) ("the Company") will pay an
annuity commencing on the Annuity Commencement Date by applying the adjusted
value of the Participant's Account in accordance with the settlement provisions.
If the Covered Person dies while the Contract is in effect and before the
Annuity Commencement Date, the Company may pay a Death Benefit to the
Beneficiary upon receipt of Due Proof of Death of the Participant. Under certain
circumstances, if the Participant dies before the Annuity Commencement Date, a
distribution is required by law. This Contract is the legal Contract. If there
is any conflict between the provisions of this Contract and any Certificate
issued in connection with it, the Contract is the controlling document.

      All payments will be made to the persons and in the manner set forth in
this Contract. Provisions and endorsements printed or written by the Company on
the following pages form part of the Contract.

      Signed by the Company at its Executive Office, Wellesley Hills,
Massachusetts on the Issue Date.

          /s/ C. James Prieur                    /s/ Ellen B. King

            C. James Prieur                        Ellen B. King
               PRESIDENT                             SECRETARY

 FLEXIBLE PAYMENT DEFERRED COMBINATION VARIABLE AND FIXED GROUP ANNUITY CONTRACT
                                NONPARTICIPATING

ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT ARE VARIABLE AND ARE NOT GUARANTEED AS TO
DOLLAR AMOUNT.

PAYMENTS AND VALUES BASED ON THE FIXED ACCOUNT ARE SUBJECT TO A MARKET VALUE
ADJUSTMENT FORMULA, THE OPERATION OF WHICH MAY RESULT IN UPWARD AND DOWNWARD
ADJUSTMENTS IN AMOUNTS PAYABLE TO A PARTICIPANT, INCLUDING WITHDRAWALS,
TRANSFERS AND AMOUNTS APPLIED TO PURCHASE AN ANNUITY. PAYMENTS FROM GUARANTEE
AMOUNTS WHICH ARE MADE WITHIN 30 DAYS PRIOR TO THE END OF A GUARANTEE PERIOD OR
THE WITHDRAWAL OF INTEREST CREDITED TO GUARANTEE AMOUNTS DURING THE CURRENT
ACCOUNT YEAR ARE NOT SUBJECT TO THE MARKET VALUE ADJUSTMENT.

RCH-GR-CONT-00-1
<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

CONTRACT SPECIFICATIONS.................................................       4

DEFINITIONS.............................................................       5

FIXED AND VARIABLE ACCOUNTS.............................................       8
     Fixed Account......................................................       8
     Variable Account and Sub-Accounts..................................       8
     Ownership of Assets................................................       8
     Investments of the Sub-Accounts....................................       8

 PURCHASE PAYMENTS......................................................       8
     Payments ..........................................................       8
     Purchase Payment interest..........................................       9
     Account Continuation...............................................       9
     Allocation of Net Purchase Payments................................       9

CONTRACT VALUES DURING ACCUMULATION PERIOD..............................       9
     Participant's Account..............................................       9
     Variable Account Value.............................................      10
     Crediting Variable Accumulation Units..............................      10
     Variable Accumulation Unit Value...................................      10
     Variable Accumulation Value........................................      10
     Net Investment Factor..............................................      10
     Fixed Account Value................................................      11
     Guarantee Periods..................................................      11
     Guaranteed Interest Rates..........................................      11
     Fixed Accumulation Value...........................................      11
     Transfer Privilege.................................................      12
     Account Fee........................................................      12

CASH WITHDRAWALS, WITHDRAWAL CHARGES AND MARKET VALUE ADJUSTMENT........      13
     Cash Withdrawals...................................................      13
     Withdrawal Charges.................................................      13
     Nursing Home Withdrawal Privilege..................................      14
     Market Value Adjustment............................................      14

DEATH BENEFIT...........................................................      15
     Death Benefit Provided by the Contract.............................      15
     Election and Effective Date of Election............................      15
     Payment of Death Benefit...........................................      16
     Amount of Death Benefit............................................      16

SETTLEMENT PROVISIONS...................................................      17
     General............................................................      17
     Election and Effective Date of Election............................      17
     Determination of Amount............................................      17
     Effect of Annuity Commencement Date on Participant's Account.......      18
     Annuity Commencement Date..........................................      18
     Fixed Annuity Payments.............................................      18

RCH-GR-CONT-00-1                     -2-
<PAGE>

     Variable Annuity Payments..........................................      18
     Annuity Unit Value.................................................      19
     Exchange of Variable Annuity Units.................................      19
     Account Fee........................................................      19
     Description of Annuity Options.....................................      19
     Amounts Payable on Death of Payee..................................      20
     Annuity Payment Rates..............................................      20

OWNERSHIP PROVISIONS....................................................      22
     Exercise of Contract Rights........................................      22
     Death of Participant...............................................      22
     Voting of Fund Shares..............................................      22
     Periodic Reports...................................................      23
     Designation and Change of Beneficiary..............................      23

GENERAL PROVISIONS......................................................      23
     Age and Sex Misstatement...........................................      23
     Contract...........................................................      24
     Currency...........................................................      24
     Determination of Values............................................      24
     Discontinuance of New Participants.................................      24
     Governing Law......................................................      24
     Guarantees.........................................................      24
     Incontestability...................................................      25
     Modification.......................................................      25
     Nonparticipating...................................................      25
     Payments by the Company............................................      25
     Proof of Age.......................................................      25
     Proof of Survival..................................................      25
     Splitting Units....................................................      25
     Rights Reserved by the Company.....................................      26

QUALIFIED CONTRACT PROVISIONS...........................................

RCH-GR-CONT-00-1                     -3-
<PAGE>

                             CONTRACT SPECIFICATIONS

<TABLE>
<S>                                                          <C>
OWNER                                                        [           ]
CONTRACT TYPE                                                [Non Qualified] or [Qualified plan under IRS
                                                             code section 401, 403(b) or 408A]
CONTRACT NUMBER                                              [79-7900-111111]
ISSUE DATE                                                    [June 21, 1998]
INITIAL PURCHASE PAYMENT                                      [$10,000][if IRA $2,000]
    Minimum Additional Payment                                [$ 1,000]
    Maximum Purchase Payment                                  [Any purchase payment that would NOT cause
    (without prior approval of the Company)                  Account Value to exceed $2,000,000]
ANNUAL ASSET CHARGES
     Up to and including $1,000,000                          [1.15%] or [1.30%] or [1.40%] or [1.55%]
                                                             [1.40% after Annuity Commencement Date for
                                                             Annuity Commencement Dates occurring within 7
                                                             years of Date of Coverage]
                                                             [1.15% after Annuity Commencement Date for
                                                             Annuity Commencement Dates occurring after 7
                                                             years from the Date of Coverage]

              Over $1,000 000                                [1.00%] or [1.15%]or [1.25%] or [1.40%]
                                                             [1.25% after Annuity Commencement Date for
                                                             Annuity Commencement Dates occurring after 7
                                                             years from the Date of Coverage]
                                                             [1.00% after Annuity Commencement Date for
                                                             Annuity Commencement Dates occurring after 7
                                                             years from Date of Coverage.]
ANNUITY OPTION                                               [Deferred]
              Minimum Annuity Purchase Amount                [$5,000]
              Minimum Initial Annuity Payment Amount         [$50]
              Account Fee After Annuity Commencement Date    [$35]
ACCOUNT FEE                                                  [$35]

MAXIMUM ACCOUNT FEE                                          [$50]
MINIMUM ACCOUNT VALUE FOR WAIVER OF ACCOUNT FEE              [$75,000]
WITHDRAWAL CHARGES                                           NUMBER OF COMPLETE        WITHDRAWAL
                                                             ACCOUNT YEARS FROM TIME   CHARGES
                                                             OF PAYMENT
                                                              [0-1                     7%
                                                              2- 3                     6%
                                                              4                        5%
                                                              5                        4%
                                                              6                        3%
                                                              7+                       0%]
FREE WITHDRAWAL AMOUNT
INITIAL GUARANTEE PERIODS(S)                                 ["1-10 Year" or "Non-Elected"]
FREE WITHDRAWAL AMOUNT                                       [ 15%][of Purchase Payments irrespective of
                                                             whether such new Payments have been liquidated
                                                             or cumulative earnings.]
GUARANTEED INTEREST RATE                                     ["1YR-4.5%, "3YR-5.6%" or "N/A"]
              Minimum Guarantee Period Amount                [$1,000]
              Minimum Guarantee Interest Rate                 3%
              Market Value Adjustment ("b" Factor)           [0%]         Maximum 0.25%

CURRENT FEE PER TRANSFER                                     [$0]
              Maximum Fee Per Transfer                       [$25]
              Maximum Number of Transfers per Year           [12]
              Minimum Transfer Amount                        [$1,000]
              Minimum Remaining in Sub-Account after         [$1,000]
              Transfer

RCH-GR-CONT-00-1
<PAGE>

<CAPTION>
<S>                                                          <C>
BASIC DEATH BENEFIT

OPTIONAL DEATH BENEFIT (S)                                   [The greatest of 1, 2, and 3 in the "Amount of
                                                             Death Benefit" provision.]

[EARNINGS ENHANCEMENT RIDER]                                 [None]

                                                             [The Basic Death Benefit plus
                                                             -   40% of the lesser of Net Purchase Payments and
                                                                 the Accumulation Account Value minus Net
                                                                 Purchase Payments if the Participant is less than
                                                                 70 years old on the Certificate Date.
                                                             -   25% of the lesser of Net Purchase Payments and
                                                                 the Accumulation Account Value minus Net
                                                                 Purchase Payments if the participant is between
                                                                 70 and 79 years old on the Certificate Date]

[WHAT BENEFIT IS PAYABLE IN THE EVENT THE PARTICIPANT'S      [If the spouse of the Participant chooses to continue
SPOUSE CHOOSES TO CONTINUE THE CERTIFICATE AFTER THE         this Certificate after the Participant's death, the
PARTICIPANT'S DEATH?]                                        amount payable under this Rider will be credited to
                                                             the Accumulation Account Value as of the Death
                                                             Benefit Date. Thereafter, the Rider will continue in
                                                             force and be payable upon the spouse's death. For
                                                             purposes of calculating this benefit upon the
                                                             spouse's death, the Accumulation Account Value on the
                                                             Participant's Death Benefit Date (inclusive of
                                                             any Death Benefit Amount increases) will be
                                                             considered the Initial Net Purchase Payment.. If a
                                                             benefit is payable on the spouse's Death Benefit
                                                             Date, the percentage payable (40% vs. 25%) will be
                                                             based on the spouse's age on the Date of Coverage]

[MAXIMUM ANNIVERSARY ACCOUNT VALUE RIDER]                                           [and]

                                                             [The Basic Death Benefit and the highest
                                                             Accumulation Account Value on any Contract
                                                             Anniversary prior to the Participant's 81st birthday,
                                                             adjusted for any subsequent Purchase Payments and
                                                             Partial Withdrawals and Charges made between such
                                                             Account Anniversary and the Death Benefit Date.

