Document:

exv10w14

 

Exhibit 10.14

[*****] in this exhibit indicates that a confidential portion of the
exhibit has been omitted; such portion has been filed separately with
the Securities and Exchange Commission.

                              UNCLASSIFIED        HM1573-04-R-0002

FOR OFFICIAL USE ONLY

WHEN SEPARATED FROM CLASSIFIED ATTACHMENTS

	 	 	 	 	 	 	 	 	 	 
	SOLICITATION, OFFER AND AWARD

	 	 	1. THIS CONTRACT IS A RATED ORDER
UNDER DPAS (15 CFR 350)
	 	 	RATING
	 	 	PAGE            OF           PAGES

1            |           52
	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	2. CONTRACT (Proc. Inst. Ident.) NO.

HM1573-04-C-0014

	 	 	3. SOLICITATION NO. 

HM1573-04-R-002
	 	 	4. TYPE OF SOLICITATION

oSEALED BID (IFB)

þ NEGOTIATED (RFP)
	 	 	5. DATE ISSUED

15 April 2004
	 	 	6. REQUISITION/PURCHASE NO.
	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	7.
ISSUED BY

CODE

	 	 
	 	 	 
	 	 	8. ADDRESS OFFER TO (If other than item 7)
	NATIONAL GEOSPATIAL-INTELLIGENCE AGENCY

ATTN: [*****]

4600 Sangamore Rd.

Bethesda, MD 20816-5003 Phone: [*****]	 	 	 
	 	 	 	 	 	 	 
	NOTE: In sealed bid solicitation “offer” and “offeror” mean “bid” and “bidder”.
	 	 	 	 	 	 	 
	SOLICITATION
	 	 	 	 	 	 	 
	9. Submit offer as detailed in section L.9.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	10. FOR INFORMATION
CALL:

	 	 	A. NAME:  [*****]
	 	 	B. TELEPHONE (NO OLLECT CALLS)

NUMBER [*****]
	 	 	1. E-MAIL ADDRESS	 	 	 	
[*****]     	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	11. TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	(x)

	 	 	SEC.
	 	 	DESCRIPTION
	 	 	PAGE (S)
	 	 	(x)
	 	 	SEC.
	 	 	DESCRIPTION
	 	 	PAGE(S)	 
	 	PART I — THE SCHEDULE	 	 	PART II — CONTRACT CLAUSES	 
	 	X

	 	 	A
	 	 	SOLICITATION/CONTRACT FORM
	 	 	 	 	 	X
	 	 	I
	 	 	CONTRACT CLAUSES	 	 	 	 
	 	X	 	 	B	 	 	SUPPLIES OR SERVICE AND PRICES/COSTS	 	 	 	 	 	PART III — LIST OF DOCUMENTS, EXHIBITS, AND OTHER ATTACH.
	 
	 	X

	 	 	C
	 	 	DESCRIPTION/SPECS/WORK STATEMENT
	 	 	 	 	 	X
	 	 	J
	 	 	LIST OF ATTACHMENTS	 	 	 	 
	 	X	 	 	D	 	 	PACKAGING AND MARKETING	 	 	 	 	 	PART IV — REPRESENTATIONS AND INSTRUCTIONS
	 
	 	X

	 	 	E
	 	 	INSPECTION AND ACCEPTANCE
	 	 	 	 	 	X
	 	 	K
	 	 	REPRESENTATIONS, CERTIFICATIONS, AND	 	 	 	 
	 	X

	 	 	F
	 	 	DELIVERIES OR PERFORMANCE
	 	 	 	 	 	 	 	 	 	 	 	OTHER STATEMENTS OF OFFERORS	 	 	 	 
	 	X

	 	 	G
	 	 	CONTRACT ADMINISTRATION
	 	 	 	 	 	X
	 	 	L
	 	 	INSTRS., COND., AND NOTICES TO OFFERORS	 	 	 	 
	 	X

	 	 	H
	 	 	SPECIAL CONTRACT REQUIREMENTS
	 	 	 	 	 	X
	 	 	M
	 	 	EVALUATION FACTORS FOR AWARD	 	 	 	 
	 	OFFER (Must be fully completed by offeror)	 
	 	NOTE: ITEM 12 does not apply if the solicitation includes the provisions at 52.214-16, Minimum Bid Acceptance Period.	 
	 	12.	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	13. DISCOUNT FOR PROMPT PAYMENT

	 	 	10 CALENDAR DAYS
	 	 	20 CALENDAR DAYS
	 	 	30 CALENDAR DAYS
	 	 	CALENDAR DAYS
	 

	 	 	N/A          %
	 	 	N/A          %
	 	 	 N/A          %
	 	 	N/A           %
	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	14. ACKNOWLEDGMENT OF AMENDMENTS

	 	 	AMENDMENT NO.
	 	 	DATE
	 	 	AMENDMENT NO.
	 	 	DATE
	 	 	 	 	 	 	 	 	 	 	 	 	 
	(The offeror acknowledges receipt of amendments to the

	 	 	 	01	 	 	 	5/21/04	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	solicitation and related documents)
numbered and dated:

	 	 	 	02	 	 	 	5/26/04	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	15A. NAME

	 	 	CODE
	 	 	1CGQ7	 	 	FACILITY	 	 	16. NAME AND TITLE OF PERSON AUTHORIZED
	AND

ADDRESS

OF

OFFEROR

	 	ORBIMAGE Inc.
 21700 Atlantic Blvd.

Dulles, VA 20166

CAGE: 1FND1
	 	 	 	 	 	 	 	 	TO SIGN OFFER (Type or print)

Matthew O’Connell

President and Chief Executive Officer

	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	15B. TELEPHONE NO. (Include area code)
          
703 480 7524

	 	 	15C. CHECK IF REMITTANCE ADDRESS o IS
DIFFERENT FROM ABOVE — ENTER          SUCH ADDRESS
	 	 	17. SIGNATURE
	 	 	18. OFFER DATE
September 27, 2004
	 	 	 	 	 	 	 	 	 	 
	AWARD (To be completed by Government)

	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	19. ACCEPTED AS TO ITEM NUMBERED

	 	 	20. AMOUNT
	 	 	21. ACCOUNTING AND APPROPRIATION
	

	 	 	$	197,125,779.00	 	 	 	TBD
	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 
	22. AUTHORITY FOR USING OTHER THAN FULL AND OPEN COMPETITION:	 	 	23. SUBMIT INVOICES TO ADDRESS SHOWN IN	 	 	 	ITEM
	o 10 U.S.C. 2304(c)(          )                    o 41 U.S.C. 253(c)(          )	 	 	See Section G	 	 	 	 	 
	 	 	 	 	 	 	 
	24. ADMINISTRATION BY (If other than Item 7) CODE	 	 	 	 	25. PAYMENT WILL BE MADE BY 
CODE	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	26. NAME OF CONTRACTING
OFFICER (Type or print)

           [*****]	 	 	27. UNITED STATES OF AMERICA

(Signature of Contracting Officer)	 	 	 	 	28. AWARD DATE
	 	 	 	 	 	 	 
	IMPORTANT — Award will be made on this form, or on the Standard Form 26, or by other authorized official written notice.

	 	 	 
	NSN
7540-01-152-8064  9-97)

	 	STANDARD FORM 33
	PREVIOUS EDITION NOT USABLE

	 	Prescribed by GSA

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Part II Post-FOC Activities

SECTION B — SUPPLIES OR SERVICES AND PRICES/COSTS

Scope and Period of Performance. This is Firm-Fixed Price contract for the procurement of imagery
and other items and is conducted pursuant to 10 USC Chapter 137. The period of performance of this
Contract is from the beginning of the Post-FOC period as specified in the Statement of Work April
1, 2007 and for 18 months thereafter and estimated to conclude on September 30, 2008

B.1 Line Item 0001 — Post-FOC COMMERCIAL IMAGERY

The scope of effort for this firm-fixed price line item is defined in Statement of Work Section 4.2
and Appendix D. This effort is priced at the amount set forth below.

Total FFP: $197,125,779

Funds are not presently available for the full amount of CLIN 0001. The Government intends to
incrementally fund CLIN 0001. The Government’s and the Contractor’s continuing obligations under
this Contract are contingent upon the availability of appropriated funds from which payment for
contract purposes can be made. No legal liability on the part of the Government for any payment or
on the part of the Contractor for any performance under any order placed under this Contract may
arise until funds are made available to the Contracting Officer for such task orders and until the
Contractor receives notice of such availability in writing from the Contracting Officer.

B.2 Government Option 1

The Contracting Officer may exercise Option 1 at any time by written notice to the Contractor not
less than sixty (60) days in advance of the option period of performance start date. Exercise and
performance of this option is subject to the availability of funding. In the event funds are not
available at option exercise, the following terms and conditions apply: “Funds are not presently
available for this option. The Government’s and the Contractor’s obligations under this Contract
are contingent upon the availability of appropriated funds from which payment for contract purposes
can be made. No legal liability on the part of the Government for any payment or on the part of
the Contractor for any performance may arise until funds are made available to the Contracting
Officer for such option and until the Contractor receives notice of such availability in writing by
the Contracting Officer.”

Line Item 0002 — Government Option 1: IMAGERY DERIVED PRODUCTS AND SERVICES

The scope of effort for this line item is defined in Statement of Work appendix E. This effort is
estimated at the amount set forth below.

Minimum Amount: $0

Maximum Amount: $150,000,000 During Post-FOC Period

Estimated Amount: $75,000,000 per year (see note 1) (see note 2)

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Note 1: Line Item 0002 funding is in addition to Line Item 0001.

Note 2: Line Item 0002 funding estimates are for Imagery Derived Products and Services cited
in Table 4-6 of the Cost/Price Volume: Geopositioning, CIB-1, CIB-5, DPPDB, Image City Maps
(ICM), and Orthorectified Mosaics.

Line Item 0002 is an indefinite-quantity line item for the supplies or services. Prices are
specified in the Statement of Work, and are effective for the entire period of performance.
Delivery or performance shall be made only as authorized by orders issued in accordance with the
Statement of Work, Section C. The Contractor shall furnish to the Government, when and if ordered,
the supplies or services specified in Line Item 0002 up to and including the amount designated as
the “maximum.” The Government has no minimum order obligations. Except for the limitations in the
value specified as the maximum amount, there is no limit on the number of orders that may be
issued. The Government may issue orders requiring delivery to multiple destinations or performance
at multiple locations.

B.3 Total Contract Price/Total Contract Funding

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Line Item	 	 	Maximum Total	 	 	 	 	 	 	 	 	Obligated	 	 	 	Unfunded	 	 
	 	#	 	 	Price	 	 	 	Current Total Price	 	 	 	Amount	 	 	 	Amount	 	 
	 	0001
	 	 	$	197,125,779	 	 	 	$	197,125,779	 	 	 	$	0	 	 	 	$[fill-in]	 
	 	0002
	 	 	$	150,000,000	 	 	 	$	150,000,000	 	 	 	 	N/A	 	 	 	 	   N/A	 	 
	 	Total
	 	 	$	347,125,779	 	 	 	$	347,125,779	 	 	 	$	0	 	 	 	$[fill-in]	 
	 

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SECTION C — DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

C.1 — Statement of Requirements

The Contractor shall provide all personnel, materials, and facilities to furnish the items
specified in Section B of this contract in accordance with the Statement of Work dated September
27, 2004.

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SECTION D — PACKAGING AND MARKING

D.1 Packaging and Marking Instructions Preservation, Packaging, Packing, and Marking of Shipments
(Commercially Packaged Items)

Packing, packaging, and marking shall be in accordance with Section C — Statement of Work. In the
event such are not applicable, packing, packaging, and marking shall be in accordance with standard
commercial practice for domestic shipment, as set forth in the Uniform Freight Classification for
commercial practice, to assure arrival at destination in serviceable condition.

D.2 Prohibited Packing Materials

The use of asbestos, excelsior, newspaper or shredded paper (all types including waxed paper,
computer paper and similar hygroscopic or non-neutral material) is prohibited.

D.3 Markings of Warranted Items

Each item covered by a warranty shall be stamped or marked as such. Where this is impracticable,
written notice shall be attached to or furnished with the warranted item. Markings will state (i)
substance of warranty, (ii) duration, and (iii) name of activity to be notified of defects.
Electronic deliveries shall contain files describing the warranty.

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SECTION E — INSPECTION AND ACCEPTANCE

E.1
1 Inspection

The inspection or acceptance of work, accomplished and/or items produced or deliverable under this
Contract shall be performed in accordance with the procedures and prerequisites as defined in
Section C — Statement of Work and FAR 52.212-4(a).

E.2 Acceptance Period Unless notification of acceptance or rejection is received earlier, the
Government acceptance shall be deemed to have occurred constructively at 30 days after receipt as
defined in the Statement of Work.

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SECTION F — DELIVERIES OR PERFORMANCE

F.1 52.242-17 Government Delay of Work (Apr 1984)

	 	(1)  (a)	If the performance of all or any part of the work of this contract is delayed or interrupted
(1) by an act of the Contracting Officer in the administration of this contract that is not
expressly or impliedly authorized by this contract, or (2) by a failure of the Contracting
Officer to act within the time specified in this contract, or within a reasonable time if not
specified, an adjustment (excluding profit) shall be made for any increase in the cost of
performance of this contract caused by the delay or interruption and the contract shall be
modified in writing accordingly. Adjustment shall also be made in the delivery or performance
dates and any other contractual term or condition affected by the delay or interruption.
However, no adjustment shall be made under this clause for any delay or interruption to the
extent that performance would have been delayed or interrupted by any other cause, including
the fault or negligence of the Contractor, or for which an adjustment is provided or excluded
under any other term or condition of this contract.

	 
	 	(b)	A claim under this clause shall not be allowed — (1) For any costs incurred more than
20 days before the Contractor shall have notified
the Contracting Officer in writing of the act or failure to act
involved; and

	 
	 	(c)	Unless the claim, in an amount stated, is asserted in writing as soon as
practicable after the termination of the delay or interruption, but
not
later than the day of final payment under the contract.

F.2 Place of Performance

The principal place of performance under this Contract shall be the Contractor’s facility located
at 21700 Atlantic Blvd, Dulles, VA 20166.

F.3 Consignee and Address

In the event submitted items are classified TOP SECRET, SI/TK or other compartmented categories
they shall be sent through Government approved courier channels to:

[*****]

Other agreement documentation or non-compartmented classification through SECRET may be forwarded
by registered mail to:

[*****]

F.4 Personal Delivery

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In the event any item under this Contract is personally delivered to the AOR or Contracting
Officer, the Contractor shall obtain a signed receipt in duplicate from the AOR or Contracting
Officer. One copy of the receipt shall be attached to the Contractor’s invoice submitted for
payment for such item(s). Failure to do so may result in delayed payment.

F.5 Term of this Contract

This Contract commences upon execution and is estimated to continue through 30 September 2008.
Provisions of this Contract, which, by their express terms or by necessary implication, apply for
periods of time other than specified herein, shall be given effect, notwithstanding this Article.
In the event requirements exceed the minimum contract amount requirements, the Government reserves
the right to compete the additional requirements.

F.6 Place of Delivery: Destination

The articles to be furnished hereunder shall be delivered in accordance with the instructions of
the NextView Contracting Officer or as designated at the time or tasking.

 

			
	F.7 52.242-15 Stop Work Order
	 	(Aug 1989)

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SECTION G — CONTRACT ADMINISTRATION DATA

G.1 Authority and Designation of a Contracting Officer’s Representative (COR)

(a) Authority. Performance of this Contract is subject to the technical guidance and review of
the Contracting Officer or the designated representative. As used herein, “technical
guidance” is restricted to scientific, engineering or other technical field of discipline
matters directly related to the work to be performed. Such guidance may be provided for the
purposes of filing in details, clarifying, interpreting or otherwise serving to accomplish the
technical objectives and requirements of the Contract. In addition, and unless specified
elsewhere in this Contract, the authority of the designated representative is specifically
limited to the technical administration of this Contract and the inspection of supplies being
produced, services being provided or work being performed to assess compliance with the scope,
the Government’s estimated cost share, schedule and technical requirements of the Contract.

(b) Designation. Designation of a Contracting Officer’s Representative (COR) will be accomplished
by issuance of a letter signed by the Contracting Officer. Two copies of the letter, with
reference to this clause, will be provided to the Contractor. The Contractor will acknowledge both
the receipt of the designation and its understanding of the limited authority specified herein, by
signing and returning a copy of the letter to the address indicated.

(c) Notification. The Contracting Officer is the only representative of the Government authorized
to negotiate, enter into, modify or take any other action with respect to this Contract.
Therefore, no other employee or representative of the Government has the authority to initiate a
course of action which may alter the terms of this Contract. All revisions to specifications,
requirements or informal commitments that may involve a change in either the total cost/price,
scope, delivery schedule or legal aspects of this Contract must be accomplished by change order or
supplemental Contract, to be negotiated and signed by the Contracting Officer. Should any action
by Government personnel (other that the Contracting Officer) imply a commitment on the part of the
Government, which would effect the terms of this Contract, the Contractor must notify the
Contracting Officer and obtain approval prior to proceeding. Otherwise, the Contractor proceeds at
its own risk.

G.2 Novation/Change of Name Notification Requirement

(a) For the purposes of this Contract, any transfer of all or substantially all of the Contractor’s
assets to a third party, or change to the Contractor’s name will be processed in a centralized
manner. The Contractor shall notify the Contracting Officer of any such proposed change.

(b) The Contractor shall provide written notification to the staff via facsimile within (30) thirty
days of any aforementioned changes. Along with details of the change, the notification shall
provide a point of contact name, title, clearance level, and phone and fax numbers.

(c) After receiving this notification, the Contractor designee will receive a letter with
instructions to assist in the preparation of the novation/change-of-name package. This Agency will
typically recognize Other Government Agency

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(OGA) Agreements; however, we have unique security requirements that must be addressed prior to
formally accepting these agreements.

(d) The Contractor is reminded that it must continue to invoice under its former name on existing
agreements until this Agency accepts your novation and/or change-of-name agreement by issuance of a
letter recognizing the agreement. In addition, the Contractor is NOT authorized to request changes
to its banking information to recognize a successor company on existing agreements until this
Agency accepts the Contractor’s novation and/or change-of-name agreement. Any delays in submitting
the required information may impact the Contractor’s ability to invoice.

(e) A submission of a novation or name change agreement does not guarantee approval by this
organization and if a change is deemed unacceptable, the Contractor will remain under contractual
obligation to perform. The Contract may be terminated for reasons of default should the Contractor
not perform.

G.3 52.232-33 Payments Electronic Funds Transfer — Central Contractor Registration (May 1999)

G.4 Contract Administration

The component listed in Block 7 of the face page of this contract will be the Contract
Administration Office in performance of certain assigned contract administration functions of the
Contracting Office in accordance with FAR 42.201. The Contract Administration Office (CAO)
assigned responsibility for this contract will advise the Contractor of any necessary instructions
and procedures to be followed in dealing with any applicable Government offices.

G.5 Remittance Address

     Wire payments should be sent to the benefit of: ORBIMAGE Inc.

