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EXHIBIT 10.1  

 
 

AGREEMENT OF PURCHASE AND SALE    
    

        AGREEMENT dated the 1st day of June, 2004 

BETWEEN:  

IMPERIAL OIL, a partnership of McCOLL-FRONTENAC PETROLEUM INC. and IMPERIAL OIL LIMITED, duly
registered in all jurisdictions within Canada and having an office in Calgary, Alberta ("Vendor") 

—and— 

RANGELAND NORTHERN PIPELINE COMPANY, a body corporate having an office in Calgary, Alberta ("Purchaser") 

—and—

PACIFIC ENERGY PARTNERS L.P., a limited partnership having an office in Long Beach, California ("Pacific") 

        WHEREAS Vendor wishes to sell and Purchaser wishes to purchase, on the terms and conditions contained in this Agreement, all of Vendor's
interest in the Assets; 

THE PARTIES AGREE AS FOLLOWS: 

ARTICLE 1

INTERPRETATION  

1.1   Definitions  

        In this Agreement, including any schedules (unless otherwise defined therein) the following terms shall have the following meanings: 

        "Adjusted Purchase Price" has the meaning given in section 2.2; 

        "Affiliate" means a corporation, limited liability company or partnership that is affiliated with the party for which the expression is
being applied, and, for the purpose of this definition: 

	(a)
	a
corporation, limited liability company or partnership is affiliated with another corporation, limited liability company or partnership if it directly or indirectly controls or is
controlled by that other corporation, limited liability company or partnership, and for the purpose of determining whether a corporation, limited liability company or partnership so controls or is so
controlled, it shall be deemed that:

	(i)
	a
corporation is directly controlled by another corporation, limited liability company or partnership if shares of the corporation to which are attached more than fifty
percent (50%) of the votes that may be cast to elect directors of the corporation are beneficially owned by that other corporation, limited liability company or partnership and the votes attached to
those shares are sufficient, if exercised, to elect a majority of the directors of the corporation,

	(ii)
	a
limited liability company is directly controlled by a corporation, another limited liability company or partnership if shares of the limited liability company to
which are attached more than fifty percent (50%) of the votes that may be cast to elect directors of the limited liability company are beneficially owned by that corporation, other limited liability
company or partnership, 

 

	(iii)
	a
partnership is directly controlled by a corporation, limited liability company or another partnership if that corporation, limited liability company or other
partnership beneficially owns more than fifty percent (50%) interest in the partnership, and

	(iv)
	a
corporation, limited liability company or partnership is indirectly controlled by another corporation, limited liability company or partnership if control, as defined
in (i), (ii) or (iii) above, as the case may be, is exercised through one or more other corporations, limited liability companies or partnerships;

	(b)
	where
two or more corporations, limited liability companies or partnerships are affiliated at the same time with the same corporation, limited liability company or partnership, they
will be deemed to be affiliated with each other; 

        "Agreement" or "this Agreement" means this Agreement of Purchase and Sale made as of the
day and year first above written, between Purchaser and Vendor; 

        "Applicable Law" means, in relation to any Person, transaction or event, all applicable provisions of laws, statutes, rules, regulations,
official directives and orders of all federal, provincial, municipal and local governmental bodies (whether administrative, legislative, executive or otherwise) and judgments, orders and decrees of
all courts, arbitrators, commissions or bodies exercising similar functions in actions or proceedings in which the Person in question is a party, by which it is bound or having application to the
transaction or event in question; 

        "Assets" means, collectively the Pipeline Assets, the Leases, the Fee Simple Lands and the Miscellaneous Interests, but not including the
Excluded Assets; 

        "Business Day" means any day of the week except Saturday, Sunday or any statutory holiday in Alberta; 

        "Closing" means the closing of the purchase and sale as contemplated by this Agreement; 

        "Closing Date" has the meaning given in section 4.1; 

        "Confidentiality Agreement" means the confidentiality agreement dated September 18, 2003 between Imperial Oil Resources and Pacific
Energy Group LLC, binding such parties and their Affiliates; 

        "Deficiencies" has the meaning given in section 3.2; 

        "Deliveries" means the documents listed in Schedule "L"; 

        "Deposit" has the meaning given in subsection 2.1(b); 

        "Dollar" or "$" means a Canadian dollar; 

        "Effective Time" has the meaning given in section 2.1; 

        "Environment" means the components of the earth and includes ambient air, land, surface and sub-surface strata, groundwater,
surface water, all layers of the atmosphere, all organic and inorganic matter and living organisms, and the interacting natural systems that include such components; 

        "Environmental Laws" means Applicable Law which relate to Environmental Matters, health or safety; 

        "Environmental Matters" means any activity, event or circumstance in respect of or relating to the past, present or future actual or
threatened activities or omissions including: 

	(a)
	the
manufacture, construction, processing, distribution, use, holding, collection, accumulation, assessment, generation, treatment, stabilization, storage, disposition, handling,
transportation, reporting or Release of Hazardous Substances on, at or into the Environment, 

2

 
	(b)
	the
protection of the Environment, or

	(c)
	pollution,
reclamation, or restoration of the Environment; 

        "Excluded Assets" means assets and technology described in Schedule "C"; 

        "Fee Simple Lands" means that land which is generally located in SE quarter of section 6, Township 53, Range 23, West of the Fourth
Meridian and as more specifically described in Schedule "A" to Schedule "E"; 

        "Government Authorities" means any federal, provincial, territorial, municipal or other government or government department, agency, board
or other authority (including but not limited to a court of law) having jurisdiction over the parties or the Assets and "Government Authority" means any
one of them; 

        "GST" means the goods and services tax prescribed by the GST Legislation; 

        "GST Legislation" means Part IX of the Excise Tax Act (Canada); 

        "Hazardous Substances" means hazardous or toxic substances, hazardous wastes, radioactive substances, asbestos, polychlorinated biphenyls,
pollutants, contaminants, dangerous goods and hydrocarbons including any and all substances and wastes as regulated under any Environmental Law; 

        "Knowledge" means the actual knowledge or awareness of its current officers and employees who are primarily responsible for the matter in
question in the course of their normal duties (other than those employees employed in the field who do not have management responsibilities, provided Vendor has made reasonable inquiry of such
employees), after reasonable inquiry of Vendor's applicable files and records. For these purposes, knowledge and awareness do not include the knowledge of any third party or constructive knowledge.
Vendor does not have any obligation to make inquiry of third parties or the files and records of any third party or public authority in connection with representations and knowledge that are made to
its knowledge or awareness; 

        "Leases" means, collectively, the various fee-simple titles, leases, easements, rights of way, right of way access, right of
entry, crossing agreements, consents, surface leases, options to lease, options to purchase land, licences of occupation, pipeline installation leases, reservations, permits, licences and other
documents of title by virtue of which the Vendor is entitled to enter upon, use occupy and enjoy lands for the operation and maintenance of the Pipeline Assets and which include the interests set out
in Schedule "B"; 

        "Letter of Intent" means the letter of intent dated February 23, 2004 between Imperial Oil Resources and Pacific Energy Group LLC; 

        "Miscellaneous Interests" means the entire right, title, estate and interest of Vendor, in all property, assets and rights relating to the
Pipeline Assets and the Leases, other than the Pipeline Assets and the Leases, to which Vendor is entitled at Closing Date in: 

	(a)
	all
contracts and agreements relating to the ownership, maintenance, operation or use of the Pipeline Assets, the Leases and the Tangibles, or any rights in relation to them,

	(b)
	in
addition to the Leases, those subsisting rights to enter upon, use and occupy the surface of any lands upon which any of the Pipeline Assets are located or of any lands to be
crossed in order to gain access to any of Pipeline Assets,

	(c)
	pipeline
and other permits, licences and authorizations relating to the Pipeline Assets,

	(d)
	all
books, records, documents, drawings, inspection reports, engineering and production data relating to the Assets including statements related to original capital expenditures
incurred to commission the Pipeline Assets into service and statements related to operating costs attributable 

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to
the Pipeline Assets for the three fiscal years preceding the year in which Closing occurs, excluding: 

	(i)
	accounting
records,

	(ii)
	proprietary
manuals not specific to the Assets,

	(iii)
	forecasts
and interpretive reports, and

	(iv)
	technology
as described in Schedule "C"; 

        "Permitted Encumbrances" means: 

	(a)
	easements,
rights of way, servitudes and similar rights in land including, but not limited to, rights of way and servitudes for highways and other roads, railways, sewers, drains, gas
and oil pipelines, gas and water mains, electric light, power, telephone, telegraph or cable television conduits, poles, wires and cables,

	(b)
	the
right reserved to or vested in any Government Authorities by the terms of any lease, licence, franchise, grant or permit forming part of the Assets, or by any statutory provision,
to terminate any lease, licence, franchise, grant or permit, or to require annual or other periodic payments as a condition of the continuance of them,

	(c)
	the
right to levy taxes on the revenue from the Assets, and governmental restrictions on pipeline flow rates or on the operation of any facility or otherwise affecting the value of
any facility,

	(d)
	the
terms and conditions of the Leases,

	(e)
	rights
reserved to or vested in any Government Authority to control or regulate any of the Assets in any manner and all Applicable Laws of Government Authorities,

	(f)
	the
right reserved or vested in any person to create or incur a lien:

	(i)
	as
security, in favour of a person conducting the development or operation of any of the Assets, for Vendor's proportionate share of the costs and expenses of the
development or operation but only to the extent those liens relate to costs and expenses for which payment is not due,

	(ii)
	for
taxes, assessments or governmental charges which are not due, or

	(iii)
	that
is a mechanics' lien, builders' lien or materialmens' lien in respect of services rendered or goods supplied but only to the extent such lien relates to goods or
services for which payment is not due,

	(g)
	the
reservations, limitations, provisos and conditions in any original grant from the Crown of any of the Leases or interests in them, and statutory exceptions to title,

	(h)
	liens
incurred, created and granted in the ordinary course of business to a public utility, municipality or Government Authorities in connection with operations conducted with respect
to the Assets, but only to the extent those liens relate to costs and expenses for which payment is not due,

	(i)
	any
lien contemplated by subsections (f) and (h) which has been created or incurred but is being contested in good faith by Vendor; and

	(j)
	the
encumbrances defined as Permitted Encumbrances in the Real Property Purchase Agreement as related to the Fee Simple Lands. 

        "Pipeline Assets" means the pipeline systems owned by Vendor described in Schedule "A" and including the Tangibles and all equipment used
in conjunction with the pipelines, whether attached or 

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appurtenant
thereto, or located upon any lands governed by the Leases as of the Effective Time but not including the Excluded Assets; 

        "Prime" means an annual rate of interest equal to the annual rate of interest announced from time to time at the main branch of the Royal
Bank of Canada in Calgary, Alberta as a reference rate then in effect for determining interest rates on Canadian dollar demand commercial loans made in Canada; 

        "Purchase Price" has the meaning given in section 2.2; 

        "Real Property Closing Date" has the meaning specified in the Real Property Purchase Agreement dated the date hereof between the Vendor
and Purchaser regarding the Fee Simple Lands in the form attached as Schedule "E"; 

        "Release" means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration
of a Hazardous Substance into or through the Environment or into or out of any lands, including the movement of a Hazardous Substance into or through the Environment or into or out of any lands,
including the movement of a Hazardous Substance through or in any part of the Environment; 

        "Statement of Adjustments" shall have the meaning given in subsection 2.5(b); 

        "Tangibles" means the interest of Vendor in all tangible depreciable property and assets that form part of or are used in connection with
the Pipeline Assets; 

        "Third Anniversary Date" means the day that is three (3) years from the Closing Date, provided that if such day is not a Business
Day, the first Business Day following such day; 

        "Third Party" means any individual or entity other than Vendor, Purchaser, Pacific and their Affiliates; 

1.2   Schedules  

        The following schedules are annexed to and form a part of this Agreement: 

	Schedule "A"	 	—	 	Pipeline Assets;
	Schedule "B"	 	—	 	Leases;
	Schedule "C"	 	—	 	Excluded Assets;
	Schedule "D"	 	—	 	form of General Conveyance;
	Schedule "E"	 	—	 	form of Real Property Purchase Agreement;
	Schedule "F"	 	—	 	form of Transitional Services Agreement;
	Schedule "G"	 	—	 	form of Buy-Sell Transportation Agreement;
	Schedule "H"	 	—	 	form of Joint Use of Easement Agreement;
	Schedule "I"	 	—	 	form of Cathodic Protection Agreement;
	Schedule "J"	 	—	 	form of Agreement Regarding Disposition of Bonnie Glen Pipeline;
	Schedule "K"	 	—	 	form of Agreement for Vendor's Tariffs and Tolls;
	Schedule "L"	 	—	 	Deliveries.

1.3   Headings  

        The insertion of headings in this Agreement is for convenience of reference only and does not affect the construction or interpretation of this Agreement. 

5

 

1.4   Gender  

        Whenever the singular or masculine or neuter is used in this Agreement, it will be construed as meaning plural or feminine or referring to a corporation, firm or
partnership and vice versa. 

1.5   Entire Agreement  

        Except for the Confidentiality Agreement, this Agreement expresses and constitutes the entire Agreement between the parties for the purchase and sale of the
Assets and may be amended only by written instrument executed by Vendor and Purchaser. 

1.6   Conflicts  

        To the extent of a conflict or inconsistency between this Agreement and the Real Property Purchase Agreement, the provisions of this Agreement shall prevail. To
the extent of a conflict or inconsistency between this Agreement, the Real Property Purchase Agreement and the Indemnity and Release Agreement attached to the Real Property Purchase Agreement, the
Indemnity and Release Agreement attached to the Real Property Purchase Agreement, when executed, shall prevail to the extent of the conflict or inconsistency. 

1.7   Time  

        In this Agreement all times are Mountain Standard Time or Daylight Saving Time, whichever is in effect pursuant to the Daylight Saving
Time Act (Alberta). 

ARTICLE 2

PURCHASE AND SALE  

2.1   Purchase and Sale  

	(a)
	Vendor
agrees to sell and transfer the Assets to Purchaser and Purchaser agrees to purchase and accept the Assets from Vendor, on the terms and conditions described in this Agreement.
If the purchase and sale contemplated by this Agreement is completed, possession and risk of ownership of the Assets shall be deemed to have passed to Purchaser effective as of 10:00 AM on the Closing
Date ("Effective Time").

	(b)
	Upon
execution of this Agreement, Purchaser shall pay $3,100,000.00 (the "Deposit") to Vendor by certified cheque or bank draft as a deposit against the Purchase Price. If Closing
occurs the Deposit shall be applied towards payment of the Adjusted Purchase Price. If this Agreement is terminated pursuant to sections 3.2 or 4.4, the Deposit shall be handled in the manner
specified in section 7.1. 

2.2   Purchase Price  

        The price to be paid by Purchaser to Vendor for the Assets (the "Purchase Price") is $31,500,000.00, payable as follows: 

	(a)
	the
Deposit shall be paid to Vendor in accordance with section 2.1(b);

	(b)
	$23,400,000.00
shall be payable to Vendor on the Closing Date; and

	(c)
	$5,000,000.00
shall be payable to Vendor on the Third Anniversary Date; 

        plus
or minus the adjustments to be made at Closing pursuant to section 2.5, (collectively the "Adjusted Purchase Price"). 

6

 

2.3   Allocation of Purchase Price  

        The Adjusted Purchase Price shall be allocated as follows: 

	(a)	 	Miscellaneous Interests	 	$	1.00	 	 
	(b)	 	Tangibles comprised of:	 	 	 	 	 
	 	 	CCA Class 1—Pipelines	 	$	21,200,000.00	 	 
	 	 	CCA Class 2—Pipelines	 	$	3,300,000.00	 	 
	 	 	CCA Class 3—Buildings	 	$	300,000.00	 	 
	 	 	CCA Class 8—Other Equipment	 	$	2,400,000.00	 	 
	(c)	 	Fee Simple Lands	 	$	500,000.00	 	 
	(d)	 	Rights of Way	 	$	3,300,000.00	 	 
	(e)	 	Interest	 	$	499,999.00	 	 

2.4   Goods and Service Tax  

	(a)
	Vendor
and Purchaser will make a joint election under section 167 of the GST Legislation so that GST will not be payable on the transfer of the Assets (including in respect of
the Fee Simple Lands to be transferred pursuant to the Real Property Purchase Agreement attached as Schedule "E". The parties will both execute the relevant GST form for Closing to effect that
election. Purchaser will file that form with its GST return for the reporting period in which Closing occurs. In the event the applicable Government Authority does not accept the election, the
Purchaser shall pay to the Vendor all GST payable on or in respect of the transfer of the Assets and shall indemnify Vendor from any penalties or interest which the Vendor may be assessed under the
GST Legislation as a result of the transfer of the Assets not being eligible for the Section 167 election.