[5% PREMIUM ROLL-UP RIDER]                                                          [and]

                                                             [The Basic Death Benefit and your total purchase
                                                             payments plus interest accrued as follows:

                                                             -   Interest will accrue on Purchase Payments
                                                                 allocated to and transfers to the Variable
                                                                 Account while they remain in the Variable
                                                                 Account at 5% per year until the first day of the
                                                                 month following the Participant's 80th birthday
                                                                 or until Purchase Payment or amount
                                                                 transferred has doubled in amount, whichever is
                                                                 earlier.]

[HOW WILL THE BENEFITS OFFERED BY THESE RIDERS BE
CALCULATED IF BOTH ARE ELECTED?]

                                                             [MAXIMUM ANNIVERSARY ACCOUNT VALUE RIDER AND
                                                             5% PREMIUM ROLL-UP RIDER

                                                             The death benefit will equal the greatest of
                                                             the following values:
                                                             -   Maximum Account Anniversary Account Value

RCH-GR-CONT-00-1
<PAGE>

<CAPTION>
<S>                                                          <C>
                                                             -   5% of Premium Rollup value
                                                             -   the Basic Death Benefit]

                                                             [MAXIMUM ANNIVERSARY ACCOUNT VALUE RIDER AND
                                                             EARNINGS ENHANCEMENT RIDER

                                                             The death benefit will equal the greater of the
                                                             following values:
                                                             -   Maximum Account Anniversary Account Value
                                                             -   the Basic Death Benefit
                                                                                 PLUS

                                                             -   The amount calculated under the Earnings
                                                                 Enhancement Rider using the Basic Death
                                                                 Benefit]

                                                             [5% PREMIUM ROLL-UP RIDER AND EARNINGS
                                                             ENHANCEMENT RIDER

                                                             The death benefit will equal the greater of the
                                                             following values:

                                                             -   5% Premium Rollup value
                                                             -   the Basic Death Benefit
                                                                                  PLUS
                                                             THE AMOUNT CALCULATED UNDER THE EARNINGS
                                                             ENHANCEMENT RIDER USING THE BASIC DEATH BENEFIT]

                                                             [MAXIMUM ANNIVERSARY ACCOUNT VALUE RIDER,
                                                             5% PREMIUM ROLL-UP RIDER, AND EARNINGS
                                                             ENHANCEMENT RIDER

                                                             The death benefit will equal the greater of the
                                                             following values:
                                                             -   Maximum Account Anniversary Account Value
                                                             -   5% Premium Rollup value
                                                             -   the Basic Death Benefit
                                                                                  PLUS
                                                             THE AMOUNT CALCULATED UNDER THE EARNINGS
                                                             ENHANCEMENT RIDER USING THE BASIC DEATH BENEFIT
                                                             VALUE.]
</TABLE>

Available Fund Options:

[         ]

RCH-GR-CONT-00-1
<PAGE>

                                   DEFINITIONS

Any reference in this Contract to "RECEIPT" and "RECEIVED" by the Company means
receipt at the Company's Annuity Service Mailing Address shown on the first page
of this Contract.

ACCOUNT YEARS AND ACCOUNT ANNIVERSARIES: The period of 365 days measured from
the Date of Coverage.

ACCUMULATION PERIOD: The period before the Annuity Commencement Date and during
the lifetime of the Participant.

ANNUITANT: The person or persons named in the Certificate Specifications page,
and on whose life the first annuity payment is to be made. If the Annuitant dies
prior to the Annuity Commencement Date, the new Annuitant will be the
Co-Annuitant, if any. If the Co-Annuitant dies or if no Co-Annuitant is named,
the Participant becomes the Annuitant upon the Annuitant's death prior to the
Annuity Commencement Date.

ANNUITY COMMENCEMENT DATE: The date on which the first annuity payment is to be
made. This date may not be earlier than the first Account Anniversary.

ANNUITY OPTION: The method for making annuity payments.

ANNUITY UNIT: A unit of measure used in the calculation of the amount of the
second and each subsequent Variable Annuity payment from the Variable Account.

APPLICATION: The document, if any, signed by each Participant that serves as his
or her application for participation under this Contract.

BENEFICIARY: Prior to the Annuity Commencement Date, the person or entity having
the right to receive the Death Benefit set forth in the Certificate, and, for a
Certificate issued under a Non-Qualified Contract, who, in the event of the
Participant's death, is the designated Beneficiary for purposes of Section 72(s)
of the Code. After the Annuity Commencement Date, the person or entity having
the right to receive any payments due under the Annuity Option elected, if
applicable, upon the death of the Payee. The Certificate must be owned by a
natural person or agent for a natural person for the Certificate to receive
favorable income tax treatment as an annuity.

CERTIFICATE: The document for each Participant which evidences the coverage of
the Participant under this Contract.

CODE: The Internal Revenue Code of 1986, as amended.

COMPANY: Sun Life Assurance Company of Canada (U.S.).

CONTRACT APPLICATION: The document, if any, signed by the Owner that evidences
the Owner's application for this Contract.

COVERED PERSON: The person upon whose death the Death Benefit will be paid.

DATE OF COVERAGE: The date on which a Participant's Certificate becomes
effective.

DEATH BENEFIT DATE: The date on which the death benefit election is effective,
which is the date on which the Company receives Due Proof of Death.

DUE PROOF OF DEATH: An original certified copy of an official death certificate,
an original certified copy of a decree of a court of competent jurisdiction as
to the finding of death, or any other proof satisfactory to the Company.

EXPIRATION DATE: The last day of a Guarantee Period.

RCH-GR-CONT-00-1                     -5-
<PAGE>

FIXED ACCOUNT: Part of the General Account of the Company, consisting of all
assets of the Company other than those allocated to a separate account of the
Company.

FIXED ANNUITY: An annuity with payments that do not vary as to dollar amount.

FUND(S): One or more open-end management investment companies or "mutual funds"
registered under the Investment Company Act of 1940.

GUARANTEE AMOUNT: Any portion of a Participant's Account Value allocated to a
particular Guarantee Period with a particular Expiration Date (including
interest earned thereon).

GUARANTEE PERIOD: The period for which a Guaranteed Interest Rate is credited.

GUARANTEED INTEREST RATE: The rate of interest credited by the Company on a
compound annual basis during any Guarantee Period.

ISSUE DATE: The date on which the Contract becomes effective.

NET INVESTMENT FACTOR: An index applied by the Company to measure the investment
performance of a Sub-Account from one Valuation Period to the next. The Net
Investment Factor may be greater than, less than, or equal to one.

NET PURCHASE PAYMENT: The portion of a Purchase Payment that remains after the
deduction of any applicable front-end sales load or premium or similar tax, if
any.

NON-QUALIFIED CONTRACT: A contract used in connection with a retirement plan
which does not receive favorable federal income tax treatment under Sections
401, 403, 408 or 408A of the Code. The Participant's interest in the Contract
must be owned by a natural person or agent for a natural person for the Contract
to receive favorable income tax treatment as an annuity.

*OWNER: The person, persons or entity entitled to the ownership rights stated in
the Contract and in whose name or names the Contract is issued. The Owner may
designate a trustee or custodian of a retirement plan which meets the
requirements of Section 401, Section 408(c), Section 408(k), or Section 408(p)
of the Code to serve as legal owner of assets of a retirement plan, but the term
Owner, as used herein, refers to the organization entering into the Contract.

PARTICIPANT: The person named in the Certificate Specifications page who is
entitled to exercise all rights and privileges of ownership under the
Certificate, except as reserved by the Owner.

PARTICIPANT'S ACCOUNT: An account to which Net Purchase Payments are credited.

PARTICIPANT'S ACCOUNT VALUE: The variable accumulation value, if any, plus the
fixed accumulation value, if any, of a Participant's Account for any Valuation
Period.

PAYEE: A recipient of payments under the Contract.

PURCHASE PAYMENT (PAYMENT): The amount paid to the Company as consideration for
the benefits provided by the Contract.

QUALIFIED CONTRACT: A Contract used in connection with a retirement plan which
may receive favorable federal income tax treatment under Sections 401, 403, 408
or 408A of the Code.

SUB-ACCOUNT: That portion of the Variable Account that invests in shares of
specific series or sub-series of a Fund.

RCH-GR-CONT-00-1                   -6-
<PAGE>

VALUATION PERIOD: The period of time from one determination of Variable
Accumulation Unit and Annuity Unit values to the next subsequent determination
of these values. Such determination shall be made as of the close of the New
York Stock Exchange on each day that the Exchange is open for trading.

VARIABLE ACCOUNT: A separate account of the Company consisting of assets set
aside by the Company, the investment performance of which is kept separate from
that of the general assets of the Company.

VARIABLE ACCUMULATION UNIT: A unit of measure used in the calculation of the
value of the variable portion of a Participant's Account.

VARIABLE ANNUITY: An annuity with payments which vary as to dollar amount in
relation to the investment performance of specified Sub-Accounts of the Variable
Account.

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

* As Specified in the Contract Specifications page, unless changed.

RCH-GR-CONT-00-1                      -7-
<PAGE>

                           FIXED AND VARIABLE ACCOUNTS

FIXED ACCOUNT

      The Fixed Account consists of all assets of the Company other than those
allocated to any separate account of the Company. Any portion of a Net Purchase
Payment allocated by a Participant to a Guarantee Period(s) will become part of
the Fixed Account.

VARIABLE ACCOUNT AND SUB-ACCOUNTS

      The Variable Account to which the variable accumulation values and
Variable Annuity payments, if any, under the contract relate was established by
the Company pursuant to a resolution of its Board of Directors. The Company has
registered the Variable Account as a unit investment trust under the Investment
Company Act of 1940. That portion of the assets of the Variable Account equal to
the reserves and other Contract liabilities with respect to the Variable Account
shall not be chargeable with liabilities arising out of any other business the
Company may conduct.

      The assets of the Variable Account are divided into Sub-Accounts. Each
Sub-Account invests exclusively in shares of a designated series or sub-series
of a Fund. The values of the Variable Accumulation Units and the Annuity Units
described in the contract reflect the investment performance of the
Sub-Accounts.

OWNERSHIP OF ASSETS

      The Company shall have exclusive and absolute ownership and control of its
assets, including all assets of the Sub-Accounts. The Company reserves the right
to transfer assets of a Sub-Account, in excess of the reserves and other policy
liabilities with respect to that Sub-Account, to another Sub-Account or to the
Company's General Account.