21700 Atlantic Blvd

Dulles, VA

20166

	 	 	 
	ABA Routing:

	 	026009593  
	BIC:

	 	bofaus3n  
	Account Name:

	 	Orbital Imaging Corporation 
	DUNS Number:

	 	824842249  
	Account Number:

	 	4122850189  
	Tax ID:

	 	54-1660268  

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G.6 Invoices

Invoices for Line Item 0001 shall be submitted on a monthly basis for the deliveries within the
preceding month. At the same time as submittal of the original invoice, the Contractor shall send
a copy of each invoice to:

	 	 	 
	

	 	Address

Contracting Officer: [*****]

Contracting Officer’s Representative (COR): [*****]

Payments for orders shall be made as follows:

	 	(a)  	Orders placed by the Government on the optional line items may utilize either
credit card payment procedures or DFAS payment procedures. The determination regarding
which method of payment will be used on individual orders will be made by the
Government at the time of order issuance. The Government will suspend the use of
credit card payment procedures upon a determination by the Contracting Officer that the
Contractor is not in compliance with the instructions set forth below. The following
specific instruction is provided for each of these payment procedures:

	 	(i)  	CREDIT CARD PAYMENT — Orders placed using credit card payment
procedures will specify that credit card payment is authorized. The order will
further specify the ordering Contracting Officer. All necessary credit card
information will be provided in advance for Contractor use. The Contractor
shall charge only the credit card of the ordering Contracting Officer.

The Contractor shall be responsible for ensuring that the Government order
information is passed through the credit card information network and that
the Contracting Officer receives the information. This information shall be
entered and passed in accordance with the following example format:

	 	 	 	 	 
	AAxxxx

	 	 	1, 2, 3, 4, 5	 

Where AAxxxx is the order number, ‘xxxx’ represents the four-digit suffix
and ‘1, 2, 3, 4, 5’ represents order line item numbers under the order. Charges
for multiple order line items will identify each line item separated by a
comma with no spaces. The Contractor may charge for a single order

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line item or a combination of line items under the same order on a single
credit card charge. When a partial delivery of an order line item number is
authorized, the Contract may charge for partial delivery of an order line
item.

The credit card charge and the order information passed through the credit
card information network will represent the complete invoice. The
Contractor shall not issue an additional invoice in any form separate from
the credit card charging process.

	 	(ii)  	DFAS PAYMENT — Order utilizing DFAS as the payment office will
specify the appropriate DFAS payment office if different from the DFAS office
noted in this Contract. Copies of the invoice will be provided to the
following individuals simultaneously:

	 	(1)  

(2)  

(3)  	Contracting Officer specified on each order

DFAS office as specified on each order

Receiving office as specified on each order

G.7 Advance Payment

Advance payment of 15% of the annual commitment under CLIN 0001 will be due at the beginning of
each contract year of performance, 15 November, pending the Contracting Officer’s acceptance of the
Contractor’s security for advance payments. The advance payment will be liquidated by invoicing
85% of the monthly invoice.

Advance payment of 15% of orders placed under CLIN 0002 will be due at the time of order placement.
The Contractor shall coordinate with the Contracting Officer prior to the placement of any charges
for advance payments. Subsequent to the processing of charges for any advance payment, the
Contractor shall submit a signed certification containing the following information:

(1) Contractor
name

(2) Contract and applicable CLIN numbers

(3) For each specific charge processed

	 	   	a            Credit
card number charged

b            Cardholder
name

c            Date
charge processed

d            Amount

(4) Total of all charges processed

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SECTION H — SPECIAL CONTRACT REQUIREMENTS

H.1 Security Requirements — Contract Classification

The association of the Government with the Contractor is unclassified in accordance with the DD254.
The maximum work to be performed is classified Secret Collateral. The maximum classification of
reports is classified Secret Collateral. The maximum classification of hardware is classified
Secret Collateral. This classified information shall be divulged only on a need to know basis, and
then only to those who have been authorized in writing by the Contracting Officer. Correspondence
originated by the Contractor and/or data to be submitted, the contents of which contain classified
information shall be stamped by you with the appropriate classification in accordance with the
DD254.

H.2 Past Performance Information — Referencing Agency Contracts

This Contract may be listed as a reference for past performance purposes in offers submitted to
agencies and organizations within the Intelligence Community. The Contractor shall obtain
Contracting Officer Approval prior to releasing any information about this Contract outside the
Intelligence Community.

H.3 Compliance with the Constitution and Statutes of the United States

Nothing in this Contract shall be construed to authorize any activity in violation of the
Constitution or Statutes of the United States.

H.4 Organizational Conflict of Interest

(a) If the Contractor is aware of any information bearing on any existing or potential
organizational conflict of interest, it shall provide a disclosure statement which describes all
relevant information concerning any past, present, or planned interests bearing on whether it
(including its chief executives and directors, or any proposed consultant or subcontractor) may
have an existing or potential organizational conflict of interest.

(b) Contractors should refer to FAR Subpart 9.5 for policies and procedures for avoiding,
neutralizing, or mitigating organizational conflicts of interest.

(c) If the Contracting Officer determines that a conflict exists or may occur, the Contracting
Officer shall advise the Contractor and take appropriate steps to avoid or otherwise resolve the
conflict through the inclusion of a special agreement clause or other appropriate means. The terms
of any special clause are subject to negotiation.

H.5 Intention to Use Consultants

(a) The Government intends to utilize the services of non-governmental engineering organizations in
technical, advisory and consulting roles for overall technical and business review of the
activities. Although the consultants shall not have the right of technical direction, they shall
from time to time and on a frequent basis attend technical reviews, participate in technical
interchange meetings, witness fabrication and assembly, and monitor

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testing within the Contractor and Subcontractor facilities. Such consultants will be involved in
providing advice to the Government concerning viability of technical approaches, utilization of
acceptable procedures, value and results of tests, and the like. The consultants will thus require
access to program-related Contractor facilities and documentation. The Contractor agrees to allow
such use and release of its proprietary data by those consultants for purposes directly related to
this Contract. Those consultants are prohibited from using or releasing the Contractor’s
proprietary data for any other purpose.

(b) Should the Contractor have any questions regarding the consultant’s requests, NGA agrees to
facilitate the requests and minimize intrusiveness to the maximum extent possible.

H.6 552.227-9000 UNAUTHORIZED USE OF NGA NAME, SEAL, AND INITIALS

(a) As provided in 10 U.S.C. Section 425, no person may, except with the written permission of the
Director, National Geospatial-Intelligence Agency, knowingly use the words “National
Geospatial-Intelligence Agency” the initials “NGA” the seal of the National Geospatial Intelligence
Agency, or any colorable imitation of such words, initials, or seal in connection with any
merchandise, retail product, impersonation, solicitation, or commercial activity in a manner
reasonably calculated to convey the impression that such use is approved, endorsed, or authorized
by the Director, NGA.

(b) Whenever it appears to the U. S. Attorney General that any person is engaged or about to
engage in an act or practice, which constitutes or will constitute conduct prohibited by paragraph
(a), the Attorney General may initiate a civil proceeding in a district court of the United States
to enjoin such act or practice. Such court shall proceed as soon as practicable to hearing and
determination of such action and may, at any time before such final determination, enter such
restraining orders or prohibitions, or take such other action as is warranted, to prevent injury to
the United States, or to any person or class of persons for whose protection the action is brought.

H.7 FOREIGN AFFILIATES

U.S. Government collection requirements and tasking may be released to the Contractor’s foreign
regional affiliates or partners for effecting collection only, unless expressly restricted in
writing by NGA. If a term in the Contractor’s NOAA operating license conflicts with the terms and
conditions of this contract, the terms and conditions of this NGA contract may be renegotiated.

H.8 SENSITIVE REQUIREMENTS AND PRODUCT HANDLING

NGA has the responsibility to identify its requirements as sensitive or non-sensitive. A sensitive
requirement may be classified or unclassified and yet require transference to the Contractor via
secure communications channels and receive special handling throughout the order fulfillment
process. Once the requirement is received it shall be treated in such a way as to not identify the
customer as NGA throughout the process, and not create any signatures external to the Contractor
that would flag it as “sensitive” or “special.” After the required imagery has been collected and
processed, it shall be

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delivered to the Contractor-maintained NGA Product Archive for access without restriction to NGA
authorized users. If the sensitive imagery is requested for delivery on media, it shall be handled
in such a manner that it is not intermingled with the shipment of NGA imagery resulting from
conventional (non-sensitive) orders.

Metadata resulting from the collection of sensitive requirements shall not be publicly accessible
from the Contractor’s public metadata catalog while imagery resulting from the collection of
sensitive requirements shall not be publicly accessible. There shall be no visibility to the
existence of the sensitive imagery or metadata by commercial customers, partners and regional
distributors without the specific approval of the government. This is not intended to preclude the
use of ground receiving stations controlled by the CDP. The tasking, receipt, and transfer of
sensitive data shall not make use of Contractor’s regional affiliates and partners for handling the
order and product without specific approval of the government. To control the period of
non-visibility of the sensitive imagery, contractors shall provide NGA with limited exclusive
rights to the products’ use. These rights will be of limited duration. Contractors shall provide
options for successive six-month extension and indefinite non-visibility. Sensitive requirements
shall be specified with the collection requirement. With the exception of images designated as
having limited exclusive rights, contractors shall be authorized to publish in their catalog and
offer for sale, any images collected, processed, licensed, and delivered to NGA and its customers
and its partners.

H.9 LIMITATION OF LIABILITY

(a) THE GOVERNMENT’S MONETARY LIABILITY UNDER THIS CONTRACT AT ANY POINT IN TIME SHALL NOT EXCEED
THE GOVERNMENT FUNDS OBLIGATED UNDER THIS CONTRACT MINUS THE GOVERNMENT FUNDS ALREADY PAID TO THE
CONTRACTOR PURSUANT TO THIS CONTRACT.

(b) The total funding amount obligated and available for payment under this Contract is set forth
in Section B. The total anticipated funding for the performance of this Contract is not presently
available. It is anticipated that from time to time additional funds will become available and
obligated under this Contract until the total funding is available and obligated. However, there
is no guarantee that any additional Government funds other than is currently obligated under this
Contract shall ever become available for the entire effort contemplated by this Contract.

(d) The provisions of this clause with respect to termination shall in no way be deemed to limit
the rights of the Government under the Termination for Cause clause of this Contract.

(e) Nothing in this clause shall affect the right of the Government to terminate this contract
pursuant to the Termination for Convenience clause of this Contract.

H.10 CONTRACTOR PERSONNEL

The Contractor agrees to assign only personnel who are citizens of the United States of America to
work on the Government’s premises. Further, only such persons as have been authorized by the
Contracting Officer or the Contracting Officer’s Technical Representative shall be assigned to this
work. In this connection, for identification purposes, the Contractor will be required to submit
the name, address, place and date of birth of all personnel who will

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work on the Government’s premises. All Foreign Nationals assigned to work on NextView shall be
identified. Non-cleared personnel shall not be made aware of classified information. Issues
regarding access to classified or sensitive information will be dealt with on a case-by-case basis.
NGA is committed to facilitating the Contractor’s capability to utilize the skills of the best
personnel available.

H.11 TERMINATION LIABILITY

The ceiling for Government liability for Cancellation costs (see clause 52.217-2) and Termination
for Convenience costs shall be equivalent to the funds obligated on the contract minus the payments
made under the contract as set forth in the Limitation of Liability clause.

H.12 Security Requirements

(a) The Contractor is obligated to comply with all relevant clauses and provisions incorporated
into this Contract and with the “Contractor Secrecy and Security Contract”, Form 4177, and as
referenced therein, the “National Industrial Security Program Operating Manual (NISPOM)” dated
January 1995 and a special classified compartment area security manual referenced in the Contract
as Addendum A, including any successor documents, revisions, or amendments to either or both
documents when furnished to the Contractor and maintain a security program that meets the
requirements of these documents.

(b) Security requirements are a material condition of this Contract. This Contract shall be subject
to immediate termination for default when it has been determined by the Contracting Officer that a
failure to fully comply with the security requirements of this Contract resulted from the willful
misconduct or lack of good faith on the part of any one of the Contractor’s directors or officers,
or on the part of any of the managers, superintendents, or equivalent representatives of the
Contractor who have supervision or direction of:

(1) All or substantially all of the Contractor’s business, or

(2) All or substantially all of the Contractor’s operations at any one plant or separate location
in which this Contract is being performed, or

(3) A separate and complete major industrial operation in connection with the performance of this
Contract.

(c) When deficiencies in the Contractor’s security program are noted which do not warrant immediate
default, the Contractor shall be provided a written notice of the deficiencies and be given a
period of 90 days in which to take corrective action. If the Contractor fails to take the necessary
corrective action, the Contracting Officer may terminate the whole or any part of this Contract for
default. The Contractor shall maintain and administer, in accordance with all relevant clauses and
provisions set forth or incorporated into this Contract and with a security program that meets the
requirements of these documents.

(d) When it is deemed necessary to disclose classified information to a Subcontractor in order to
accomplish the purposes of this Contract, the Contractor shall request permission of the
Contracting Officer prior to such disclosure. The Contractor agrees to include in all subcontracts
all appropriate security provisions pertaining to this Contract.

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(e) Classification Authority — Executive Order 12958 dated 20 April 1995, “Classified National
Security Information,” and implementation directives, provides principles and procedures for the
proper classification and declassification of material. These principles and procedures are
applicable to classified documents or materials generated by the Contractor in performance of this
Contract.

(f) Identification and Markings — The classification of documentation shall comply with the
guidelines set forth in Executive Order 12958.

(g) Each classified document shall indicate which paragraphs or, other portions, including subjects
and titles, are classified and which are unclassified. The symbol “(TS)” for Top Secret, “(S)” for
Secret, “(C)” for Confidential, and “(U)” for Unclassified will be placed at the beginning of the
text to which it applies. Non-text portions of a document, such as photographs, graphs, charts, and
maps, will be marked in a readily discernible manner, as will their captions.

(h) Subjects and titles should be selected so as not to require classification. When a classified
subject or title must be used, a short title or other unclassified identifier should be assigned to
facilitate receipting and reference, if such an identifier (e.g., a report number or registry
number) will not otherwise be assigned.

(i) Downgrading and Declassification — No classified document or material provided by the
Government, or generated by the Contractor pursuant to the Contract, may be downgraded or
declassified unless authorized in writing by the NGA Contracting Officer.

(j) References made to the clause entitled “Non-Publicity” — Violations of this clause constitute
a major breach of Contract and the Contract may be terminated for default, without the requirement
of a 10-day cure notice.

(k) The Contractor shall report all contacts described in the NISPOM section 3-Reporting
Requirements as promptly as possible, but in no event later than two business days after receipt of
such knowledge to the NGA Contracting Officer Representative (COR).

(l) If, subsequent to the date of this Contract, the security requirements under this Contract are
changed by the Government, as provided in this clause, and the security costs or time required for
delivery under this Contract are thereby increased or decreased, the Contract cost, delivery
schedule, or both, and any other provision of this Contract which may be affected shall be subject
to an equitable adjustment in accordance with the procedures in the Changes clause of this
Contract.

H.13 Security Requirements — Clearances

The Contractor shall request clearances required to perform under this Contract. NGA will
facilitate processing required clearances.

H.14 DISCLOSURE OF FOREIGN OWNERSHIP, CONTROL, OR INFLUENCE

(a) Definitions. As used in this provision:

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	 	(1)  	Effectively owned or controlled means that a foreign entity has the power, either
directly or indirectly, whether exercised or exercisable, to control the election,
appointment, or tenure of the offeror’s officers or a majority of the offeror’s board of
directors by any means, e.g., ownership, contract, or operation of law (or equivalent power
for unincorporated organizations).
	 
	 	(2)  	Foreign entity includes the state and the government of any country (other than the
United States and its possessions and trust territories); any political subdivision, agency,
or instrumentality thereof; any foreign corporation or other business form; as well as any
foreign individual.
	 
	 	(3)  	Proscribed information means:

	 	(i)  	Top Secret information;
	 
	 	(ii)  	Communications Security (COMSEC) information, except classified keys used to operate
secure telephone units (STU-IIIs);
	 
	 	(iii)  	Restricted Data as defined in the U.S. Atomic Energy Act of 1954, as amended;
	 
	 	(iv)  	Special Access Program (SAP) information; or
	 
	 	(v)  	Sensitive Compartmented Information (SCI).

(b) Disclosure. Offerors responding to this Request for Proposal (RFP) are advised that it is the
Government’s intent to secure services or equipment from firms which are not under foreign
ownership, control, or influence (FOCI) or where any FOCI may, in the opinion of the Government,
adversely impact on security requirements. Accordingly, all offerors responding to this RFP are
required to certify that no foreign ownership or controlling interest exists by submitting one of
the following with their offer: SF 328 Certificate Pertaining to Foreign Interests; or FOCI
Certification (below) that a current SF 328, submitted within the past five years, is on file with
NGA (specify the RFP or contract number for which the form was submitted), and that the
representations and certifications contained in that disclosure have not changed.

H.15 Security Requirements — Software Certification

(a) The Contractor certifies that it will undertake to ensure that any software to be provided or
any Government Furnished Software to be returned, under this Contract will be provided or returned
free from computer virus, which could damage, destroy, or maliciously alter software, firmware, or
hardware, or which could reveal to unauthorized persons any data or other information accessed
through or processed by the software.

(b) The Contractor shall immediately inform the Contracting Officer when it has a reasonable
suspicion that any software provided or returned, to be provided or returned, or associated with
the production may cause the harm described in paragraph (a) above.

(c) If the Contractor intends to include in the delivered software any computer code not essential
to the contractual requirement, this shall be explained in full detail to the Contracting Officer
and COR.

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(d) The Contractor acknowledges its duty to exercise reasonable care, to include the following, in
the course of contract performance:

(1) Using on a regular basis current versions of commercially available anti-virus software
to guard against computer viruses when introducing maintenance, diagnostic, or other
software into computers; and

(2) Prohibiting the use of non-Contract related software on computers, especially from
unknown or unreliable sources.

H.16 152.204-712 Personal Conduct

(a) The Contractor and its employees shall comply with conduct requirements in effect at the
Government’s work site. The Government reserves the right to exclude or remove from the site any
employee of the Contractor or of a subcontractor whom the Government reasonably deems careless,
uncooperative, or whose continued employment on the work is deemed by the Government to be contrary
to the public interest.

(b) The Contractor shall inform its employees that the Agency has a zero tolerance policy for
harassing behavior and that it shall not be tolerated. Any Contractor employee who is found to be
culpable in incidents of harassment shall be immediately escorted from the premises and denied
further access. This policy creates a greater burden upon the conduct of Contractor employees. The
Contractor shall emphasize this fact to its employees.

(c) Exclusion under the circumstances described in this clause shall not relieve the Contractor
from full performance of the requirements of this Contract, nor will it provide the basis for any
claims against the Government.

H.17 Incorporation of Section K, Representation Certifications, and Other Statements of Offeror

SECTION K dated June 15, 2004 is incorporated herein by reference and made a part of this Contract.

H.18 Reserved

H.19 Key Personnel

(a) The Contractor shall identify the key technical, management and administrative personnel to be
assigned to work under this Contract:

	 	 	 
	Name	 	Title
	Lee F. Demitry

	 	Vice President Space Systems Engineering and 
	 

	 	 NextView Program Manager
	Alex Fox

	 	Deputy Program Manager and IPT
	Tony Anzilotti

	 	Finance Lead
	Patricia Manghelli

	 	Contracts Lead
	John Spuria

	 	Space & Launch Segment Development Manager
	Richard Blumberg

	 	Ground Segment Development Manager
	Robert Ferraro

	 	Satellite Operations Lead
	Dennis Holdman

	 	Imaging Operations Lead
	Aaron Cole

	 	Tasking & Collection Lead
	Chuck Tremper

Mike Schmidt

	 	Imaging Processing Lead

Product Dissemination & Distribution Lead

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(b) The personnel specified above are considered to be essential to the work performed hereunder.
Prior to diverting any of the specified individuals to other programs, the Contractor shall provide
advance notification of at least thirty (30) calendar days to the Contracting Officer and shall
submit resumes of the proposed substitutes in sufficient detail to permit evaluation of the impact
on the program. No diversion from the above procedure shall be made by the Contractor without the
written consent of the Contracting Officer, provided that the Contracting Officer may ratify in
writing such diversion and such ratification shall constitute the consent of the Contracting
Officer required by this clause.