	(b)
	If
the amount of the GST payable hereunder is adjusted as a result of any reassessment by the applicable Governmental Authority, any adjustment and any associated interest and
penalties will be for the Purchaser's account. However, the parties will cooperate to ensure that all reasonable steps are taken to minimize the net impact of any such taxes and the corresponding
penalties and interest. 

2.5   Adjustments  

	(a)
	All
benefits and obligations incurred for or in connection with the Assets prior to the Effective Time, including operating costs, capital costs and Lease rentals are for Vendor's
account (whether paid before or after Closing). All prepaid rentals, paid on account of the Assets before the Effective Time, shall be apportioned between Vendor and Purchaser on a per diem basis as
of the Effective Time.

	(b)
	On
or before 3 Business Days prior to the Closing Date, Vendor shall deliver to Purchaser a statement of all adjustments ("Statement of Adjustments") to be made pursuant to
section 2.5(a) in respect of the costs and expenses of Vendor prior to Closing. The Statement of Adjustments shall be prepared on the basis of Vendor's good faith estimate of such costs.
Vendor shall make available to Purchaser all information reasonably necessary for Purchaser to understand and confirm the calculations in such statement and any amount deemed owing by one party or
another pursuant to the Statement of Adjustments shall be used to calculate the payment made by Purchaser at Closing pursuant to section 2.2. The Statement of Adjustments shall be signed by
Vendor and Purchaser at the Closing Date. Any invoice received by a party after Closing which relates to costs or expenses incurred in connection with the Assets before the Effective Time shall
continue to be apportioned to, and paid by, the relevant party in accordance with section 2.5(a) for a period of six (6) months following the Closing Date. 

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ARTICLE 3

INTERIM MATTERS  

3.1   Title Examination and Access to the Assets  

	(a)
	If
and as requested by Purchaser prior to Closing Date, Vendor shall make or cause to be made available to Purchaser and its representatives (subject to their being covered by the
Confidentiality Agreement), during reasonable business hours:

	(i)
	all
information and documentation in its possession or available to it relating to the title of Vendor to the Assets,

	(ii)
	the
accounting, financial, tax (excluding income tax) and operating records of Vendor for the Assets,

	(iii)
	all
engineering, maintenance and operating reports, records, logs, drawings and other data for the Assets, including pipeline inspection tool reports but excluding all
other forecasts and interpretive reports, and

	(iv)
	all
documents and materials relating to Environmental Matters and access to Vendor's environmental and production engineering personnel for the purpose of discussing
Environmental Matters.

	(b)
	At
Purchaser's risk and expense and upon reasonable notice, Vendor shall allow Purchaser and its representatives physical access to the Assets, to the extent Vendor has or can
reasonably obtain access, to allow Purchaser to assess the condition of the Pipeline Assets and to identify any Environmental Matters or abandonment and reclamation costs. 

3.2   Deficiencies  

	(a)
	Purchaser
shall from time to time but no later than 7 days before Closing Date, give written notice to Vendor describing in reasonable detail all defects, deficiencies,
irregularities and missing documentation relating to the Assets that, in the reasonable opinion of Purchaser, materially and adversely affect the value of the Assets and that Purchaser requires to
have remedied ("Deficiencies"). Vendor shall use reasonable efforts to promptly remedy the Deficiencies specified by Purchaser and Purchaser shall notify Vendor within two Business Days after Vendor
has provided such remedies to Purchaser if the Deficiencies are not remedied to Purchaser's satisfaction.

	(b)
	If
all Deficiencies are not remedied to Purchaser's satisfaction, acting reasonably, prior to 5:00 p.m. on the third Business Day before the Closing Date, Purchaser shall elect
by written notice not later than the second Business Day before Closing Date:

	(i)
	with
the agreement of Vendor, to grant a further period of time within which Vendor may remedy the uncured Deficiencies, to Purchaser's satisfaction, acting reasonably,
or

	(ii)
	waive
the unremedied Deficiencies and proceed with the completion of the transaction contemplated by this Agreement, or

	(iii)
	to
terminate this Agreement and section 7.1 shall apply. 

3.3   Interim Provisions  

        Between the date of this Agreement and Closing Date, Vendor shall operate and maintain the Assets in a proper and prudent manner in accordance with good industry
practices and any agreements governing the ownership and operation of the Assets. Vendor shall not, without the prior written 

8

 

approval
of Purchaser, which approval shall not be unreasonably withheld and shall be given in a timely fashion: 

	(a)
	authorize
or make any expenditure in respect of the Assets, other than:

	(i)
	usual
operating expenditures incurred,

	(ii)
	capital
expenditures required in accordance with accepted industry practice, for which Vendor's share does not exceed $25,000 for any single operation, and

	(iii)
	expenditures
which Vendor deems necessary to protect lives, property or income;

	(b)
	propose
or initiate any operations to expand or restrict capacity of the Pipeline Assets;

	(c)
	surrender
or abandon any of the Assets; or

	(d)
	amend
any significant agreement or instrument relating to the Assets if the amendment would have a material adverse effect on the aggregate value of the Assets. 

        If
Purchaser does not respond to a written request by Vendor for an approval within five (5) Business Days, it will be deemed to have given its approval to the matter, which is
subject of such written request. 

ARTICLE 4

COMPLETION  

4.1   Closing Date  

        The closing of the purchase and sale contemplated by this Agreement shall take place at the office of Vendor at 237 - 4th Avenue, S.W.,
Calgary, Alberta at on June 30, 2004, or at any other place or at any other time or date agreed to in writing by the parties ("Closing Date"). 

4.2   Vendor Deliveries at Closing  

        At Closing, Vendor shall deliver, or cause to be delivered, to Purchaser, the following: 

	(a)
	the
General Conveyance in the form of Schedule "D" executed by Vendor;

	(b)
	the
officer's certificate of Vendor specified in section 4.4(d);

	(c)
	the
following documents, all executed by Vendor or by Vendor's Affiliate, as may be required to specifically convey Vendor's interest in the Assets to Purchaser or Purchaser's
nominee, who must be an Affiliate of Purchaser.

	(i)
	all
transfers, conveyances (including the conveyance in the form attached as Schedule "D"), assignments, novation agreements, notices, and other documents and
instruments reasonably required by Purchaser for the purpose of effecting the purchase and sale of all of the Assets in accordance with the terms of this Agreement, all executed by Vendor (but
execution by Third Parties shall not be required),

	(ii)
	either
the documents included in Miscellaneous Interests or an undertaking to Purchaser to provide them within 30 days following the Closing Date,

	(iii)
	the
Transitional Services Agreement set forth in substantially the form attached as Schedule "F",

	(iv)
	the
Transportation Agreement set forth in substantially the form attached as Schedule "G",

	(v)
	the
Joint Use of Easement Agreement set forth in substantially the form attached as Schedule "H", 

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	(vi)
	the
Cathodic Protection Agreement set forth in substantially the form attached as Schedule "I",

	(vii)
	the
Agreement Regarding Disposition of Bonnie Glen Pipeline set forth in substantially the form attached as Schedule "J",

	(viii)
	the
Agreement for Vendor's Tariffs and Tolls set forth in substantially the form attached as Schedule "K",

	(ix)
	an
officer's certificate of Vendor covenanting to certify at the Real Property Closing Date, that Vendor shall have performed in all material respects, all covenants,
agreements and conditions required by the Real Property Purchase Agreement to be performed or complied with by Vendor on or prior to the Real Property Closing Date and that Vendor's representations
and warranties contained in Section 5.1 as they pertain to the Fee Simple Lands shall be true and correct on the date of the Real Property Purchase Agreement and on the Real Property Closing
Date and Vendor shall not be aware on the Real Property Closing Date of any facts indicating the contrary; and

	(x)
	any
other documents required to be delivered by Vendor to Purchaser at Closing pursuant to this Agreement. 

4.3   Purchaser and Pacific Deliveries at Closing  

        At Closing, Purchaser shall deliver, or cause to be delivered, to Vendor, the following: 

	(a)
	the
amounts payable by Purchaser at Closing pursuant to section 2.2;

	(b)
	the
General Conveyance in the form of Schedule "D" executed by Purchaser;

	(c)
	the
officer's certificate of Purchaser specified in section 4.5(b);

	(d)
	the
officer's certificate of Pacific specified in section 4.5(c);

	(e)
	the
documents specified in section 4.2(c), all executed by Purchaser or Purchaser's nominee (who must be an Affiliate of Purchaser) as Purchaser may direct;

	(f)
	any
other documents required to be delivered by Purchaser to Vendor at Closing pursuant to this Agreement. 

4.4   Purchaser's Conditions Precedent  

        The following are conditions precedent to Purchaser's obligation to complete the purchase of the Assets: 

	(a)
	on
or before Closing Date Purchaser shall be satisfied that there are no defects in the physical condition of the Pipeline Assets that would have a material adverse effect on the
aggregate value of the Assets;

	(b)
	except
as approved in writing by Purchaser, between the date of this Agreement and Closing Date there shall not be any damage to or alteration of the Assets (including, but not
limited to, any significant amendment to any agreement or instrument forming a part of them) that would have a material adverse effect on the aggregate value of the Assets;

	(c)
	Vendor
shall have complied with its obligations specified in section 4.2; 

10

  

	(d)
	Vendor
shall have performed in all material respects, all covenants, agreements and conditions required by this Agreement to be performed or complied with by Vendor on or prior to
Closing Date and Vendor's representations and warranties contained in section 5.1 shall be true and correct on the date of this Agreement and on Closing Date and Purchaser shall not be aware on
Closing Date of any facts indicating the contrary. On Closing Date, Vendor shall have delivered to Purchaser a certificate, dated as of Closing Date, stating that it has performed all such covenants,
agreements and conditions and that the representations and warranties contained in section 5.1 are true and correct on the date of this Agreement and on Closing Date;

	(e)
	there
shall not be any judicial restraining order or injunction, preliminary or otherwise, in effect prohibiting the Closing of the transactions contemplated by this Agreement. There
shall not be pending or threatened any litigation or proceeding instituted by any Third Party or Government Authority to restrain, prohibit or otherwise interfere with or obtain substantial monetary
damages in connection with the consummation of the transactions contemplated by this Agreement, or the operation of the Assets by Purchaser after the Closing Date.

	(f)
	The
transactions contemplated by this Agreement shall have been approved by Industry Canada under the Investment Canada Act.

	(g)
	Purchaser
shall be satisfied that the result of its environmental due diligence performed on or in connection with the Fee Simple Lands has not identified any Environmental Matters,
the reclamation of which would have a material adverse effect on the aggregate value of the Assets;

	(h)
	Vendor
shall have executed and delivered to Purchaser concurrently with its execution of this Agreement, the Real Property Purchase and Sale Agreement attached hereto as Schedule "E";

	(i)
	At
Closing, Purchaser shall have received the documents specified in section 4.2(c) executed by Vendor. 

        The
preceding conditions are for the sole benefit of Purchaser and may be waived in whole or in part by Purchaser in writing. If any of the preceding conditions is not satisfied or
waived by Purchaser on or before Closing, Purchaser may terminate this Agreement by written notice to Vendor on Closing Date and section 7.1 shall apply. 

4.5   Vendor's Conditions Precedent  

        The following are conditions precedent to Vendor's obligation to complete the sale of the Assets: 

	(a)
	on
the Closing Date, Purchaser shall have delivered to Vendor a certified cheque or bank draft payable to Vendor in an amount equal to the aggregate of:

	(i)
	the
Purchase Price minus the Deposit, minus

	(ii)
	the
amount in section 2.2(c), minus

	(iii)
	the
interest on the Deposit at Prime calculated from the date the Deposit is received by Vendor up to, but not including, Closing Date, plus

	(iv)
	the
amount due pursuant to section 2.4, if any;

	(b)
	Purchaser
shall have performed in all material respects, all covenants, agreements and conditions required by this Agreement to be performed or complied with by Purchaser on or prior
to Closing Date and Purchaser's representations and warranties contained in section 5.3 shall be true and correct on the date of this Agreement and on Closing Date and Vendor shall not be aware
on Closing Date of any facts indicating the contrary. On Closing Date, Purchaser shall have delivered to Vendor a certificate of Purchaser, dated as of Closing Date, stating that it has performed all 

11

 

such
covenants, agreements and conditions and that the representations and warranties contained in section 5.3 are true and correct on the date of this Agreement and on Closing Date; 

	(c)
	Pacific
shall have performed in all material respects, all covenants, agreements and conditions required by this Agreement to be performed or complied with by Pacific as guarantor on
or prior to Closing Date and Pacific's representations and warranties contained in section 5.4 shall be true and correct on the date of this Agreement and on Closing Date and Vendor shall not
be aware on Closing Date of any facts indicating the contrary. On Closing Date, Pacific shall have delivered to Vendor a certificate of Pacific, dated as of Closing Date, stating that it has performed
all such covenants, agreements and conditions and that the representations and warranties contained in section 5.4 are true and correct on the date of this Agreement and on Closing Date;

	(d)
	Purchaser
shall have provided Vendor with evidence that it, or its Affiliate, has satisfied applicable regulatory requirements to become a licensee of the Pipeline Assets;

	(e)
	an
irrevocable letter of credit redeemable no later than on the Third Anniversary Date in guarantee of the amount of $5,000,000.00 in favour of Vendor and drawn on one of the five
major banks in Canada, which Purchaser may satisfy by a letter of credit having an expiration date prior to the Third Anniversary Date, so long as it is payable upon expiration in the absence of a
renewal or replacement and so long as such letter is in fact renewed or replaced prior to any expiration before the Third Anniversary Date; and

	(f)
	Purchaser
shall have executed and delivered to Vendor concurrently with its execution of this Agreement, the Real Property Purchase and Sale Agreement attached hereto as Schedule "E";
and

	(g)
	Purchaser
and Pacific shall have complied with the obligations specified in section 4.3. 

        The
preceding conditions are for the sole benefit of Vendor and may be waived in whole or in part by Vendor in writing. If any of the preceding conditions is not satisfied or waived by
Vendor on or before Closing, Vendor may terminate this Agreement by written notice to Purchaser on Closing Date and section 7.1 shall apply. 

4.6   Efforts to Fulfill Conditions  

	(a)
	Purchaser
and Vendor shall proceed diligently, honestly and in good faith and use all reasonable efforts to satisfy and comply with and assist in the satisfaction of and compliance
with the conditions set forth in sections 4.4 and 4.5;

	(b)
	Purchaser
shall promptly make all requisite applications and filings required pursuant to the Investment Canada Act in respect of the transaction contemplated by this Agreement and
shall pay any applicable fee and all taxes thereon. Notwithstanding the foregoing, Vendor shall cooperate with and provide reasonable assistance to Purchaser in the preparation of any such
applications and filings. Purchaser shall provide Vendor in advance, copies of all applications and filings (other than portions thereof relating to the future plans of Purchaser) for approval by
Vendor, not to be unreasonably withheld;

	(c)
	Purchaser
shall provide Vendor with copies of all notifications or approvals obtained immediately upon receipt of same; and

	(d)
	If
a party for whose benefit a condition has been included in section 4.4 or 4.5 fails to notify the other party at or prior to Closing as to whether or not the condition has
been satisfied or complied with, the condition shall be conclusively deemed to have been waived by such party. 

12

 

4.7   Post-Completion Administration  

	(a)
	If
the purchase and sale contemplated by this Agreement is completed, then until Purchaser becomes the recognized holder of the Assets in the place of Vendor, the provisions of
section 3.3 shall apply to the Assets and Vendor shall:

	(i)
	hold
possession of the Assets on behalf of Purchaser and receive and hold all proceeds, benefits and advantages incurred for the Assets for the benefit, use and
ownership of Purchaser, in accordance with good industry practices;

	(ii)
	in
a timely manner deliver to Purchaser all revenues, proceeds and other benefits received by Vendor for the Assets after deduction of any amounts owing by Purchaser to
Vendor in respect of the Assets;

	(iii)
	in
a timely manner deliver to Purchaser all Third Party notices, and communications in respect of the Assets received by Vendor;

	(iv)
	in
a timely manner deliver to Third Parties all notices and communications as Purchaser may reasonably request and all monies and other items Purchaser reasonably
provides for the Assets; and

	(v)
	as
agent of Purchaser, do and perform all acts and things, and execute and deliver all agreements, notices and other documents and instruments, that Purchaser reasonably
requests for the purpose of facilitating the exercise of rights incidental to the ownership of the Assets. 