INVESTMENTS OF THE SUB-ACCOUNTS

      All amounts allocated to a Sub-Account will be used to purchase shares of
a specific series or sub-series of a Fund. The Fund shares available on the
Issue Date are shown on the Contract Specifications page; more series and/or
Funds may be subsequently added or deleted. Each Fund is an open-end management
investment company ("mutual fund") registered under the Investment Company Act
of 1940. Any and all distributions made by a Fund with respect to shares held by
a Sub-Account will be reinvested to purchase additional shares of that Fund at
net asset value. Deductions from the Sub-Accounts will, in effect, be made by
reducing the number of Accumulation Units attributable to a Participant's
Account. Each Sub-Account will be fully invested in Fund shares at all times.

                                PURCHASE PAYMENTS

PAYMENTS

      All Purchase Payments are to be paid to the Company at its Annuity Service
Mailing Address. The amount of Purchase Payments may vary; however, the Company
will not accept an initial Purchase Payment for any Certificate which is less
than the minimum amount set forth on the Certificate Specifications page, and
each additional Purchase Payment must be at least the minimum additional amount
specified on the Certificate Specifications page. In addition, the prior
approval of the Company is required before it will accept a Purchase Payment
which would cause the Participant's Account Value to exceed the maximum Purchase
Payment amount specified on the Certificate Specifications page. If the
Participant's Account Value exceeds such maximum amount, no additional Purchase
Payments will be allocated without the prior approval of the Company.

RCH-GR-CONT-00-1                      -8-
<PAGE>

PURCHASE PAYMENT INTEREST

      Purchase Payments will be credited with interest at the rate shown on the
Certificate Specifications page. A Participant may choose between two Purchase
Payment Interest options: Option A provides for the crediting of interest at the
rate shown on the Specification Page to each Purchase Payment made during the
first Account Year. On each Five Year Anniversary, additional interest (called
"Five Year Anniversary Interest") will be credited to the Participant's Account
Value at the rate shown on the Specification Page. Option B provides for the
crediting of interest at the rate shown on the Specification Page to all
Purchase Payment accepted by the Company. If no option is elected on or before
the Date of Coverage, Option A will automatically apply.

      Interest under either option will be credited during the same Valuation
Period that the Purchase Payment is received (or on any Five Year Anniversary if
Option A is elected) and allocated to the Sub-Accounts and/or Fixed Account in
the same proportion as the Net Purchase Payment is allocated. If Option A was
elected, any Five Year Anniversary Interest will be proportionally allocated to
the Sub-Accounts and/or the Fixed Account (excluding any Fixed Account if used
to support a dollar cost averaging transfer program) based on their respective
values.

      No interest will be credited if the Certificate is returned pursuant to
the Right To Return provision.

ACCOUNT CONTINUATION

      Account shall be continued automatically in full force during the lifetime
of the Participant until the Annuity Commencement Date A Participant's or until
the Participant's Account is surrendered.

ALLOCATION OF NET PURCHASE PAYMENTS

      The Net Purchase Payment is that portion of a Purchase Payment that
remains after deduction of any applicable front-end sales load and premium tax
or similar tax. Each Net Purchase Payment will, upon receipt by the Company, be
allocated to the Participant's Account, either to the Sub-Accounts or to the
Fixed Account or to both the Sub-Accounts and the Fixed Account in accordance
with the allocation factors specified in the Application, or as subsequently
changed by the Participant. Purchase Payment Interest will be credited on a
proportional basis to the same Sub-Accounts and/or Fixed Accounts as Net
Purchase Payments. Purchase Payment interest will be credited on a proportional
basis to the same Sub-Accounts and/or Fixed Accounts as Net Purchase Payments.

      The allocation factors for new Purchase Payments among the Guarantee
Periods and the Sub-Accounts may be changed by the Participant at any time by
giving notice of the change to the Company, in accordance with the Company's
procedures then in effect. The Participant may effect such change directly, or
through an authorized third party, subject to the Company's approval given in
its sole discretion, and further subject to adherence to such Company procedures
as may be adopted from time to time. Any change will take effect with the first
Purchase Payment received with or after receipt of notice of the change by the
Company and will continue in effect until subsequently changed.

                   CONTRACT VALUES DURING ACCUMULATION PERIOD

PARTICIPANT'S ACCOUNT

      The Company will establish a Participant's Account for each Participant
under this Contract and will maintain the Participant's Account during the
Accumulation Period. The Participant's Account Value for any Valuation Period is
equal to the variable accumulation value, if any, plus the fixed accumulation
value, if any, of the Participant's Account for that Valuation Period.

RCH-GR-CONT-00-1                       -9-
<PAGE>

                             VARIABLE ACCOUNT VALUE

CREDITING VARIABLE ACCUMULATION UNITS

      Upon receipt of a Purchase Payment by the Company, all or that portion, if
any, of the Net Purchase Payment to be allocated to the Sub-Accounts will be
credited to the Participant's Account in the form of Variable Accumulation
Units. The number of particular Variable Accumulation Units to be credited is
determined by dividing the dollar amount allocated to the particular Sub-Account
by the Variable Accumulation Unit value of the particular Sub-Account for the
Valuation Period during which the Purchase Payment is received by the Company.

VARIABLE ACCUMULATION UNIT VALUE

      The Variable Accumulation Unit value for each Sub-Account was established
at $10.00 for the first Valuation Period of the particular Sub-Account. The
Variable Accumulation Unit value for the particular Sub-Account for any
subsequent Valuation Period is determined by methodology which is the
mathematical equivalent of multiplying the Variable Accumulation Unit value for
the particular Sub-Account for the immediately preceding Valuation Period by the
Net Investment Factor for the particular Sub-Account for such subsequent
Valuation Period. The Variable Accumulation Unit value for each Sub-Account for
any Valuation Period is the value determined as of the end of the particular
Valuation Period and may increase, decrease or remain constant from Valuation
Period to Valuation Period in accordance with the Net Investment Factor
described below.

VARIABLE ACCUMULATION VALUE

      The variable accumulation value, if any, of a Participant's Account for
any Valuation Period is equal to the sum of the value of all Variable
Accumulation Units of each Sub-Account credited to the Participant's Account for
such Valuation Period. The variable accumulation value of each Sub-Account is
determined by multiplying the number of Variable Accumulation Units, if any,
credited to each Sub-Account by the Variable Accumulation Unit value of the
particular Sub-Account for such Valuation Period.

NET INVESTMENT FACTOR

      The Net Investment Factor is an index applied to measure the investment
performance of a Sub-Account from one Valuation Period to the next. The Net
Investment Factor may be greater than, less than, or equal to one; therefore,
the value of a Variable Accumulation Unit may increase, decrease or remain
unchanged.

      The Net Investment Factor for any Sub-Account for any Valuation Period is
determined by dividing (a) by (b) and then subtracting (c) from the result
where:

      (a)  is the net result of:

                1)  the net asset value of a Fund share held in the Sub-Account
                    determined as of the end of the Valuation Period, plus

                2)  the per share amount of any dividend or other distribution
                    declared by the Fund on the shares held in the Sub-Account
                    if the ex-dividend date occurs during the Valuation Period,
                    plus or minus

                3)  a per share credit or charge with respect to any taxes paid
                    or reserved for by the Company during the Valuation Period
                    which are determined by the Company to be attributable to
                    the operation of the Sub-Account;

RCH-GR-CONT-00-1                        10

<PAGE>

      (b)  is the net asset value of a Fund share held in the Sub-Account
           determined as of the end of the preceding Valuation Period; and

      (c)  is the asset charge factor determined by the Company for the
           Valuation Period to reflect the charges for assuming the mortality
           and expense risks and administrative expense risks.

      The asset charge factor for any Valuation Period is equal to the daily
asset charge factor multiplied by the number of 24 hour periods in the Valuation
Period. The daily asset charge factor will be determined by the Company based
upon the Annual Asset Charge shown on the Certificate Specifications Page.

                               FIXED ACCOUNT VALUE

GUARANTEE PERIODS

      The Participant elects one or more Guarantee Period(s) from among those
made available by the Company. The period(s) elected will determine the
Guaranteed Interest Rate(s). A Purchase Payment or the portion (at least equal
to the minimum Guarantee Period amount set forth on the Certificate
Specifications page) thereof (or amount transferred in accordance with the
"Transfer Privilege" provision described below) allocated to a particular
Guarantee Period, less any applicable premium taxes or similar taxes and any
amounts subsequently withdrawn, will earn interest at the Guaranteed Interest
Rate in effect during the Guarantee Period. Initial Guarantee Periods begin on
the date a Net Purchase Payment is applied (or, in the case of a transfer, on
the effective date of the transfer) and end when the number of calendar years in
the Guaranteed Period elected (measured from the end of the calendar month in
which the amount was allocated to the Guaranteed Period) has elapsed. The last
day of a Guarantee Period is the Expiration Date. Subsequent Guarantee Periods
begin on the first day following the Expiration Date.

      Any portion of a Participant's Account Value allocated to a particular
Guarantee Period with a particular Expiration Date (including interest earned
thereon) is referred to as a Guarantee Amount. As a result of additional
Purchase Payments, renewals and transfers of portions of the Participant's
Account Value, Guarantee Amounts allocated to Guarantee Periods of the same
duration may have different Expiration Dates, and each Guarantee Amount will be
treated separately for purposes of determining any market value adjustment.

      The Company will notify the Participant in writing at least 45 and no more
than 75 days prior to the Expiration Date for any Guarantee Amount. A new
Guarantee Period of the same duration as the previous Guarantee Period will
commence automatically at the end of the previous Guarantee Period unless the
Company receives, in writing prior to the end of such Guarantee Period, an
election by the Participant of a different Guarantee Period from among those
being offered by the Company at such time, or instructions to transfer all or a
portion of the Guarantee Amount to one or more Sub-Accounts in accordance with
the "Transfer Privilege" provision. Each new Guarantee Amount must be at least
the amount set forth on the Certificate Specifications page unless it is equal
to the entire Guarantee Amount being transferred.

GUARANTEED INTEREST RATES

      The Company periodically will establish an applicable Guaranteed Interest
Rate for each Guarantee Period offered by the Company. These rates will be
guaranteed for the duration of the respective Guarantee Periods.

      No Guaranteed Interest Rate will be less than the minimum rate per year
set forth on the Certificate Specifications page, compounded annually.