H.20 Reserved

H.21 NextView IMAGERY END USER LICENSE AGREEMENT

a. General Terms

1. This clause applies to all unprocessed sensor data and requirements-compliant processed
imagery, imagery services, imagery-derived products and imagery support data licensed under
this Contract. No other clauses related to intellectual property or data rights of any sort
shall have any effect related to the unprocessed sensor data and requirements-compliant
processed imagery, imagery services, imagery-derived products and imagery support data
delivered under this Contract.

2. All license rights for use of the unprocessed sensor data and requirements-compliant
processed imagery, imagery services, imagery-derived products and imagery support data
provided to the U.S. Government purchased under this NGA contract are in perpetuity.

3. Licensed users may generate an unlimited number of hardcopies and softcopies of the
unprocessed sensor data and requirements-compliant processed imagery, imagery services,
imagery-derived products and imagery support data for their use.

4. (i) Licensed users may generate any derived product from the licensed unprocessed sensor
data; and requirements-compliant processed imagery, imagery services, imagery-derived
products and imagery support data.

     (ii) Unprocessed sensor data and requirements-compliant processed imagery, imagery
services, imagery-derived products and imagery support data licensed under this NGA contract
have no restrictions on use and distribution by Licensed Users, but shall contain the
copyright markings.

b. Licensed Users

1. The imagery may be used by the U.S. Government (including, all branches, departments,
agencies, and offices).

2. The U.S. Government may provide the imagery to the following organizations:

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State Governments

Local Governments

Foreign Governments and inter-governmental organizations

NGO’s and other non-profit organizations

3. In consideration for the flexibility afforded to the U.S. Government by allowing
unprocessed sensor data and requirements-compliant processed imagery, imagery services,
imagery-derived products and imagery support data to be shared, the United States Government
shall use its reasonable best efforts to minimize the effects on commercial sales.
Acquisition and dissemination of imagery and imagery products collected within the United
States shall be restricted in accordance with law and regulation.

H.22 Warranty

The Contractor provides a limited warranty for 30 days that the Products delivered will be of the
area of interest ordered and the media used to carry the Products will be free from physical or
material defects. The Contractor’s sole liability shall be to replace the media if the media (not
the software or data encoded thereon) is defective and NGA returns such to the Contractor within
30 days of delivery. WITH THE EXCEPTION OF THE PROCEEDING WARRANTY, AND IRRESPECTIVE OF ANY OTHER
TERM IN THIS CONTRACT TO THE CONTRACT, THE PRODUCTS ARE PROVIDED WITHOUT WARRANTY OF ANY KIND, AND
ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE DISCLAIMED. THE
CONTRACTOR DOES NOT WARRANT THAT THE PRODUCTS WILL MEET NGA’S NEEDS OR EXPECTATIONS, OR THAT
OPERATIONS OF THE PRODUCTS WILL BE ERROR FREE OR UNINTERRUPTED. NO INFORMATION PROVIDED BY THE
CONTRACTOR OR ITS AGENTS, EMPLOYEES, OR ITS RESELLERS OR DISTRIBUTORS SHALL CREATE A WARRANTY, OR
IN ANY WAY INCREASE THE SCOPE OF THIS LIMITED WARRANTY, AND NGA IS NOT ENTITLED TO RELY ON ANY SUCH
INFORMATION. Nothing in this clause impacts the Government’s rights under the inspection and
acceptance clauses of this contract.

H.23 Government Property.

(a) The Government shall deliver to the Contractor, at the time and locations stated in this
Agreement, the Government-furnished property in “as is” condition described in the Schedule or
specifications.

(b) Title to Government-furnished property shall remain in the Government. The Contractor shall use
the Government-furnished property only in connection with the performance of work under this
Agreement. The Contractor shall maintain adequate property control records in accordance with sound
industrial practice and will make such records available for Government inspection at all
reasonable times.

(c) Upon delivery of Government-furnished property to the Contractor, the Contractor assumes the
risk and responsibility for its loss or damage, except-

(1) For reasonable wear and tear;

(2) To the extent property is consumed in performing this Agreement; or

(3) As otherwise provided for by the provisions of this Agreement.

(d) Upon completing this Agreement, the Contractor shall follow the instructions of the Agreements
Officer regarding the disposition of all Government-furnished property not consumed in performing
this Agreement or previously delivered to the Government. The Contractor shall prepare for
shipment, deliver f.o.b. origin, or dispose of the Government property, as may be directed or
authorized by the Agreements Officer. The net proceeds of any such disposal shall be credited to
the Agreement price or shall be paid to the Government as directed by the Agreements Officer.

(e) If this contract is to be performed outside the Untied States and its

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outlying areas, the words “Government” and “Government-furnished” (wherever they appear in this clause) shall be construed as “United States Government” and “United States
Government-furnished,” respectively.

H.24 Non-Publicity

The Contractor shall not use or allow to be used any aspect of this solicitation and/or contract
for publicity, advertisement purposes, or as a reference for new business. This shall include, but
is not limited to, the use of the terms “ISSA” or “ISA” or any other sponsor specific terms in any
public employment advertisements. It is further understood that this obligation shall not expire
upon completion or termination of this contract, but will continue indefinitely. The Contractor may
request a waiver or release from the foregoing, but shall not deviate there from unless authorized
to do so in writing by the Contracting Officer. Contractors are not required to obtain waivers when
informing offices within this Agency of contracts it has performed or is in the process of
performing provided there are no security restrictions. Contractors may include the requirement for
security clearances up to the TS/SCI level in public employment advertisements.

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SECTION I - CONTRACT CLAUSES

Contract Terms and Conditions — Commercial Items (Oct. 2003)

(a) Inspection/Acceptance. The Contractor shall only tender for acceptance those items that conform
to the requirements of this contract. The Government reserves the right to inspect or test any
supplies or services that have been tendered for acceptance. The Government may require repair or
replacement of nonconforming supplies or reperformance of nonconforming services at no increase in contract price.
The Government must exercise its post-acceptance rights — (1) Within a reasonable time after the
defect was discovered or should have been discovered; and (2) Before any substantial change occurs
in the condition of the item, unless the change is due to the defect in the item.

(b) Assignment. The Contractor or its assignee may assign its rights to receive payment due as a
result of performance of this contract to a bank, trust company, or other financing institution,
including any Federal
lending agency in accordance with the Assignment of Claims Act (31
U.S.C. 3727). However, when a
third party makes payment (e.g., use of the Government wide commercial purchase card), the
Contractor may not
assign its rights to receive payment under this contract.

(c) RESERVED.

(d) Disputes. This contract is subject to the Contract Disputes Act of 1978, as amended (41 U.S.C.
601-613). Failure of the parties to this contract to reach agreement on any request for equitable
adjustment, claim, appeal or action arising under or relating to this contract shall be a dispute
to be resolved in accordance with the clause at FAR 52.233-1, Disputes, which is incorporated
herein by reference. The Contractor shall proceed diligently with performance of this contract,
pending final resolution of any dispute arising under the contract.

(e) Definitions. The clause at FAR 52.202-1, Definitions, is incorporated herein by reference.

(f) Excusable delays. The Contractor shall be liable for default unless nonperformance is caused by
an occurrence beyond the reasonable control of the Contractor and without its fault or negligence
such as, acts of God or the public enemy, acts of the Government in either its sovereign or
contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes, unusually severe
weather, and delays of common carriers. The Contractor shall notify the Contracting Officer in
writing as soon as it is reasonably possible after the commencement of any excusable delay, setting
forth the full particulars in connection therewith, shall remedy such occurrence with all
reasonable dispatch, and shall promptly give written notice to the
Contracting Officer of the cessation of such occurrence.

(g) Invoice.

(1) The Contractor shall submit an original invoice and three copies (or electronic invoice, if authorized) to the address designated in the contract to receive invoices. An invoice must include —

(i) Name and address of the Contractor;

(ii) Invoice date and number;

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(iii) Contract number, contract line item number and, if
applicable, the order number;

(iv) Description, quantity, unit of measure, unit price
and extended price of the items delivered;

(v) Shipping number and date of shipment, including the
bill of lading number and weight of shipment if shipped on Government bill
of lading;

(vi) Terms of any discount for prompt payment offered;

(vii) Name and address of official to whom payment is to
be sent;

(viii) Name, title, and phone number of person to notify in event of defective
invoice; and

(ix) Taxpayer Identification Number (TIN). The Contractor
shall include its TIN on the invoice only if required elsewhere in this
contract.

(x) Electronic funds transfer (EFT) banking information.

(A) The Contractor shall include EFT banking
information on the invoice only if required elsewhere in this
contract.

(B) If EFT banking information is not required
to be on the invoice, in order for the invoice to be a proper
invoice, the Contractor shall have submitted correct EFT banking
information in accordance with the applicable solicitation provision,
contract clause (e.g., 52.232-33, Payment by Electronic Funds
Transfer-Central Contractor Registration, or 52.232-34, Payment by
Electronic Funds Transfer-Other Than Central Contractor
Registration), or applicable agency procedures.

(C) EFT banking information is not required if
the Government waived the requirement to pay by EFT.

(2) Invoices will be handled in accordance with the Prompt Payment Act
(31 U.S.C. 3903) and Office of Management and Budget (OMB) prompt payment
regulations at 5 CFR part 1315.

(h) Patent indemnity. Not applicable – the Government is not granting the Contractor authorization
or consent to infringe patents or copyrights.

(i) Payment.

(1) Items accepted. Payment shall be made for items accepted by the Government that
have been delivered to the delivery destinations set forth in this contract.

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(2) Prompt Payment. The Government will make payment in accordance with the Prompt
Payment Act (31 U.S.C. 3903) and prompt payment regulations at 5 CFR Part 1315.

(3) Electronic Funds Transfer (EFT). If the Government makes payment by EFT, see
52.212-5(b) for the appropriate EFT clause.

(4) Discount. In connection with any discount offered for early payment, time shall be
computed from the date of the invoice. For the purpose of computing the discount
earned, payment shall be considered to have been made on the date, which appears on
the payment check, or the specified payment date if an electronic funds transfer
payment is made.

(5) Overpayments. If the Contractor becomes aware of a duplicate contract financing or
invoice payment or that the Government has otherwise overpaid on a contract financing
or invoice payment, the Contractor shall immediately notify the Contracting Officer
and request instructions for disposition of the overpayment.

(j) Risk of loss. Unless the contract specifically provides otherwise, risk of loss or damage to
the supplies provided under this contract shall remain with the Contractor until, and shall pass to
the Government upon:

(1) Delivery of the supplies to a carrier, if transportation is f.o.b.
origin; or

(2) Delivery of the supplies to the Government at the destination
specified in the contract, if transportation is f.o.b. destination.

(k) Taxes. The contract price includes all applicable Federal, State, and local taxes and duties.

(l) Termination for the Government’s convenience. The Government reserves the right to terminate
this contract, or any part hereof, for its sole convenience. In the event of such termination, the
Contractor shall
immediately stop all work hereunder and shall immediately cause any and all of its suppliers and
subcontractors to cease work. Subject to the terms of this contract, the Contractor shall be paid a
percentage of the contract price reflecting the percentage of the work performed prior to the
notice of
termination, plus reasonable charges the Contractor can demonstrate to the satisfaction of the
Government using its standard record keeping system have resulted from the termination. The
Contractor shall not be required to comply with the cost accounting standards or contract cost
principles for this purpose. This paragraph does not give the Government any right to audit the
Contractor’s records. The Contractor shall not be paid for any work performed or costs incurred,
which reasonably could have been avoided.

(m) Termination for cause. The Government may terminate this contract, or any part hereof, for
cause in the event of any default by the Contractor, or if the Contractor fails to comply with any
contract terms and conditions, or fails to provide the Government, upon request, with adequate
assurances of future performance. In the event of termination for cause, the Government shall not
be liable to the Contractor for any amount for supplies or services not accepted, and the
Contractor shall be liable to the Government for

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any and all rights and remedies provided by law. If it is determined that the Government improperly
terminated this contract for default, such termination shall be deemed a termination for
convenience.

(n) Title. Unless specified elsewhere in this contract, title to items furnished under this
contract shall pass to the Government upon acceptance, regardless of when or where the Government
takes physical possession. This provision does not apply to items licensed under this contract.

(o) Limitation of Contractor’s liability. Except as otherwise provided by an express warranty, the
Contractor will not be liable to the Government for consequential damages resulting from any defect
or deficiencies in accepted items.

(p) Other compliances. The Contractor shall comply with all applicable Federal, State and local
laws, executive orders, rules and regulations applicable to its performance under this contract.

(q) Compliance with laws unique to Government contracts. The Contractor agrees to comply with 31
U.S.C. 1352 relating to limitations on the use of appropriated funds to influence certain Federal
contracts; 18 U.S.C. 431 relating to officials not to benefit; 40 U.S.C. 327, et seq., Contract Work Hours and
Safety Standards Act; 41 U.S.C. 51-58, Anti-Kickback Act of 1986; 41 U.S.C. 265 and 10 U.S.C. 2409
relating to whistleblower protections; 49 U.S.C. 40118, Fly American; and 41 U.S.C. 423 relating to
procurement integrity.

(r) Order of precedence. Any inconsistencies in this solicitation or contract shall be resolved by
giving precedence in the following order:

(1) The schedule of supplies/services.

(2) The Assignments, Disputes, Payments, Invoice, Other Compliances, and
Compliance with Laws Unique to Government Contracts paragraphs of this clause.

(3) The clause at 52.212-5.

(4) Addenda to this solicitation or contract, including any license
agreements for computer software.

(5) Solicitation provisions if this is a solicitation.

(6) Other paragraphs of this clause.

(7) The Standard Form 1449.

(8) Other documents, exhibits, and attachments.

(9) The specification.

(s) Central Contractor Registration (CCR).

(1) Unless exempted by an addendum to this contract, the Contractor is
responsible during performance and through final payment of any contract for the
accuracy and completeness of the data within the CCR database, and for any
liability resulting from the Government’s

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reliance on inaccurate or incomplete data. To remain registered in the CCR database
after the initial registration, the Contractor is required to review and update on an
annual basis from the date of initial registration or subsequent updates its
information in the CCR database to ensure it is current, accurate and complete.
Updating information in the CCR does not alter the terms and conditions of this
contract and is not a substitute for a properly executed contractual document.

(2)(i) If a Contractor has legally changed its business name, “doing business as” name,
or division name (whichever is shown on the contract), or has transferred the
assets used in performing the contract, but has not completed the necessary
requirements regarding novation and change-of-name agreements in Subpart 42.12,
the Contractor shall provide the responsible Contracting Officer a minimum of one
business day’s written notification of its intention to:

(A) Change the name in the CCR database;

(B) Comply with the requirements of Subpart
42.12 of the FAR;

(C) Agree in writing to the timeline and
procedures specified by the responsible Contracting Officer. The
Contractor must provide with the notification sufficient
documentation to support the legally changed name.

(ii) If the Contractor fails to comply with the requirements of paragraph
(t)(2)(i) of this clause, or fails to perform the agreement at paragraph
(t)(2)(i)(C) of this clause, and, in the absence of a properly executed novation
or change-of-name agreement, the CCR information that shows the Contractor to be
other than the Contractor indicated in the contract will be considered to be
incorrect information within the meaning of the “Suspension of Payment” paragraph of the electronic funds transfer (EFT) clause of
this contract.

(6) The Contractor shall not change the name or address for EFT payments or manual
payments, as appropriate, in the CCR record to reflect an assignee for the purpose of
assignment of claims (see FAR Subpart 32.8, Assignment of Claims). Assignees shall be
separately registered in the CCR database. Information provided to the Contractor’s
CCR record that indicates payments, including those made by EFT, to an ultimate
recipient other than that Contractor will be considered to be incorrect information
within the meaning of the “Suspension of payment” paragraph of the EFT clause of this
contract.

(7) Offerors and Contractors may obtain information on registration and
annual confirmation requirements via the Internet at http://www.ccr.gov or by
calling 1-888-227-2423, or 269-961-5757.

Contract Terms and Conditions Required to Implement Statutes or Executive

Orders—Commercial Items (Oct. 2003)

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(a) The Contractor shall comply with the following Federal Acquisition Regulation (FAR) clause,
which is incorporated in this contract by reference, to implement provisions of law or Executive
orders applicable to acquisitions of commercial items: 52.233-3, Protest after Award (AUG 1996) (31
U.S.C. 3553).

(b) The Contractor shall comply with the FAR clauses in this paragraph (b) that the Contracting
Officer has indicated as being incorporated in this contract by reference to implement provisions
of law or Executive orders applicable to acquisitions of commercial items: [Contracting Officer
check as appropriate.]

X (1) 52.203-6, Restrictions on Subcontractor Sales to the Government (JUL 1995), with Alternate I
(OCT 1995) (41 U.S.C. 253g and 10 U.S.C. 2402).

__ (2) 52.219-3, Notice of Total HUBZone Set-Aside (JAN 1999) (15 U.S.C. 657a).

__ (3) 52.219-4, Notice of Price Evaluation Preference for HUBZone Small Business Concerns (JAN
1999) (if the offeror elects to waive the preference, it shall so indicate in its offer) (15 U.S.C.
657a).

__ (4)(i) 52.219-5, Very Small Business Set-Aside (JUNE 2003) (Pub.L. 103- 403, section 304, Small
Business Reauthorization and Amendments Act of 1994).

__ (ii) Alternate I (MAR 1999) of 52.219-5.

__ (iii) Alternate II (JUNE 2003) of 52.219-5.

__ (5)(i) 52.219-6, Notice of Total Small Business Set-Aside (JUNE 2003) (15 U.S.C. 644).

__ (ii) Alternate I (OCT 1995) of 52.219-6.

__ (6)(i) 52.219-7, Notice of Partial Small Business Set-Aside (JUNE 2003) (15 U.S.C. 644).

__ (ii) Alternate I (OCT 1995) of 52.219-7.

X(7) 52.219-8, Utilization of Small Business Concerns (OCT 2000) (15 U.S.C. 637(d)(2) and (3)).

__ (8)(i) 52.219-9, Small Business Subcontracting Plan (JAN 2002) (15 U.S.C. 637(d)(4)).

__ (ii) Alternate I (OCT 2001) of 52.219-9.

__ (iii) Alternate II (OCT 2001) of 52.219-9.

__ (9) 52.219-14, Limitations on Subcontracting (DEC 1996) (15 U.S.C. 637(a)(14)).

__ (10)(i) 52.219-23, Notice of Price Evaluation Adjustment for Small Disadvantaged Business
Concerns (JUNE 2003) (Pub.L. 103-355, section 7102, and 10 U.S.C. 2323) (if the offeror elects to
waive the adjustment, it shall so indicate in its offer).

__ (ii) Alternate I (JUNE 2003) of 52.219-23.

__ (11) 52.219-25, Small Disadvantaged Business Participation Program— Disadvantaged Status and
Reporting (OCT 1999) (Pub.L. 103-355, section 7102, and 10 U.S.C. 2323).

__ (12) 52.219-26, Small Disadvantaged Business Participation Program— Incentive Subcontracting
(OCT 2000) (Pub.L. 103-355, section 7102, and 10 U.S.C. 2323).

X(13) 52.222-3, Convict Labor (JUNE 2003) (E.O. 11755).

X(14) 52.222-19, Child Labor—Cooperation with Authorities and Remedies (SEP 2002) (E.O. 13126).