Vendor
is not liable to Purchaser for any loss or damage suffered by Purchaser in connection with the arrangement established by this section 4.7, except to the extent that the loss or damage
is caused by Vendor's gross negligence or its willful misconduct. Purchaser shall indemnify and save harmless Vendor from and against any claims, demands, actions, causes of action, damages, losses,
costs
(including costs on a solicitor/client basis), liability or expense arising out of the performance by Vendor of its obligations under this section 4.7, except to the extent that the loss or
damage is caused by Vendor's gross negligence or its willful misconduct. Nothing in this section 4.7 shall be construed as extending or restricting or limiting in any manner any of the other
covenants, warranties, representations and other obligations of the parties under this Agreement. 

	(b)
	If
Vendor is obligated to make any payments after Closing Date in connection with the operation of the Assets, Purchaser shall reimburse Vendor for such amounts within 30 days
from receipt of Vendor's invoice.

	(c)
	Vendor
shall pay, on behalf of Purchaser, all rentals for the Leases and surface rights with anniversary dates falling on or before the last day of the third calendar month following
the month in which Closing Date occurs.

	(d)
	Purchaser
shall provide Vendor with reasonable access to, and Vendor may retain or subsequently obtain from Purchaser copies or photocopies of, any of the documents comprised in
Miscellaneous Interests that it considers necessary to enable it to comply with any Applicable Laws or the requirements of any authority or to conduct audits relating to the period prior to the
Closing Date. 

13

 
ARTICLE 5

REPRESENTATIONS AND WARRANTIES  

5.1   Vendor's Representations  

        Vendor represents and warrants to Purchaser that: 

	(a)
	Imperial
Oil is a partnership duly formed pursuant to, and validly subsisting under, the laws of those jurisdictions in which it is required to be registered for the purposes of this
transaction;

	(b)
	Vendor
has the requisite power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement;

	(c)
	the
execution and delivery of this Agreement and the completion of the sale of the Assets in accordance with the terms of this Agreement do not and will not violate or conflict with
any provision of:

	(i)
	the
constating documents relating to Vendor or any statute, rule or regulation applicable to Vendor, or

	(ii)
	any
agreement or instrument to which Vendor is a party or by which it is bound and of which Vendor has Knowledge or any judgment, decree or order applicable to Vendor;

	(d)
	this
Agreement is, and all documents executed and delivered pursuant to this Agreement will be, legal, valid and binding obligations of Vendor enforceable against Vendor in accordance
with their terms;

	(e)
	Vendor
does not warrant title to the Leases or Fee Simple Lands, however, Vendor does represent and warrant that:

	(i)
	it
has not committed any act or failed to do any act that would result in any of the Leases or Fee Simple Lands being cancelled or subject to termination, surrender,
forfeiture, alienation or reduction; and

	(ii)
	the
Leases, the Tangibles and the Fee Simple Lands are free and clear of all liens, encumbrances, adverse claims, demands and royalties or other interests created by,
through or under Vendor, except for the Permitted Encumbrances;

	(f)
	subject
to the rents, covenants and conditions of the Leases to be paid, performed and observed by the lessee, Purchaser may hold the Leases for the remainder of their terms, and all
renewals or extensions of them and may hold the Fee Simple Lands, for its own benefit without interruption by Vendor or any other person claiming by, through or under Vendor;

	(g)
	there
are no authorizations for expenditures pursuant to which expenditures are or may be made, nor any other financial commitments outstanding or due, or that may become due for the
Assets or their operations after the Effective Time other than those to which Purchaser has given its consent and those for which no consent was required pursuant to the Leases and operating
agreements;

	(h)
	to
the best of Vendor's Knowledge, Vendor has performed and observed all of its duties, liabilities, obligations and covenants required to be performed by it under the terms of any of
the Leases and agreements pertaining to the Assets, and Vendor is not in default of any of the terms, covenants and conditions of those Leases or agreements, the default of which would have a material
adverse effect on the aggregate value of the Assets;

	(i)
	to
the best of Vendor's Knowledge, there are no charges, claims, proceedings, suits or actions in existence contemplated or threatened, against the Assets or the interest of Vendor in
them that would have a material adverse effect on the aggregate value of the Assets; 

14

 
	(j)
	Vendor
has not incurred any liability, contingent or otherwise, for brokers' or finders' fees for this transaction for which Purchaser will have any obligation or liability;

	(k)
	to
the best of Vendor's Knowledge, all ad valorem, property, production, severance and similar taxes and assessments based on, or measured by, the ownership of the Assets or the
receipt of proceeds from them, and all rentals incurred prior to Closing Date that are due before Closing Date will have been paid by Vendor;

	(l)
	to
best of Vendor's Knowledge:

	(i)
	all
operations in respect of the Assets have been conducted in accordance with Applicable Law in all material respects;

	(ii)
	all
material permits, authorizations, approvals and licences required to operate the Pipeline Assets have been obtained and are in force; and

	(iii)
	all
Tangibles have been maintained in accordance with good industry practices;

	(m)
	except
for agreements that can be terminated on notice of 31 days or less without penalty, the Vendor is not a party to any agreement for the contract operation by a Third
Party of the Assets or any of them, or agreements to provide transportation, capacity or service to any person;

	(n)
	none
of the Tangibles whose value is in excess of $50,000 are subject to a lease to or from Vendor;

	(o)
	to
the best of Vendor's Knowledge, Vendor has not received notice of default and is not, to Vendor's Knowledge, in any default under any material obligation, agreement, document,
order, writ, injunction or decree of any Government Authority or Applicable Law, which could reasonably be expected to have a material adverse effect on the aggregate value of the Assets;

	(p)
	the
Assets are not subject to any preferential right of purchase requiring procurement of a waiver from a Third Party prior to the disposition of any of the Assets;

	(q)
	to
the best of Vendor's Knowledge, it has not received any notices, orders or demands from any Governmental Authority for any Environmental Matter relating to the Assets that has not
been complied with in all material respects;

	(r)
	neither
the Vendor, nor any of its partners, is a non-resident of Canada for the purposes of the Income Tax Act (Canada);
and

	(s)
	without
limiting the generality of the foregoing representations and warranties of Vendor, Vendor has not failed to disclose to Purchaser, any fact or information that would be
material to a purchaser of assets similar to the Assets, and there has been no event, transaction or information that could reasonably be expected to have a material adverse effect on the aggregate
value of the Assets that Vendor is aware of that it has not disclosed either, in writing to Purchaser, or made available for review by Vendor. 

5.2   Limitation  

	(a)
	Vendor
makes no representations or warranties for the Assets except as contained in section 5.1. Vendor disclaims any liability and responsibility for any representation or
warranty that may have been made or alleged to have been made and contained in any document or statement made or communicated to Purchaser including, but not limited to, any opinion, information or
advice provided to Purchaser by any officer, shareholder, director, employee, agent, consultant or representative of Vendor in respect of:

	(i)
	estimates
of prices or future cash flows arising from the Assets;

	(iii)
	any
engineering or other interpretations or economic evaluations of the Assets; and 

15

 

	(iv)
	the
quality, condition, fitness or merchantability of any of the Assets.

	(b)
	Purchaser
acknowledges it has made, and will continue prior to Closing Date to make, its own independent examination, investigation, analysis, evaluation and verification of the
Assets, including Purchaser's own estimate and appraisal of the extent and value of the Assets. 

5.3   Representations of Purchaser  

        Purchaser represents and warrants to Vendor that: 

	(a)
	Purchaser
is an unlimited liability company duly organized and validly subsisting under the laws of its jurisdiction of incorporation and the laws of those jurisdictions in which it
is required to be registered for the purposes of this transaction;

	(b)
	Purchaser
has the corporate power and authority to execute and deliver this Agreement and to perform all obligations under this Agreement;

	(c)
	the
execution and delivery of this Agreement and the completion of the purchase of the Assets in accordance with the terms of this Agreement do not and will not violate or conflict
with any provision of:

	(i)
	the
charter, bylaws or equivalent governing documents relating to Purchaser or any statute, rule or regulation applicable to Purchaser, or

	(ii)
	any
agreement or instrument to which Purchaser is a party or by which it is bound and of which Purchaser has knowledge or any judgment, decree or order applicable to
Purchaser;

	(d)
	this
Agreement and all documents executed and delivered pursuant to this Agreement are legal, valid and binding obligations of Purchaser enforceable against Purchaser in accordance
with their terms;

	(e)
	Purchaser
has not incurred any liability, contingent or otherwise, for broker's or finder's fees for this transaction for which Vendor will have any obligation or liability;

	(f)
	Purchaser
is a "non-Canadian" as that term is defined in the Investment Canada Act (Canada); and

	(g)
	all
regulatory approvals needed by Purchaser in connection with the transaction contemplated by this Agreement will either be obtained by the Closing Date or are not required, except
notification under the Investment Canada Act (Canada) which shall be filed within 30 days before Closing Date, if required, and the applicable
waiting period under the Competition Act (Canada) will have expired before the Closing Date. 

5.4   Representations of Pacific  

        Pacific represents and warrants to Vendor that: 

	(a)
	Pacific
is a limited partnership duly formed to and validly subsisting under the laws of its jurisdiction of formation;

	(b)
	Pacific
has the requisite power and authority to execute and deliver this Agreement and to perform its obligations as guarantor under section 6.7 of this Agreement;

	(c)
	the
execution and delivery by Pacific of this Agreement and the guarantee of Purchaser's obligations under this Agreement do not and will not violate or conflict with any provision
of:

	(i)
	the
charter, bylaws or equivalent governing documents relating to Pacific or any statute, rule or regulation applicable to Pacific, or 

16

 

	(ii)
	any
agreement or instrument to which Pacific is a party or by which it is bound and of which Pacific has knowledge or any judgment, decree or order applicable to
Pacific;

	(d)
	the
guarantee executed and delivered by Pacific pursuant to this Agreement is a legal, valid and binding obligation of Pacific enforceable against Pacific in accordance with its
terms; and

	(e)
	Pacific
has not incurred any liability, contingent or otherwise, for broker's or finder's fees for this transaction for which Vendor will have any obligation or liability. 

5.5   Enforcement Limitation  

        Vendor may not enforce any claim for any breach or failure of any representation or warranty contained in section 5.3 or 5.4 unless Vendor has given
Purchaser and Pacific written notice of the claim within 18 months of Closing Date, including particulars of the representation or warranty alleged to have failed or been breached and details
of the facts establishing the failure or breach. Similarly, Purchaser may not enforce any claim for any failure or breach of any representation or warranty contained in section 5.1 unless
Purchaser has given Vendor written notice of the claim within 18 months
of Closing Date, including particulars of the representation or warranty alleged to have failed or been breached and details of the facts establishing the failure or breach. A failure or breach of a
representation or warranty prior to Closing Date (unless it has previously been remedied in full to the satisfaction of the other party by the party whose representation or warranty has failed)
entitles the party for whose benefit the representation or warranty existed to declare this Agreement terminated and of no effect in which case the provisions of section 7.1 shall apply. A
misrepresentation or failure of a representation or warranty subsequent to the Closing Date shall entitle a party for whose benefit the representation or warranty existed to claim damages only. 

ARTICLE 6

RECOURSE  

6.1   General Indemnification  

        Except as provided in section 6.2, Vendor shall continue to be liable for and indemnify Purchaser, its Affiliates and their respective directors, officers,
employees, agents and representatives from and against any claims, demands, actions, causes of action, damages, losses, costs (including legal costs on a solicitor/client basis), liabilities or
expenses arising out of any matter pertaining to the Assets and accruing prior to the Effective Time. This indemnity is not a title warranty and does not provide an extension of any warranty contained
in section 5.1. If the purchase and sale of the Assets is completed in accordance with the provisions of this Agreement, Purchaser shall be liable for and indemnify Vendor, its Affiliates and
their respective directors, officers, employees, agents and representatives from and against any claims, demands, actions, causes of action, damages, losses, costs (including legal costs on a
solicitor/client basis), liabilities or expenses arising out of any matter or thing pertaining to the Assets and accruing on or after the Effective Time. Except as provided in section 6.2, each
of the preceding indemnifications applies only to those claims made within 18 months of Closing Date and to the extent that the liabilities, losses, costs, claims or damages suffered or
incurred by Vendor or Purchaser, as the case may be, have not arisen as a result of the negligence or willful misconduct of the party claiming the indemnity or as a result of the breach of any of that
party's covenants, warranties, representations or other obligations under this Agreement. 

6.2   Indemnification for Environmental Damage and Reclamation Costs  

	(a)
	Purchaser
acknowledges it is purchasing the Assets on an "as is" basis and, subject to Closing and except as otherwise provided in Subsection 6.2(d), shall assume liability for
all environmental obligations and liabilities and all abandonment and restoration costs attributable to the Assets. Provided that Closing occurs, Purchaser shall be solely liable for and indemnify
Vendor against any 

17

 

claims,
demands, actions, causes of action, damages, losses, costs (including legal costs on a solicitor/client basis), liabilities or expenses suffered by Vendor or which it may sustain, pay or incur
as a result of any act, omission, matter or thing for which a claim is made on or after the Effective Time in connection with all environmental obligations and liabilities and all abandonment and
restoration costs relating to the Assets whether they arise before or after the Effective Time except to the extent resulting from a breach of Vendor's representation and warranty contained in
Subsections 5.1(i), (o), (q) or (s) and except to the extent otherwise provided in Subsection 6.2(d). 

	(b)
	Vendor
and Purchaser acknowledge that Purchaser's assumption of responsibility for the future abandonment, reclamation costs and environmental responsibilities associated with the
Assets and Vendor's release of responsibility therefor was accounted for in determining the Purchase Price.

	(c)
	Vendor
agrees, to the extent Purchaser requested, to provide Purchaser between the date hereof and Closing with full and unrestricted access to all physical sites, documents and
materials which pertain to Environmental Matters for the Assets and shall make Vendor's environmental and production engineering personnel available to Purchaser at all reasonable times for the
purposes of discussing Environmental Matters.

	(d)
	The
Parties acknowledge and agree that Vendor shall remain liable for, and the indemnity provided by Purchaser in Subsection 6.2(a) shall not, under any circumstances,
extend to environmental obligations and liabilities attributable to the Assets resulting from:

	(i)
	any
illness, injury or death to any person, caused by an activity or omission of Vendor; and

	(ii)
	any
and all criminal liability under Applicable Law, fines or penalties caused by, related to or arising in connection with violations of Environmental Laws by Vendor; 

        which
may have occurred or accrued prior to the Effective Time and which may be enforced subject to applicable limitation periods. 

6.3   Indemnification for Representations and Warranties  

	(a)
	After
Closing and subject to all other provisions of this Article 6, Vendor shall continue to be liable for and indemnify, defend and save harmless Purchaser, its Affiliates
and their respective directors, officers, employees, agents and representatives from and against any and all claims, demands, actions, causes of action, damages, losses, costs (including legal costs
on a solicitor/client basis), liabilities or expenses suffered, or incurred by any of them, as a direct or indirect result of:

	(i)
	any
breach of a representation or warranty of Vendor set forth in section 5.1; and

	(ii)
	any
breach of a covenant or agreement of Vendor contained in this Agreement.

	(b)
	After
Closing and subject to all other provisions of this Article 6, Purchaser shall continue to be liable for and indemnify, defend and save harmless Vendor, its Affiliates
and their respective directors, officers, employees, agents and representatives from and against any and all claims, demands, actions, causes of action, damages, losses, costs (including legal costs
on a solicitor/client basis), liabilities or expenses suffered, or incurred by any of them, as a direct or indirect result of:

	(i)
	any
breach of a representation or warranty of Purchaser set forth in section 5.1; and

	(ii)
	any
breach of a covenant or agreement of Purchaser contained in this Agreement.

	(c)
	Except
as provided in section 6.2, each of the indemnities specified in section 6.3(a) and (b) applies only to those claims made within 18 months of
the Closing Date and to the extent that the liabilities, losses, costs, claims or damages suffered or incurred by Vendor or Purchaser, as the case may be, have not arisen as a result of the negligence
or willful misconduct of the party 

18

 

claiming
the indemnity or as a result of a breach of any of that party's covenants, warranties, representations or obligations under this Agreement. 