FIXED ACCUMULATION VALUE

      Upon receipt of a Purchase Payment by the Company, all or that portion, if
any, of the Net Purchase

RCH-GR-CONT-00-1                      11

<PAGE>

Payment which is allocated to the Fixed Account will be credited to the
Participant's Account and allocated to the Guarantee Period(s) selected by the
Participant. The fixed accumulation value, if any, of a Participant's Account
for any Valuation Period is equal to the sum of the values of all Guarantee
Amounts credited to the Participant's Account for such Valuation Period.

TRANSFER PRIVILEGE

      At any time during the Accumulation Period the Participant may transfer
all or part of the Participant's Account Value to one or more Sub-Accounts or
Guarantee Periods, subject to the conditions set forth below. Except as
described below, a transfer will generally be effective on the date the request
for transfer is received by the Company.

      Transfers involving Sub-Accounts will reflect the purchase or cancellation
of Variable Accumulation Units having an aggregate value equal to the dollar
amount being transferred to or from a particular Sub-Account. The purchase or
cancellation of such units shall be made using Variable Accumulation Unit values
of the applicable Sub-Account for the Valuation Period during which the transfer
is effective. Transfers to a Guarantee Period will result in a new Guarantee
Period for the amount being transferred. Any such Guarantee Period will begin on
the effective date of the transfer and end on the Expiration Date. The amount
transferred into such Guarantee Period will earn interest at the Guaranteed
Interest Rate declared by the Company for that Guarantee Period as of the
effective date of the transfer.

      Transfers will be subject to the following conditions: (1) not more than
12 transfers may be made in any Account Year; a minimum of 30 calendar days must
elapse between the transfers made to or from the Fixed Account or among
Guarantee periods within the Fixed Account; (2) the amount being transferred
from a Sub-Account may not be less than the amount set forth on the Certificate
Specifications page unless the total Participant's Account Value attributable to
a Sub-Account is being transferred; (3) any Participant's Account Value
remaining in a Sub-Account may not be less than the amount set forth on the
Certificate Specifications page; and (4) the total Participant's Account Value
attributable to the Guarantee Amount must be transferred, except for an
"interest out" transfer (I.E., the entire amount of interest credited to all
Guarantee Amounts during the current Account Year is transferred to one or more
Sub-Accounts). In addition, transfers of a Guarantee Amount (except interest
credited to such Guarantee Amount during the current Account Year) will be
subject to the market value adjustment described below unless the transfer is
effective within 30 days prior to the Expiration Date applicable to the
Guarantee Amount. Transfers involving Variable Accumulation Units shall be
subject to such terms and conditions as may be imposed by the Funds. Similarly,
the Company reserves the right in its sole discretion to delay the effective
date of any transfer involving the Fixed Account for reasons similar to those
underlying delays of transfers among Sub-Accounts. The Company also reserves the
right in its sole discretion to refuse or delay all transfer requests initiated
on behalf of a Participant by any third party authorized by the Participant to
make such requests. Currently, there is no charge for transfers; however, the
Company reserves the right to impose a charge for each transfer as shown on the
Certificate Specifications page. The Company reserves the right to limit the
amount which may be transferred from the Sub-Accounts to the Fixed Account.

ACCOUNT FEE

      Prior to the Annuity Commencement Date, on each Account Anniversary the
Company will deduct from the value of each Participant's Account an annual
account fee to reimburse the Company for administrative expenses relating to the
contract and the Participant's Account. In Account Years one through five the
account fee is equal to the lesser of the amount specified on the Certificate
Specifications page and 2% of the Participant's Account Value; thereafter the
account fee may be changed annually, but in no event may it exceed the lesser of
the maximum amount specified on the Certificate Specifications page and 2% of
the Participant's Account Value. The account fee will be deducted on a PRO RATA
basis from amounts allocated to each Guarantee Period and each Sub-Account in
which the Participant's Account is invested at the time of such deduction. If a
Participant's Account is surrendered for its full value on other than an Account
Anniversary, the account fee will be deducted in full at the time of such
surrender. The Company will waive the account fee when either (a) the entire
Participant's Account Value has been

RCH-GR-CONT-00-1                      12

<PAGE>

allocated to the Fixed Account during the entire previous Account Year, or (b)
the Participant's Account Value is greater than the amount specified on the
Certificate Specifications page on the Account Anniversary. On the Annuity
Commencement Date the value of the Participant's Account will be reduced by a
proportionate amount of the account fee to reflect the time elapsed between the
last Account Anniversary and the day before the Annuity Commencement Date.

      After the Annuity Commencement Date an annual account fee in an amount
specified on the Certificate Specifications page will be deducted in equal
amounts from each Variable Annuity payment made during the year. No such
deduction is made from Fixed Annuity payments.

        CASH WITHDRAWALS, WITHDRAWAL CHARGES AND MARKET VALUE ADJUSTMENT

CASH WITHDRAWALS

      At any time before the Annuity Commencement Date, the Participant may
elect to receive a cash withdrawal payment from the Company by filing with the
Company at its Annuity Service Mailing Address, a written election in such form
as the Company may require. Any such election shall specify the amount of the
withdrawal and will be effective on the date that it is received by the Company.
Any cash withdrawal payment will be paid within seven days from the date the
election becomes effective, except as the Company may be permitted to defer such
payment in accordance with the Investment Company Act of 1940. The Company
reserves the right to defer the payment of amounts withdrawn from the Fixed
Account for a period not to exceed six months from the date written request for
such withdrawal is received by the Company.

      The Participant may request a full surrender or a partial withdrawal. A
full surrender will result in a cash withdrawal payment equal to the value of
the Participant's Account at the end of the Valuation Period during which the
election becomes effective less the account fee, plus or minus any applicable
market value adjustment, and less any applicable withdrawal charge. A partial
withdrawal (I.E., a payment of an amount less than that paid under a full
surrender) will result in the cancellation of a portion of the Participant's
Account Value with an aggregate dollar value equal to the dollar amount of the
cash withdrawal payment, plus or minus any applicable market value adjustment
and plus any applicable withdrawal charge.

      In the case of a partial withdrawal, the Participant may instruct the
Company as to the amounts to be withdrawn from each Sub-Account and/or Guarantee
Amount. If not so instructed, the Company will effect the partial withdrawal PRO
RATA from each Sub-Account and Guarantee Amount in which the Participant's
Account Value is invested at the end of the Valuation Period during which the
withdrawal becomes effective. If a partial withdrawal is requested which would
leave a Participant's Account Value less than the account fee, then such partial
withdrawal will be treated as a full surrender.

      Cash withdrawals from a Sub-Account will result in the cancellation of
Variable Accumulation Units attributable to the Participant's Account with an
aggregate value on the effective date of the withdrawal equal to the total
amount by which the Sub-Account is reduced. The cancellation of such units will
be based on the Variable Accumulation Unit value(s) of the Sub-Account(s) for
the Valuation Period during which the cash withdrawal is effective.

      All cash withdrawals of any Guarantee Amount, except those effective
within 30 days prior to the Expiration Date of such Guarantee Amount or the
withdrawal of interest credited to such Guarantee Amount during the current
Account Year, will be subject to the market value adjustment described below.

WITHDRAWAL CHARGES

      If a cash withdrawal is made, a withdrawal charge may be assessed by the
Company. The amount of any withdrawal charge is determined as follows:

RCH-GR-CONT-00-1                       13

<PAGE>

         *  OLD PAYMENTS AND NEW PAYMENTS: With respect to a particular Account
            Year, new Payments are those Payments made in that Account Year or
            in the eight immediately preceding Account Years; and old Payments
            are those Payments not defined as new Payments.

         *  ORDER OF LIQUIDATION: For purposes of a full surrender or partial
            withdrawal, each withdrawal is allocated first to any previously
            unliquidated Payments (on a first-in, first-out basis) until all
            Purchase Payments have been liquidated. Any remaining balance that
            is withdrawn will be considered "earnings" as defined below.

         *  FREE WITHDRAWAL AMOUNT: As defined in the Contract Specifications
            Page

         *  MAXIMUM WITHDRAWAL AMOUNT WITHOUT A WITHDRAWAL CHARGE: The maximum
            amount that can be withdrawn without a withdrawal charge in an
            Account Year is equal to the sum of: (a) the free withdrawal amount.
            and (b) any previously unliquidated old Payments.

         *  AMOUNT SUBJECT TO WITHDRAWAL CHARGE: For any partial withdrawal or
            full surrender, the amount subject to withdrawal charge is the
            amount of the partial withdrawal or full surrender less the maximum
            withdrawal amount without a withdrawal charge, up to a maximum of
            the sum of all unliquidated new Payments.

         *  WITHDRAWAL CHARGE PERCENTAGE: The withdrawal charge percentage
            varies according to the number of complete Account Years between the
            Account Year in which a Purchase Payment was credited to the
            Participant's Account and the Account Year in which it is withdrawn.

         *  AMOUNT OF WITHDRAWAL CHARGE: The amount of the withdrawal charge is
            determined by multiplying the amount subject to a withdrawal charge
            by the withdrawal charge percentage(s) set forth on the Certificate
            Specifications page.

            No withdrawal charge is imposed upon amounts applied to purchase an
            annuity. For any Qualified Certificate, the free withdrawal amount
            in any Account Year will be the greater of the free withdrawal
            amount described above and any amounts required to be withdrawn to
            comply with the minimum distribution requirements of the Code. This
            applies only to the portion of the required minimum distribution
            attributable to that Qualified Certificate.

NURSING HOME WITHDRAWAL PRIVILEGE

      The Company will waive the withdrawal charge arising from a full surrender
if: (1) at least one year has elapsed since the Certificate's Date of Coverage,
and (2) the Participant is confined to an eligible nursing home and has been
confined there for at least the preceding one hundred eighty (180) days. Proof
of the Participant's confinement to an eligible nursing home must be provided to
the Company at its Annuity Service Mailing Address in such form as the Company
may require.

      For purposes of this section, an eligible nursing home is a licensed
hospital or licensed skilled or intermediate care nursing facility at which
medical treatment is available on a daily basis and daily medical records are
kept for each patient.

MARKET VALUE ADJUSTMENT

      Any cash withdrawal (which for purposes of this section includes non
dollar cost averaging transfers and amounts applied to purchase an annuity) of a
Guarantee Amount, other than a withdrawal effective within 30 days prior to the
Expiration Date of the Guarantee Amount, or the withdrawal of interest credited
on such Guarantee

RCH-GR-CONT-00-1                      14

<PAGE>

Amount during the current Account Year, will be subject to a market value
adjustment.

      The market value adjustment will reflect the relationship between the
current rate (as described in the formula below) for the amount being withdrawn
and the Guaranteed Interest Rate applicable to the amount being withdrawn. It
also reflects the time remaining in the applicable Guarantee Period.