 __(15) 52.222-21, Prohibition of Segregated Facilities (FEB 1999).

X(16) 52.222-26, Equal Opportunity (APR 2002) (E.O. 11246).

X(17) 52.222-35, Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era,
and Other Eligible Veterans (DEC 2001) (38 U.S.C. 4212).

X(18) 52.222-36, Affirmative Action for Workers with Disabilities (JUN

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1998) (29 U.S.C. 793).

X(19) 52.222-37, Employment Reports on Special Disabled Veterans, Veterans of the Vietnam Era,
and Other Eligible Veterans (DEC 2001) (38 U.S.C. 4212).

__ (20)(i) 52.223-9, Estimate of Percentage of Recovered Material Content for EPA-Designated
Products (AUG 2000) (42 U.S.C. 6962(c)(3)(A)(ii)).

__ (ii) Alternate I (AUG 2000) of 52.223-9 (42 U.S.C. 6962(i)(2)(C)).

__ (21) 52.225-1, Buy American Act—Supplies (JUNE 2003) (41 U.S.C. 10a- 10d).

__ (22)(i) 52.225-3, Buy American Act—North American Free Trade Agreement— Israeli Trade Act
(JUNE 2003) (41 U.S.C. 10a-10d, 19 U.S.C. 3301 note, 19 U.S.C. 2112 note).

__ (ii) Alternate I (MAY 2002) of 52.225-3.

__ (iii) Alternate II (MAY 2002) of 52.225-3.

X(23) 52.225-5, Trade Agreements (Oct 2003) (19 U.S.C. 2501, et seq., 19 U.S.C. 3301 note).

X(24) 52.225-13, Restrictions on Certain Foreign Purchases (Oct. 2003) (E.o.s, proclamations,
and statutes administered by the Office of Foreign Assets Control of the Department of the
Treasury).

__ (25) 52.225-15, Sanctioned European Union Country End Products (FEB 2000) (E.O. 12849).

__ (26) 52.225-16, Sanctioned European Union Country Services (FEB 2000) (E.O. 12849).

__ (27) 52.232-29, Terms for Financing of Purchases of Commercial Items (FEB 2002) (41 U.S.C.
255(f), 10 U.S.C. 2307(f)).

__ (28) 52.232-30, Installment Payments for Commercial Items (OCT 1995) (41 U.S.C. 255(f), 10
U.S.C. 2307(f)).

X(29) 52.232-33, Payment by Electronic Funds Transfer—Central Contractor Registration (OCT
2003) (31 U.S.C. 3332).

__ (30) 52.232-34, Payment by Electronic Funds Transfer—Other than Central Contractor Registration
(MAY 1999) (31 U.S.C. 3332).

__ (31) 52.232-36, Payment by Third Party (MAY 1999) (31 U.S.C. 3332).

__ (32) 52.239-1, Privacy or Security Safeguards (AUG 1996) (5 U.S.C. 552a).

__ (33)(i) 52.247-64, Preference for Privately Owned U.S.-Flag Commercial Vessels (APR 2003) (46
U.S.C. Appx 1241 and 10 U.S.C. 2631).

__ (ii) Alternate I (APR 1984) of 52.247-64.

(c) The Contractor shall comply with the FAR clauses in this paragraph (c), applicable to
commercial services, that the Contracting Officer has indicated as being incorporated in this
contract by reference to implement provisions of law or Executive orders applicable to acquisitions
of commercial items: [Contracting Officer check as appropriate.]

__ (1) 52.222-41, Service Contract Act of 1965, as Amended (MAY 1989) (41 U.S.C. 351, et seq.).

__ (2) 52.222-42, Statement of Equivalent Rates for Federal Hires (MAY 1989) (29 U.S.C. 206 and 41
U.S.C. 351, et seq.).

__ (3) 52.222-43, Fair Labor Standards Act and Service Contract Act—Price Adjustment (Multiple
Year and Option Contracts) (MAY 1989) (29 U.S.C. 206 and 41 U.S.C. 351, et seq.).

__ (4) 52.222-44, Fair Labor Standards Act and Service Contract Act—Price Adjustment (February
2002) (29 U.S.C. 206 and 41 U.S.C. 351, et seq.).

__ (5) 52.222-47, SCA Minimum Wages and Fringe Benefits Applicable to Successor Contract Pursuant
to Predecessor Contractor Collective Bargaining Agreements (CBA) (May 1989) (41 U.S.C. 351, et
seq.).

(d) Comptroller General Examination of Record. The Contractor shall comply with the provisions of
this paragraph (d) if this contract was awarded using other than sealed bid, is in excess of the
simplified acquisition threshold, and does not contain the clause at 52.215-2, Audit and
Records—Negotiation.

(1) The Comptroller General of the United States, or an authorized representative of the
Comptroller General, shall have access to and right to

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examine any of the Contractor’s directly pertinent records involving transactions related to this
contract.

(2) The Contractor shall make available at its offices at all reasonable times the records,
materials, and other evidence for examination, audit, or reproduction, until 3 years after final
payment under this contract or for any shorter period specified in FAR Subpart 4.7, Contractor
Records Retention, of the other clauses of this contract. If this contract is completely or
partially terminated, the records relating to the work terminated shall be made available for 3
years after any resulting final termination settlement. Records relating to appeals under the
disputes clause or to litigation or the settlement of claims arising under or relating to this
contract shall be made available until such appeals, litigation, or claims are finally resolved.

(3) As used in this clause, records include books, documents, accounting procedures and practices,
and other data, regardless of type and regardless of form. This does not require the Contractor to
create or maintain any record that the Contractor does not maintain in the ordinary course of
business or pursuant to a provision of law.

(e)(1) Notwithstanding the requirements of the clauses in paragraphs (a), (b), (c), and (d) of this
clause, the Contractor is not required to flow down any FAR clause, other than those in paragraphs
(i) through (vi) of this paragraph in a subcontract for commercial items. Unless otherwise
indicated below, the extent of the flow down shall be as required by the clause—

(i) 52.219-8, Utilization of Small Business Concerns (October 2000) (15 U.S.C. 637(d)(2) and (3)),
in all subcontracts that offer further subcontracting opportunities. If the subcontract (except
subcontracts to small business concerns) exceeds $500,000 ($1,000,000 for construction of any
public facility), the subcontractor must include 52.219-8 in lower tier subcontracts that offer
subcontracting opportunities.

(ii) 52.222-26, Equal Opportunity (April 2002) (E.O. 11246).

(iii) 52.222-35, Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era, and
Other Eligible Veterans (December 2001) (38 U.S.C. 4212).

(iv) 52.222-36, Affirmative Action for Workers with Disabilities (June 1998) (29 U.S.C. 793).

(v) 52.222-41, Service Contract Act of 1965, as Amended (May 1989), flow down required for all
subcontracts subject to the Service Contract Act of 1965 (41 U.S.C. 351, et seq.).

(vi) 52.247-64, Preference for Privately Owned U.S.-Flag Commercial Vessels (April 2003) (46 U.S.C.
Appx 1241 and 10 U.S.C. 2631). Flow down required in accordance with paragraph (d) of FAR clause
52.247-64.

(2) While not required, the Contractor may include in its subcontracts for commercial items a
miNGAl number of additional clauses necessary to satisfy its contractual obligations.

52.243-1 Changes—Fixed Price (Aug 1987)

52.211-15 Defense Priority
and Allocation Requirements (Sep 1990) Audits and Records - Negotiation

52.215-21 Requirements for Cost or Pricing Data or Information Other Than Cost or Pricing Data –
Modifications (Oct 1997)

a) As used in this clause, records includes books, documents, accounting procedures and practices,
and other data, regardless of type and regardless of whether such items are in written form, in the
form of computer data, or in any other form.

(b) Examination of costs. If this is a cost-reimbursement, incentive, time-

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and-materials, labor-hour, or price redeterminable contract, or any combination of these, the Contractor shall
maintain and the Contracting Officer, or an authorized representative of the Contracting Officer,
shall have the right to examine and audit all records and other evidence sufficient to reflect
properly all costs claimed to have been incurred or anticipated to be incurred directly or
indirectly in performance of this contract. This right of examination shall include inspection at
all reasonable times of the Contractor’s plants, or parts of them, engaged in performing the
contract.

(c) Cost or pricing data. If the Contractor has been required to submit cost or pricing data in
connection with any pricing action relating to this contract, the Contracting Officer, or an
authorized representative of the Contracting Officer, in order to evaluate the accuracy,
completeness, and currency of the cost or pricing data, shall have the right to examine and audit
all of the Contractor’s records, including computations and projections, directly related to—

(1) The proposal for the modification;

(2) The discussions conducted on the proposal(s), including those related to negotiating;

(3) Pricing of the modification; or

(4) Performance of the modification.

(d) Comptroller General.

(1) The Comptroller General of the United States, or an authorized representative, shall have
access to and the right to examine any of the Contractor’s directly pertinent records involving
transactions related to this contract or a subcontract hereunder.

(2) This paragraph may not be construed to require the Contractor or subcontractor to create or
maintain any record that the Contractor or subcontractor does not maintain in the ordinary course
of business or pursuant to a provision of law.

(e) Reports. If the Contractor is required to furnish cost, funding, or performance reports, the
Contracting Officer or an authorized representative of the Contracting Officer shall have the right
to examine and audit the supporting records and materials, for the purpose of evaluating

(1) the effectiveness of the Contractor’s policies and procedures to produce data compatible with
the objectives of these reports and

(2) the data reported.

(f) Availability. The Contractor shall make available at its office at all reasonable times the
records, materials, and other evidence described in paragraphs (a), (b), (c), (d), and (e) of this
clause, for examination, audit, or reproduction, until 3 years after final payment under this
contract or for any shorter period specified in Subpart 4.7, Contractor Records Retention, of the
Federal Acquisition Regulation (FAR), or for any longer period required by statute or by other
clauses of this contract. In addition—

(1) If this contract is completely or partially terminated, the Contractor shall make available the
records relating to the work terminated until 3 years after any resulting final termination
settlement; and

(2) The Contractor shall make available records relating to appeals under the Disputes clause or to
litigation or the settlement of claims arising under or relating to this contract until such
appeals, litigation, or claims are finally resolved.

(g) The Contractor shall insert a clause containing all the terms of this clause, including this
paragraph (a), in all subcontracts under this contract that exceed the simplified acquisition
threshold and—

(1) That are cost-reimbursement, incentive, time-and-materials, labor-hour, or price-redeterminable
type or any combination of these;

(2) For which cost or pricing data are required; or

(3) That require the subcontractor to furnish reports as discussed in

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paragraph (e) of this clause.

52.217-2 Cancellation Under Multi-Year Contracts (OCT 1997)(Modified)

	(1)  	“Cancellation,” as used in this clause, means that the Government is canceling its
requirements for all supplies or services in program years subsequent to that in which notice
of cancellation is provided.

	 	(a)  	Except for cancellation under this clause or termination under the Default clause,
any reduction by the Contracting Officer in the requirements of this contract shall be
considered a termination under the Termination for Convenience of the Government clause.
	 
	 	(b)  	The ceiling for Government liability for cancellation costs and termination for
convenience costs shall be equivalent to the funds obligated on the Contract at the time
of termination minus the payments made under the Contract.
	 
	 	(c)  	The cancellation charge shall be computed and the claim submitted as if the claim
were being made under the Termination for Convenience of the Government clause of this
contract. The Contractor shall submit the claim promptly but no later than 1 year from
the date — (1) Of notification of the nonavailability of funds; or (2) Specified in the
Schedule by which notification of the availability of additional funds for the next
succeeding program year is required to be issued, whichever is earlier, unless extensions
in writing are granted by the Contracting Officer.
	 
	 	(d)  	The Contractor’s claim may include —

	 	(e)  	(1) Reasonable nonrecurring costs (see Subpart 15.4 of the Federal Acquisition
Regulation) which are applicable to and normally would have been amortized in all
supplies or services which are multi-year requirements;

(2) Allocable portions of the costs of facilities acquired or
established for the conduct of the work, to the extent that it is
impracticable for the Contractor to use the facilities in its commercial work,
and if the costs are not charged to the contract through overhead or otherwise
depreciated;

(3) Costs incurred for the assembly, training, and transportation to and from the
job site of a specialized work force; and

(4) Costs not amortized solely because the cancellation had precluded anticipated
benefits of Contractor or subcontractor learning.

	 	(f)  	The claim shall not include —

(1) Labor, material, or other expenses incurred by the Contractor or
subcontractors for performance of the canceled work;

(2) Any cost already paid to the Contractor;

(3) Anticipated profit or unearned fee on the canceled work; or

(4) For service contracts, the remaining useful commercial life of
facilities. “Useful commercial life” means the commercial utility of the facilities
rather than their physical life with due

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consideration given to such factors as location of facilities, their specialized
nature, and obsolescence.

(g) In no case shall no case shall government cost accounting standards be applicable to this
clause or Contract. In the event that the clause refers to cost accounting standard, the
parties will substitute GAAP.

52.217-9 Option to Extend the Term of the Contract. MAR 2000

	(a)  	The Government may extend the term of this contract by written notice to the Contractor
during the Pre-FOC phase and or the Post-FOC phase.

	(b)  	If the Government exercises this option, the extended contract shall be considered to include
this option clause.

	(c)  	The total duration of this contract, including the exercise of any options under this clause,
shall not exceed 6 years.

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SECTION J - LIST OF ATTACHMENTS

	 	 	 	 
	Attachment	 	Description	 
	1

	 	 NextView Statement of Work (SOW) dated 27 September 2004	 
	 
	2

	 	Government Furnished Property	 
	 
	3

	 	DD254, Contract Security Classification Specification	 
	 
	4

	 	List of Data Delivered with Government Purpose Rights	 
	 
	5

	 	List of Data with Limited Rights	 

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SECTION J - LIST OF ATTACHMENTS

Pre-FOC Agreements # HM1573-04-3-0001/Post-FOC Contract # HM1573-04-C-0014

	 	 	 
	Attachment	 	Description
	 
	 	 
	1

	 	NextView Statement of Work (SOW) dated 12 November 2004
	 
	2

	 	Government Furnished Property
	 
	3

	 	DD254, Contract Security Classification Specification
	 
	4

	 	List of Data Delivered with Government Purpose Rights
	 
	5

	 	List of Data with Limited Rights

 

 

ATTACHMENT 1

STATEMENT OF WORK

 

 

NextView-ORBIMAGE

Volume 8.0_ Revised Version 6

Statement of Work

	 	 	 
	For:

	 	By:
	National Geospatial-Intelligence Agency

	 	ORBIMAGE Inc.
	4600 Sangamore Road

	 	21700 Atlantic Boulevard
	Bethesda, MD 20816-5003

	 	Dulles, VA 20166

12 November 2004

In Response to:

Contract # HM1573-04-3-0001

Restrictions on Use, Publication, or Disclosure of Proprietary

Information

This document contains information proprietary to ORBIMAGE Inc. or to third parties to which
ORBIMAGE Inc. may have a legal obligation to protect such information from unauthorized
disclosure, use or duplication. Any disclosure, use or duplication of this document or of any
of the information contained herein for other than the specific purpose for which it was
disclosed is expressly prohibited, except as ORBIMAGE Inc. may otherwise agree to in writing.

WARNING: The export of technical data without approval from the U.S. Department of State is
prohibited by the Arms Export Control Act, Title 22, U.S.C., Sec. 2751, et seq. and the
International Traffic in Arms

 

 

Regulations (ITAR), 22 C.F.R. Sec 120, et seq. Violations of these laws and regulations carry
severe criminal penalties.

[*****]

[Note: 48 pages have been omitted.]

 

 

ATTACHMENT 2

GOVERNMENT FURNISHED PROPERTY

 

 

	 	 	 
	UNCLASSIFIED

	 	HM1573-04-3-0001

FOR OFFICIAL USE ONLY

WHEN SEPARATED FROM CLASSIFIED ATTACHMENTS

Attachment 2 – Government Furnished Property List

The following items shall be furnished by the Government for the performance of the subject legal
instrument.

[*****]

 

 

ATTACHMENT 3

DD254, CONTRACT SECURITY CLASSIFICATION SPECIFICATION

 

 

[*****]

 

 

ATTACHMENT 4

LIST OF DATA DELIVERED WITH GOVERNMENT PURPOSE RIGHTS

[*****]

 

 

ATTACHMENT 5

LIST OF DATA DELIVERED WITH LIMITED PURPOSE RIGHTS

[*****]<PAGE>

                                                                 CONFORMED COPY

===============================================================================

                           BEVERLY ENTERPRISES, INC.

                                      and

                              The Bank of New York

                                as Rights Agent

                                Rights Agreement

                          Dated as of January 26, 2005

===============================================================================

<PAGE>
                                RIGHTS AGREEMENT

         Rights Agreement, dated as of January 26, 2005, between Beverly
Enterprises, Inc., a Delaware corporation (the "Company"), and The Bank of New
York, a New York banking corporation, as Rights Agent (the "Rights Agent").

                                    RECITALS

         WHEREAS, on January 25, 2005, the Board of Directors of the Company
adopted this Agreement, and has authorized and declared a dividend of one
preferred share purchase right (a "Right") for each Common Share (as defined in
Section 1.6) of the Company outstanding at the close of business on February 7,
2005 (the "Record Date") and has authorized and directed the issuance of one
Right (subject to adjustment as provided herein) with respect to each Common
Share that shall become outstanding between the Record Date and the earliest of
the Distribution Date and the Expiration Date (as such terms are defined in
Sections 3.1 and 7.1), each Right initially representing the right to purchase
one one-thousandth (subject to adjustment) of a share of Series A Junior
Participating Preferred Stock (the "Preferred Shares") of the Company having
the rights, powers and preferences set forth in the form of Certificate of
Designation attached hereto as Exhibit A, upon the terms and subject to the
conditions hereinafter set forth PROVIDED, HOWEVER, that Rights may be issued
with respect to Common Shares that shall become outstanding after the
Distribution Date and prior to the Expiration Date in accordance with Section
22.

         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:

                  1.1.     "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 10% or more of the
Common Shares of the Company then outstanding but shall not include (i) an
Exempt Person (as such term is hereinafter defined) or (ii) if, as of the date
hereof, any Person is the Beneficial Owner of 10% or more of the Common Shares
outstanding (an "Existing Holder"), such Existing Holder shall not be or become
an "Acquiring Person" unless and until such time as such Existing Holder shall
become the Beneficial Owner of one or more additional Common Shares of the
Company (other than pursuant to a dividend or distribution paid or made by the
Company on the outstanding Common Shares in Common Shares or pursuant to a
split or subdivision of the outstanding Common Shares), unless, upon becoming
the Beneficial Owner of such additional Common Shares, such Existing Holder is
not then the Beneficial Owner of 10% or more of the Common Shares then
outstanding. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common Shares by the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 10% or more
of the Common Shares of the Company then outstanding; provided, however, that
if a Person shall become the Beneficial Owner of 10% or more of the Common
Shares of the Company then outstanding solely by

<PAGE>
reason of share purchases by the Company and shall, after such share purchases
by the Company, become the Beneficial Owner of one or more additional Common
Shares of the Company (other than pursuant to a dividend or distribution paid
or made by the Company on the outstanding Common Shares in Common Shares or
pursuant to a split or subdivision of the outstanding Common Shares), then such
Person shall be deemed to be an "Acquiring Person" unless upon becoming the
Beneficial Owner of such additional shares of Common Stock such Person does not
beneficially own 10% or more of the shares of Common Stock then outstanding.
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this Section 1.1,
has become such inadvertently (including, without limitation, because (A) such
Person was unaware that it beneficially owned a percentage of Common Stock that
would otherwise cause such Person to be an "Acquiring Person" or (B) such
Person was aware of the extent of its Beneficial Ownership of Common Stock but
had no actual knowledge of the consequences of such Beneficial Ownership under
this Agreement), and without any intention of changing or influencing control
of the Company, and such Person divests as promptly as practicable a sufficient
number of Common Shares so that such Person would no longer be an Acquiring
Person, as defined pursuant to the foregoing provisions of this Section 1.1,
then such Person shall not be deemed to be or have become an "Acquiring Person"
at any time for any purposes of this Agreement. For all purposes of this
Agreement, any calculation of the number of Common Shares outstanding at any
particular time, including for purposes of determining the particular
percentage of such outstanding Common Shares 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 Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in effect on the date
of this Agreement.