6.4   Application to Other Documents  

        The indemnities contained in sections 6.1, 6.2 and 6.3 shall apply to all assignments, transfers, conveyances, novations and other documents conveying the
Assets to Purchaser despite the actual terms of those assignments, transfers, conveyances, novations and other documents. 

6.5   Limitation  

        All claims made pursuant to Articles 5 and 6 must be in writing and include particulars of the claim and of the facts giving rise to it. The liability of one
party to the other for the aggregate of all claims made pursuant to Article 5 and sections 6.1 and 6.3 shall not exceed the Purchase Price. 

6.6   Substitution and Subrogation  

        To the extent possible, Vendor shall convey the Assets to Purchaser with full right of substitution and subrogation of Purchaser in the position of Vendor with
respect to the benefit of all covenants and warranties previously given by others for the Assets or any part of them. 

6.7   Performance Guarantee of Pacific  

	(a)
	Should
Purchaser fail to perform any of its covenants or obligations under this Agreement, or fail to provide or execute any of the documents set forth under this Agreement, or any of
the documents set forth in Schedule "L", Pacific agrees it will fully guarantee the payment and performance of those obligations of Purchaser under this Agreement, any of the documents
set forth under this Agreement or any of the documents set forth in Schedule "L" which have not been performed promptly upon demand therefor from Vendor subject to the limitations,
disclaimers and conditions contained in this Agreement. All defences and counterclaims available to Purchaser shall also be available to Pacific. Vendor acknowledges and agrees that Pacific is
executing this Agreement only for the purposes of assenting to this provision and making the related representations and warranties in section 5.4 of this Agreement.

	(b)
	At
any time after the tenth anniversary of the Closing Date, Pacific shall have the right to terminate its guarantee under section 6.7(a) by delivering to Vendor:

	(i)
	a
written agreement, in a form reasonably satisfactory to Vendor, executed in favour of Vendor by any Affiliate of Pacific or Purchaser (the
"Substitute Guarantor") whereby the Substitute Guarantor assumes all of the obligations of Pacific under section 6.7 (a); and

	(ii)
	an
audited balance sheet of the Substitute Guarantor prepared in accordance with GAAP that shows the Substitute Guarantor having a net worth of at least one
hundred million dollars ($100,000,000) as of the close of the Substitute Guarantor's fiscal year immediately preceding delivery of the assumption agreement and balance sheet. 

        Upon
delivery by Pacific of the foregoing documents, Pacific's obligations under this agreement shall terminate and be null and void, except that Pacific shall continue to be liable
under Section 6.7(a) with respect to any claims filed by Vendor prior to such delivery. 

	(c)
	If
at any subsequent point in time after the assumption of obligations by the Substitute Guarantor as provided in section 6.7(b), the Substitute Guarantor shall cease to
maintain a net worth greater than that set out in section 6.7(b)(ii) as a result of any affirmative act or acts of the Substitute Guarantor or its owners to restructure the assets or
capital structure of the Substitute Guarantor, then Pacific shall provide to Vendor a written agreement, in a form reasonably satisfactory to 

19

 

Vendor,
executed in favour of Vendor by Pacific, whereby Pacific re-assumes all of the obligations under section 6.7(a), subject again to Sections 6.7(b) and (c). 

	(d)
	In
the event Pacific and its Affiliates at any time after the Closing Date divest themselves of assets and interests in entities such that Pacific or the Substitute Guarantor, as
applicable, no longer holds any material ownership interest, direct or indirect, in the assets that make up what is, as of the date hereof, commonly referred to as the Rangeland pipeline system and
the Mid Alberta pipeline; then Pacific or the Substitute Guarantor may assign its obligations under section 6.7(a) to the purchaser of such assets or entities provided Vendor, acting
reasonably, consents to the assignment and the purchaser enters into a written agreement, in favour of Vendor, in a form reasonably satisfactory to Vendor whereby the purchaser assumes the obligations
of Pacific or the Substitute Guarantor under 6.7(a), in which case Pacific shall be released from the obligations specified in Subsection 6.7(a). 

ARTICLE 7

GENERAL  

7.1   Consequences of Termination  

        If this Agreement is terminated in accordance with its terms prior to the Closing, then the parties shall be released from all of their obligations under this
Agreement except as follows: 

	(a)
	a
party shall remain liable for breaches of any covenants, warranties, representations or other obligations prior to the time at which termination occurs;

	(b)
	each
party shall be responsible for its own costs;

	(c)
	if
Closing does not occur due to a breach of representation or warranty made by Purchaser in section 5.3 or a breach of Purchaser of a covenant in this Agreement or as a
consequence of the failure to satisfy the conditions precedent in section 4.5, the Deposit shall be forfeited to and retained by Vendor for its own account absolutely as a genuine preestimate
by Vendor and Purchaser of Vendor's entire liquidated damages as a result of such breach and the retention of the Deposit by Vendor in such circumstances shall be Vendor's sole remedy in the event of
such breach by Purchaser; and

	(d)
	if
Closing does not occur for any reason or circumstance other than specified in section 7.1(c), the Deposit with interest thereon at Prime, calculated from the date the
Deposit is received by Vendor up to, but not including, the date the Deposit is refunded, shall be returned to Purchaser for the account of Purchaser absolutely. 

        If
this Agreement is terminated, Purchaser shall immediately return to Vendor all materials delivered to Purchaser by Vendor, together with all copies of them that may have been made by
Purchaser. 

20

 

7.2   Notices  

	(a)
	All
notices and other communications given in connection with this Agreement shall be in writing and may be given by delivering them or mailing them by registered mail or sending them
by facsimile or other similar form of communication to the parties at the following addresses: 

	VENDOR:	 	Imperial Oil Resources,

237 - 4th Avenue S.W.

Box 2480, Station M

Calgary, Alberta

T2P 3M9
	 	 	Attention:	 	Manager, Asset Enhancement
	 	 	FAX:	 	(403) 237-4265
	PURCHASER:	 	Rangeland Northern Pipeline Company

Suite 810, 555 - 4th Avenue S.W.

Calgary, Alberta T2P 3E7
	 	 	Attention:	 	Vice-President, Operations
	 	 	FAX:	 	(403) 263-1715
	GUARANTOR:	 	Pacific Energy Partners, L.P.

5900 Cherry Avenue

Long Beach, CA 90805-4408

USA
	 	 	Attention:	 	President
	 	 	FAX:	 	(562) 728-2823

	(b)
	Any
notice, direction or instrument shall:

	(i)
	if
delivered, be deemed to have been given or made at the time of delivery;

	(ii)
	if
mailed by registered mail and properly addressed, be deemed to have been given or made on the 7th day following the day on which it was mailed. If at the time of
mailing or between the time of mailing and the actual receipt of the notice, a mail strike, slowdown or other labour dispute occurs that may affect the delivery of the notice by mail, then the notice
is effective only if actually delivered or if given in accordance with paragraph (iii); and

	(iii)
	if
sent by facsimile or other similar form of communication, be deemed to have been given or made on the first Business Day following the day on which it was sent.

	(c)
	Any
party may give written notice of change of address in the same manner described in this section, in which event subsequent notices and other communications shall be given to that
party at the changed address. 

7.3   Public Announcements  

        Vendor and Purchaser shall cooperate with each other in releasing information concerning this Agreement and the transactions provided for by it, and shall furnish
to and discuss with the other party drafts of all press and other releases prior to publication. This section does not prevent either party from furnishing information to any Government
Authorities or to the public if required by law, however, the parties shall advise each other in advance of any public statement they propose to make regarding this Agreement. 

21

   7.4   Transfer of Ownership  

	(a)
	Vendor
shall prepare all transfers, conveyances and documents required to assign the interest of Vendor in and to the Assets to Purchaser at Purchaser's cost, none of which shall
confer or impose upon a party a greater right of obligation than contemplated in this Agreement.

	(b)
	After
Closing Date, Purchaser shall, unless otherwise agreed by Vendor, promptly register in the applicable registry all registrable transfers, conveyances and changes of name related
to the Assets. Purchaser shall be responsible for notifying product purchasers, suppliers, contractors, Government Authorities and any other Third Party of its acquisition of the Assets. Purchaser is
responsible for all costs of registration and all costs associated with obtaining execution by Third Parties where their execution is required. One copy of those documents evidencing execution by
Third Parties or registration, as applicable, shall be provided to Vendor by Purchaser as soon as is reasonably possible. Where necessary, Purchaser shall erect, install or correct any signs as may be
required by Government Authorities indicating ownership or operatorship of the Assets and Vendor may remove any signs that indicate Vendor's ownership or operation of the Assets. 

7.5   Line Fill  

        Existing line fill in the Pipeline Assets is owned by Vendor and will be displaced by line fill owned by Purchaser on the basis of first in—first out. 

7.6   Further Assurances  

        Vendor and Purchaser shall on and after Closing Date, at the request of the other and without further consideration, do and perform all further acts and execute
and deliver all further documents reasonably required and co-operate in securing execution of all documents by Third Parties where required to ensure the conveyance of the Assets to
Purchaser and to ensure the carrying out of the terms of this Agreement. 

7.7   Confidentiality  

        The information disclosed under the Confidentiality Agreement (the "Confidential Information") shall be governed by the Confidentiality Agreement provided that
upon Closing, the Purchaser's rights to use or disclose such information shall be subject only to any document of title governing the Assets. Purchaser and Pacific or their respective officers,
employees or representatives shall not disclose any information concerning any aspect of the transactions contemplated by this Agreement, to anyone other than as required by Government Authorities or
by law without the prior written consent of Vendor. This obligation terminates when that information becomes generally available to the public other than through the breach by Purchaser or Pacific or
their respective officers, employees or representatives, or after completion of the purchase of the Assets by Purchaser. 

7.8   Assignment  

        Neither party may assign its interest in or under this Agreement without the prior written consent of the other party provided that either party may assign their
entire interest in this Agreement to an Affiliate without the other party's prior written consent. Any assignment shall take effect upon notice thereof being given to the other party together with the
written assumption of such assignee of all the obligations hereunder of the assigning party. 

7.9   Enurement  

        This Agreement enures to the benefit of and is binding upon the parties and their respective successors and permitted assigns. 

22

 

7.10 Time of Essence  

        Time is of the essence. 

7.11 Governing Law  

        This Agreement will be interpreted and enforced in accordance with the laws in force in the Province of Alberta, and each of the parties submits to the
jurisdiction of the courts of the Province of Alberta for the interpretation and enforcement of this Agreement. 

7.12 Waiver  

        A waiver by either party is not effective unless in writing, and a waiver affects only the matter and its occurrence specifically identified in the writing
granting the waiver and does not extend to any other matter or occurrence. 

7.13 Non-Merger  

        The provisions contained in this Agreement shall survive Closing Date and shall not merge in any conveyance, transfer, assignment, novation agreement or other
document or instrument issued pursuant to or in connection with this Agreement. 

7.14 Supercedes Letter of Intent  

        This Agreement supersedes the Letter of Intent. 

7.15 Counterpart  

        This Agreement may be executed in as many counterparts as are necessary and all executed counterparts together shall constitute one agreement. 

23

 

THE PARTIES HAVE EXECUTED THIS AGREEMENT AS FOLLOWS:  

IMPERIAL OIL, by its partners, 

	
IMPERIAL OIL LIMITED,	
 	

RANGELAND NORTHERN PIPELINE
	by its attorney	 	COMPANY

by:
	

/s/  PHILLIP J. GRAHAM      
 Phillip J. Graham	
 	

/s/  IRVIN TOOLE, JR.      
 Irvin Toole, Jr.
	Manager—Asset Enhancement	 	President and Chief Executive Officer
	

 	
 	

	
McCOLL-FRONTENAC PETROLEUM INC.,	
 	

PACIFIC ENERGY PARTNERS L.P.
	by its attorney	 	By Pacific Energy GP, Inc, its general partner

By:
	

/s/  PHILLIP J. GRAHAM      
 Phillip J. Graham	
 	

/s/  IRVIN TOOLE, JR.      
 Irvin Toole, Jr.
	Manager—Asset Enhancement	 	President and Chief Executive Officer
	

 	
 	

24

QuickLinks

AGREEMENT OF PURCHASE AND SALE<Page>

                                                                     Exhibit 4.2

                                  HOSPIRA, INC.

                                       TO

                        LASALLE BANK NATIONAL ASSOCIATION

                                     Trustee

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

                                    INDENTURE

                            Dated as of June 14, 2004

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

<Page>

                                  Hospira, Inc.
                 Certain Sections of this Indenture relating to
                  Sections 3.10 through 3.18, inclusive, of the
                    Trust Indenture Act of 1939, as amended:

<Table>
<Caption>
      Provisions of Trust
    Indenture Act of 1939,
          as amended                                          Indenture Section
        <S>                                                     <C>
        Section 310(a)(1)                                       6.9
                   (a)(2)                                       6.9
                   (a)(3)                                       Not Applicable
                   (a)(4)                                       Not Applicable
                      (b)                                       6.8, 6.10
                      (c)                                       Not Applicable
           Section 311(a)                                       6.13
                      (b)                                       6.13
                      (c)                                       Not Applicable
           Section 312(a)                                       7.1, 7.2(a)
                      (b)                                       7.2(b)
                      (c)                                       7.2(c)
           Section 313(a)                                       7.3(a)
                      (b)                                       7.3(a)
                      (c)                                       7.3(a)
                      (d)                                       7.3(b)
           Section 314(a)                                       7.4
                   (a)(4)                                       1.1, 10.4
                      (b)                                       Not Applicable
                   (c)(1)                                       1.2
                   (c)(2)                                       1.2
                   (c)(3)                                       Not Applicable
                      (d)                                       Not Applicable
                      (e)                                       1.2
           Section 315(a)                                       6.1
                      (b)                                       6.2
                      (c)                                       6.1
                      (d)                                       6.1
                      (e)                                       5.14
           Section 316(a)                                       1.1
                (a)(1)(A)                                       5.2, 5.12
                (a)(1)(B)                                       5.13
                   (a)(2)                                       Not Applicable
                      (b)                                       5.8
                      (c)                                       1.4(c)
        Section 317(a)(1)                                       5.3
                   (a)(2)                                       5.4
                      (b)                                       10.3
           Section 318(a)                                       1.7
</Table>

NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.