      The market value adjustment will be determined by multiplying the amount
being withdrawn after the deduction of any applicable account fee and before
deduction of any applicable withdrawal charge by the market value adjustment
factor. The market value adjustment factor is:

                                              N/12
                           [(1 + I)/(1 + J+b)]     -1

      where,

      I is the Guaranteed Interest Rate being credited to the Guarantee Amount
subject to the market value adjustment,

      J is the Guaranteed Interest Rate declared by the Company, as of the
effective date of the application of the market value adjustment, for current
allocations to Guarantee Periods equal to the balance of the Guarantee Period of
the Guarantee Amount subject to the market value adjustment, rounded to the next
higher number of complete years. For any Guarantee Period of less than one year
J is the Guaranteed Interest Rate we declare at the for a Guarantee Period of
the same length as your Guarantee Period (the current rate);

      b is a factor which the Company will determine for each Certificate and
which is set forth on the Certificate Specifications page and which will not
exceed .25%, and

      N is the number of complete months remaining in the Guarantee Period of
the Guarantee Amount subject to the market value adjustment.

      In the determination of J, if the Company does not currently offer the
applicable Guarantee Period, then the rate will be determined by linear
interpolation of the current rates for Guarantee Periods that are available.

                                  DEATH BENEFIT

DEATH BENEFIT PROVIDED BY THE CONTRACT

      If the Covered Person dies while this Contract and the applicable
Certificate are in effect and before the Annuity Commencement Date, the Company,
upon receipt of Due Proof of Death of the Covered Person, may pay a Death
Benefit to the Beneficiary in accordance with this Death Benefit provision. If
the Covered Person is not a natural person, the Annuitant is considered the
Participant for the purpose of this Death Benefit provision.

      If there is no designated Beneficiary living on the date of death of the
Covered Person, the Company will pay the Death Benefit upon receipt of Due Proof
of Death of the Covered Person or the Beneficiary, if applicable, in one sum to
the estate of the deceased Covered Person. If the death of the Covered Person
occurs on or after the Annuity Commencement Date, no Death Benefit will be
payable under the Contract except as may be provided under the form of annuity
elected.

ELECTION AND EFFECTIVE DATE OF ELECTION

      During the lifetime of the Participant and prior to the Annuity
Commencement Date, the Participant may elect to have the Death Benefit applied
under one or more of the Annuity Options in accordance with the Contract's
settlement provisions to effect a Variable Annuity or a Fixed Annuity or a
combination of both for the Beneficiary as Payee after the death of the
Participant. This election may be made or subsequently revoked by filing with
the

RCH-GR-CONT-00-1                        15

<PAGE>

Company at its Annuity Service Mailing Address, a written election or revocation
of an election in such form as the Company may require. Any election or
revocation of an election of a method of settlement of the Death Benefit by the
Participant will become effective on the date it is received by the Company. For
the purposes of the "Payment of Death Benefit" section below, any election of
the method of settlement of the Death Benefit by the Participant which is in
effect on the date of death of the Participant will be deemed effective on the
date Due Proof of Death of the Participant is received by the Company.

      If no election of a method of settlement of the Death Benefit by the
Participant is in effect on the date of death of the Participant, the
Beneficiary may elect (a) to receive the Death Benefit in the form of a cash
payment, in which event the Participant's Account will be canceled; or (b) to
have the Death Benefit applied under one or more of the Annuity Options in
accordance with the settlement provisions to effect, on the Annuity Commencement
Date determined in the "Payment of Death Benefit" section below, a Variable
Annuity or a Fixed Annuity or a combination of both for the Beneficiary as
Payee. In no event shall any method of settlement be exercised which would
violate the mandatory distribution requirements of Section 72(s) of the Code.
For additional options available if the designated Beneficiary is the surviving
spouse, please refer to the section of this Contract entitled "OWNERSHIP
PROVISIONS - Death of Participant."

      The election of a method of settlement may be made by filing with the
Company at its Annuity Service Mailing Address, a written election in such form
as the Company may require. Any written election of a method of settlement of
the Death Benefit by the Beneficiary will become effective on the later of: (a)
the date the election is received by the Company; or (b) the date Due Proof of
Death of the Participant is received by the Company. If a written election by
the Beneficiary is not received by the Company within 60 days following the date
Due Proof of Death of the Participant is received by the Company, the
Beneficiary shall be deemed to have elected a cash payment as of the last day of
such 60 day period.

PAYMENT OF DEATH BENEFIT

      If the Death Benefit is to be paid in cash, payment will be made within
seven days of the Death Benefit Date, except as the Company may be permitted to
defer any such payment in accordance with the Investment Company Act of 1940. If
settlement under one or more of the Annuity Options is elected, the Annuity
Commencement Date will be the first day of the second calendar month following
the effective date of the election and the Participant's Account will be
maintained in effect until the Annuity Commencement Date.

AMOUNT OF DEATH BENEFIT

The Death Benefit is determined as of the Death Benefit Date.

      If the Covered Person was age 85 or less on the Date of Coverage, the
Death Benefit is equal to the greatest of:

      (1) the Participant's Account Value for the Valuation Period in which the
          Death Benefit Date occurs; and

      (2) the amount which would have been payable in the event of a full
          surrender of the Participant's Account on the Death Benefit Date;

      (3) Net Purchase Payments, adjusted for any partial withdrawals, as of the
          Death Benefit Date; and

      (4) any Optional Death Benefit, if elected on or before the Date of
          Coverage, as shown on the Certificate Specifications page.

      If the Participant was age 86 or older on the Date of Coverage, the Death
Benefit will be equal to (2) above.

RCH-GR-CONT-00-1                       16

<PAGE>

      A partial withdrawal will affect the amount payable under (3) and (4) on a
basis proportional to the reduction in Participant's Account Value brought about
by such withdrawal. That is, any partial withdrawal will reduce the death
benefit amount to an amount equal to the death benefit amount immediately before
the withdrawal multiplied by the ratio of the Participant's Account Value
immediately after the withdrawal to the Participant's Account Value immediately
before the withdrawal.

      If (2) or (3) is operative, the Participant's Account Value will be
increased by the excess of (2) or (3) over (1) and the increase will be
allocated to the Sub-Accounts based on the respective values of the Sub-Accounts
on the Death Benefit Date. If the "Maximum Account Anniversary Value" or " 5%
Premium Rollup Rider" Optional Death Benefit(s) is/are elected and is/are
operative, the Participant's Account Value will be increased by the excess of
(4) over (1) and the increase will be allocated as described above. If no
portion of the Participant's Account is allocated to the Sub-Accounts, the
entire increase will be allocated to the Sub-Account invested in either a money
market Fund, if available, or the Company's General Account.

                              SETTLEMENT PROVISIONS

GENERAL

      On the Annuity Commencement Date, the adjusted value of the Participant's
Account as determined in accordance with the "Determination of Amount" provision
below will be applied, as specified by the Participant, under one or more of the
Annuity Options provided in the Contract or under such other settlement options
as may be agreed to by the Company. However, if the amount to be applied under
any Annuity Option is less than the Minimum Annuity Purchase Amount, set forth
on the Certificate Specifications page, or if the first annuity payment payable
in accordance with such option is less than the Minimum Initial Annuity Payment
Amount set forth on the Certificate Specifications page, the Company will pay
the amount to be applied in a single payment to the Payee.

      After the Annuity Commencement Date, no change of Annuity Option is
permitted and no payments may be requested under the Cash Withdrawals provision
of the Contract. Exchanges of Variable Annuity Units are permitted.

ELECTION AND EFFECTIVE DATE OF ELECTION

      During the lifetime of the Participant and prior to the Annuity
Commencement Date, the Participant may elect to have the adjusted value of the
Participant's Account applied on the Annuity Commencement Date under one or more
of the Annuity Options provided in the Contract. If more than one person is
named as Annuitant, due to the designation of a Co-Annuitant, the Participant
may elect to name one of such persons to be the sole Annuitant as of the Annuity
Commencement Date.

      The Participant may also change any election but any election or change of
election must be effective at least 30 days prior to the Annuity Commencement
Date. This election or change of election may be made by filing with the Company
as its Annuity Service Mailing Address, a written election or change of election
in such form as the Company may require. Any such election or change of election
will become effective on the date it is received by the Company. If no such
election is in effect on the 30th day prior to the Annuity Commencement Date,
the adjusted value of the Participant's Account will be applied under Annuity
Option B, for a life annuity with 120 monthly payments certain. If there is no
election of a sole Annuitant in effect on the 30th day prior to the Annuity
Commencement date, the person designated as Co-Annuitant will be the Payee under
the applicable Annuity Option.

      Any such election may specify the proportion of the adjusted value of the
Participant's Account to be applied to provide a Fixed Annuity and/or a Variable
Annuity. In the event the election does not so specify, then the portion of the
adjusted value of the Participant's Account to be applied to provide a Fixed
Annuity and/or a Variable Annuity will be determined on a PRO RATA basis from
the composition of the Participant's Account on the Annuity

RCH-GR-CONT-00-1                        17

<PAGE>

Commencement Date.

      The Annuity Options in the Contract may also be elected as provided in the
"Death Benefit" section of the contract.

DETERMINATION OF AMOUNT

      The adjusted value of the Participant's Account is applied to provide a
Variable Annuity or a Fixed Annuity or a combination of both. This value shall
be equal to the Participant's Account Value for the Valuation Period which ends
immediately preceding the Annuity Commencement Date, minus a proportionate
amount of the account fee to reflect the time elapsed between the last Account
Anniversary and the day before the Annuity Commencement Date, plus or minus any
applicable market value adjustment and minus any applicable premium or similar
tax.

EFFECT OF ANNUITY COMMENCEMENT DATE ON PARTICIPANT'S ACCOUNT

      The Participant's Account will be canceled on the Annuity Commencement
Date.

ANNUITY COMMENCEMENT DATE

      The Annuity Commencement Date is set forth on the Certificate
Specifications page. This date may be changed from time to time by the
Participant provided that each change is effective at least 30 days prior to the
then current Annuity Commencement Date and the new Annuity Commencement Date is
a date which is: (1) at least 30 days after the effective date of the change;
(2) the first day of a month; and (3) not later than the first day of the first
month following the Annuitant's 95th birthday, unless otherwise restricted, in
the case of a Qualified Contract, by the retirement plan or by applicable law.
For a Charitable Remainder Trust, the age in (3) is the Annuitant's 100th
birthday. If more than one person is named as Annuitant, due to the designation
of a Co-Annuitant, the Annuity Commencement Date will not be later than the
first day of the first month following the 95th birthday of the youngest of
those persons so named(100th birthday in the case of a Charitable Remainder
Trust). Any change of the Annuity Commencement Date may be made by filing with
the Company at its Annuity Service Mailing Address, a written designation of a
new Annuity Commencement Date in such form as the Company may require. Any such
change will become effective on the date the designation is received by the
Company.