                  1.2.     "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, as in effect on the date of this
Agreement.

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

                           (i)      which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly (as
determined pursuant to Rule 13d-3 of the General Rules and Regulations under
the Exchange Act as in effect on the date of this Agreement);

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

                                       2
<PAGE>
acquire upon the exercise of Rights at any time prior to the time that any
Person becomes an Acquiring Person, (y) securities issuable upon the exercise
of Rights from and after the time that any Person becomes an Acquiring Person
if such Rights were acquired by such Person or any of such Person's Affiliates
or Associates prior to the Distribution Date or pursuant to Section 3.1 or
Section 22 ("Original Rights") or pursuant to Section 11.9 or Section 11.15
with respect to an adjustment to Original Rights or (z) securities which such
Person or any of such Person's Affiliates or Associates may acquire, does or do
acquire or may be deemed to acquire or may be deemed to have the right to
acquire, pursuant to any merger or other acquisition agreement between the
Company and such Person (or one or more of such Person's Affiliates or
Associates) if prior to such Person becoming an Acquiring Person the Board of
Directors of the Company has approved such agreement and determined that such
Person shall not be or be deemed to be the beneficial owner of such securities
within the meaning of this Section 1.3; or (B) the right to vote pursuant to
any agreement, arrangement or understanding (whether or not in writing);
PROVIDED, HOWEVER, that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, any security under this clause (B) if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy
or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations of the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or

                           (iii)    which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof) and
with respect to which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), whether or not in
writing, for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy or consent as described in the proviso to Section 1.3(ii)(B))
or disposing of any securities of the Company;

PROVIDED, HOWEVER, that no Person who is an officer, director or employee of an
Exempt Person shall be deemed, solely by reason of such Person's status or
authority as such, to be the "Beneficial Owner" of, to have "Beneficial
Ownership" of or to "beneficially own" any securities that are "beneficially
owned" (as defined in this Section 1.3), including, without limitation, in a
fiduciary capacity, by an Exempt Person or by any other such officer, director
or employee of an Exempt Person.

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

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

                  1.6.     "Common Shares" when used with reference to the
Company shall mean the shares of common stock, par value $.10 per share, of the
Company. "Common Shares" when used with reference to any Person other than the
Company shall mean the capital stock with the

                                       3
<PAGE>
greatest voting power, or the equity securities or other equity interest having
power to control or direct the management, of such other Person or, if such
Person is a Subsidiary (as such term is hereinafter defined) of another Person,
the Person or Persons which ultimately control such first-mentioned Person, and
which has issued and outstanding such capital stock, equity securities or
equity interest.

                  1.7.     "Exempt Person" shall mean the Company or any
Subsidiary of the Company, in each case including, without limitation, in its
fiduciary capacity, or any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity or trustee holding shares of capital
stock of the Company for or pursuant to the terms of any such plan, or for the
purpose of funding other employee benefits for employees of the Company or any
Subsidiary of the Company.

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

                  1.9.     "Shares Acquisition Date" shall mean the first date
of public announcement (which, for purposes of this definition, shall include,
without limitation, the filing of a report pursuant to Section 13(d) of the
Exchange Act or pursuant to a comparable successor statute) by the Company or
an Acquiring Person that an Acquiring Person has become such or that discloses
information which reveals the existence of an Acquiring Person or such earlier
date as a majority of the Board of Directors shall become aware of the
existence of an Acquiring Person.

                  1.10.    "Subsidiary" of any Person shall mean any
corporation or other entity of which a majority of the voting power of the
voting equity securities or equity interests is owned, of record or
beneficially, directly or indirectly, by such Person.

                  1.11.    A "Trigger Event" shall be deemed to have occurred
upon any Person becoming an Acquiring Person.

                  1.12.    The following terms shall have the meanings defined
for such terms in the Sections set forth below:

<TABLE>
<CAPTION>
                Term                                    Section

                <S>                                     <C>
                Adjustment Shares                       11.1.2
                common stock equivalent                 11.1.3
                Company                                 Recitals
                current per share market price          11.4
                Current Value                           11.1.3
                Distribution Date                       3.1
                equivalent preferred stock              11.2
                Exchange Act                            1.1
                Exchange Consideration                  27
                Existing Holder                         1.1
                Expiration Date                         7.1
                Final Expiration Date                   7.1
</TABLE>

                                       4
<PAGE>
<TABLE>
                <S>                                     <C>
                Nasdaq                                  9
                NYSE                                    11.4.1
                Original Rights                         1.3
                Preferred Shares                        Recitals
                Principal Party                         13.2
                Purchase Price                          4
                Record Date                             Recitals
                Redemption Date                         7.1
                Redemption Price                        23.1
                Right                                   Recitals
                Right Certificate                       3.1
                Rights Agent                            Recitals
                Security                                11.4
                Spread                                  11.1.3
                Substitution Period                     11.1.3
                Summary of Rights                       3.2
                Trading Day                             11.4
</TABLE>

         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 hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable upon ten days' prior written notice to the Rights Agent.
The Rights Agent shall have no duty to supervise, and in no event shall be
liable for the acts or omissions of, any such co-Rights Agent. In the event the
Company appoints one or more co-Rights Agents, the respective duties of the
Rights Agent and any co-Rights Agent shall be as the Company shall determine.
Contemporaneously with such appointment, if any, the Company shall notify the
Rights Agent thereof.

         Section 3. Issuance of Right Certificates.

                  3.1.     Rights Evidenced by Share Certificates. Until the
earlier of (i) the tenth day after the Shares Acquisition Date or (ii) the
tenth Business Day after the date of the commencement of, or first public
announcement of the intent of any Person (other than an Exempt Person) to
commence, a tender or exchange offer the consummation of which would result in
any Person (other than an Exempt Person) becoming the Beneficial Owner of
Common Shares aggregating 10% or more of the then outstanding Common Shares of
the Company (the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights (unless earlier expired, redeemed or
terminated) will be evidenced (subject to the provisions of Section 3.2) by the
certificates for Common Shares registered in the names of the holders thereof
(which certificates for Common Shares shall also be deemed to be Right
Certificates) and not by separate certificates, and (y) the Rights (and the
right to receive certificates therefor) will be transferable only in connection
with the transfer of the underlying Common Shares. The Company shall give the
Rights Agent prompt written notice upon its becoming aware that the
Distribution Date has occurred. The preceding sentence notwithstanding, prior
to the occurrence of a Distribution Date specified as a result of an event
described in clause (ii) (or such later Distribution Date as the Board of
Directors of the Company may select pursuant to this sentence), the Board of
Directors may postpone, one or more times, the Distribution Date which

                                       5
<PAGE>
would occur as a result of an event described in clause (ii) beyond the date
set forth in such clause (ii). Nothing herein shall permit such a postponement
of a Distribution Date after a Person becomes an Acquiring Person. As soon as
practicable after the Distribution Date, the Company will prepare and execute,
the Rights Agent will countersign and the Company (or, if requested, the Rights
Agent, at the Company's expense) will send, by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the close of business on the
Distribution Date (other than any Acquiring Person or any Associate or
Affiliate of an Acquiring Person), at the address of such holder shown on the
records of the Company, one or more certificates for Rights, in substantially
the form of Exhibit B hereto (a "Right Certificate"), evidencing one Right
(subject to adjustment as provided herein) for each Common Share so held. As of
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.

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

                  3.3.     New Certificates After Record Date. Certificates for
Common Shares which become outstanding (whether upon issuance out of authorized
but unissued Common Shares, disposition out of treasury or transfer or exchange
of outstanding Common Shares) after the Record Date but prior to the earliest
of the Distribution Date or the Expiration Date, shall have impressed, printed,
stamped, written or otherwise affixed onto them the following legend:

         This certificate also evidences and entitles the holder hereof to
         certain rights as set forth in an Agreement between Beverly
         Enterprises, Inc. (the "Company") and The Bank of New York, as Rights
         Agent, dated as of January 26, 2005, as the same may be amended from
         time to time (the "Agreement"), the terms of which are hereby
         incorporated herein by reference and a copy of which is on file at the
         principal executive offices of the Company. Under certain
         circumstances, as set forth in the Agreement, such Rights will be
         evidenced by separate certificates and will no longer be evidenced by
         this certificate. The Company will mail to the holder of this
         certificate a copy of the Agreement without charge after receipt of a
         written request therefor. AS DESCRIBED IN THE AGREEMENT, RIGHTS WHICH
         ARE OWNED BY, TRANSFERRED TO OR HAVE BEEN OWNED BY ACQUIRING PERSONS
         OR ASSOCIATES OR AFFILIATES THEREOF (AS DEFINED IN THE AGREEMENT)
         SHALL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.

                                       6
<PAGE>
With respect to such certificates containing the foregoing legend, until the
Distribution Date (or the earlier Expiration Date), the Rights associated with
the Common Shares represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such certificates,
except as otherwise provided herein, shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby. In the event that
the Company purchases or acquires any Common Shares after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Shares
shall be deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Shares which are no longer
outstanding.

         Notwithstanding this Section 3.3, the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.

         Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase shares, certification and assignment to be
printed on the reverse thereof) shall be substantially the same as Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or trading system on which the Rights may from time to time be listed
or quoted, or to conform to usage. The Company shall instruct the Rights Agent
in writing of the Rights which should be so legended in accordance with the
preceding sentence and shall supply the Rights Agent with such legended Right
Certificates. The Right Certificates shall be in a machine printable format and
in a form reasonably satisfactory to the Rights Agent. Subject to the terms and
conditions hereof, the Right Certificates, whenever issued, shall be dated as
of the Record Date, and shall show the date of countersignature by the Rights
Agent, and on their face shall entitle the holders thereof to purchase such
number of one one-thousandths of a Preferred Share as shall be set forth
therein at the price per one one-thousandth of a Preferred Share set forth
therein (the "Purchase Price"), but the number of such one one-thousandths of a
Preferred Share and the Purchase Price shall be subject to adjustment as
provided herein.

         Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board of
Directors, Chief Executive Officer, President or any Executive 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 any Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be countersigned, either manually or by
facsimile signature, by an authorized signatory of the Rights Agent, but it
shall not be necessary for the same signatory to countersign all of the Right
Certificates hereunder. No Right Certificate shall be valid for any purpose
unless so countersigned. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery
by the Company, such Right Certificates, nevertheless, may be countersigned by
the Rights Agent, and issued and delivered by the Company with the same force
and effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Company; and any Right Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such

                                       7
<PAGE>
Right Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any such
person was not such an officer.

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

         Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 11.1.2 and Section 14, at any time after the close
of business on the Distribution Date, and at or prior to the close of business
on the Expiration Date, any Right Certificate or Right Certificates (other than
Right Certificates representing Rights that have become void pursuant to
Section 11.1.2 or that have been exchanged pursuant to Section 27) may be
transferred, split up or combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number
of one one-thousandths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up or combine or exchange any Right
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender, together with any required form of assignment and
certificate duly completed, the Right Certificate or Right Certificates to be
transferred, split up or combined or exchanged at the office of the Rights
Agent designated for such purpose together with such signature guarantees and
other and further documentation as the Rights Agent may reasonably request.
Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Right
Certificate or Right Certificates until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Right Certificate or Right Certificates and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall countersign and
deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment from the holders of Right Certificates of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer,
split up or combination or exchange of such Right Certificates.

         Subject to the provisions of Section 11.1.2 , at any time after the
Distribution Date and prior to the Expiration Date, upon receipt by the Company
and the Rights Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them,
and, at the Company's request, reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated, together
with such signature guarantees and other and further documentation as the
Rights Agent may reasonably request, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.

                                       8
<PAGE>
         Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.

                  7.1.     Exercise of Rights. Subject to Section 11.1.2 and
except as otherwise provided herein, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase and certification on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the aggregate Purchase
Price for the total number of one one-thousandths of a Preferred Share (or
other securities, cash or other assets) as to which the Rights are exercised,
at or prior to the time (the "Expiration Date") that is the earliest of (i) the
close of business on January 26, 2015 (the "Final Expiration Date"), (ii) the
time at which the Rights are redeemed as provided in Section 23 (the
"Redemption Date"), (iii) the closing of any merger or other acquisition
transaction involving the Company pursuant to an agreement of the type
described in Section 13.3 at which time the Rights are deemed terminated, or
(iv) the time at which the Rights are exchanged as provided in Section 27.

                  7.2.     Purchase. The Purchase Price for each one
one-thousandth of a Preferred Share pursuant to the exercise of a Right shall
be initially $50.00, shall be subject to adjustment from time to time as
provided in Sections 11, 13 and 26 and shall be payable in lawful money of the
United States of America in accordance with Section 7.3.

                  7.3.     Payment Procedures. Upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase and certification duly executed, accompanied by payment of the
aggregate Purchase Price for the total number of one one-thousandths of a
Preferred Share to be purchased and an amount equal to any applicable transfer
tax required to be paid by the holder of such Right Certificate in accordance
with Section 9, in cash or by certified or cashier's check or money order
payable to the order of the Company, the Rights Agent shall thereupon promptly
(i)(A) requisition from any transfer agent of the Preferred Shares (or make
available, if the Rights Agent is the transfer agent) certificates for the
number of Preferred Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of Preferred Shares
issuable upon exercise of the Rights hereunder with a depository agent,
requisition from the depositary agent depositary receipts representing
interests in such number of one one-thousandths of a Preferred Share as are to
be purchased (in which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to comply with all
such requests, (ii) when appropriate, requisition from the Company the amount
of cash to be paid in lieu of the issuance of fractional shares in accordance
with Section 14 or otherwise in accordance with Section 11.1.3, (iii) promptly
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 Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, promptly deliver such cash to
or upon the order of the registered holder of such Right Certificate. In the
event that the Company is obligated to issue other securities of the Company,
pay cash and/or distribute other property pursuant to Section 11.1.3, the
Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when appropriate.

                                       9
<PAGE>
                  7.4.     Partial Exercise. In case the registered holder of
any Right Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such Right Certificate or to his duly authorized assigns,
subject to the provisions of Section 14.

                  7.5.     Full Information Concerning Ownership.
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 of Rights upon the occurrence of any purported exercise
as set forth in this Section 7 unless the certificate contained in the form of
election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise shall have been duly completed and signed by the
registered holder thereof and the Company shall have been provided with such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.

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

         Section 9. Reservation and Availability of Capital Stock. The Company
covenants and agrees that from and after the Distribution Date it will cause to
be reserved and kept available out of its authorized and unissued Preferred
Shares (and, following the occurrence of a Trigger Event, out of its authorized
and unissued Common Shares or other securities or out of its shares held in its
treasury) the number of Preferred Shares (and, following the occurrence of a
Trigger Event, Common Shares and/or other securities) that will be sufficient
to permit the exercise in full of all outstanding Rights.

         So long as the Preferred Shares (and, following the occurrence of a
Trigger Event, Common Shares and/or other securities) issuable upon the
exercise of Rights may be listed on any national securities exchange or traded
in the over-the-counter market and quoted on the National Association of
Securities Dealers, Inc. Automated Quotation System ("Nasdaq") (including the
National Market or Small Cap Market), 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 or admitted to trading on such exchange
or quoted on Nasdaq upon official notice of issuance upon such exercise.

         The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Preferred Shares (and, following the
occurrence of a Trigger Event, Common

                                      10
<PAGE>
Shares 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 shares.

         From and after such time as the Rights become exercisable, the Company
shall use its best efforts, if then necessary to permit the issuance of
Preferred Shares upon the exercise of Rights, to register and qualify such
Preferred Shares under the Securities Act and any applicable state securities
or "Blue Sky" laws (to the extent exemptions therefrom are not available),
cause such registration statement and qualifications to become effective as
soon as possible after such filing and keep such registration and
qualifications effective until the earlier of the date as of which the Rights
are no longer exercisable for such securities and the Expiration Date. The
Company may temporarily suspend, for a period of time not to exceed ninety (90)
days, the exercisability of the Rights in order to prepare and file a
registration statement under the Securities Act and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is
no longer in effect in each case with simultaneous written notice to the Rights
Agent. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained and until a
registration statement under the Securities Act (if required) shall have been
declared effective. Unless otherwise advised by the Company, and subject to the
proper execution and delivery thereof, including the certifications thereon,
the Rights Agent may assume that any Right exercised is permitted to be
exercised under applicable law and shall have no liability for acting in
reliance upon such assumption.

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

         Section 10. Preferred Shares Record Date. Each person in whose name
any certificate for Preferred Shares (or Common Shares 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 the Preferred Shares
(or Common Shares and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; PROVIDED, HOWEVER,
that if the date of such surrender and payment is a date upon which the
Preferred Shares (or Common Shares and/or other

                                      11
<PAGE>
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 Shares (or Common Shares 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 Right
Certificate shall not be entitled to any rights of a holder of Preferred Shares
for which the Rights shall be exercisable, including, without limitation, the
right to vote or to receive dividends or other distributions, and shall not be
entitled to receive any notice of any proceedings of the Company, except as
provided herein.

         Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights. The Purchase Price, the number of Preferred Shares or other
securities or property purchasable upon exercise of each Right and the number
of Rights outstanding are subject to adjustment from time to time as provided
in this Section 11.

                  11.1.    Post-Execution Events.

                           11.1.1.  Corporate Dividends, Reclassifications,
Etc. In the event the Company shall at any time after the date of this
Agreement (A) declare and pay a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11.1, the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Shares transfer books of the Company were
open, he would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification;
PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. If an event
occurs which would require an adjustment under both Section 11.1.1 and Section
11.1.2, the adjustment provided for in this Section 11.1.1 shall be in addition
to, and shall be made prior to, the adjustment required pursuant to, Section
11.1.2.

                           11.1.2.  Acquiring Person Events; Triggering Events.
Subject to Sections 23.1 and 27, in the event that a Trigger Event occurs,
then, from and after the first occurrence of such event, each holder of a
Right, except as provided below, shall thereafter have a right to receive, upon
exercise thereof at a price per Right equal to the then current Purchase Price
multiplied by the number of one one-thousandths of a Preferred Share for which
a Right is then exercisable (without giving effect

                                      12
<PAGE>
to this Section 11.1.2), in accordance with the terms of this Agreement and in
lieu of Preferred Shares, such number of Common Shares as shall equal the
result obtained by (x) multiplying the then current Purchase Price by the then
number of one one-thousandths of a Preferred Share for which a Right is then
exercisable (without giving effect to this Section 11.1.2) and (y) dividing
that product by 50% of the current per share market price of the Common Shares
(determined pursuant to Section 11.4) on the first of the date of the
occurrence of, or the date of the first public announcement of, a Trigger Event
(the "Adjustment Shares"); PROVIDED that the Purchase Price and the number of
Adjustment Shares shall thereafter be subject to further adjustment as
appropriate in accordance with Section 11.6. Notwithstanding the foregoing,
upon the occurrence of a Trigger Event, any Rights that are or were acquired or
beneficially owned by (1) any Acquiring Person or any Associate or Affiliate
thereof, (2) a transferee of any Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such, or
(3) a transferee of any Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of this Section 11.1.2, and
subsequent transferees, shall become void without any further action, and any
holder (whether or not such holder is an Acquiring Person or an Associate or
Affiliate of an Acquiring Person) of such Rights shall thereafter have no right
to exercise such Rights under any provision of this Agreement or otherwise.
From and after the Trigger Event, no Right Certificate shall be issued pursuant
to Section 3 or Section 6 that represents Rights that are or have become void
pursuant to the provisions of this paragraph, and any Right Certificate
delivered to the Rights Agent that represents Rights that are or have become
void pursuant to the provisions of this paragraph shall be canceled.