<Page>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                            PAGE
<S>             <C>                                                                           <C>
                                            ARTICLE I
                     DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.1     Definitions....................................................................1

Section 1.2     Compliance Certificates and Opinions...........................................6

Section 1.3     Form of Documents Delivered to Trustee.........................................7

Section 1.4     Acts of Holders; Record Dates..................................................7

Section 1.5     Notices, Etc., to Trustee and Company..........................................8

Section 1.6     Notice to Holders; Waiver......................................................8

Section 1.7     Conflict with Trust Indenture Act..............................................9

Section 1.8     Effect of Headings and Table of Contents.......................................9

Section 1.9     Separability Clause............................................................9

Section 1.10    Benefits of Indenture..........................................................9

Section 1.11    Governing Law..................................................................9

Section 1.12    Legal Holidays.................................................................9

                                           ARTICLE II
                                         SECURITY FORMS

Section 2.1     Forms Generally...............................................................10

Section 2.2     Form of Face of Security......................................................10

Section 2.3     Form of Reverse of Security...................................................12

Section 2.4     Additional Provisions Required in Book-Entry Security.........................15

Section 2.5     Form of Trustee's Certificate of Authentication...............................15

                                           ARTICLE III
                                         THE SECURITIES

Section 3.1     Amount Unlimited; Issuable in Series..........................................15

Section 3.2     Denominations.................................................................17

Section 3.3     Execution, Authentication, Delivery and Dating................................17

Section 3.4     Temporary Securities..........................................................18

Section 3.5     Registration, Registration of Transfer and Exchange...........................19

Section 3.6     Mutilated, Destroyed, Lost and Stolen Securities..............................20

Section 3.7     Payment of Interest; Interest Rights Preserved................................20

Section 3.8     Persons Deemed Owners.........................................................21

Section 3.9     Cancellation..................................................................22

Section 3.10    Computation of Interest.......................................................22
</Table>

                                       -i-
<Page>

                                TABLE OF CONTENTS
                                   (continued)

<Table>
<Caption>
                                                                                            PAGE
<S>             <C>                                                                           <C>
                                           ARTICLE IV
                                   SATISFACTION AND DISCHARGE

Section 4.1     Satisfaction and Discharge of Indenture.......................................22

Section 4.2     Application of Trust Money....................................................23

                                            ARTICLE V
                                            REMEDIES

Section 5.1     Events of Default.............................................................23

Section 5.2     Acceleration of Maturity; Rescission and Annulment............................24

Section 5.3     Collection of Indebtedness and Suits for Enforcement by Trustee...............25

Section 5.4     Trustee May File Proofs of Claim..............................................26

Section 5.5     Trustee May Enforce Claims Without Possession of Securities...................26

Section 5.6     Application of Money Collected................................................26

Section 5.7     Limitation on Suits...........................................................27

Section 5.8     Unconditional Right of Holders to Receive Principal, Premium and Interest.....27

Section 5.9     Restoration of Rights and Remedies............................................27

Section 5.10    Rights and Remedies Cumulative................................................27

Section 5.11    Delay or Omission Not Waiver..................................................28

Section 5.12    Control by Holders............................................................28

Section 5.13    Waiver of Past Defaults.......................................................28

Section 5.14    Undertaking for Costs.........................................................28

Section 5.15    Waiver of Stay or Extension Laws..............................................29

                                           ARTICLE VI
                                          THE TRUSTEE

Section 6.1     Certain Duties and Responsibilities...........................................29

Section 6.2     Notice of Defaults............................................................29

Section 6.3     Certain Rights of Trustee.....................................................29

Section 6.4     Not Responsible for Recitals or Issuance of Securities........................30

Section 6.5     May Hold Securities...........................................................30

Section 6.6     Money Held in Trust...........................................................30

Section 6.7     Compensation and Reimbursement................................................30

Section 6.8     Disqualification; Conflicting Interests.......................................31

Section 6.9     Corporate Trustee Required; Eligibility.......................................31

Section 6.10    Resignation and Removal; Appointment of Successor.............................31
</Table>

                                      -ii-
<Page>

                                TABLE OF CONTENTS
                                   (continued)

<Table>
<Caption>
                                                                                            PAGE
<S>             <C>                                                                           <C>
Section 6.11    Acceptance of Appointment by Successor........................................32

Section 6.12    Merger, Conversion, Consolidation or Succession to Business...................33

Section 6.13    Preferential Collection of Claims Against Company.............................34

Section 6.14    Appointment of Authenticating Agent...........................................34

                                           ARTICLE VII
                        HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 7.1     Company to Furnish Trustee Names and Addresses of Holders.....................35

Section 7.2     Preservation of Information; Communications to Holders........................35

Section 7.3     Reports by Trustee............................................................36

Section 7.4     Reports by Company............................................................36

                                          ARTICLE VIII
                      CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 8.1     Company May Consolidate, Etc., Only on Certain Terms..........................36

Section 8.2     Successor Substituted.........................................................37

                                           ARTICLE IX
                                     SUPPLEMENTAL INDENTURES

Section 9.1     Supplemental Indentures Without Consent of Holders............................37

Section 9.2     Supplemental Indentures with Consent of Holders...............................38

Section 9.3     Execution of Supplemental Indentures..........................................39

Section 9.4     Effect of Supplemental Indentures.............................................39

Section 9.5     Conformity with Trust Indenture Act...........................................39

Section 9.6     Reference in Securities to Supplemental Indentures............................39

                                            ARTICLE X
                                            COVENANTS

Section 10.1    Payment of Principal, Premium and Interest....................................40

Section 10.2    Maintenance of Office or Agency...............................................40

Section 10.3    Money for Securities Payments to Be Held in Trust.............................40

Section 10.4    Statement by Officers as to Default...........................................41

Section 10.5    Existence.....................................................................41

Section 10.6    Maintenance of Properties.....................................................41

Section 10.7    Payment of Taxes and Other Claims.............................................42

Section 10.8    Restrictions on Secured Debt..................................................42

Section 10.9    Limitation on Sales and Leasebacks............................................43

Section 10.10   Waiver of Certain Covenants...................................................43
</Table>

                                      -iii-
<Page>

                                TABLE OF CONTENTS
                                   (continued)

<Table>
<Caption>
                                                                                            PAGE
<S>             <C>                                                                           <C>
                                           ARTICLE XI
                                    REDEMPTION OF SECURITIES

Section 11.1    Applicability of Article......................................................44

Section 11.2    Election to Redeem; Notice to Trustee.........................................44

Section 11.3    Selection by Trustee of Securities to Be Redeemed.............................44

Section 11.4    Notice of Redemption..........................................................44

Section 11.5    Deposit of Redemption Price...................................................45

Section 11.6    Securities Payable on Redemption Date.........................................45

Section 11.7    Securities Redeemed in Part...................................................46

                                           ARTICLE XII
                                          SINKING FUNDS

Section 12.1    Applicability of Article......................................................46

Section 12.2    Satisfaction of Sinking Fund Payments with Securities.........................46

Section 12.3    Redemption of Securities for Sinking Fund.....................................46

                                          ARTICLE XIII
                               DEFEASANCE AND COVENANT DEFEASANCE

Section 13.1    Applicability of Article; Company's Option to Effect Defeasance or Covenant
                Defeasance....................................................................47

Section 13.2    Defeasance and Discharge......................................................47

Section 13.3    Covenant Defeasance...........................................................47

Section 13.4    Conditions to Defeasance or Covenant Defeasance...............................48

Section 13.5    Deposited Money and U.S. Government Obligations to be Held in Trust; Other
                Miscellaneous Provisions......................................................49

Section 13.6    Reinstatement.................................................................50
</Table>

                                      -iv-
<Page>

       INDENTURE, dated as of June 14, 2004 between Hospira, Inc., a corporation
duly organized and existing under the laws of the State of Delaware (herein
called the "Company"), having its principal office at 275 North Field Drive,
Lake Forest, Illinois 60045, and LaSalle Bank National Association, a national
banking association duly organized and existing under the laws of the United
States of America, as Trustee (herein called the "Trustee").

                             RECITALS OF THE COMPANY

       The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.

       All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.

                   NOW, THEREFORE, THIS INDENTURE WITNESSETH:

       For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:

                                    ARTICLE I

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

       Section 1.1      DEFINITIONS.

       For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

               (1)      the terms defined in this Article have the meanings
       assigned to them in this Article and include the plural as well as the
       singular;

               (2)      all other terms used herein which are defined in the
       Trust Indenture Act, either directly or by reference therein, have the
       meanings assigned to them therein;

               (3)      all accounting terms not otherwise defined herein have
       the meanings assigned to them in accordance with generally accepted
       accounting principles, and, except as otherwise herein expressly
       provided, the term "generally accepted accounting principles" with
       respect to any computation required or permitted hereunder shall mean
       such accounting principles as are generally accepted at the date of such
       computation; and

               (4)      the words "herein", "hereof" and "hereunder" and other
       words of similar import refer to this Indenture as a whole and not to any
       particular Article, Section or other subdivision.

       "Act," when used with respect to any Holder, has the meaning specified in
Section 1.4.

       "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the

<Page>

management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.

       "Attributable Debt" means (except as otherwise provided in this
paragraph), as to any particular lease under which any Person is at the time
liable for a term of more than 12 months, at any date as of which the amount
thereof is to be determined (the "determination date"), the total net amount of
rent required to be paid by such Person under such lease during the remaining
term thereof (excluding any subsequent renewal or other extension options held
by the lessee), discounted from the respective due dates thereof to the
determination date at the rate of 8% per annum, compounded monthly. The net
amount of rent required to be paid under any such lease for any such period
shall be the aggregate amount of the rent payable by the lessee with respect to
such period after excluding amounts required to be paid on account of
maintenance and repairs, services, insurance, taxes, assessments, water rates
and similar charges and contingent rents (such as those based on sales or
monetary inflation). If any lease is terminable by the lessee upon the payment
of a penalty, if under the terms of the lease the termination right is not
exercisable until after the determination date, and if the amount of such
penalty discounted to the determination date at the rate of 8% per annum
compounded monthly is less than the net amount of rentals payable after the time
as of which such termination could occur (the "termination time") discounted to
the determination date at the rate of 8% per annum compounded monthly, then such
discounted penalty amount shall be used instead of such discounted amount of net
rentals payable after the termination time in calculating the Attributable Debt
for such lease. If any lease is terminable by the lessee upon the payment of a
penalty, if such termination right is exercisable on the determination date, and
if the amount of the net rentals payable under such lease after the
determination date discounted to the determination date at the rate of 8% per
annum compounded monthly is greater than the amount of such penalty, the
"Attributable Debt" for such lease as of such determination date shall be equal
to the amount of such penalty.

       "Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.

       "Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board.

       "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

       "Book-Entry Security" means a Security in the form prescribed in Section
2.4 evidencing all or part of a series of Securities, issued to the Depository
for such series or its nominee, and registered in the name of such Depository or
nominee.

       "Business Day," when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.

       "Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.

                                        2
<Page>

       "Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.

       "Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Chief
Executive Officer, a Senior Vice President or a Corporate Vice President, and by
its Chief Financial Officer, its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.

       "Consolidated Net Assets" means the aggregate amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom all current liabilities, as set forth on the consolidated balance
sheet of the Company and its consolidated subsidiaries prepared as of the end of
a fiscal year in accordance with generally accepted accounting principles which
the Company shall have most recently distributed to its shareholders prior to
the time as of which "Consolidated Net Assets" shall be determined.

       "Corporate Trust Office" means the principal office of the Trustee in
Chicago, Illinois at which at any particular time its corporate trust business
shall be administered.

       "Corporation" means a corporation, association, company, joint-stock
company or business trust.

       "Defaulted Interest" has the meaning specified in Section 3.7.

       "Depository" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Book-Entry Securities,
the Person designated as Depository for such series by the Company pursuant to
Section 3.1, which Person shall be a clearing agency registered under the
Securities Exchange Act of 1934, as amended.

       "Domestic Subsidiary" means any Subsidiary substantially all the property
of which is located, or substantially all of the business of which is carried
on, within the United States of America (excluding its territories and
possessions and Puerto Rico), provided, however, that the term shall not include
any Subsidiary which (i) is engaged principally in the financing of operations
outside of the United States of America or in leasing personal property or
financing inventory, receivables or other property or (ii) does not own a
Principal Domestic Property.

       "Event of Default" has the meaning specified in Section 5.1.

       "Funded Debt" means indebtedness of the Company (other than the
Securities or indebtedness subordinated to the Securities) or indebtedness of a
wholly-owned Domestic Subsidiary, for money borrowed, having a stated maturity
more than 12 months from the date of application of sale/leaseback proceeds or
which is extendible at the option of the obligor thereon to a date more than 12
months from the date of such application.

       "Holder" means a Person in whose name a Security is registered in the
Security Register.

       "Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 3.1.

                                        3
<Page>

       "interest," when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.

       "Interest Payment Date," when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.

       "Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.

       "Mortgage" means any mortgage, pledge, lien, security interest,
conditional sale or other title retention agreement or other similar
encumbrance.

       "Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Chief Executive Officer, a Senior Vice President or a Corporate Vice
President, and by the Chief Financial Officer, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company, and delivered
to the Trustee. One of the officers signing an Officers' Certificate given
pursuant to Section 10.4 shall be the principal executive, financial or
accounting officer of the Company.

       "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.

       "Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 5.2.

       "Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, EXCEPT:

               (i)      Securities theretofore cancelled by the Trustee or
       delivered to the Trustee for cancellation;

               (ii)     Securities for whose payment or redemption money in the
       necessary amount has been theretofore deposited with the Trustee or any
       Paying Agent (other than the Company) in trust or set aside and
       segregated in trust by the Company (if the Company shall act as its own
       Paying Agent) for the Holders of such Securities; PROVIDED that, if such
       Securities are to be redeemed, notice of such redemption has been duly
       given pursuant to this Indenture or provision therefor satisfactory to
       the Trustee has been made; and

               (iii)    Securities which have been paid pursuant to Section 3.6
       or in exchange for or in lieu of which other Securities have been
       authenticated and delivered pursuant to this Indenture, other than any
       such Securities in respect of which there shall have been presented to
       the Trustee proof satisfactory to it that such Securities are held by a
       bona fide purchaser in whose hands such Securities are valid obligations
       of the Company;

PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof pursuant to Section 5.2, (ii) the principal amount of a Security
denominated in one or more foreign currencies or currency units shall be the
U.S.

                                        4
<Page>

dollar equivalent, determined in the manner provided as contemplated by Section
3.1 on the date of original issuance of such Security, of the principal amount
(or, in the case of an Original Issue Discount Security, the U.S. dollar
equivalent on the date of original issuance of such Security of the amount
determined as provided in (i) above) of such Security, and (iii) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.

       "Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.

       "Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.

       "Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 3.1.

       "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

       "Principal Domestic Property" means any building, structure or other
facility, together with the land upon which it is erected and fixtures
comprising a part thereof, used primarily for manufacturing, processing,
research, warehousing or distribution and located in the United States of
America (excluding its territories and possessions and Puerto Rico) owned or
leased by the Company or any Subsidiary the net book value of which on the date
as of which the determination is being made exceeds 2% of Consolidated Net
Assets, other than any such building structure or other facility or portion of
any thereof (i) which is an air or water pollution control facility financed by
obligations issued by a State or local governmental unit, or (ii) which the
Chairman of the Board, the Chief Executive Officer, a Senior Vice President or a
Corporate Vice President, and the Chief Financial Officer, the Treasurer of the
Company determine in good faith is not of material importance to the total
business conducted, or assets owned, by the Company and its Subsidiaries as an
entirety.

       "Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.

       "Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

       "Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 3.1.

                                        5
<Page>

       "Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.

       "Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.5.

       "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.

       "Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.

       "Subsidiary" means any corporation of which the Company directly or
indirectly owns or controls stock which under ordinary circumstances (not
dependent upon the happening of a contingency) has voting power to elect a
majority of the board of directors of such corporation; provided, however, that
the term shall not include any such corporation if and so long as (i) such
corporation does not own a Principal Domestic Property and (ii) the Chairman of
the Board, the Chief Executive Officer, a Senior Vice President or a Corporate
Vice President, and the Chief Financial Officer, the Treasurer, or an Assistant
Treasurer of the Company determine in good faith at least annually that the then
aggregate investments by the Company and its Domestic Subsidiaries (including
all guarantees and other extensions of credit) in such corporation are not of
material importance to the total business conducted, or assets owned, by the
Company and its Domestic Subsidiaries.

       "Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
or include each Person who is then a Trustee hereunder, and if at any time there
is more than one such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities of that series.

       "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; PROVIDED, HOWEVER, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.

       "Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."

       Section 1.2      COMPLIANCE CERTIFICATES AND OPINIONS.

       Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.

       Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include

                                        6
<Page>

               (1)      a statement that each individual signing such
       certificate or opinion has read such covenant or condition and the
       definitions herein relating thereto;

               (2)      a brief statement as to the nature and scope of the
       examination or investigation upon which the statements or opinions
       contained in such certificate or opinion are based;

               (3)      a statement that, in the opinion of each such
       individual, he has made such examination or investigation as is necessary
       to enable him to express an informed opinion as to whether or not such
       covenant or condition has been complied with; and

               (4)      a statement as to whether, in the opinion of each such
       individual, such condition or covenant has been complied with.

       Section 1.3      FORM OF DOCUMENTS DELIVERED TO TRUSTEE.

       In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

       Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.

       Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

       Section 1.4      ACTS OF HOLDERS; RECORD DATES.

               (1)      Any request, demand, authorization, direction, notice,
       consent, waiver or other action provided by this Indenture to be given or
       taken by Holders may be embodied in and evidenced by one or more
       instruments of substantially similar tenor signed by such Holders in
       person or by agent duly appointed in writing; and, except as herein
       otherwise expressly provided, such action shall become effective when
       such instrument or instruments are delivered to the Trustee and, where it
       is hereby expressly required, to the Company. Such instrument or
       instruments (and the action embodied therein and evidenced thereby) are
       herein sometimes referred to as the "Act" of the Holders signing such
       instrument or instruments. Proof of execution of any such instrument or
       of a writing appointing any such agent shall be sufficient for any
       purpose of this Indenture and (subject to Section 6.1) conclusive in
       favor of the Trustee and the Company, if made in the manner provided in
       this Section.