      The Annuity Commencement Date may also be changed by an election of a
settlement option as provided in the "Death Benefit" section of this Contract.

FIXED ANNUITY PAYMENTS

      The dollar amount of each Fixed Annuity payment shall be determined in
accordance with the annuity payment rates shown on pages 19 and 20, which are
based on the minimum guaranteed interest rate of 3% per year or, if more
favorable to the Payee(s), in accordance with the annuity payment rates
published by the Company and in use on the Annuity Commencement Date.

VARIABLE ANNUITY PAYMENTS

      The dollar amount of the first Variable Annuity payment shall be
determined in accordance with the annuity payment rates shown on pages 19 and
20, which are based on an assumed interest rate of 3% per year.

      All Variable Annuity payments other than the first are determined by means
of Annuity Units credited with respect to the particular Payee. The number of
Annuity Units to be credited in respect of a particular Sub-Account is
determined by dividing that portion of the first Variable Annuity payment
attributable to that Sub-Account by the

RCH-GR-CONT-00-1                      18

<PAGE>

Annuity Unit value of that Sub-Account for the Valuation Period which ends
immediately preceding the Annuity Commencement Date. The resulting number of
Annuity Units of each Sub-Account credited with respect to the Payee remains
fixed unless an exchange of Annuity Units is made pursuant to the Exchange of
Variable Annuity Units section below. The dollar amount of each Variable Annuity
payment after the first may increase, decrease or remain constant, and is equal
to the sum of the amounts determined by multiplying the number of Annuity Units
of a particular Sub-Account credited with respect to the Payee by the Annuity
Unit value for the particular Sub-Account for the Valuation Period which ends
immediately preceding the due date of each subsequent Variable Annuity payment.

ANNUITY UNIT VALUE

      The Annuity Unit value for each Sub-Account was established at $10.00 for
the first Valuation Period of the particular Sub-Account. The Annuity Unit value
for the particular Sub-Account for any subsequent Valuation Period is determined
by multiplying the Annuity Unit value for the particular Sub-Account for the
immediately preceding Valuation Period by the Net Investment Factor for the
particular Sub-Account for the current Valuation Period and then multiplying
that product by a factor to neutralize the assumed interest rate of 3% per year
used to establish the annuity payment rates found in the Contract.

EXCHANGE OF VARIABLE ANNUITY UNITS

      After the Annuity Commencement Date the Payee may, by filing a written
request with the Company at its Annuity Service Mailing Address, exchange the
value of a designated number of Annuity Units of a particular Sub-Account then
credited with respect to such Payee for other Annuity Units, the value of which
would be such that the dollar amount of an annuity payment made on the date of
the exchange would be unaffected by such exchange. The maximum number of
exchanges that may be made in any Account Year is set forth on the Certificate
Specifications page.

      Exchanges may be made among the Sub-Accounts only. Exchange shall be made
using the Annuity Unit values for the Valuation Period during which the request
for exchange is received by the Company.

ACCOUNT FEE

      After the Annuity Commencement Date an annual account fee equal to the
amount specified on the Certificate Specifications page will be deducted in
equal amounts from each Variable Annuity payment made during the year as
provided in the "Contract Values During Accumulation Period" section of this
Contract. No such deduction is made from Fixed Annuity payments.

DESCRIPTION OF ANNUITY OPTIONS

      Annuity Options A, B, C and D are available on either a Fixed Annuity or a
Variable Annuity basis.

      -          Annuity Option A. Life Annuity: Monthly payments during the
         lifetime of the Payee. These payments will terminate at the death of
         the Payee without any provision for continuation of payments to a
         Beneficiary.

      -          Annuity Option B. Life Annuity with 60, 120, 180 or 240 Monthly
         Payments Certain: Monthly payments during the lifetime of the Payee and
         in any event for sixty (60), one hundred twenty (120), one hundred
         eighty (180) or two hundred forty (240) months certain as elected.

RCH-GR-CONT-00-1                          19

<PAGE>

      -          Annuity Option C. Joint and Survivor Annuity: Monthly payments
         payable during the joint lifetime of the Payee and a designated second
         person and during the lifetime of the survivor. During the lifetime of
         the survivor variable monthly payments, if any, will be determined
         using the percentage chosen at the time of the election of this option
         of the number of each type of Annuity Unit credited with respect to the
         Payee, and each fixed monthly payment, if any, will be equal to the
         same percentage of the Fixed Monthly payment payable during the joint
         lifetime of the Payee and designated second person.

      -          Annuity Option D. Monthly Payments for a Specified Period
         Certain: Monthly payments for any specified period of time (at least
         (5) years but not exceeding thirty (30) years), as elected. Monthly
         payments for a Specified Period Certain of 5 to 9 years is not
         available during the first seven account years.

AMOUNTS PAYABLE ON DEATH OF PAYEE

      In the event of the death of the Payee on or after the Annuity
Commencement Date, the Company will pay any remaining payments under any Annuity
Option then in effect to the Payee's designated Beneficiary as they become due.
If there is no designated Beneficiary entitled to these remaining payments then
living, the Company will pay the amount specified in the schedule below for any
Annuity Option then in effect in one sum to the deceased Payee's estate. Any
Beneficiary who becomes entitled to any remaining payments under any Annuity
Option may elect to receive the amount specified in the schedule below for such
option in one sum. In the event of the death of a Beneficiary who has become
entitled to receive any remaining payments under any Annuity Option, the Company
will pay the amount specified for such option in the schedule below in one sum
to the deceased Beneficiary's estate. All payments made in one lump sum by the
Company, as provided in this paragraph, are made in lieu of paying any remaining
payments under the Annuity Option then in effect.

Option     Amount
------     ------
   B       The discounted value of the remaining payments, if any, for the
           certain period.
   D       The discounted value of the remaining payments, if any, for the
           certain period.

      In the case of Options B and D the discounted value will be based, for
payments being made on a variable basis, on interest compounded annually at the
assumed interest rate and on the assumptions that the particular Annuity Unit
values applicable to the remaining payments will be the particular Annuity Unit
values for the Valuation Period which ends on the day before the date of the
determination and that the discounted value will remain unchanged thereafter.

ANNUITY PAYMENT RATES

      The annuity payment rate tables below show, for each $1,000 applied, the
dollar amount of both (a) the first monthly Variable Annuity payment based on
the assumed interest rate of 3% and (b) the monthly Fixed Annuity payment, when
the payment is based on the minimum guaranteed interest rate of 2.5% per year.

      The mortality table used in determining the annuity payment rates for
Annuity Options A, B and C is the 2000 Individual Annuitant Mortality Table A.
In using this mortality table, ages of Annuitants will be reduced by one year
for Annuity Commencement Dates occurring during the years 2010-2019, reduced by
two years for Annuity Commencement Dates occurring during the decade 2020-2029,
and so on.

      The annuity payment rates in the tables shown below reflect rates of
mortality appropriate for Annuity Commencement Dates occurring during the years
2000-2009. Thus, for Annuity Commencement Dates occurring in the decade
2010-2019 the term ADJUSTED AGE as used in the tables below, means actual age
less one year. ADJUSTED AGE shall mean actual age less two years for Annuity
Commencement Dates occurring during the decade

RCH-GR-CONT-00-1                       20

<PAGE>

2020-2029, and so on.

      ADJUSTED AGES will be determined based on the actual age(s) of the
Annuitant(s), in completed years and months, as of the Annuity Commencement
Date. The tables below show annuity payment rates for exact ADJUSTED AGES; rates
for ADJUSTED AGES expressed in completed years and months will be based on
straight line interpolation between the appropriate annuity payment rates.

      The dollar amount of each annuity payment for any adjusted age or
combination of adjusted ages not shown below or for any other form of Annuity
Option agreed to by the Company will be quoted by the Company on request.

<TABLE>
<CAPTION>
                                   AMOUNT OF FIRST MONTHLY ANNUITY PAYMENT PER $1,000
                                         SINGLE LIFE ANNUITY(INTEREST AT 3.0%)
------------------------------------------------------------------------------------------------------------------------------------
               OPTION A                                                             OPTION B
             LIFE ANNUITY                                              LIFE ANNUITY WITH PAYMENTS CERTAIN
------------------------------------------------------------------------------------------------------------------------------------

                                                60 PAYMENTS          120 PAYMENTS          180 PAYMENTS           240 PAYMENTS
   ADJUSTED                                -----------------------------------------------------------------------------------------
      AGE         MALE     FEMALE             MALE      FEMALE     MALE      FEMALE     MALE       FEMALE       MALE      FEMALE
-------------------------------------      -----------------------------------------------------------------------------------------
<S>               <C>      <C>             <C>          <C>        <C>       <C>        <C>        <C>          <C>       <C>
      20          2.98      2.91              2.98       2.91      2.98       2.90      2.98        2.90        2.97       2.90
-------------------------------------      -----------------------------------------------------------------------------------------