         The Company shall use all reasonable efforts to ensure that the
provisions of this Section 11.1.2 are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a result of
its failure to make any determinations with respect to any Acquiring Person or
its Affiliates, Associates or transferees hereunder.

         From and after the occurrence of an event specified in Section 13.1,
any Rights that theretofore have not been exercised pursuant to this Section
11.1.2 shall thereafter be exercisable only in accordance with Section 13 and
not pursuant to this Section 11.1.2.

                           11.1.3.  Insufficient Shares. The Company may at its
option substitute for a Common Share issuable upon the exercise of Rights in
accordance with the foregoing Section 11.1.2 a number of Preferred Shares or
fraction thereof such that the current per share market price of one Preferred
Share multiplied by such number or fraction is equal to the current per share
market price of one Common Share. In the event that upon the occurrence of a
Trigger Event there shall not be sufficient Common Shares authorized but
unissued, or held by the Company as treasury shares, to permit the exercise in
full of the Rights in accordance with the foregoing Section 11.1.2, the Company
shall take all such action as may be necessary to authorize additional Common
Shares for issuance upon exercise of the Rights, PROVIDED, HOWEVER, that if the
Company determines that it is unable to cause the authorization of a sufficient
number of additional Common Shares, then, in the event the Rights become
exercisable, the Company, with respect to each Right and to the extent
necessary and permitted by applicable law and any agreements or instruments in
effect on the date hereof to which it is a

                                      13
<PAGE>
party, shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value"), over (2)
the Purchase Price (such excess, the "Spread") and (B) with respect to each
Right (other than Rights which have become void pursuant to Section 11.1.2),
make adequate provision to substitute for the Adjustment Shares, upon payment
of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Preferred Shares or other equity securities of the Company
(including, without limitation, shares, or fractions of shares, of preferred
stock which, by virtue of having dividend and liquidation rights substantially
comparable to those of the Common Shares, the Board of Directors of the Company
has deemed in good faith to have substantially the same value as Common Shares)
(each such share of preferred stock or fractions of shares of preferred stock
constituting a "common stock equivalent"), (4) debt securities of the Company,
(5) other assets or (6) any combination of the foregoing having an aggregate
value equal to the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company based upon the advice of a
nationally recognized investment banking firm selected in good faith by the
Board of Directors of the Company; PROVIDED, HOWEVER, that if the Company shall
not have made adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the occurrence of a Trigger Event, then the
Company shall be obligated to deliver, to the extent necessary and permitted by
applicable law and any agreements or instruments in effect on the date hereof
to which it is a party, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, Common Shares (to the extent
available) and then, if necessary, such number or fractions of Preferred Shares
(to the extent available) and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the Spread. If the Board of Directors of
the Company shall determine in good faith that it is unlikely that sufficient
additional Common Shares could be authorized for issuance upon exercise in full
of the Rights, the thirty (30) day period set forth above may be extended and
re-extended to the extent necessary, but not more than ninety (90) days
following the occurrence of a Trigger Event, in order that the Company may seek
stockholder approval for the authorization of such additional shares (such
period as may be extended, the "Substitution Period"). To the extent that the
Company determines that some action need be taken pursuant to the second and/or
third sentences of this Section 11.1.3, the Company (x) shall provide that such
action shall apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended as well as a public announcement at
such time as the suspension is no longer in effect. For purposes of this
Section 11.1.3, the value of a Common Share shall be the current per share
market price (as determined pursuant to Section 11.4) on the date of the
occurrence of a Trigger Event and the value of any "common stock equivalent"
shall be deemed to have the same value as the Common Shares on such date. The
Board of Directors of the Company may, but shall not be required to, establish
procedures to allocate the right to receive Common Shares upon the exercise of
the Rights among holders of Rights pursuant to this Section 11.1.3.

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

                                      14
<PAGE>
purchase Preferred Shares (or securities having the same rights, privileges and
preferences as the Preferred Shares ("equivalent preferred stock")) or
securities convertible into Preferred Shares or equivalent preferred stock at a
price per Preferred Share or per share of equivalent preferred stock (or having
a conversion or exercise price per share, if a security convertible into or
exercisable for Preferred Shares or equivalent preferred stock) less than the
current per share market price of the Preferred Shares (as determined pursuant
to Section 11.4) on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of Preferred Shares and shares of equivalent
preferred stock outstanding on such record date plus the number of Preferred
Shares and shares of equivalent preferred stock which the aggregate offering
price of the total number of Preferred Shares and/or shares of equivalent
preferred stock to be offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at such current per
share market price and the denominator of which shall be the number of
Preferred Shares and shares of equivalent preferred stock outstanding on such
record date plus the number of additional Preferred Shares and/or shares of
equivalent preferred stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible);
PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors 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. Preferred
Shares and shares of equivalent preferred stock owned by or held for the
account of the Company or any Subsidiary of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustments 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.

                  11.3.    Distributions. In case the Company shall fix a
record date for the making of a distribution to all holders of the Preferred
Shares (including any such distribution made in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness, cash, securities or assets (other than a regular
periodic cash dividend at a rate not in excess of 125% of the rate of the last
regular periodic cash dividend theretofore paid or, in case regular periodic
cash dividends have not theretofore been paid, at a rate not in excess of 50%
of the average net income per share of the Company for the four quarters ended
immediately prior to the payment of such dividend, or a dividend payable in
Preferred Shares (which dividend, for purposes of this Agreement, shall be
subject to the provisions of Section 11.1.1(A))) or convertible securities, or
subscription rights or warrants (excluding those referred to in Section 11.2),
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 per share
market price of the Preferred Shares (as determined pursuant to Section 11.4)
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,
securities or evidences of indebtedness so to be distributed or of such
subscription

                                      15
<PAGE>
rights or warrants applicable to one Preferred Share and the denominator of
which shall be such current per share market price of the Preferred Shares (as
determined pursuant to Section 11.4); PROVIDED, HOWEVER, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution
is not so made, the Purchase Price shall again be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.

                  11.4.    Current Per Share Market Value.

                           11.4.1.  General. For the purpose of any computation
hereunder, the "current per share market price" of any security (a "Security"
for the purpose of this Section 11.4.1) on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the thirty
(30) consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date; PROVIDED, HOWEVER, that in the event that the current per
share market price of the Security is determined during any period following
the announcement by the issuer of such Security of (i) a dividend or
distribution on such Security payable in shares of such Security or securities
convertible into such shares or (ii) any subdivision, combination or
reclassification of such Security, and prior to the expiration of thirty (30)
Trading Days after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification, then,
and in each such case, the "current per share market price" shall be
appropriately adjusted to reflect the current market price per share equivalent
of such Security. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange (the
"NYSE") or, if the Security is not listed or admitted to trading on the NYSE,
as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which the Security is listed or admitted to trading or, if the Security is not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by Nasdaq or such other
system then in use, or, if on any such date the Security is not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Security selected by the
Board of Directors of the Company. If on any such date no such market maker is
making a market in the Security, the fair value of the Security on such date as
determined in good faith by the Board of Directors of the Company shall be
used. The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to trading is
open for the transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange, a Business Day. If the
Security is not publicly held or not so listed or traded, or if on any such
date the Security is not so quoted and no such market maker is making a market
in the Security, "current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company or,
if at the time of such determination there is an Acquiring Person, by a
nationally recognized investment banking firm selected by the Board of
Directors, which shall have the duty to make

                                      16
<PAGE>
such determination in a reasonable and objective manner, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.

                           11.4.2.  Preferred Shares. Notwithstanding Section
11.4.1, for the purpose of any computation hereunder, the "current per share
market price" of the Preferred Shares shall be determined in the same manner as
set forth above in Section 11.4.1 (other than the last sentence thereof). If
the current per share market price of the Preferred Shares cannot be determined
in the manner described in Section 11.4.1, the "current per share market price"
of the Preferred Shares shall be conclusively deemed to be an amount equal to
1000 (as such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the Common Shares
occurring after the date of this Agreement) multiplied by the current per share
market price of the Common Shares (as determined pursuant to Section 11.4.1).
If neither the Common Shares nor the Preferred Shares are publicly held or so
listed or traded, or if on any such date neither the Common Shares nor the
Preferred Shares are so quoted and no such market maker is making a market in
either the Common Shares or the Preferred Shares, "current per share market
price" of the Preferred Shares shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, or, if at
the time of such determination there is an Acquiring Person, by a nationally
recognized investment banking firm selected by the Board of Directors of the
Company, which shall have the duty to make such determination in a reasonable
and objective manner, which determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes. For
purposes of this Agreement, the "current per share market price" of one
one-thousandth of a Preferred Share shall be equal to the "current per share
market price" of one Preferred Share divided by 1000.

                  11.5.    Insignificant Changes. No adjustment in the Purchase
Price shall be required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price. Any adjustments which by reason
of this Section 11.5 are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one-thousand
thousandth of a Preferred Share or the nearest one-thousandth of a Common Share
or other share or security, as the case may be.

                  11.6.    Shares Other Than Preferred Shares. If as a result
of an adjustment made pursuant to Section 11.1, the holder of any Right
thereafter exercised shall become entitled to receive any shares of capital
stock of the Company other than Preferred Shares, thereafter the number of such
other shares so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Shares contained in
Sections 11.1, 11.2, 11.3, 11.5, 11.8, 11.9 and 11.13, and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares shall apply
on like terms to any such other shares.

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

                                      17
<PAGE>
                  11.8.    Effect of Adjustments. Unless the Company shall have
exercised its election as provided in Section 11.9, upon each adjustment of the
Purchase Price as a result of the calculations made in Sections 11.2 and 11.3,
each Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of one one-thousandths of a Preferred Share (calculated to the nearest
one-thousand thousandth of a Preferred Share) obtained by (i) multiplying (x)
the number of one one-thousandths of a Preferred 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.

                  11.9.    Adjustment in Number of Rights. The Company may
elect on or after the date of any adjustment of the Purchase Price to adjust
the number of Rights, in substitution for any adjustment in the number of one
one-thousandths of a Preferred Share issuable upon the exercise of a Right.
Each of the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of one one-thousandths of a Preferred Share
for which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one-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 Right Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11.9, the Company may, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14, the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and 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 Right Certificates on the record date
specified in the public announcement.

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

                  11.11.   Par Value Limitations. Before taking any action that
would cause an adjustment reducing the Purchase Price below one one-thousandth
of the then par value, if any, of the Preferred Shares or other shares of
capital stock issuable upon exercise of the Rights, the

                                      18
<PAGE>
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Preferred Shares or other such shares at such
adjusted Purchase Price.

                  11.12.   Deferred Issuance. In any case in which this Section
11 shall require that an adjustment in the Purchase Price be made effective as
of a record date for a specified event, the Company may elect to defer until
the occurrence of such event the issuance to the holder of any Right exercised
after such record date of that number of Preferred Shares and shares of other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the Preferred Shares and shares of other capital stock or other
securities, assets or cash 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 upon the occurrence of the event requiring such adjustment.

                  11.13.   Reduction in Purchase Price. Anything in this
Section 11 to the contrary notwithstanding, the Company shall be entitled to
make such reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any consolidation or
subdivision of the Preferred Shares, issuance wholly for cash of any of the
Preferred Shares at less than the current market price, issuance wholly for
cash of Preferred Shares or securities which by their terms are convertible
into or exchangeable for Preferred Shares, dividends on Preferred Shares
payable in Preferred Shares or issuance of rights, options or warrants referred
to hereinabove in this Section 11, hereafter made by the Company to holders of
its Preferred Shares shall not be taxable to such stockholders.

                  11.14.   Company Not to Diminish Benefits of Rights. The
Company covenants and agrees that after the earlier of the Shares Acquisition
Date or Distribution Date it will not, except as permitted by Section 23,
Section 26 or Section 27, 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 substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.

                  11.15.   Adjustment of Rights Associated with Common Shares.
Notwithstanding anything contained in this Agreement to the contrary, in the
event that the Company shall at any time after the date hereof and prior to the
Distribution Date (i) declare or pay any dividend on the outstanding Common
Shares payable in Common Shares, (ii) effect a subdivision or consolidation of
the outstanding Common Shares (by reclassification or otherwise than by the
payment of dividends payable in Common Shares), or (iii) combine the
outstanding Common Shares into a greater or lesser number of Common Shares,
then in any such case, the number of Rights associated with each Common Share
then outstanding, or issued or delivered thereafter but prior to the
Distribution Date or in accordance with Section 22 shall be proportionately
adjusted so that the number of Rights thereafter associated with each Common
Share following any such event shall equal the result obtained by multiplying
the number of Rights associated with each Common Share immediately prior to
such event by a fraction, the numerator of which shall be the total number of
Common Shares outstanding immediately prior to the occurrence of the event and
the denominator of which shall be the total number of Common Shares outstanding

                                      19
<PAGE>
immediately following the occurrence of such event. The adjustments provided
for in this Section 11.15 shall be made successively whenever such a dividend
is declared or paid or such a subdivision, combination or consolidation is
effected.

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

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

                  13.1.    Certain Transactions. In the event that, from and
after the first occurrence of a Trigger Event, directly or indirectly, (A) the
Company shall consolidate with, or merge with and into, any other Person and
the Company shall not be the continuing or surviving corporation, (B) any
Person shall consolidate with the Company, or merge with and into the Company
and the Company shall be the continuing or surviving corporation of such merger
and, in connection with such merger, all or part of the Common Shares shall be
changed into or exchanged for stock or other securities of the Company or any
other Person or cash or any other property, or (C) the Company shall sell,
exchange, mortgage or otherwise transfer (or one or more of its Subsidiaries
shall sell, exchange, mortgage or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company or one or more wholly-owned
Subsidiaries of the Company in one or more transactions each of which complies
with Section 11.14), then, and in each such case, proper provision shall be
made so that (i) each holder of a Right (other than Rights which have become
void pursuant to Section 11.1.2) shall thereafter have the right to receive,
upon the exercise thereof at a price per Right equal to the then current
Purchase Price multiplied by the number of one one-thousandths of a Preferred
Share for which a Right was exercisable immediately prior to the first
occurrence of a Trigger Event (as subsequently adjusted pursuant to Sections
11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12), in accordance with the terms of this
Agreement and in lieu of Preferred Shares or Common Shares, such number of
validly authorized and issued, fully paid, non-assessable and freely tradable
Common Shares 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 (x) multiplying the then
current Purchase Price by the number of one one-thousandths of a Preferred
Share for which a Right was exercisable immediately prior to the first
occurrence of a Trigger Event (as subsequently adjusted pursuant to Sections
11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12) and (y) dividing that product by 50%
of the then current per share market price of the Common Shares of such
Principal Party (determined pursuant to Section 11.4) on the date of
consummation of such consolidation, merger, sale or transfer; PROVIDED, that
the price per Right so payable and the number of Common Shares of such
Principal Party so receivable upon exercise of a Right shall thereafter be
subject to further adjustment as appropriate in accordance with Section 11.6 to
reflect any events covered thereby occurring in respect of the Common

                                      20
<PAGE>
Shares of such Principal Party after the occurrence of such consolidation,
merger, sale or transfer; (ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party; and (iv) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of its Common Shares
in accordance with Section 9) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its Common Shares thereafter
deliverable upon the exercise of the Rights; PROVIDED that, upon the subsequent
occurrence of any consolidation, merger, sale or transfer of assets or other
extraordinary transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a Right and
payment of the Purchase Price as provided in this Section 13.1, such cash,
shares, rights, warrants and other property which such holder would have been
entitled to receive had such holder, at the time of such transaction, owned the
Common Shares of the Principal Party receivable upon the exercise of a Right
pursuant to this Section 13.1, and such Principal Party shall take such steps
(including, but not limited to, reservation of shares of stock) as may be
necessary to permit the subsequent exercise of the Rights in accordance with the
terms hereof for such cash, shares, rights, warrants and other property. The
Company shall not consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement confirming that the
requirements of this Section 13.1 and Section 13.2 shall promptly be performed
in accordance with their terms and that such consolidation, merger, sale or
transfer of assets shall not result in a default by the Principal Party under
this Agreement as the same shall have been assumed by the Principal Party
pursuant to this Section 13.1 and Section 13.2 and providing that, as soon as
practicable after executing such agreement pursuant to this Section 13, the
Principal Party, at its own expense, shall

                  (1) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Expiration Date and
similarly comply with applicable state securities laws;

                  (2) use its best efforts, if the Common Shares of the
Principal Party shall be listed or admitted to trading on the NYSE or on another
national securities exchange, to list or admit to trading (or continue the
listing of) the Rights and the securities purchasable upon exercise of the
Rights on the NYSE or such securities exchange, or, if the Common Shares of the
Principal Party shall not be listed or admitted to trading on the NYSE or a
national securities exchange, to cause the Rights and the securities receivable
upon exercise of the Rights to be authorized for quotation on Nasdaq or on such
other system then in use;

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

                                       21
<PAGE>

                  (4) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Shares of the Principal Party subject
to purchase upon exercise of outstanding Rights.

         In case the Principal Party has provision in any of its authorized
securities or in its certificate of incorporation or by-laws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue (other than to holders of Rights pursuant
to this Section 13), in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, Common Shares or
common stock equivalents of such Principal Party at less than the then current
market price per share thereof (determined pursuant to Section 11.4) or
securities exercisable for, or convertible into, Common Shares or common stock
equivalents of such Principal Party at less than such then current market price
(other than to holders of Rights pursuant to this Section 13), or (ii) providing
for any special payment, taxes or similar provision in connection with the
issuance of the Common Shares of such Principal Party pursuant to the provision
of Section 13, then, in such event, the Company hereby agrees with each holder
of Rights that it shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.

         The Company covenants and agrees that it shall not, at any time after
the Trigger Event, enter into any transaction of the type described in clauses
(A) through (C) of this Section 13.1 if (i) at the time of or immediately after
such consolidation, merger, sale, transfer or other transaction 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, (ii) prior to, simultaneously with or
immediately after such consolidation, merger, sale, transfer or other
transaction, the stockholders of the Person who constitutes, or would
constitute, the Principal Party for purposes of Section 13.2 shall have received
a distribution of Rights previously owned by such Person or any of its
Affiliates or Associates or (iii) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the Rights. The
provisions of this Section 13 shall similarly apply to successive transactions
of the type described in clauses (A) through (C) of this Section 13.1.