                                        7
<Page>

               (2)      The fact and date of the execution by any Person of any
       such instrument or writing may be proved by the affidavit of a witness of
       such execution or by a certificate of a notary public or other officer
       authorized by law to take acknowledgments of deeds, certifying that the
       individual signing such instrument or writing acknowledged to him the
       execution thereof. Where such execution is by a signer acting in a
       capacity other than his individual capacity, such certificate or
       affidavit shall also constitute sufficient proof of his authority. The
       fact and date of the execution of any such instrument or writing, or the
       authority of the Person executing the same, may also be proved in any
       other manner which the Trustee deems sufficient.

               (3)      The Company may, in the circumstances permitted by the
       Trust Indenture Act, fix any day as the record date for the purpose of
       determining the Holders of Securities of any series entitled to give or
       take any request, demand, authorization, direction, notice, consent,
       waiver or other action, or to vote on any action, authorized or permitted
       to be given or taken by Holders of Securities of such series. If not set
       by the Company prior to the first solicitation of a Holder of Securities
       of such series made by any Person in respect of any such action, or, in
       the case of any such vote, prior to such vote, the record date for any
       such action or vote shall be the 30th day (or, if later, the date of the
       most recent list of Holders required to be provided pursuant to Section
       7.1) prior to such first solicitation or vote, as the case may be. With
       regard to any record date for action to be taken by the Holders of one or
       more series of Securities, only the Holders of Securities of such series
       on such date (or their duly designated proxies) shall be entitled to give
       or take, or vote on, the relevant action.

               (4)      The ownership of Securities shall be proved by the
       Security Register.

               (5)      Any request, demand, authorization, direction, notice,
       consent, waiver or other Act of the Holder of any Security shall bind
       every future Holder of the same Security and the Holder of every Security
       issued upon the registration of transfer thereof or in exchange therefor
       or in lieu thereof in respect of anything done, omitted or suffered to be
       done by the Trustee or the Company in reliance thereon, whether or not
       notation of such action is made upon such Security.

       Section 1.5      NOTICES, ETC., TO TRUSTEE AND COMPANY.

       Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,

               (1)      the Trustee by any Holder or by the Company shall be
       sufficient for every purpose hereunder if made, given, furnished or filed
       in writing to or with the Trustee at its Corporate Trust Office,
       Attention: Corporate Trust Administration, or

               (2)      the Company by the Trustee or by any Holder shall be
       sufficient for every purpose hereunder (unless otherwise herein expressly
       provided) if in writing and mailed, first-class postage prepaid, to the
       Company addressed to it at the address of its principal office specified
       in the first paragraph of this instrument, Attention: Treasurer or at any
       other address previously furnished in writing to the Trustee by the
       Company.

       Section 1.6      NOTICE TO HOLDERS; WAIVER.

       Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice.

                                        8
<Page>

In any case where notice to Holders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect to other
Holders. Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.

       In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.

       Section 1.7      CONFLICT WITH TRUST INDENTURE ACT.

       If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.

       Section 1.8      EFFECT OF HEADINGS AND TABLE OF CONTENTS.

       The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

       Section 1.9      SUCCESSORS AND ASSIGNS.

       All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.

       Section 1.9      SEPARABILITY CLAUSE.

       In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

       Section 1.10     BENEFITS OF INDENTURE.

       Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.

       Section 1.11     GOVERNING LAW.

       This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.

       Section 1.12     LEGAL HOLIDAYS.

       In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision

                                        9
<Page>

of this Indenture or of the Securities (other than a provision of the Securities
of any series which specifically states that such provision shall apply in lieu
of this Section)) payment of interest or principal (and premium, if any) need
not be made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, PROVIDED that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be.

                                   ARTICLE II

                                 SECURITY FORMS

       Section 2.1      FORMS GENERALLY.

       The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 3.3 for the authentication and delivery of such
Securities.

       The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.

       Section 2.2      FORM OF FACE OF SECURITY.

       [INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE
REGULATIONS THEREUNDER.]

                                  Hospira, Inc.

No. ..................                                    $ .................

       Hospira, Inc., a corporation duly organized and existing under the laws
of Delaware (herein called the "Company," which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to _________________________________, or registered assigns, the
principal sum of ________________________________ Dollars on ________________
______________ [IF THE SECURITY IS TO BEAR INTEREST, PRIOR TO MATURITY, INSERT
-, and to pay interest thereon from ____________ or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on _____________ and __________ in each year, commencing
______________, at the rate of .______% per annum, until the principal hereof is
paid or made available for payment [IF APPLICABLE, INSERT -, and (to the extent
that the payment of such interest shall be legally enforceable) at the rate of
.._____% per annum on any overdue principal and premium and on any overdue
installment of interest]. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or

                                       10
<Page>

one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be the _____ or _____
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture].

       [IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT - The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of _____% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand. Any
such interest on any overdue principal that is not so paid on demand shall bear
interest at the rate of _____% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
demand for payment to the date payment of such interest has been made or duly
provided for, and such interest shall also be payable on demand.]

       Payment of the principal of (and premium, if any) and [IF APPLICABLE
INSERT - any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in Chicago, Illinois, in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts [IF APPLICABLE INSERT -;
PROVIDED, HOWEVER, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register].

       Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

       Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

                                       11
<Page>

       IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated:                                    HOSPIRA, INC.

                                          By:
                                             ---------------------------

Attest:

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

       Section 2.3      FORM OF REVERSE OF SECURITY.

       This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of _____________ (herein called the
"Indenture"), between the Company and LaSalle Bank National Association, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof, limited in aggregate principal amount to
$___________.

       [IF APPLICABLE, INSERT - The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [IF APPLICABLE, INSERT -
(1) on ___________ in any year commencing with the year ___________ and ending
with the year ___________ through operation of the sinking fund for this series
at a Redemption Price equal to 100% of the principal amount, and (2)] at any
time [on or after ___________, 20___], as a whole or in part, at the election of
the Company, at the following Redemption Prices (expressed as percentages of the
principal amount): If redeemed [on or before ___________, %, and if redeemed]
during the 12-month period beginning ___________ of the years indicated,

<Table>
<Caption>
                       Redemption                              Redemption
       Year              Price               Year                 Price
       <S>             <C>                   <C>               <C>

</Table>

and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption [IF APPLICABLE INSERT - (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]

       [IF APPLICABLE, INSERT - The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ___________ in any
year commencing with the year __________ and ending with the year _______
through operation of the sinking fund for this series at the Redemption Prices
for redemption through operation of the sinking fund (expressed as percentages
of the principal

                                       12
<Page>

amount) set forth in the table below, and (2) at any time [on or after
___________], as a whole or in part, at the election of the Company, at the
Redemption Prices for redemption otherwise than through operation of the sinking
fund (expressed as percentages of the principal amount) set forth in the table
below: If redeemed during the 12-month period beginning ___________ of the years
indicated,

<Table>
<Caption>
                     Redemption Price            Redemption Price For
                       For Redemption         Redemption Otherwise Than
                     Through Operation         Through Operation of the
       Year         of the Sinking Fund              Sinking Fund
-------------------------------------------------------------------------
       <S>          <C>                       <C>

</Table>

and thereafter at a Redemption Price equal to ..........% of the principal
amount, together in the case of any such redemption (whether through operation
of the sinking fund or otherwise) with accrued interest to the Redemption Date,
but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]

[Notwithstanding the foregoing, the Company may not, prior to ___________,
redeem any Securities of this series as contemplated by [Clause (2) of] the
preceding paragraph as a part of, or in anticipation of, any refunding operation
by the application, directly or indirectly, of moneys borrowed having an
interest cost to the Company (calculated in accordance with generally accepted
financial practice) of less than ________% per annum.]

       [The sinking fund for this series provides for the redemption on _____ in
each year beginning with the year _________ and ending with the year ___________
of [not less than $___________ ("mandatory sinking fund") and not more than]
$___________ aggregate principal amount of Securities of this series. Securities
of this series acquired or redeemed by the Company otherwise than through
[mandatory] sinking fund payments may be credited against subsequent [mandatory]
sinking fund payments otherwise required to be made [in the inverse order in
which they become due].]

       [IF THE SECURITY IS SUBJECT TO REDEMPTION, INSERT - In the event of
redemption of this Security in part only, a new Security or Securities of this
series and of like tenor for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.]

       [IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT - If
an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]

       [IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT - If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to - INSERT FORMULA FOR DETERMINING THE
AMOUNT. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.]

                                       13
<Page>

       [The Indenture contains provisions for defeasance at any time of [the
entire indebtedness of this Security or] certain restrictive covenants and
Events of Default with respect to this Security [, in each case] upon compliance
with certain conditions set forth therein.]

       The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

       No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.

       As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

       The Securities of this series are issuable only in registered form
without coupons in denominations of $___________ and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.

       No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

       Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

       All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.

                                       14
<Page>

       Section 2.4      ADDITIONAL PROVISIONS REQUIRED IN BOOK-ENTRY SECURITY.

       Any Book-Entry Security issued hereunder shall, in addition to the
provisions contained in Sections 2.2 and 2.3, bear a legend in substantially the
following form:

       "This Security is a Book-Entry Security within the meaning of the
       Indenture hereinafter referred to and is registered in the name of a
       Depository or a nominee of a Depository. This Security is exchangeable
       for Securities registered in the name of a person other than the
       Depository or its nominee only in the limited circumstances described in
       the Indenture and may not be transferred except as a whole by the
       Depository to a nominee of the Depository or by a nominee of the
       Depository to the Depository or another nominee of the Depository."

       Section 2.5      FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.

       The Trustee's certificates of authentication shall be in substantially
the following form:

       This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

                                          LASALLE BANK NATIONAL
                                            ASSOCIATION,
                                            as Trustee

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

Dated:

                                   ARTICLE III

                                 THE SECURITIES

       Section 3.1      AMOUNT UNLIMITED; ISSUABLE IN SERIES.

       The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.

       The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 3.3,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,

               (1)      the title of the Securities of the series (which shall
       distinguish the Securities of the series from Securities of any other
       series);

                                       15
<Page>

               (2)      any limit upon the aggregate principal amount of the
       Securities of the series which may be authenticated and delivered under
       this Indenture (except for Securities authenticated and delivered upon
       registration of transfer of, or in exchange for, or in lieu of, other
       Securities of the series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.7
       and except for any Securities which, pursuant to Section 3.3, are deemed
       never to have been authenticated and delivered hereunder);

               (3)      the Person to whom any interest on a Security of the
       series shall be payable, if other than the Person in whose name that
       Security (or one or more Predecessor Securities) is registered at the
       close of business on the Regular Record Date for such interest;

               (4)      the date or dates on which the principal of the
       Securities of the series is payable;

               (5)      the rate or rates at which the Securities of the series
       shall bear interest, if any, or the method of calculating such rate or
       rates of interest, the date or dates from which such interest shall
       accrue, the Interest Payment Dates on which any such interest shall be
       payable and the Regular Record Date for any interest payable on any
       Interest Payment Date;

               (6)      the place or places where the principal of and any
       premium and interest on Securities of the series shall be payable;

               (7)      the period or periods within which, the price or prices
       at which and the terms and conditions upon which Securities of the series
       may be redeemed, in whole or in part, at the option of the Company;

               (8)      the obligation, if any, of the Company to redeem,
       purchase or repay Securities of the series pursuant to any sinking fund
       or analogous provisions or at the option of a Holder thereof and the
       period or periods within which, the price or prices at which and the
       terms and conditions upon which Securities of the series shall be
       redeemed, purchased or repaid, in whole or in part, pursuant to such
       obligation;

               (9)      if other than denominations of $100,000 and any integral
       multiple of $1,000 in excess thereof, the denominations in which
       Securities of the series shall be issuable;

               (10)     the currency, currencies or currency units in which
       payment of the principal of and any premium and interest on any
       Securities of the series shall be payable if other than the currency of
       the United States of America and the manner of determining the equivalent
       thereof in the currency of the United States of America for purposes of
       the definition of "Outstanding" in Section 1.1;

               (11)     if the amount of payments of principal of or any premium
       or interest on any Securities of the series may be determined with
       reference to an index or formula, the manner in which such amounts shall
       be determined;

               (12)     if the principal of or any premium or interest on any
       Securities of the series is to be payable, at the election of the Company
       or a Holder thereof, in one or more currencies or currency units other
       than that or those in which the Securities are stated to be payable, the
       currency, currencies or currency units in which payment of the principal
       of and any premium and interest on Securities of such series as to which
       such election is made shall be payable, and the periods within which and
       the terms and conditions upon which such election is to be made;

                                       16
<Page>

               (13)     the application, if any, of Section 13.2 or 13.3 to the
       Securities of any series;

               (14)     whether the Securities of the series shall be issued in
       whole or in part in the form of one or more Book-Entry Securities and, in
       such case, the Depository with respect to such Book-Entry Security or
       Securities and the circumstances under which any Book-Entry Security may
       be registered for transfer or exchange, or authenticated and delivered,
       in the name of a Person other than such Depository or its nominee, if
       other than as set forth in Section 3.5;

               (15)     if other than the principal amount thereof, the portion
       of the principal amount of Securities of the series which shall be
       payable upon declaration of acceleration of the Maturity thereof pursuant
       to Section 5.2; and

               (16)     any other terms of the series (which terms shall not be
       inconsistent with the provisions of this Indenture, except as permitted
       by Section 9.1(5)).

       All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to Section 3.3) set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.

       If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.

       Section 3.2      DENOMINATIONS.

       The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 3.1. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.

       Section 3.3      EXECUTION, AUTHENTICATION, DELIVERY AND DATING.

       The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Chief Executive Officer, a Senior Vice President or a
Corporate Vice President of the Company, under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.

       Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

       At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any Series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established in or
pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1,
in authenticating such Securities, and accepting the additional

                                       17
<Page>

responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 6.1) shall be
fully protected in relying upon, an Opinion of Counsel stating,

               (i)      if the form of such Securities has been established by
       or pursuant to Board Resolution as permitted by Section 2.1, that such
       form has been established in conformity with the provisions of this
       Indenture;

               (ii)     if the terms of such Securities have been established by
       or pursuant to Board Resolution as permitted by Section 3.1, that such
       terms have been established in conformity with the provisions of this
       Indenture; and

               (iii)    that such Securities, when authenticated and delivered
       by the Trustee and issued by the Company in the manner and subject to any
       conditions specified in such Opinion of Counsel, will constitute valid
       and legally binding obligations of the Company enforceable in accordance
       with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
       reorganization, moratorium and similar laws of general applicability
       relating to or affecting creditors' rights and to general equity
       principles.

If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.

       Notwithstanding the provisions of Section 3.1 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.

       Each Security shall be dated the date of its authentication.

       No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 3.9, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.

       Section 3.4      TEMPORARY SECURITIES.

       Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.

                                       18
<Page>

       If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor one or more definitive
Securities of the same series, of any authorized denominations and of a like
aggregate principal amount and tenor. Until so exchanged the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.

       Section 3.5      REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.

       The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.

       Upon surrender for registration of transfer of any Security of any series
at the office or agency in a Place of Payment for that series, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of the same
series, of any authorized denominations and of a like aggregate principal amount
and tenor.

       At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.

       All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.

       Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.

       No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.

       The Company shall not be required (i) to issue, register the transfer of
or exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 11.3 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.

                                       19
<Page>

       Notwithstanding the foregoing, any Book-Entry Security shall be
exchangeable pursuant to this Section 3.5 for Securities registered in the name
of Persons other than the Depository for such Security or its nominee only if
(i) such Depository notifies the Company that it is unwilling or unable to
continue as Depository for such Book-Entry Security or if at any time such
Depository ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, (ii) the Company executes and delivers to the
Trustee a Company Order that such Book-Entry Security shall be so exchangeable
or (iii) there shall have occurred and be continuing an Event of Default with
respect to the Securities. Any Book-Entry Security that is exchangeable pursuant
to the preceding sentence shall be exchangeable for Securities registered in
such names as such Depository shall direct.

       Notwithstanding any other provision in this Indenture, a Book-Entry
Security may not be transferred except as a whole by the Depository with respect
to such Book-Entry Security to a nominee of such Depository or by a nominee of
such Depository to such a Depository or another nominee of such Depository.

       Section 3.6      MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.

       If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.

       If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.

       In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.

       Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.

       Every new Security of any series issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.

       The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.

       Section 3.7      PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.

       Except as otherwise provided as contemplated by Section 3.1 with respect
to any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any

                                       20
<Page>

Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest.

       Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:

       (1) The Company may elect to make payment of any Defaulted Interest to
       the Persons in whose names the Securities of such series (or their
       respective Predecessor Securities) are registered at the close of
       business on a Special Record Date for the payment of such Defaulted
       Interest, which shall be fixed in the following manner. The Company shall
       notify the Trustee in writing of the amount of Defaulted Interest
       proposed to be paid on each Security of such series and the date of the
       proposed payment, and at the same time the Company shall deposit with the
       Trustee an amount of money equal to the aggregate amount proposed to be
       paid in respect of such Defaulted Interest or shall make arrangements
       satisfactory to the Trustee for such deposit prior to the date of the
       proposed payment, such money when deposited to be held in trust for the
       benefit of the Persons entitled to such Defaulted Interest as in this
       Clause provided. Thereupon the Trustee shall fix a Special Record Date
       for the payment of such Defaulted Interest which shall be not more than
       15 days and not less than 10 days prior to the date of the proposed
       payment and not less than 10 days after the receipt by the Trustee of the
       notice of the proposed payment. The Trustee shall promptly notify the
       Company of such Special Record Date and, in the name and at the expense
       of the Company, shall cause notice of the proposed payment of such
       Defaulted Interest and the Special Record Date therefor to be mailed,
       first-class postage prepaid, to each Holder of Securities of such series
       at his address as it appears in the Security Register, not less than 10
       days prior to such Special Record Date. Notice of the proposed payment of
       such Defaulted Interest and the Special Record Date therefor having been
       so mailed, such Defaulted Interest shall be paid to the Persons in whose
       names the Securities of such series (or their respective Predecessor
       Securities) are registered at the close of business on such Special
       Record Date and shall no longer be payable pursuant to the following
       Clause (2).

       (2) The Company may make payment of any Defaulted Interest on the
       Securities of any series in any other lawful manner not inconsistent with
       the requirements of any securities exchange on which such Securities may
       be listed, and upon such notice as may be required by such exchange, if,
       after notice given by the Company to the Trustee of the proposed payment
       pursuant to this Clause, such manner of payment shall be deemed
       practicable by the Trustee.

       Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.

       Section 3.8      PERSONS DEEMED OWNERS.

       Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and any premium and
(subject to Section 3.7) any interest on such Security and for all other
purposes whatsoever, whether or

                                       21
<Page>

not such Security be overdue, and neither the Company, the Trustee nor any agent
of the Company or the Trustee shall be affected by notice to the contrary.

       Section 3.9      CANCELLATION.

       All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.

       Section 3.10     COMPUTATION OF INTEREST.

       Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.

                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

       Section 4.1      SATISFACTION AND DISCHARGE OF INDENTURE.

       This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

               (1)      either

                        (A)   all Securities theretofore authenticated and
               delivered (other than (i) Securities which have been destroyed,
               lost or stolen and which have been replaced or paid as provided
               in Section 3.6 and (ii) Securities for whose payment money has
               theretofore been deposited in trust or segregated and held in
               trust by the Company and thereafter repaid to the Company or
               discharged from such trust, as provided in Section 10.3) have
               been delivered to the Trustee for cancellation; or

                        (B)   all such Securities not theretofore delivered to
               the Trustee for cancellation

               (i)      have become due and payable, or

               (ii)     will become due and payable at their Stated Maturity
       within one year, or

                                       22
<Page>

               (iii)    are to be called for redemption within one year under
       arrangements satisfactory to the Trustee for the giving of notice of
       redemption by the Trustee in the name, and at the expense, of the
       Company,

       and the Company, in the case of (i), (ii) or (iii) above, has deposited
       or caused to be deposited with the Trustee as trust funds in trust for
       the purpose an amount sufficient to pay and discharge the entire
       indebtedness on such Securities not theretofore delivered to the Trustee
       for cancellation, for principal and any premium and interest to the date
       of such deposit (in the case of Securities which have become due and
       payable) or to the Stated Maturity or Redemption Date, as the case may
       be;

               (2)      the Company has paid or caused to be paid all other sums
       payable hereunder by the Company; and

               (3)      the Company has delivered to the Trustee an Officers'
       Certificate and an Opinion of Counsel, each stating that all conditions
       precedent herein provided for relating to the satisfaction and discharge
       of this Indenture have been complied with.

       Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Trustee to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive.

       Section 4.2      APPLICATION OF TRUST MONEY.

       Subject to provisions of the last paragraph of Section 10.3, all money
deposited with the Trustee pursuant to Section 4.1 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.

                                    ARTICLE V

                                    REMEDIES

       Section  5.1     EVENTS OF DEFAULT.

       "Event of Default," wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

               (1)      default in the payment of any interest upon any Security
       of that series when it becomes due and payable, and continuance of such
       default for a period of 30 days; or

               (2)      default in the payment of the principal of (or premium,
       if any, on) any Security of that series at its Maturity; or

                                       23
<Page>

               (3)      default in the deposit of any sinking fund payment, when
       and as due by the terms of a Security of that series; or

               (4)      default in the performance, or breach, of any covenant
       or warranty of the Company in this Indenture (other than a covenant or
       warranty a default in whose performance or whose breach is elsewhere in
       this Section specifically dealt with or which has expressly been included
       in this Indenture solely for the benefit of series of Securities other
       than that series), and continuance of such default or breach for a period
       of 90 days after there has been given, by registered or certified mail,
       to the Company by the Trustee or to the Company and the Trustee by the
       Holders of at least 25% in principal amount of the Outstanding Securities
       of that series a written notice specifying such default or breach and
       requiring it to be remedied and stating that such notice is a "Notice of
       Default" hereunder; or

               (5)      the entry by a court having jurisdiction in the premises
       of (A) a decree or order for relief in respect of the Company in an
       involuntary case or proceeding under any applicable Federal or State
       bankruptcy, insolvency, reorganization or other similar law or (B) a
       decree or order adjudging the Company bankrupt or insolvent, or approving
       as properly filed a petition seeking reorganization, arrangement,
       adjustment or composition of or in respect of the Company under any
       applicable Federal or State law, or appointing a custodian, receiver,
       liquidator, assignee, trustee, sequestrator or other similar official of
       the Company or of any substantial part of its property, or ordering the
       winding up or liquidation of its affairs, and the continuance of any such
       decree or order for relief or any such other decree or order unstayed and
       in effect for a period of 60 consecutive days; or

               (6)      the commencement by the Company of a voluntary case or
       proceeding under any applicable Federal or State bankruptcy, insolvency,
       reorganization or other similar law or of any other case or proceeding to
       be adjudicated a bankrupt or insolvent, or the consent by it to the entry
       of a decree or order for relief in respect of the Company in an
       involuntary case or proceeding under any applicable Federal or State
       bankruptcy, insolvency, reorganization or other similar law or to the
       commencement of any bankruptcy or insolvency case or proceeding against
       it, or the filing by it of a petition or answer or consent seeking
       reorganization or relief under any applicable Federal or State law, or
       the consent by it to the filing of such petition or to the appointment of
       or taking possession by a custodian, receiver, liquidator, assignee,
       trustee, sequestrator or other similar official of the Company or of any
       substantial part of its property, or the making by it of an assignment
       for the benefit of creditors, or the admission by it in writing of its
       inability to pay its debts generally as they become due, or the taking of
       corporate action by the Company in furtherance of any such action; or

               (7)      any event which constitutes an "Event of Default" under
       the terms governing Securities of that series established as provided in
       Section 3.1.

       Section 5.2      ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.

       If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if any of the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified in the terms
thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.

                                       24
<Page>

       At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if

               (1)      the Company has paid or deposited with the Trustee a sum
       sufficient to pay

                        (A)   all overdue interest on all Securities of that
               series,

                        (B)   the principal of (and premium, if any, on) any
               Securities of that series which have become due otherwise than by
               such declaration of acceleration and any interest thereon at the
               rate or rates prescribed therefor in such Securities,

                        (C)   to the extent that payment of such interest is
               lawful, interest upon overdue interest at the rate or rates
               prescribed therefor in such Securities, and

                        (D)   all sums paid or advanced by the Trustee hereunder
               and the reasonable compensation, expenses, disbursements and
               advances of the Trustee, its agents and counsel;

       and

               (2)      all Events of Default with respect to Securities of that
       series, other than the non-payment of the principal of Securities of that
       series which have become due solely by such declaration of acceleration,
       have been cured or waived as provided in Section 5.13.

No such rescission shall affect any subsequent default or impair any right
consequent thereon.

       Section 5.3      COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.

       The Company covenants that if

               (1)      default is made in the payment of any interest on any
       Security when such interest becomes due and payable and such default
       continues for a period of 30 days, or

               (2)      default is made in the payment of the principal of (or
       premium, if any, on) any Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.

       If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement

                                       25
<Page>

in this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.

       Section 5.4      TRUSTEE MAY FILE PROOFS OF CLAIM.

       In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.7.

       No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.

       Section 5.5      TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES.

       All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.

       Section 5.6      APPLICATION OF MONEY COLLECTED.

       Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:

               FIRST: To the payment of all amounts due the Trustee under
       Section 6.7; and

               SECOND: To the payment of the amounts then due and unpaid for
       principal of and any premium and interest on the Securities in respect of
       which or for the benefit of which such money has been collected, ratably,
       without preference or priority of any kind, according to the amounts due
       and payable on such Securities for principal and any premium and
       interest, respectively.

                                       26
<Page>

       Section 5.7      LIMITATION ON SUITS.

       No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless

               (1)      such Holder has previously given written notice to the
       Trustee of a continuing Event of Default with respect to the Securities
       of that series;

               (2)      the Holders of not less than 25% in principal amount of
       the Outstanding Securities of that series shall have made written request
       to the Trustee to institute proceedings in respect of such Event of
       Default in its own name as Trustee hereunder;

               (3)      such Holder or Holders have offered to the Trustee
       reasonable indemnity against the costs, expenses and liabilities to be
       incurred in compliance with such request;

               (4)      the Trustee for 60 days after its receipt of such
       notice, request and offer of indemnity has failed to institute any such
       proceeding; and

               (5)      no direction inconsistent with such written request has
       been given to the Trustee during such 60-day period by the Holders of a
       majority in principal amount of the Outstanding Securities of that
       series;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.

       Section 5.8      UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST.

       Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 3.7) any
interest on such Security on the Stated Maturity or Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.

       Section 5.9      RESTORATION OF RIGHTS AND REMEDIES.

       If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.

       Section 5.10     RIGHTS AND REMEDIES CUMULATIVE.

       Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 3.6, no right or remedy herein conferred upon or

                                       27
<Page>

reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.

       Section 5.11     DELAY OR OMISSION NOT WAIVER.

       No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.

       Section 5.12     CONTROL BY HOLDERS.

       The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, PROVIDED that

               (1)      such direction shall not be in conflict with any rule of
       law or with this Indenture, and

               (2)      the Trustee may take any other action deemed proper by
       the Trustee which is not inconsistent with such direction.

       Section 5.13     WAIVER OF PAST DEFAULTS.

       The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default

               (1)      in the payment of the principal of or any premium or
       interest on any Security of such series, or

               (2)      in respect of a covenant or provision hereof which under
       Article Nine cannot be modified or amended without the consent of the
       Holder of each Outstanding Security of such series affected.

       Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.

       Section 5.14     UNDERTAKING FOR COSTS.

       In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; PROVIDED that

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<Page>

neither this Section nor the Trust Indenture Act shall be deemed to authorize
any court to require such an undertaking or to make such an assessment in any
suit instituted by the Company or the Trustee.

       Section 5.15     WAIVER OF STAY OR EXTENSION LAWS.

       The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

                                   ARTICLE VI

                                   THE TRUSTEE

       Section 6.1      CERTAIN DUTIES AND RESPONSIBILITIES.

       The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

       Section 6.2      NOTICE OF DEFAULTS.

       If a default occurs hereunder with respect to Securities of any series,
the Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; PROVIDED,
HOWEVER, that in the case of any default of the character specified in Section
5.1(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.

       Section 6.3      CERTAIN RIGHTS OF TRUSTEE.

       Subject to the provisions of Section 6.1:

               (1)      the Trustee may rely and shall be protected in acting or
       refraining from acting upon any resolution, certificate, statement,
       instrument, opinion, report, notice, request, direction, consent, order,
       bond, debenture, note, other evidence of indebtedness or other paper or
       document believed by it to be genuine and to have been signed or
       presented by the proper party or parties;

               (2)      any request or direction of the Company mentioned herein
       shall be sufficiently evidenced by a Company Request or Company Order and
       any resolution of the Board of Directors may be sufficiently evidenced by
       a Board Resolution;

                                       29
<Page>

               (3)      whenever in the administration of this Indenture the
       Trustee shall deem it desirable that a matter be proved or established
       prior to taking, suffering or omitting any action hereunder, the Trustee
       (unless other evidence be herein specifically prescribed) may, in the
       absence of bad faith on its part, rely upon an Officers' Certificate;

               (4)      the Trustee may consult with counsel and the written
       advice of such counsel or any Opinion of Counsel shall be full and
       complete authorization and protection in respect of any action taken,
       suffered or omitted by it hereunder in good faith and in reliance
       thereon;

               (5)      the Trustee shall be under no obligation to exercise any
       of the rights or powers vested in it by this Indenture at the request or
       direction of any of the Holders pursuant to this Indenture, unless such
       Holders shall have offered to the Trustee reasonable security or
       indemnity against the costs, expenses and liabilities which might be
       incurred by it in compliance with such request or direction;

               (6)      the Trustee shall not be bound to make any investigation
       into the facts or matters stated in any resolution, certificate,
       statement, instrument, opinion, report, notice, request, direction,
       consent, order, bond, debenture, note, other evidence of indebtedness or
       other paper or document, but the Trustee, in its discretion, may make
       such further inquiry or investigation into such facts or matters as it
       may see fit, and, if the Trustee shall determine to make such further
       inquiry or investigation, it shall be entitled to examine the books,
       records and premises of the Company, personally or by agent or attorney;
       and

               (7)      the Trustee may execute any of the trusts or powers
       hereunder or perform any duties hereunder either directly or by or
       through agents or attorneys and the Trustee shall not be responsible for
       any misconduct or negligence on the part of any agent or attorney
       appointed with due care by it hereunder.

       Section 6.4      NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.

       The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.

       Section 6.5      MAY HOLD SECURITIES.

       The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.8 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.

       Section 6.6      MONEY HELD IN TRUST.

       Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.

       Section 6.7      COMPENSATION AND REIMBURSEMENT.

                                       30
<Page>

       The Company agrees

               (1)      to pay to the Trustee from time to time reasonable
       compensation for all services rendered by it hereunder (which
       compensation shall not be limited by any provision of law in regard to
       the compensation of a trustee of an express trust);

               (2)      except as otherwise expressly provided herein, to
       reimburse the Trustee upon its request for all reasonable expenses,
       disbursements and advances incurred or made by the Trustee in accordance
       with any provision of this Indenture (including the reasonable
       compensation and the expenses and disbursements of its agents and
       counsel), except any such expense, disbursement or advance as may be
       attributable to its negligence or bad faith; and

               (3)      to indemnify the Trustee for, and to hold it harmless
       against, any loss, liability or expense incurred without negligence or
       bad faith on its part, arising out of or in connection with the
       acceptance or administration of the trust or trusts hereunder, including
       the costs and expenses of defending itself against any claim or liability
       in connection with the exercise or performance of any of its powers or
       duties hereunder.

       Section 6.8      DISQUALIFICATION; CONFLICTING INTERESTS.

       If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.

       Section 6.9      CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

       There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000 and its Corporate Trust
Office in Chicago, Illinois. If such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.

       Section 6.10     RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

               (1)      No resignation or removal of the Trustee and no
       appointment of a successor Trustee pursuant to this Article shall become
       effective until the acceptance of appointment by the successor Trustee in
       accordance with the applicable requirements of Section 6.11.

               (2)      The Trustee may resign at any time with respect to the
       Securities of one or more series by giving written notice thereof to the
       Company. If the instrument of acceptance by a successor Trustee required
       by Section 6.11 shall not have been delivered to the Trustee within 30
       days after the giving of such notice of resignation, the resigning
       Trustee may petition any court of competent jurisdiction for the
       appointment of a successor Trustee with respect to the Securities of such
       series.

               (3)      The Trustee may be removed at any time with respect to
       the Securities of any series by Act of the Holders of a majority in
       principal amount of the Outstanding Securities of such series, delivered
       to the Trustee and to the Company.