RCH-GR-CONT-00-1                       21

<PAGE>

<CAPTION>
<S>               <C>      <C>             <C>          <C>        <C>       <C>        <C>        <C>          <C>       <C>
-------------------------------------      -----------------------------------------------------------------------------------------
      25          3.08      2.99              3.08       2.99      3.07       2.99      3.07        2.98        3.07       2.98
-------------------------------------      -----------------------------------------------------------------------------------------
      30          3.19      3.09              3.19       3.09      3.19       3.09      3.19        3.08        3.18       3.08
-------------------------------------      -----------------------------------------------------------------------------------------
      35          3.34      3.21              3.34       3.21      3.34       3.21      3.33        3.21        3.32       3.20
-------------------------------------      -----------------------------------------------------------------------------------------
      40          3.53      3.37              3.53       3.37      3.52       3.37      3.51        3.36        3.49       3.35
-------------------------------------      -----------------------------------------------------------------------------------------
      45          3.77      3.57              3.77       3.57      3.76       3.56      3.73        3.55        3.70       3.53
-------------------------------------      -----------------------------------------------------------------------------------------
      50          4.07      3.82              4.07       3.82      4.04       3.81      4.00        3.79        3.94       3.76
-------------------------------------      -----------------------------------------------------------------------------------------
      55          4.46      4.15              4.45       4.14      4.41       4.12      4.34        4.09        4.23       4.03
-------------------------------------      -----------------------------------------------------------------------------------------
      60          4.97      4.58              4.95       4.57      4.88       4.53      4.74        4.46        4.55       4.35
-------------------------------------      -----------------------------------------------------------------------------------------
      65          5.68      5.17              5.64       5.15      5.48       5.07      5.22        4.92        4.88       4.71
-------------------------------------      -----------------------------------------------------------------------------------------
      70          6.67      6.01              6.56       5.95      6.23       5.78      5.73        5.47        5.16       5.05
-------------------------------------      -----------------------------------------------------------------------------------------
      75          8.02      7.22              7.77       7.08      7.08       6.67      6.19        6.02        5.36       5.31
-------------------------------------      -----------------------------------------------------------------------------------------
      80          9.92      9.02              9.32       8.65      7.95       7.66      6.54        6.47        5.46       5.44
-------------------------------------      -----------------------------------------------------------------------------------------
      85         12.56      11.71            11.17      10.68      8.69       8.55      6.75        6.72        5.50       5.49
-------------------------------------      -----------------------------------------------------------------------------------------
      90         16.17      15.54            13.14      12.87      9.20       9.15      6.84        6.83        5.51       5.51
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                   OPTION C
                                          JOINT AND SURVIVOR ANNUITY
                             (ASSUMED ELECTION OF JOINT AND TWO-THIRDS SURVIVOR)
----------------------------------------------------------------------------------------------------------------
    ADJUSTED AGE                                        ADJUSTED AGE OF FEMALE
      OF MALE
                             55                60                 65                70                75
----------------------------------------------------------------------------------------------------------------
<S>                        <C>               <C>                <C>               <C>               <C>
----------------------------------------------------------------------------------------------------------------
         55                4.11              4.31               4.53              4.77              5.04
----------------------------------------------------------------------------------------------------------------
         60                4.29              4.52               4.79              5.09              5.42
----------------------------------------------------------------------------------------------------------------
         65                4.48              4.76               5.09              5.46              5.88
----------------------------------------------------------------------------------------------------------------
         70                4.70              5.02               5.41              5.88              6.41
----------------------------------------------------------------------------------------------------------------
         75                4.91              5.28               5.74              6.31              6.99
----------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                        OPTION D
                                        PAYMENTS FOR A SPECIFIED PERIOD CERTAIN
               ------------------------------------------------------------------------------------------

                   YEARS          AMOUNT          YEARS         AMOUNT          YEARS         AMOUNT
               <S>                <C>             <C>           <C>             <C>           <C>
                     10            9.61            17            6.22            24            4.84
                     11            8.86            18            5.96            25            4.70
                     12            8.23            19            5.72            26            4.58
                     13            7.71            20            5.51            27            4.47
                     14            7.25            21            5.31            28            4.37
                     15            6.86            22            5.14            29            4.27
                     16            6.52            23            4.98            30            4.18
               ------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                  AMOUNT OF FIRST MONTHLY ANNUITY PAYMENT PER $1,000
                                        SINGLE LIFE ANNUITY(INTEREST AT 2.5%)
------------------------------------------------------------------------------------------------------------------------------------
              OPTION A                                                             OPTION B
            LIFE ANNUITY                                              LIFE ANNUITY WITH PAYMENTS CERTAIN
------------------------------------------------------------------------------------------------------------------------------------

                                                60 PAYMENTS          120 PAYMENTS          180 PAYMENTS           240 PAYMENTS
   ADJUSTED                                -----------------------------------------------------------------------------------------
      AGE         MALE     FEMALE             MALE      FEMALE     MALE      FEMALE     MALE       FEMALE       MALE      FEMALE
-------------------------------------      -----------------------------------------------------------------------------------------
<S>               <C>      <C>             <C>          <C>        <C>       <C>        <C>        <C>          <C>       <C>
      20          2.67      2.59              2.67       2.59      2.67       2.59      2.67        2.59        2.67       2.59
-------------------------------------      -----------------------------------------------------------------------------------------
      25          2.77      2.68              2.77       2.68      2.77       2.68      2.77        2.68        2.77       2.68
-------------------------------------      -----------------------------------------------------------------------------------------

RCH-GR-CONT-00-1                       22

<PAGE>

<CAPTION>
<S>               <C>      <C>             <C>          <C>        <C>       <C>        <C>        <C>          <C>       <C>
-------------------------------------      -----------------------------------------------------------------------------------------
      30          2.90      2.79              2.90       2.79      2.89       2.79      2.89        2.79        2.89       2.78
-------------------------------------      -----------------------------------------------------------------------------------------
      35          3.05      2.92              3.05       2.92      3.05       2.92      3.04        2.91        3.03       2.91
-------------------------------------      -----------------------------------------------------------------------------------------
      40          3.24      3.08              3.24       3.08      3.24       3.08      3.23        3.07        3.21       3.06
-------------------------------------      -----------------------------------------------------------------------------------------
      45          3.49      3.29              3.48       3.28      3.47       3.28      3.45        3.27        3.42       3.25
-------------------------------------      -----------------------------------------------------------------------------------------
      50          3.79      3.54              3.79       3.54      3.77       3.53      3.73        3.51        3.67       3.48
-------------------------------------      -----------------------------------------------------------------------------------------
      55          4.18      3.87              4.17       3.87      4.13       3.85      4.08        3.82        3.97       3.76
-------------------------------------      -----------------------------------------------------------------------------------------
      60          4.70      4.31              4.67       4.30      4.61       4.26      4.48        4.20        4.30       4.09
-------------------------------------      -----------------------------------------------------------------------------------------
      65          5.40      4.90              5.36       4.88      5.22       4.81      4.97        4.67        4.63       4.45
-------------------------------------      -----------------------------------------------------------------------------------------
      70          6.38      5.73              6.28       5.68      5.97       5.52      5.48        5.22        4.92       4.81
-------------------------------------      -----------------------------------------------------------------------------------------
      75          7.73      6.94              7.49       6.82      6.83       6.41      5.96        5.78        5.12       5.07
-------------------------------------      -----------------------------------------------------------------------------------------
      80          9.62      8.74              9.05       8.38      7.71       7.42      6.31        6.23        5.22       5.21
-------------------------------------      -----------------------------------------------------------------------------------------
      85         12.25      11.41            10.91      10.42      8.46       8.32      6.52        6.50        5.27       5.26
-------------------------------------      -----------------------------------------------------------------------------------------
      90         15.86      15.23            12.89      12.62      8.98       8.93      6.61        6.61        5.27       5.27
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                 OPTION C
                                         JOINT AND SURVIVOR ANNUITY
                             (ASSUMED ELECTION OF JOINT AND TWO-THIRDS SURVIVOR)
----------------------------------------------------------------------------------------------------------------
    ADJUSTED AGE                                       ADJUSTED AGE OF FEMALE
      OF MALE
                            55                60                 65                70                75
----------------------------------------------------------------------------------------------------------------
<S>                        <C>               <C>                <C>               <C>               <C>
----------------------------------------------------------------------------------------------------------------
         55                3.83              4.03               4.25              4.49              4.75
----------------------------------------------------------------------------------------------------------------
         60                4.01              4.25               4.52              4.82              5.14
----------------------------------------------------------------------------------------------------------------
         65                4.20              4.49               4.82              5.19              5.60
----------------------------------------------------------------------------------------------------------------
         70                4.41              4.74               5.14              5.60              6.14
----------------------------------------------------------------------------------------------------------------
         75                4.61              4.99               5.46              6.03              6.71
----------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                        OPTION D
                                        PAYMENTS FOR A SPECIFIED PERIOD CERTAIN
               ------------------------------------------------------------------------------------------

                   YEARS          AMOUNT          YEARS         AMOUNT          YEARS         AMOUNT
               <S>                <C>             <C>           <C>             <C>           <C>
                     10            9.39            17            6.00            24            4.60
                     11            8.64            18            5.73            25            4.46
                     12            8.02            19            5.49            26            4.34
                     13            7.49            20            5.27            27            4.22
                     14            7.03            21            5.08            28            4.12
                     15            6.64            22            4.90            29            4.02
                     16            6.30            23            4.74            30            3.93
               ------------------------------------------------------------------------------------------
</TABLE>

RCH-GR-CONT-00-1                        23

<PAGE>

                              OWNERSHIP PROVISIONS

EXERCISE OF CONTRACT RIGHTS

      The Contract shall belong to the Owner. Unless any Contract rights and
privileges have been expressly reserved by the Owner, the Participant shall be
entitled to exercise all rights and privileges in connection with such
Participant's Certificate. In any case, such rights and privileges can be
exercised without the consent of the Beneficiary (other than an irrevocable
Beneficiary) or any other person. Such rights and privileges may be exercised
only during the lifetime of the Participant and prior to the Annuity
Commencement Date, except as otherwise provided in the Contract.

      The Annuitant becomes the Payee on and after the Annuity Commencement
Date. The Beneficiary becomes the Payee on the death of the Participant prior to
the Annuity Commencement date, or on the death of the Annuitant after the
Annuity Commencement Date. Such Payees may thereafter exercise such rights and
privileges, if any, of ownership which continue.

DEATH OF PARTICIPANT

      If a Participant under a Non-Qualified Contract dies prior the Annuity
Commencement Date, that Participant's Account must be distributed to the
"designated Beneficiary" (as defined below) either (1) as a lump sum within five
years after the date of death of the Participant, or (2) as an annuity over some
period not greater than the life or expected life of the designated Beneficiary,
with annuity payment beginning within one year after the date of death of the
Participant. For this purpose (and for purposes of Section 72(s) of the Code),
the person named as Beneficiary shall be considered the designated Beneficiary,
and if no person then living has been so named, then the Annuitant shall
automatically be the designated Beneficiary. If the designated Beneficiary is
the surviving spouse of the deceased Participant, the spouse can elect to
continue the Certificate in the spouse's own name as Participant, in which case
the mandatory distribution requirements will apply on the spouse's death. As
designated Beneficiary, the surviving spouse may also choose to have the
Participant's Account distributed as an annuity over some period not greater
than his or her life or expected life, with annuity payments beginning within
one year after the date of death of the Participant.

      If the Payee dies on or after the Annuity Commencement Date and before the
entire accumulation under such Participant's Account has been distributed, the
remaining portion of such Participant's Account, if any, must be distributed as
least as rapidly as the method of distribution then in effect.

      In any case in which a non-natural person constitutes a holder of the
Certificate for the purposes of Section 72(s) of the Code, (1) the distribution
requirements described above shall apply upon the death of any Annuitant, and
(2) a change in any Annuitant shall be treated as the death of such Annuitant.

      In all cases, no Participant or Beneficiary shall be entitled to exercise
any rights that would adversely affect the treatment of the Contract as an
annuity Contract under the Code.