         13.2. Principal Party. "Principal Party" shall mean:

                  (i) in the case of any transaction described in (A) or (B) of
the first sentence of Section 13.1: (i) the Person that is the issuer of the
securities into which the Common Shares are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer the Common
Shares of which have the greatest aggregate market value of shares outstanding,
or (ii) if no securities are so issued, (x) the Person that is the other party
to the merger, if such Person survives said merger, or, if there is more than
one such Person, the Person the Common Shares of which have the greatest
aggregate market value of shares outstanding or (y) if the Person that is the
other party to the merger does not survive the merger, the Person that does
survive the merger (including the Company if it survives) or (z) the Person
resulting from the consolidation; and

                                       22
<PAGE>

                  (ii) in the case of any transaction described in (C) of the
first sentence in Section 13.1, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons is the
issuer of Common Shares having the greatest aggregate market value of shares
outstanding; PROVIDED, HOWEVER, that in any such case described in the foregoing
clause (i) or (ii) of this Section 13.2, if the Common Shares of such Person are
not at such time or have not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, then (1) if such Person
is a direct or indirect Subsidiary of another Person the Common Shares of which
are and have been so registered, the term "Principal Party" shall refer to such
other Person, or (2) if such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Shares of all of which are and have been so
registered, the term "Principal Party" shall refer to whichever of such Persons
is the issuer of Common Shares having the greatest aggregate market value of
shares outstanding, or (3) if such Person is owned, directly or indirectly, by a
joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in clauses (1) and (2) above
shall apply to each of the owners having an interest in the venture as if the
Person owned by the joint venture was a Subsidiary of both or all of such joint
venturers, and the Principal Party in each such case shall bear the obligations
set forth in this Section 13 in the same ratio as its interest in such Person
bears to the total of such interests.

         In no event shall the Rights Agent have any liability in respect of any
such Principal Party transactions, including, without limitation, the propriety
thereof. The Rights Agent may rely and be fully protected in relying upon a
certificate of the Company stating that the provisions of this Section 13.2 have
been fulfilled. Notwithstanding anything in this Agreement to the contrary, the
prior written consent of the Rights Agent must be obtained in connection with
any such supplemental agreement which alters the rights or duties of the Rights
Agent.

         13.3. Approved Acquisitions. Notwithstanding anything contained herein
to the contrary, upon the consummation of any merger or other acquisition
transaction of the type described in clause (A), (B) or (C) of Section 13.1
involving the Company pursuant to a merger or other acquisition agreement
between the Company and any Person (or one or more of such Person's Affiliates
or Associates) which agreement has been approved by the Board of Directors of
the Company prior to any Person becoming an Acquiring Person, this Agreement and
the rights of holders of Rights hereunder shall be terminated in accordance with
Section 7.1.

    Section 14. Fractional Rights and Fractional Shares.

         14.1. Cash in Lieu of Fractional Rights. The Company shall not be
required to issue fractions of Rights or to distribute Right Certificates which
evidence fractional Rights (except prior to the Distribution Date in accordance
with Section 11.15). In lieu of such fractional Rights, there shall be paid to
the registered holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole Right. For the purposes of
this Section 14.1, the current market value of a whole Right shall be the
closing price of the Rights for the

                                       23
<PAGE>

Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price 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 NYSE or, if the Rights are
not listed or admitted to trading on the NYSE, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by Nasdaq or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights, the current market
value of the Rights on such date shall be the fair value of the Rights as
determined in good faith by the Board of Directors of the Company, or, if at the
time of such determination there is an Acquiring Person, by a nationally
recognized investment banking firm selected by the Board of Directors of the
Company, which shall have the duty to make such determination in a reasonable
and objective manner, which determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.

         14.2. Cash in Lieu of Fractional Preferred Shares. The Company shall
not be required to issue fractions of Preferred Shares (other than fractions
which are integral multiples of one one-thousandth of a Preferred Share) upon
exercise or exchange of the Rights or to distribute certificates which evidence
fractional Preferred Shares (other than fractions which are integral multiples
of one one-thousandth of a Preferred Share). Interests in fractions of Preferred
Shares in integral multiples of one one-thousandth of a Preferred Share may, at
the election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it;
PROVIDED that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares that are not
integral multiples of one one-thousandth of a Preferred Share, the Company shall
pay to the registered holders of Right Certificates at the time such Rights are
exercised or exchanged as herein provided an amount in cash equal to the same
fraction of the current per share market price of one Preferred Share (as
determined in accordance with Section 14.1) for the Trading Day immediately
prior to the date of such exercise or exchange.

         14.3. Cash in Lieu of Fractional Common Shares. The Company shall not
be required to issue fractions of Common Shares or to distribute certificates
which evidence fractional Common Shares upon the exercise or exchange of Rights.
In lieu of such fractional Common Shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole Common Share (as
determined in accordance with Section 14.1) for the Trading Day immediately
prior to the date of such exercise or exchange.

                                       24
<PAGE>

         14.4. Waiver of Right to Receive Fractional Rights or Shares. 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 or exchange
of a Right, except as permitted by this Section 14.

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

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

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

                  (b) as of and after the Distribution Date, the Right
         Certificates are transferable only on the registry books of the Rights
         Agent if surrendered at the office of the Rights Agent designated for
         such purpose, duly endorsed or accompanied by a proper instrument of
         transfer with all required certifications completed, together with a
         signature guarantee and such other and further documentation as the
         Rights Agent may reasonably request;

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

                  (d) notwithstanding anything in this Agreement to the
         contrary, neither the Company nor the Rights Agent shall have any
         liability to any holder of a Right or other Person as a result of its
         inability to perform any of its obligations under this Agreement by
         reason of any preliminary or permanent injunction or other order,
         decree or ruling issued by a court of competent jurisdiction or by a
         governmental, regulatory or

                                       25
<PAGE>

         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.

         Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.

         Section 18. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent such compensation as shall be agreed to in writing between the
Company and the Rights Agent for all services rendered by it hereunder in
accordance with a fee schedule to be mutually agreed upon and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel fees
and other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without gross negligence or willful
misconduct on the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration of this
Agreement, including, without limitation, the costs and expenses of defending
against any claim (whether asserted by the Company, a holder of Rights or any
other Person) of liability in the premises, including reasonable attorneys fees
and expenses, arising therefrom, directly or indirectly.

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

         Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation or limited liability company into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation or limited liability company resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent shall be a
party, or any corporation or limited liability company succeeding to all or
substantially all of the corporate trust or stock transfer business of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, PROVIDED that such
corporation or limited liability company would be eligible

                                       26
<PAGE>

for appointment as a successor Rights Agent under the provisions of Section 21.
In case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.

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

     Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations expressly imposed by this Agreement, and no implied duties or
obligations shall be read into this Agreement against the Rights Agent, upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound. In no event
shall the Rights Agent be responsible or liable for any failure or delay in the
performance of its obligations under this Agreement arising out of or caused by,
directly or indirectly, forces beyond its reasonable control, including without
limitation strikes, work stoppages, accidents, acts of war or terrorism, civil
or military disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer
(software or hardware) services.

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

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

                                       27
<PAGE>

         20.3. Standard of Care. The Rights Agent shall be liable hereunder only
for its own gross negligence or willful misconduct; provided, however, that the
Rights Agent shall not be liable for any indirect, special, consequential or
punitive damages.

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

         20.5. No Responsibility as to Certain Matters. The Rights Agent shall
not be under any responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Agreement
or in any Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 11.1.2) or any adjustment required under the provisions of Sections 3,
11, 13, 23 or 27 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
Right Certificates after actual notice of any such change or adjustment); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any Preferred Shares or other
securities to be issued pursuant to this Agreement or any Right Certificate or
as to whether any Preferred Shares will, when so issued, be validly authorized
and issued, fully paid and nonassessable.

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

     The Company agrees to give the Rights Agent prompt written notice upon its
learning of any event or ownership which would prohibit the exercise or transfer
of the Right Certificates.

         20.6. Further Assurance by Company. 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.

         20.7. Authorized Company Officers. The Rights Agent is hereby
authorized and directed to accept instructions with respect to the performance
of its duties hereunder from any

                                       28
<PAGE>

one of the Chairman of the Board of Directors, the Chief Executive Officer, the
President, the Chief Financial Officer, any Executive Vice President, the
Treasurer, the Secretary or any Assistant Treasurer or Assistant Secretary of
the Company, and to apply to such officers for advice or instructions in
connection with its duties under this Agreement, and it shall not be liable for
any action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
these instructions. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent with respect to
its duties or obligations under this Agreement and the date on and/or after
which such action shall be taken or such omission shall be effective. The Rights
Agent shall not be liable to the Company for any action taken by, or omission
of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified therein (which date shall not be less
than three (3) business days after the date any such officer actually receives
such application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking of any such action (or the effective date
in the case of omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken
or omitted.

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

         20.9. Reliance on Attorneys and Agents. 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, omission, default,
neglect or misconduct of any such attorneys or agents or for any loss to the
Company resulting from any such act, omission, default, neglect or misconduct,
PROVIDED that reasonable care was exercised in the selection.

         20.10. Incomplete Certificate. If, with respect to any Rights
Certificate surrendered to the Rights Agent for exercise or transfer, the
certificate contained in the form of assignment or the form of election to
purchase set forth on the reverse thereof, as the case may be, has not been
completed to certify the holder is not an Acquiring Person (or an Affiliate or
Associate thereof), the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with the
Company.

         20.11. Rights Holders List. At any time and from time to time after the
Distribution Date, upon the request of the Company, the Rights Agent shall
promptly deliver to the Company a list, as of the most recent practicable date
(or as of such earlier date as may be specified by the Company), of the holders
of record of Rights.

     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

                                       29
<PAGE>

in writing mailed to the Company by overnight mail or by registered or certified
mail. Following the Distribution Date, the Company shall promptly notify the
holders of the Right Certificates by first-class mail of any such resignation.
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
Shares and/or Preferred Shares, as applicable, by registered or certified mail,
and to the holders of the Right Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the resigning, removed, or incapacitated Rights Agent shall remit to the
Company, or to any successor Rights Agent designated by the Company, all books,
records, funds, certificates or other documents or instruments of any kind then
in its possession which were acquired by such resigning, removed or
incapacitated Rights Agent in connection with its services as Rights Agent
hereunder, and shall thereafter be discharged from all duties and obligations
hereunder. Following notice of such removal, resignation or incapacity, the
Company shall appoint a successor to such Rights Agent. If the Company shall
fail to make such appointment within a period of thirty (30) days after giving
notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the Rights Agent or the
registered holder of any Right Certificate may apply, at the expense of the
Company, to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing business under the laws
of the United States or of the State of New York (or any other state of the
United States so long as such corporation is authorized to do business as a
banking institution in the State of New York) in good standing, having an office
in the State of New York, which is authorized under such laws to exercise stock
transfer or corporate trust powers and is subject to supervision or examination
by Federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $10 million. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall, upon
payment of all amounts owed it hereunder, deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment the Company
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Shares and/or Preferred Shares, as applicable, and,
following the Distribution Date, mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

     Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of Common Shares following the Distribution Date and prior to the
Expiration Date, the

                                       30
<PAGE>

Company shall, with respect to Common Shares so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, granted or
awarded, or upon exercise, conversion or exchange of securities hereinafter
issued by the Company, in each case existing prior to the Distribution Date,
issue Right Certificates representing the appropriate number of Rights in
connection with such issuance or sale; PROVIDED, HOWEVER, that (i) no such Right
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
Right Certificate would be issued and (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.

     Section 23. Redemption.

         23.1. Right to Redeem. The Board of Directors of the Company may, at
its option, at any time prior to a Trigger Event, redeem all but not less than
all of the then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend,
recapitalization or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price"), and
the Company may, at its option, pay the Redemption Price in Common Shares (based
on the "current per share market price," determined pursuant to Section 11.4, of
the Common Shares at the time of redemption), cash or any other form of
consideration deemed appropriate by the Board of Directors. The redemption of
the Rights by the Board of Directors may be made effective at such time, on such
basis and subject to such conditions as the Board of Directors in its sole
discretion may establish.

         23.2. Redemption Procedures. Immediately upon the action of the Board
of Directors of the Company ordering the redemption of the Rights (or at such
later time as the Board of Directors may establish for the effectiveness of such
redemption), and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price for each Right so held. The
Company shall promptly give public notice of such redemption; PROVIDED, HOWEVER,
that the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. The Company shall promptly give notice of such
redemption to the Rights Agent and shall, or shall cause the Rights Agent to
give, notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for the Common Shares. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption shall state
the method by which the payment of the Redemption Price will be made. Neither
the Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 27, and other than in
connection with the purchase, acquisition or redemption of Common Shares prior
to the Distribution Date.

     Section 24. Notice of Certain Events. In case the Company shall propose at
any time after the earlier of the Shares Acquisition Date and the Distribution
Date (a) to pay any dividend payable in stock of any class to the holders of
Preferred Shares or to make any other distribution

                                       31
<PAGE>

to the holders of Preferred Shares (other than a regular periodic cash dividend
at a rate not in excess of 125% of the rate of the last regular periodic cash
dividend theretofore paid or, in case regular periodic cash dividends have not
theretofore been paid, at a rate not in excess of 50% of the average net income
per share of the Company for the four quarters ended immediately prior to the
payment of such dividends, or a stock dividend on, or a subdivision, combination
or reclassification of the Common Shares), or (b) to offer to the holders of
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, or (c) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), or (d) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person (other than pursuant to
a merger or other acquisition agreement of the type described in Section
1.3(ii)(A)(z)), or (e) to effect the liquidation, dissolution or winding up of
the Company, or (f) to declare or pay any dividend on the Common Shares payable
in Common Shares or to effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by payment of dividends in
Common Shares), then, in each such case, the Company shall give to the Rights
Agent and to each holder of a Right Certificate, in accordance with Section 25,
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 Preferred Shares and/or Common
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (a) or (b) above at least ten (10) days
prior to the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at least ten
(10) days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Preferred Shares and/or Common
Shares, whichever shall be the earlier.

     In case any event set forth in Section 11.1.2 or Section 13 shall occur,
then, in any such case, (i) the Company shall as soon as practicable thereafter
give to the Rights Agent and to each holder of a Right Certificate, in
accordance with Section 25, a notice of the occurrence of such event, which
notice shall describe the event and the consequences of the event to holders of
Rights under Section 11.1.2 and Section 13, and (ii) all references in this
Section 24 to Preferred Shares shall be deemed thereafter to refer to Common
Shares and/or, if appropriate, other securities.

     Notwithstanding anything in this Agreement to the contrary, prior to the
Distribution Date a filing by the Company with the Securities and Exchange
Commission shall constitute sufficient notice to the holders of securities of
the Company, including the Rights, for purposes of this Agreement and no other
notice need be given.

     Section 25. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:

                                       32
<PAGE>

                           Beverly Enterprises, Inc.
                           One Thousand Beverly Way
                           Fort Smith, Arkansas  72919
                           Attention:  Secretary

Subject to the provisions of Section 21 and Section 24, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:

                           The Bank of New York
                           101 Barclay Street
                           Floor 11 East
                           New York, New York  10286
                           Attention:  Stock Transfer Administrator

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

         Section 26. Supplements and Amendments. For so long as the Rights are
then redeemable, the Company may in its sole and absolute discretion, and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement in any respect without the approval of any holders of Rights
or Common Shares. From and after the time that the Rights are no longer
redeemable, the Company may, and the Rights Agent shall, if the Company so
directs, from time to time supplement or amend this Agreement without the
approval of any holders of Rights (i) to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein or (ii) to make any other changes or provisions
in regard to matters or questions arising hereunder which the Company may deem
necessary or desirable, including but not limited to extending the Final
Expiration Date; PROVIDED, HOWEVER, that no such supplement or amendment shall
adversely affect the interests of the holders of Rights as such (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no
such supplement or amendment may cause the Rights again to become redeemable or
cause this Agreement again to become amendable other than in accordance with
this sentence; PROVIDED FURTHER, that the right of the Board of Directors to
extend the Distribution Date shall not require any amendment or supplement
hereunder. 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 26, the Rights Agent shall execute such
supplement or amendment. Without limiting the foregoing, at any time prior to
such time as any Person becomes an Acquiring Person, the Company and the Rights
Agent may amend this Agreement to lower the thresholds set forth in Sections 1.1
and 3.1 to not less than the greater of (i) any percentage greater than the
largest percentage of the outstanding Common Shares then known by the Company to
be beneficially owned by any Person (other than an Exempt Person) and (ii) 10%.
Notwithstanding any other provision hereof, the Rights Agent's consent must be
obtained

                                       33
<PAGE>

regarding any amendment or supplement pursuant to this Section which alters the
Rights Agent's rights or duties.

     Section 27. Exchange.

         27.1. Exchange of Common Shares for Rights. The Board of Directors of
the Company may, at its option, at any time after the occurrence of a Trigger
Event, exchange Common Shares for all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11.1.2) by exchanging at an exchange ratio
of that number of Common Shares having an aggregate value equal to the Spread
(with such value being based on the current per share market price (as
determined pursuant to Section 11.4) on the date of the occurrence of a Trigger
Event) per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such amount per
Right being hereinafter referred to as the "Exchange Consideration").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Acquiring Person shall have become
the Beneficial Owner of 50% or more of the Common Shares then outstanding. From
and after the occurrence of an event specified in Section 13.1, any Rights that
theretofore have not been exchanged pursuant to this Section 27.1 shall
thereafter be exercisable only in accordance with Section 13 and may not be
exchanged pursuant to this Section 27.1. The exchange of the Rights by the Board
of Directors may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.

         27.2. Exchange Procedures. Immediately upon the action of the Board of
Directors of the Company ordering the exchange for any Rights pursuant to
Section 27.1 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive the Exchange Consideration. The Company shall
promptly give public notice of any such exchange; PROVIDED, HOWEVER, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange shall state the method by which the
exchange of the Common Shares 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
the Rights that have become void pursuant to the provisions of Section 11.1.2)
held by each holder of Rights.

         27.3. Insufficient Shares. The Company may at its option substitute,
and, in the event that there shall not be sufficient Common Shares issued but
not outstanding or authorized but unissued to permit an exchange of Rights for
Common Shares as contemplated in accordance with this Section 27, the Company
shall substitute to the extent of such insufficiency, for each Common Share that
would otherwise be issuable upon exchange of a Right, a number of Preferred
Shares or fraction thereof (or equivalent preferred stock, as such term is
defined in Section 11.2) such that the current per share market price
(determined pursuant to Section 11.4) of one Preferred Share (or equivalent
preferred share) multiplied by such number or fraction is

                                       34
<PAGE>

equal to the current per share market price of one Common Share (determined
pursuant to Section 11.4) as of the date of such exchange.

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

     Section 30. Determination and Actions by the Board of Directors. The Board
of Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise the rights and powers specifically
granted to the Board of Directors of the Company 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, without limitation, a determination
to redeem or not redeem the Rights or amend this Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) that are done or
made by the Board of Directors of the Company in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights, as such, and all other parties, and (y) not subject the Board of
Directors to any liability to the holders of the Rights.

     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.

     Section 32. Governing Law. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be made and performed
entirely within such State, provided, however, that the rights and obligations
of the Rights Agent shall be governed by and construed in accordance with the
laws of the State of New York. The parties hereto hereby waive the right to a
jury trial in any action arising out of this Agreement. Any dispute arising out
of this Agreement shall be litigated in the borough of Manhattan, New York City,
New York, and the parties hereby submit to the jurisdiction of such courts and
acknowledge that such courts are a convenient forum.

                                       35
<PAGE>

     Section 33. Counterparts. This Agreement may be executed in any number of
counterparts and delivered via facsimile transmission, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

     Section 34. Descriptive Heading. 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.

                            [Signature Page Follows]

                                       36
<PAGE>

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

                                 BEVERLY ENTERPRISES, INC.

                                 By          /s/ William R. Floyd
                                      -----------------------------------------
                                      Name:  William R. Floyd
                                      Title: Chairman of the Board and
                                             Chief Executive Officer

                                 THE BANK OF NEW YORK, AS RIGHTS AGENT

                                 By        /s/ Robert J. Rinaudo
                                      ------------------------------------------
                                      Name:    Robert J. Rinaudo
                                      Title:   Assistant Vice President

<PAGE>

                                                                       EXHIBIT A

                                     FORM OF

                           CERTIFICATE OF DESIGNATIONS

                                       of

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       of

                            BEVERLY ENTERPRISES, INC.

                         (Pursuant to Section 151 of the
                        Delaware General Corporation Law)

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

         Beverly Enterprises, Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on January 25, 2005.

         RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Certificate
of Incorporation of this Corporation, the Board of Directors hereby creates a
series of Preferred Stock, par value $1.00 per share (the "Preferred Stock"), of
the Corporation and hereby states the designation and number of shares, and
fixes the relative rights, powers and preferences, and qualifications,
limitations and restrictions thereof as follows:

         Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 300,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; PROVIDED that no decrease shall reduce the
number of shares of Series A Preferred Stock to a number less than the number of
shares then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible into Series A
Preferred Stock.

         Section 2. Dividends and Distributions.

                           (A) Subject to the prior and superior rights of the
         holders of any shares of any class or series of stock of this
         Corporation ranking prior and superior to the Series A Preferred Stock
         with respect to dividends, the holders of shares of Series A Preferred
         Stock, in preference to the holders of Common Stock, par value $.10 per
         share (the

                                      A-1
<PAGE>

         "Common Stock"), of the Corporation, and of any other stock ranking
         junior to the Series A Preferred Stock, shall be entitled to receive,
         when, as and if declared by the Board of Directors out of funds legally
         available for the purpose, quarterly dividends payable in cash on the
         first day of March, June, September and December in each year (each
         such date being referred to herein as a "Quarterly Dividend Payment
         Date"), commencing on the first Quarterly Dividend Payment Date after
         the first issuance of a share or fraction of a share of Series A
         Preferred Stock, in an amount per share (rounded to the nearest cent)
         equal to the greater of (a) $10.00 or (b) subject to the provision for
         adjustment hereinafter set forth, 1000 times the aggregate per share
         amount of all cash dividends, and 1000 times the aggregate per share
         amount (payable in kind) of all non-cash dividends or other
         distributions, other than a dividend payable in shares of Common Stock
         or a subdivision of the outstanding shares of Common Stock (by
         reclassification or otherwise), declared on the Common Stock since the
         immediately preceding Quarterly Dividend Payment Date or, with respect
         to the first Quarterly Dividend Payment Date, since the first issuance
         of any share or fraction of a share of Series A Preferred Stock. In the
         event the Corporation shall at any time declare or pay any dividend on
         the Common Stock payable in shares of Common Stock, or effect a
         subdivision, combination or consolidation of the outstanding shares of
         Common Stock (by reclassification or otherwise than by payment of a
         dividend in shares of Common Stock) into a greater or lesser number of
         shares of Common Stock, then in each such case the amount to which
         holders of shares of Series A Preferred Stock were entitled immediately
         prior to such event under clause (b) of the preceding sentence shall be
         adjusted by multiplying such amount by a fraction, the numerator of
         which is the number of shares of Common Stock outstanding immediately
         after such event and the denominator of which is the number of shares
         of Common Stock that were outstanding immediately prior to such event.

                           (B) The Corporation shall declare a dividend or
         distribution on the Series A Preferred Stock as provided in paragraph
         (A) of this Section 2 immediately after it 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 declared on the Common Stock during the
         period between any Quarterly Dividend Payment Date and the next
         subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per
         share on the Series A Preferred Stock shall nevertheless be payable on
         such subsequent Quarterly Dividend Payment Date.

                           (C) Dividends shall begin to accrue and be cumulative
         on outstanding shares of Series A Preferred Stock from the Quarterly
         Dividend Payment Date next preceding the date of issue of such shares,
         unless the date of issue of such shares is prior to the record date for
         the first Quarterly Dividend Payment Date, in which case dividends on
         such shares shall begin to accrue from the date of issue of such
         shares, or unless the date of issue is a Quarterly Dividend Payment
         Date or is a date after the record date for the determination of
         holders of shares of Series A Preferred Stock entitled to receive a
         quarterly dividend and before such Quarterly Dividend Payment Date, in
         either of which events such dividends shall begin to accrue and be
         cumulative from such Quarterly Dividend Payment Date. Accrued but
         unpaid dividends shall not bear interest. Dividends paid on the shares
         of Series A Preferred Stock in an amount less than the total amount of
         such dividends at the time accrued and payable on such shares shall be

                                      A-2
<PAGE>

         allocated pro rata on a share-by-share basis among all such shares at
         the time outstanding. The Board of Directors may fix a record date for
         the determination of holders of shares of Series A Preferred Stock
         entitled to receive payment of a dividend or distribution declared
         thereon, which record date shall be not more than sixty (60) days prior
         to the date fixed for the payment thereof.

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

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

                           (B) Except as otherwise provided herein, in any other
         Certificate of Designations creating a series of Preferred Stock or any
         similar stock, or by law, the holders of shares of Series A Preferred
         Stock and the holders of shares of Common Stock and any other capital
         stock of the Corporation having general voting rights shall vote
         together as one class on all matters submitted to a vote of
         stockholders of the Corporation.

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

         Section 4. Certain Restrictions.

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

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

                                      A-3
<PAGE>

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

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

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

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

         Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.

         Section 6. Liquidation, Dissolution or Winding Up.

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

                                      A-4
<PAGE>

        Common Stock, or (2) to the holders of shares of stock ranking on a
        parity (either as to dividends or upon liquidation, dissolution or
        winding up) with the Series A Preferred Stock, except distributions
        made ratably on the Series A Preferred Stock and all such parity stock
        in proportion to the total amounts to which the holders of all such
        shares are entitled upon such liquidation, dissolution or winding up.
        In the event the Corporation shall at any time declare or pay any
        dividend on the Common Stock payable in shares of Common Stock, or
        effect a subdivision, combination or consolidation of the outstanding
        shares of Common Stock (by reclassification or otherwise than by
        payment of a dividend in shares of Common Stock) into a greater or
        lesser number of shares of Common Stock, then in each such case the
        aggregate amount to which holders of shares of Series A Preferred Stock
        were entitled immediately prior to such event under the proviso in
        clause (1) of 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 are
        outstanding immediately prior to such event.

                           (B) In the event, however, that there are not
         sufficient assets available to permit payment in full of the Series A
         Liquidation Preference and the liquidation preferences of all other
         classes and series of stock of the Corporation, if any, that rank on a
         parity with the Series A Preferred Stock in respect thereof, then the
         assets available for such distribution shall be distributed ratably to
         the holders of the Series A Preferred Stock and the holders of such
         parity shares in proportion to their respective liquidation
         preferences.

                           (C) Neither the merger or consolidation of the
         Corporation into or with another corporation nor the merger or
         consolidation of any other corporation into or with the Corporation
         shall be deemed to be a liquidation, dissolution or winding up of the
         Corporation within the meaning of this Section 6.

         Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

                                      A-5
<PAGE>

         Section 8. No Redemption. The shares of Series A Preferred Stock shall
not be redeemable by the Company.

         Section 9. Rank. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up, junior to all series of any other class of the
Corporation's Preferred Stock, except to the extent that any such other series
specifically provides that it shall rank on a parity with or junior to the
Series A Preferred Stock.

         Section 10. Amendment. At any time any shares of Series A Preferred
Stock are outstanding, the Certificate of Incorporation of the Corporation shall
not be amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting
separately as a single class.

         Section 11. Fractional Shares. Series A Preferred Stock may be issued
in fractions of a share that 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 Preferred Stock.

                                      A-6
<PAGE>

         IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its Chairman of the Board and Chief Executive
Officer this 26th day of January, 2005.

                                      ------------------------------
                                      William R. Floyd,
                                      Chairman of the Board and
                                      Chief Executive Officer

                                      A-7
<PAGE>

                                                                       EXHIBIT B

                           [Form of Right Certificate]

Certificate No. R-                                                        Rights
                                                                  -------

         NOT EXERCISABLE AFTER JANUARY 26, 2015 OR EARLIER IF NOTICE OF
         REDEMPTION OR EXCHANGE IS GIVEN OR IF THE COMPANY IS MERGED OR ACQUIRED
         PURSUANT TO AN AGREEMENT OF THE TYPE DESCRIBED IN SECTION 1.3(ii)(A)(z)
         OF THE AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER
         RIGHT, AND TO EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT. UNDER
         CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 11.1.2 OF THE AGREEMENT),
         RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO AN ACQUIRING PERSON (AS
         DEFINED IN THE AGREEMENT), OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS WILL
         BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.

                                Right Certificate

                            BEVERLY ENTERPRISES, INC.

         This certifies that           , or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of January 26, 2005, as the same may be amended from time to
time (the "Agreement"), between Beverly Enterprises, Inc., a Delaware
corporation (the "Company"), and The Bank of New York, a New York banking
corporation, as Rights Agent (the "Rights Agent"), to purchase from the Company
at any time after the Distribution Date and prior to 5:00 P.M. (New York City
time) on January 26, 2015, at the offices of the Rights Agent, or its successors
as Rights Agent, designated for such purpose, one one-thousandth of a fully
paid, nonassessable share of Series A Junior Participating Preferred Stock, par
value $1.00 per share (the "Preferred Shares") of the Company, at a purchase
price of $50.00 per one one-thousandth of a Preferred Share, subject to
adjustment (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and certification duly
executed, together with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request. The number of Rights
evidenced by this Right Certificate (and the number of one one-thousandths of a
Preferred Share which may be purchased upon exercise thereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
January 26, 2005 based on the Preferred Shares as constituted at such date.
Capitalized terms used in this Right Certificate without definition shall have
the meanings ascribed to them in the Agreement. As provided in the Agreement,
the Purchase Price and the number of Preferred Shares which may be purchased
upon the exercise of the Rights evidenced by this Right Certificate are subject
to modification and adjustment upon the happening of certain events.

         This Right Certificate is subject to all of the terms, provisions and
conditions of the Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference

                                      B-1
<PAGE>

and made a part hereof and to which Agreement reference is hereby made for a
full description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Right Certificates. Copies of the Agreement are on file at the principal offices
of the Company and the Rights Agent.

         This Right Certificate, with or without other Right Certificates, upon
surrender at the offices of the Rights Agent designated for such purpose,
together with a signature guarantee and such other and further documentation as
the Rights Agent may reasonably request, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of one one-thousandths
of a Preferred Share as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.

         Subject to the provisions of the Agreement, the Board of Directors may,
at its option, (i) redeem the Rights evidenced by this Right Certificate at a
redemption price of $.01 per Right or (ii) exchange Common Shares for the Rights
evidenced by this Certificate, in whole or in part.

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

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

         If any term, provision, covenant or restriction of the 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 the Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.

         This Right Certificate shall not be valid or binding for any purpose
until it shall have been countersigned by an authorized signatory of the Rights
Agent.

                                      B-2
<PAGE>

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

Attest:                                    BEVERLY ENTERPRISES, INC.

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

Countersigned:

THE BANK OF NEW YORK, as Rights Agent

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

                                      B-3
<PAGE>

                   [Form of Reverse Side of Right Certificate]
                               FORM OF ASSIGNMENT

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

FOR VALUE RECEIVED
                   -------------------------------------------------------------
hereby sells, assigns and transfers unto
                                         ---------------------------------------

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

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

                         (Please print name and address
                                 of transferee)

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

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

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

Signature Guaranteed:

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

         Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934,
as amended.

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

The undersigned hereby certifies that:

         (1) the Rights evidenced by this Right Certificate are not beneficially
owned by and are not being assigned to an Acquiring Person or an Affiliate or an
Associate thereof; and

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

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

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

Signature Guaranteed:

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

                                      B-4
<PAGE>

                          FORM OF ELECTION TO PURCHASE

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

To: Beverly Enterprises, Inc.

         The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Right Certificate to purchase the
Preferred Shares issuable upon the exercise of such Rights (or such other
securities or property 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:

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

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

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

Please insert social security
or other identifying number

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

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

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

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

Signature Guaranteed:

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

         Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934,
as amended.

                                      B-5
<PAGE>

The undersigned hereby certifies that:

         (1) the Rights evidenced by this Right Certificate are not beneficially
owned by and are not being assigned to an Acquiring Person or an Affiliate or an
Associate thereof; and

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

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

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

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

                                     NOTICE

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

         In the event the certification set forth above in the Form of
Assignment or Form of Election to Purchase is not completed, the Company will
deem the beneficial owner of the Rights evidenced by this Right Certificate to
be an Acquiring Person or an Affiliate or Associate hereof and such Assignment
or Election to Purchase will not be honored.

                                      B-6
<PAGE>

                                                                       EXHIBIT C

             As described in the Rights Agreement, Rights which are
         held by or have been held by an Acquiring Person or Associates
     or Affiliates thereof (as defined in the Rights Agreement) and certain
                    transferees thereof shall become null and
                    void and will no longer be transferable.

                          SUMMARY OF RIGHTS TO PURCHASE
                                PREFERRED SHARES

         On January 25, 2005 the Board of Directors of Beverly Enterprises, Inc.
(the "Company") declared a dividend of one preferred share purchase right (a
"Right") for each share of common stock, $.10 par value (the "Common Shares"),
of the Company outstanding at the close of business on February 7, 2005 (the
"Record Date"). As long as the Rights are attached to the Common Shares, the
Company will issue one Right (subject to adjustment) with each new Common Share
so that all such shares will have attached Rights. When exercisable, each Right
will entitle the registered holder to purchase from the Company one
one-thousandth of a share of Series A Junior Participating Preferred Stock, par
value $1.00 per share (the "Preferred Shares"), of the Company at a price of
$50.00 per one one-thousandth of a Preferred Share, subject to adjustment (the
"Purchase Price"). The description and terms of the Rights are set forth in a
Rights Agreement, dated as of January 26, 2005, as the same may be amended from
time to time (the "Agreement"), between the Company and The Bank of New York, as
Rights Agent (the "Rights Agent").

         Until the earlier to occur of (i) ten (10) days following a public
announcement that a person or group of affiliated or associated persons has
acquired, or obtained the right to acquire, beneficial ownership of 10% or more
of the Common Shares (an "Acquiring Person") or (ii) ten (10) business days (or
such later date as may be determined by action of the Board of Directors prior
to such time as any person or group of affiliated persons becomes an Acquiring
Person) following the commencement or announcement of an intention to make a
tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 10% or more of the Common Shares
(the earlier of (i) and (ii) being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate together
with a copy of this Summary of Rights. In the event that the Company's
outstanding 2.75% Convertible Subordinated Notes due 2033 become convertible
into Common Shares, the Common Shares underlying any Convertible Subordinated
Notes beneficially owned by any person or group of affiliated or associated
persons will be taken into account for purposes of determining whether that
person or group of affiliated or associated persons has become an Acquiring
Person.

         The Agreement provides that until the Distribution Date (or earlier
redemption exchange, termination, or expiration of the Rights), the Rights will
be transferred with and only with the Common Shares. Until the Distribution Date
(or earlier redemption or expiration of the Rights), new Common Share
certificates issued after the close of business on the Record Date upon transfer
or new issuance of the Common Shares will contain a notation incorporating the
Agreement by reference. Until the Distribution Date (or earlier redemption,
exchange, termination or expiration of the Rights), the surrender for transfer
of any certificates for

                                      C-1
<PAGE>

Common Shares, with or without such notation or a copy of this Summary of
Rights, will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.

         The Rights are not exercisable until the Distribution Date. The Rights
will expire on January 26, 2015, subject to the Company's right to extend such
date (the "Final Expiration Date"), unless earlier redeemed or exchanged by the
Company or terminated.

         Each Preferred Share purchasable upon exercise of the Rights will be
entitled, when, as and if declared, to a minimum preferential quarterly dividend
payment of $10.00 per share but will be entitled to an aggregate dividend of
1000 times the dividend, if any, declared per Common Share. In the event of
liquidation, dissolution or winding up of the Company, the holders of the
Preferred Shares will be entitled to a minimum preferential liquidation payment
of $1000 per share (plus any accrued but unpaid dividends) but will be entitled
to an aggregate payment of 1000 times the payment made per Common Share. Each
Preferred Share will have 1000 votes and will vote together with the Common
Shares. Finally, in the event of any merger, consolidation or other transaction
in which Common Shares are exchanged, each Preferred Share will be entitled to
receive 1000 times the amount received per Common Share. Preferred Shares will
not be redeemable. These rights are protected by customary antidilution
provisions. Because of the nature of the Preferred Share's dividend, liquidation
and voting rights, the value of one one-thousandth of a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.

         The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares or convertible
securities at less than the current market price of the Preferred Shares or
(iii) upon the distribution to holders of the Preferred Shares of evidences of
indebtedness, cash, securities or assets (excluding regular periodic cash
dividends at a rate not in excess of 125% of the rate of the last regular
periodic cash dividend theretofore paid or, in case regular periodic cash
dividends have not theretofore been paid, at a rate not in excess of 50% of the
average net income per share of the Company for the four quarters ended
immediately prior to the payment of such dividend, or dividends payable in
Preferred Shares (which dividends will be subject to the adjustment described in
clause (i) above)) or of subscription rights or warrants (other than those
referred to above).

         In the event that a Person becomes an Acquiring Person or if the
Company were the surviving corporation in a merger with an Acquiring Person or
any affiliate or associate of an Acquiring Person and the Common Shares were not
changed or exchanged, each holder of a Right, other than Rights that are or were
acquired or beneficially owned by the Acquiring Person (which Rights will
thereafter be void), will thereafter have the right to receive upon exercise
that number of Common Shares having a market value of two times the then current
Purchase Price

                                      C-2
<PAGE>

of the Right. In the event that, after a person has become an Acquiring Person,
the Company is acquired in a merger or other business combination transaction or
more than 50% of its assets or earning power are sold, proper provision will be
made so that each holder of a Right shall thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price of the Right, that
number of shares of common stock of the acquiring company which at the time of
such transaction would have a market value of two times the then current
Purchase Price of the Right.

         At any time after a Person becomes an Acquiring Person and prior to the
earlier of one of the events described in the last sentence of the previous
paragraph or the acquisition by such Acquiring Person of 50% or more of the
outstanding Common Shares, the Board of Directors may cause the Company to
exchange the Rights (other than Rights owned by an Acquiring Person which will
have become void), in whole or in part, for that number of Common Shares having
an aggregate value equal to the excess of the value of the Common Shares
issuable upon the exercise of the Rights over the Purchase Price for the Rights
(subject to adjustment).

         No adjustment in the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such Purchase Price. No
fractional Preferred Shares or Common Shares will be issued (other than
fractions of Preferred Shares which are integral multiples of one one-thousandth
of a Preferred Share, which may, at the election of the Company, be evidenced by
depository receipts), and in lieu thereof, a payment in cash will be made based
on the market price of the Preferred Shares or Common Shares on the last trading
date prior to the date of exercise.

         The Rights may be redeemed in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price") by the Board of Directors at any time
prior to the time that an Acquiring Person has become such. The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.

         Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company beyond those as an existing stockholder,
including, without limitation, the right to vote or to receive dividends.

         Any of the provisions of the Agreement may be amended by the Board of
Directors of the Company for so long as the Rights are then redeemable, and
after the Rights are no longer redeemable, the Company may amend or supplement
the Agreement in any manner that does not adversely affect the interests of the
holders of the Rights (other than an Acquiring Person or an affiliate or
associate of an Acquiring Person). The Company may at any time prior to such
time as any person becomes an Acquiring Person amend the Agreement to lower the
thresholds described above to no less than the greater of (i) any percentage
greater than the largest percentage of the outstanding Common Shares then known
by the Company to be beneficially owned by any person or group of affiliated or
associated persons (other than an Exempt Person) and (ii) 10%.

                                      C-3
<PAGE>

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

                                      C-4

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