VOTING OF FUND SHARES

      The Company will vote Fund shares held by the Sub-Accounts at meetings of
shareholders of the Funds, but will follow voting instructions received from
persons having the right to give voting instructions. The Owner or Participant,
as the case may be, is the person having the right to give voting instructions
prior to the Annuity Commencement Date. On or after the Annuity Commencement
Date the Payee is the person having such voting rights. Any shares attributable
to the Company and any Fund shares for which no timely voting instructions have
been received will be voted by the Company in the same proportion as the shares
for which instructions are received from persons have such voting rights.

      Neither the Variable Account nor the Company is under any duty to provide
information concerning the voting instruction rights of persons who may have
such rights under retirement or deferred compensation plans, other than rights
afforded by the Investment Company Act of 1940, nor do they have any duty to
inquire as to the

RCH-GR-CONT-00-1                       24

<PAGE>

instructions received or the authority of Owners, Participants, or others to
instruct on the voting of Fund shares. Except as the Variable Account or the
Company has actual knowledge to the contrary, the instructions given by Owners,
Participants and Payees will be valid as they affect the Variable Account, the
Company and any others having voting instruction rights with respect to the
Variable Account.

      All Fund proxy material, together with an appropriate form to be used to
give voting instructions, will be provided to each Owner, each Participant and
each Payee having the right to give voting instructions at least 10 days prior
to each meeting of the shareholders of the Fund. The number of particular Fund
shares as to which each such person is entitled to give instructions will be
determined by the Company as of a date not more than 90 days prior to each such
meeting. Prior to the Annuity Commencement Date, the number of Fund shares as to
which voting instructions may be given to the Company is determined by dividing
the value of all the Variable Accumulation Units of the particular Sub-Account
credited to the Participant's Account by the net asset value of one Fund share
as of the same date. On or after the Annuity Commencement Date, the number of
Fund shares as to which such instructions may be given by a Payee is determined
by dividing the reserve held by the Company in the particular Sub-Account with
respect to the particular Payee by the net asset value of a Fund share as of the
same date.

PERIODIC REPORTS

      During the Accumulation Period the Company will send to the Participant,
or such other person having voting rights, at least once during each Account
Year, a statement showing the number, type and value of Accumulation Units
credited to the Participant's Account and the fixed accumulation value of such
account, which statement shall be accurate as of a date not more than two months
previous to the date of mailing. In addition, every person having voting rights
will receive such reports or prospectuses concerning the Variable Account and
each Fund as may be required by the Investment Company Act of 1940 and the
Securities Act of 1933. The Company will also send such statements reflecting
transactions in the Participant's Account as may be required by applicable laws,
rules and regulations.

DESIGNATION AND CHANGE OF BENEFICIARY

      The Beneficiary designation contained in any Application will remain in
effect until changed.

      Subject to the rights of an irrevocable Beneficiary, the designation of
Beneficiary may be changed or revoked. Any change or revocation must be filed
with the Company at its Annuity Service Mailing Address in such form as the
Company may require. The change or revocation will not be binding upon the
Company until it is received by the Company. When it is so received the change
or revocation will be effective as of the date on which the Beneficiary
designation or revocation was signed, but the change or revocation will be
without prejudice to the Company on account of any payment made or any action
taken by the Company before the Company receives and acknowledges the change or
revocation.

                               GENERAL PROVISIONS

AGE AND SEX MISSTATEMENT

      If any date of birth or sex, or both, has been misstated in the
Application, if any, or elsewhere, the amounts payable pursuant to the Contract
will be the amounts which would have been provided using the correct age or sex,
or both. Any deficiency in payments already made by the Company shall be paid
promptly and any excess in the payments already made by the Company shall be
charged against the benefits falling due after the adjustment.

RCH-GR-CONT-00-1                       25

<PAGE>

CONTRACT

      The Contract is issued in consideration of the Contract Application, if
any, and payment of the initial Purchase Payment. This Contract and the Contract
Application, if any, a copy of which may be attached, constitute the entire
Contract. All statements made in the Contract Application and any Participant's
Application will be deemed representations and not warranties, and no statement
will void the Contract or a Participant's interest therein or be used in defense
to a claim unless it is contained in such Contract Application or Participant's
Application, if any, or in any similar document of that Participant and a copy
is attached to the Contract or Certificate, as applicable, at issue. Only the
President, a Vice President, the Actuary or the Secretary of the Company has
authority to agree on behalf of the Company to any alteration of the Contract or
any Certificate, or to any waiver of the rights or requirements of the Company.

CURRENCY

      All amounts due under the Contract are payable in U.S. dollars, lawful
money of the United States of America.

DETERMINATION OF VALUES

      The method of determination by the Company of the Net Investment Factor
and the number and value of Accumulation Units and Annuity Units shall be
conclusive upon the Owner, the Participant, any Payee and any Beneficiary.

DISCONTINUANCE OF NEW PARTICIPANTS

      The Company, by giving 30 days' prior written notice to the Owner, may
limit or discontinue the acceptance of new Applications and the issuance of new
Certificates under this Contract. Such limitation or discontinuance shall have
no effect on rights or benefits with respect to any Participant's Account
established prior to the effective date of such limitation or discontinuance.

GOVERNING LAW

      This Contract and all Certificates issued in connection with it will be
governed by the laws of the jurisdiction where the Contract Application is
signed.

GUARANTEES

      Subject to the Net Investment Factor provision, the Company guarantees
that the dollar amount of Variable Annuity payments made during the lifetime of
the Payee(s) will not be adversely affected by the actual mortality experience
of the Company or by the actual expenses incurred by the Company in excess of
the expense deductions provided for in the Contract and other Contracts
providing benefits which vary in accordance with the investment performance of
the Sub-Accounts.

INCONTESTABILITY

      This Contract is incontestable, subject to the "Age and Sex
Misstatements", "Proof of Age" and "Proof of Survival" provisions contained
herein.

RCH-GR-CONT-00-1                       26

<PAGE>

MODIFICATION

      Upon notice to the Owner, the Participant(s) or the Payee(s) during the
annuity period, this Contract may be modified by the Company, but only if such
modification (a) is necessary to make the Contract or the Variable Account
comply with any law or regulation issued by a governmental agency to which the
Company or the Variable Account is subject; or (b) is necessary to assure
continued qualification of the Contract under the Code or other federal or state
laws relating to retirement annuities or annuity contracts; or (c) is necessary
to reflect a change in the operation of the Variable Account or the
Sub-Accounts; (d) provides additional Variable Account and/or Fixed Account
options; or (e) as may otherwise be in the best interests of Owners,
Participants or Payees, as applicable. In the event of any such modification,
the Company may make appropriate endorsement to the Contract to reflect such
modification.

      In addition, upon 60 days' prior written notice to the Owner, the Contract
may be modified by the Company to change the withdrawal charges, account fees,
mortality and expense risk charges, administrative expense charges, the tables
used in determining the amount of the first monthly Variable Annuity and Fixed
Annuity payments and the formula used to calculate the market value adjustment,
provided that any such modification shall apply only to Participant's Accounts
established after the effective date of the modification. All of the charges and
the annuity tables which are provided in the Contract prior to any such
modification will remain in effect permanently, unless improved by the Company,
with respect to Participant's Accounts established prior to the effective date
of such modification.

NONPARTICIPATING

      The Contract is nonparticipating and will not share in any profits or
surplus earnings of the Company and therefore, no dividends are payable.

PAYMENTS BY THE COMPANY

      All sums payable by the Company pursuant to the Contract are payable only
at its Executive Office or such other place as may be designated by the Company.
The Company may require surrender of the Contract upon final payment of all sums
payable by the Company pursuant to the Contract.

PROOF OF AGE

      The Company shall have the right to require evidence of the age of any
Payee under Annuity Options A, B, and C prior to the Annuity Commencement Date.

PROOF OF SURVIVAL

      The Company shall have the right to require evidence of the survival of
any Payee under Annuity Options A, B and C at the time any payment payable to
such Payee is due.

SPLITTING UNITS

      The Company reserves the right to split or combine the value of Variable
Accumulation Units, Annuity Units or any of them. In effecting any such change
of unit values, strict equity will be preserved and no change will have a
material effect on the benefits or other provisions of this Contract.

RIGHTS RESERVED BY THE COMPANY

RCH-GR-CONT-00-1                      27

<PAGE>

      The Company reserves the right, to the extent permitted by law, to: (1)
deregister the Variable Account under the Investment Company Act of 1940; (2)
combine any two or more Variable Accounts; (3) operate the Variable Account as a
management investment company or any other form permitted by law; (4) substitute
shares of a Fund for shares of another investment company if shares of such Fund
are not available, or if, in the Company's judgment, further investment in such
Fund's shares is no longer appropriate; (5) add or delete Funds, or series or
sub-series thereof, and corresponding Sub-Accounts; (6) add or remove Guarantee
Periods available at any time for election by a Participant; and (7) restrict or
eliminate any of the voting rights of Participants (or Owners) or other persons
who have voting rights as to the Variable Account.

RCH-GR-CONT-00-1                         28

<PAGE>

                   SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

        A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE ASSURANCE COMPANY OF CANADA

Executive Office:                                 Home Office:
ONE SUN LIFE EXECUTIVE PARK                       WILMINGTON, DELAWARE
WELLESLEY HILLS, MASSACHUSETTS 02481

Annuity Service Mailing Address:
SUN LIFE OF CANADA (U.S.)
RETIREMENT PRODUCTS AND SERVICES
P.O. BOX [ # ]
BOSTON, MASSACHUSETTS [ ZIP CODE ]

          FLEXIBLE PAYMENT DEFERRED COMBINATION VARIABLE AND FIXED GROUP
                       ANNUITY CONTRACT NONPARTICIPATING

       ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON THE
       INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNT ARE VARIABLE AND ARE NOT
       GUARANTEED AS TO DOLLAR AMOUNT.

       PAYMENTS AND VALUES BASED ON THE FIXED ACCOUNT ARE SUBJECT TO A MARKET
       VALUE ADJUSTMENT FORMULA, THE OPERATION OF WHICH MAY RESULT IN UPWARD AND
       DOWNWARD ADJUSTMENTS IN AMOUNTS PAYABLE TO A PARTICIPANT, INCLUDING
       WITHDRAWALS, TRANSFERS AND AMOUNTS APPLIED TO PURCHASE AN ANNUITY.
       PAYMENTS MADE FROM GUARANTEE AMOUNTS WHICH ARE WITHIN 30 DAYS PRIOR TO
       THE END OF A GUARANTEE PERIOD OR THE WITHDRAWAL OF INTEREST CREDITED TO
       GUARANTEE AMOUNTS DURING THE CURRENT ACCOUNT YEAR ARE NOT SUBJECT TO THE
       MARKET VALUE ADJUSTMENT.

RCH-GR-CONT-00-1                          29

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