                                       31
<Page>

               (4)      If at any time:

                        (A)   the Trustee shall fail to comply with Section 6.8
               after written request therefor by the Company or by any Holder
               who has been a bona fide Holder of a Security for at least six
               months, or

                        (B)   the Trustee shall cease to be eligible under
               Section 6.9 and shall fail to resign after written request
               therefor by the Company or by any such Holder, or

                        (C)   the Trustee shall become incapable of acting or
               shall be adjudged a bankrupt or insolvent or a receiver of the
               Trustee or of its property shall be appointed or any public
               officer shall take charge or control of the Trustee or of its
               property or affairs for the purpose of rehabilitation,
               conservation or liquidation,

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all securities, or (ii) subject to Section 5.14, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.

               (5)      If the Trustee shall resign, be removed or become
       incapable of acting, or if a vacancy shall occur in the office of Trustee
       for any cause, with respect to the Securities of one or more series, the
       Company, by a Board Resolution, shall promptly appoint a successor
       Trustee or Trustees with respect to the Securities of that or those
       series (it being understood that any such successor Trustee may be
       appointed with respect to the Securities of one or more or all of such
       series and that at any time there shall be only one Trustee with respect
       to the Securities of any particular series) and shall comply with the
       applicable requirements of Section 6.11. If, within one year after such
       resignation, removal or incapability, or the occurrence of such vacancy,
       a successor Trustee with respect to the Securities of any Series shall be
       appointed by Act of the Holders of a majority in principal amount of the
       Outstanding Securities of such series delivered to the Company and the
       retiring Trustee, the successor Trustee so appointed shall, forthwith
       upon its acceptance of such appointment in accordance with the applicable
       requirements of Section 6.11, become the successor Trustee with respect
       to the Securities of such series and to that extent supersede the
       successor Trustee appointed by the Company. If no successor Trustee with
       respect to the Securities of any Series shall have been so appointed by
       the Company or the Holders and accepted appointment in the manner
       required by Section 6.11, any Holder who has been a bona fide Holder of a
       Security of such series for at least six months may, on behalf of himself
       and all others similarly situated, petition any court of competent
       jurisdiction for the appointment of a successor Trustee with respect to
       the Securities of such series.

               (6)      The Company shall give notice of each resignation and
       each removal of the Trustee with respect to the Securities of any series
       and each appointment of a successor Trustee with respect to the
       Securities of any series to all Holders of Securities of such series in
       the manner provided in Section 1.6. Each notice shall include the name of
       the successor Trustee with respect to the Securities of such series and
       the address of its Corporate Trust Office.

       Section 6.11     ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

               (1)      In case of the appointment hereunder of a successor
       Trustee with respect to all Securities, every such successor Trustee so
       appointed shall execute, acknowledge and deliver to the Company and to
       the retiring Trustee an instrument accepting such appointment, and

                                       32
<Page>

       thereupon the resignation or removal of the retiring Trustee shall become
       effective and such successor Trustee, without any further act, deed or
       conveyance, shall become vested with all the rights, powers, trusts and
       duties of the retiring Trustee; but, on the request of the Company or the
       successor Trustee, such retiring Trustee shall, upon payment of its
       charges, execute and deliver an instrument transferring to such successor
       Trustee all the rights, powers and trusts of the retiring Trustee and
       shall duly assign, transfer and deliver to such successor Trustee all
       property and money held by such retiring Trustee hereunder.

               (2)      In case of the appointment hereunder of a successor
       Trustee with respect to the Securities of one or more (but not all)
       series, the Company, the retiring Trustee and each successor Trustee with
       respect to the Securities of one or more series shall execute and deliver
       an indenture supplemental hereto wherein each successor Trustee shall
       accept such appointment and which (1) shall contain such provisions as
       shall be necessary or desirable to transfer and confirm to, and to vest
       in, each successor Trustee all the rights, powers, trusts and duties of
       the retiring Trustee with respect to the Securities of that or those
       series to which the appointment of such successor Trustee relates, (2) if
       the retiring Trustee is not retiring with respect to all Securities,
       shall contain such provisions as shall be deemed necessary or desirable
       to confirm that all the rights, powers, trusts and duties of the retiring
       Trustee with respect to the Securities of that or those series as to
       which the retiring Trustee is not retiring shall continue to be vested in
       the retiring Trustee, and (3) shall add to or change any of the
       provisions of this Indenture as shall be necessary to provide for or
       facilitate the administration of the trusts hereunder by more than one
       Trustee, it being understood that nothing herein or in such supplemental
       indenture shall constitute such Trustees co-trustees of the same trust
       and that each such Trustee shall be trustee of a trust or trusts
       hereunder separate and apart from any trust or trusts hereunder
       administered by any other such Trustee; and upon the execution and
       delivery of such supplemental indenture the resignation or removal of the
       retiring Trustee shall become effective to the extent provided therein
       and each such successor Trustee, without any further act, deed or
       conveyance, shall become vested with all the rights, powers, trusts and
       duties of the retiring Trustee with respect to the Securities of that or
       those series to which the appointment of such successor Trustee relates;
       but, on request of the Company or any successor Trustee, such retiring
       Trustee shall duly assign, transfer and deliver to such successor Trustee
       all property and money held by such retiring Trustee hereunder with
       respect to the Securities of that or those series to which the
       appointment of such successor Trustee relates.

               (3)      Upon request of any such successor Trustee, the Company
       shall execute any and all instruments for more fully and certainly
       vesting in and confirming to such successor Trustee all such rights,
       powers and trusts referred to in paragraph (a) and (b) of this Section,
       as the case may be.

               (4)      No successor Trustee shall accept its appointment unless
       at the time of such acceptance such successor Trustee shall be qualified
       and eligible under this Article.

       Section 6.12     MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.

       Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to

                                       33
<Page>

such authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor Trustee
had itself authenticated such Securities.

       Section 6.13     PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

       If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).

       Section 6.14     APPOINTMENT OF AUTHENTICATING AGENT.

       The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 3.6, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

       Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

       An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

                                       34
<Page>

       The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.

       If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:

       This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

                                         LASALLE BANK NATIONAL ASSOCIATION
                                               AS TRUSTEE

                                         By
                                            -----------------------------
                                               AS AUTHENTICATING AGENT

                                         By
                                            -----------------------------
                                               AUTHORIZED OFFICER

                                   ARTICLE VII

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

       Section 7.1      COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
HOLDERS.

       The Company will furnish or cause to be furnished to the Trustee

               (1)      semi-annually, not later than May 1 and November 1 in
       each year, a list, in such form as the Trustee may reasonably require, of
       the names and addresses of the Holders as of the preceding April 1 or
       October 1, as the case may be, and

               (2)      at such other times as the Trustee may request in
       writing, within 30 days after the receipt by the Company of any such
       request, a list of similar form and content as of a date not more than 15
       days prior to the time such list is furnished;

EXCLUDING from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.

       Section 7.2      PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.

               (1)      The Trustee shall preserve, in as current a form as is
       reasonably practicable, the names and addresses of Holders contained in
       the most recent list furnished to the Trustee as provided in Section 7.1
       and the names and addresses of Holders received by the Trustee in its
       capacity as Security Registrar. The Trustee may destroy any list
       furnished to it as provided in Section 7.1 upon receipt of a new list so
       furnished.

               (2)      The rights of the Holders to communicate with other
       Holders with respect to their rights under this Indenture or under the
       Securities, and the corresponding rights and privileges of the Trustee,
       shall be as provided by the Trust Indenture Act.

                                       35
<Page>

               (3)      Every Holder of Securities, by receiving and holding the
       same, agrees with the Company and the Trustee that neither the Company
       nor the Trustee nor any agent of either of them shall be held accountable
       by reason of any disclosure of information as to names and addresses of
       Holders made pursuant to the Trust Indenture Act.

       Section 7.3      REPORTS BY TRUSTEE.

               (1)      The Trustee shall transmit to Holders such reports
       concerning the Trustee and its actions under this Indenture as may be
       required pursuant to the Trust Indenture Act at the times and in the
       manner provided pursuant thereto.

               (2)      A copy of each such report shall, at the time of such
       transmission to Holders, be filed by the Trustee with each stock exchange
       upon which any Securities are listed, with the Commission and with the
       Company. The Company will notify the Trustee when any Securities are
       listed on any stock exchange.

       Section 7.4      REPORTS BY COMPANY.

       The Company shall file with the Trustee and the Commission, and transmit
to Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; PROVIDED that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be filed with
the Trustee within 15 days after the same is so required to be filed with the
Commission.

                                  ARTICLE VIII

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

       Section 8.1      COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.

       The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and the Company shall not permit any Person to consolidate with
or merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:

               (1)      in case the Company shall consolidate with or merge into
       another Person or convey, transfer or lease its properties and assets
       substantially as an entirety to any Person, the Person formed by such
       consolidation or into which the Company is merged or the Person which
       acquires by conveyance or transfer, or which leases, the properties and
       assets of the Company substantially as an entirety shall be a
       corporation, partnership or trust, shall be organized and validly
       existing under the laws of the United States of America, any State
       thereof or the District of Columbia and shall expressly assume, by an
       indenture supplemental hereto, executed and delivered to the Trustee, in
       form satisfactory to the Trustee, the due and punctual payment of the
       principal of and any premium and interest on all the Securities and the
       performance or observance of every covenant of this Indenture on the part
       of the Company to be performed or observed;

               (2)      immediately after giving effect to such transaction and
       treating any indebtedness which becomes an obligation of the Company or a
       Subsidiary as a result of such transaction as having been incurred by the
       Company or such Subsidiary at the time of such transaction, no

                                       36
<Page>

       Event of Default, and no event which, after notice or lapse of time or
       both, would become an Event of Default, shall have happened and be
       continuing;

               (3)      if, as a result of any such consolidation or merger or
       such conveyance, transfer or lease, properties or assets of the Company
       would become subject to a mortgage, pledge, lien, security interest or
       other encumbrance which would not be permitted by this Indenture, the
       Company or such successor Person, as the case may be, shall take such
       steps as shall be necessary effectively to secure the Securities equally
       and ratably with (or prior to) all indebtedness secured thereby; and

               (4)      the Company has delivered to the Trustee an Officers'
       Certificate and an Opinion of Counsel, each stating that such
       consolidation, merger, conveyance, transfer or lease and, if a
       supplemental indenture is required in connection with such transaction,
       such supplemental indenture comply with this Article and that all
       conditions precedent herein provided for relating to such transaction
       have been complied with.

       Section 8.2      SUCCESSOR SUBSTITUTED.

       Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 8.1, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

       Section 9.1      SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.

       Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:

               (1)      to evidence the succession of another Person to the
       Company and the assumption by any such successor of the covenants of the
       Company herein and in the Securities; or

               (2)      to add to the covenants of the Company for the benefit
       of the Holders of all or any series of Securities (and if such covenants
       are to be for the benefit of less than all series of Securities, stating
       that such covenants are expressly being included solely for the benefit
       of such series) or to surrender any right or power herein conferred upon
       the Company; or

               (3)      to add any additional Events of Default; or

               (4)      to add to or change any of the provisions of this
       Indenture to such extent as shall be necessary to permit or facilitate
       the issuance of Securities in bearer form, registrable or not registrable
       as to principal, and with or without interest coupons, or to permit or
       facilitate the issuance of Securities in uncertificated form; or

                                       37
<Page>

               (5)      to add to, change or eliminate any of the provisions of
       this Indenture in respect of one or more series of Securities, PROVIDED
       that any such addition, change or elimination (i) shall neither (A) apply
       to any Security of any series created prior to the execution of such
       supplemental indenture and entitled to the benefit of such provision nor
       (B) modify the rights of the Holder of any such Security with respect to
       such provision or (ii) shall become effective only when there is no such
       Security Outstanding; or

               (6)      to secure the Securities pursuant to the requirements of
       Section 10.8 or otherwise; or

               (7)      to establish the form or terms of Securities of any
       series as permitted by Sections 2.1 and 3.1; or

               (8)      to evidence and provide for the acceptance of
       appointment hereunder by a successor Trustee with respect to the
       Securities of one or more series and to add to or change any of the
       provisions of this Indenture as shall be necessary to provide for or
       facilitate the administration of the trusts hereunder by more than one
       Trustee, pursuant to the requirements of Section 6.11(b); or

               (9)      to cure any ambiguity, to correct or supplement any
       provision herein which may be inconsistent with any other provision
       herein, or to make any other provisions with respect to matters or
       questions arising under this Indenture, PROVIDED that such action
       pursuant to this clause (9) shall not adversely affect the interests of
       the Holders of Securities of any series in any material respect.

       Section 9.2      SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.

       With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; PROVIDED, HOWEVER,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,

               (1)      change the Stated Maturity of the principal of, or any
       installment of principal of or interest on, any Security, or reduce the
       principal amount thereof or the rate of interest thereon or any premium
       payable upon the redemption thereof, or reduce the amount of the
       principal of an Original Issue Discount Security that would be due and
       payable upon a declaration of acceleration of the Maturity thereof
       pursuant to Section 5.2, or change any Place of Payment where, or the
       coin or currency in which, any Security or any premium or interest
       thereon is payable, or impair the right to institute suit for the
       enforcement of any such payment on or after the Stated Maturity thereof
       (or, in the case of redemption, on or after the Redemption Date), or

               (2)      reduce the percentage in principal amount of the
       Outstanding Securities of any series, the consent of whose Holders is
       required for any such supplemental indenture, or the consent of whose
       Holders is required for any waiver (of compliance with certain provisions
       of this Indenture or certain defaults hereunder and their consequences)
       provided for in this Indenture, or

                                       38
<Page>

               (3)      modify any of the provisions of this Section, Section
       5.13 or Section 10.10, except to increase any such percentage or to
       provide that certain other provisions of this Indenture cannot be
       modified or waived without the consent of the Holder of each Outstanding
       Security affected thereby, PROVIDED, HOWEVER, that this clause shall not
       be deemed to require the consent of any Holder with respect to changes in
       the references to "the Trustee" and concomitant changes in this Section
       and Section 10.10, or the deletion of this proviso, in accordance with
       the requirements of Sections 6.11(b) and 9.1(8).

A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.

       It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.

       Section 9.3      EXECUTION OF SUPPLEMENTAL INDENTURES.

       In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Officer's Certificate and an Opinion of Counsel each stating that the execution
of such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.

       Section 9.4      EFFECT OF SUPPLEMENTAL INDENTURES.

       Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

       Section 9.5      CONFORMITY WITH TRUST INDENTURE ACT.

       Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.

       Section 9.6      REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.

       Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.

                                       39
<Page>

                                    ARTICLE X

                                    COVENANTS

       Section 10.1     PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.

       The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.

       Section 10.2     MAINTENANCE OF OFFICE OR AGENCY.

       The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.

       The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; PROVIDED, HOWEVER, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.

       Section 10.3     MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.

       If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.

       Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.

       The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will (i) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in

                                       40
<Page>

respect of the Securities of that series, and upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent for payment in respect of the Securities of that series.

       The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.

       Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in Chicago, Illinois,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the
Company.

       Section 10.4     STATEMENT BY OFFICERS AS TO DEFAULT.

       The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.

       Section 10.5     EXISTENCE.

       Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; PROVIDED, HOWEVER, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.

       Section 10.6     MAINTENANCE OF PROPERTIES.

       The Company will cause all properties used or useful in the conduct of
its business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; PROVIDED, HOWEVER, that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any of such properties if such discontinuance is, in
the

                                       41
<Page>

judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.

       Section 10.7     PAYMENT OF TAXES AND OTHER CLAIMS.

       The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; PROVIDED,
HOWEVER, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.

       Section 10.8     RESTRICTIONS ON SECURED DEBT.

       The Company will not itself, and will not permit any Domestic Subsidiary
to, incur, issue, assume or guarantee any indebtedness for money borrowed
represented by notes, bonds, debentures or other similar evidences of
indebtedness for money borrowed (such notes, bonds, debentures or other similar
evidences of indebtedness for money borrowed being hereinafter in this Article
called "Debt"), secured by a Mortgage on any Principal Domestic Property of the
Company or any Domestic Subsidiary, or any shares of stock or Debt of any
Domestic Subsidiary, without effectively providing that the Outstanding
Securities (together with, if the Company shall so determine, any other Debt of
the Company or such Domestic Subsidiary then existing or thereafter created
which is not subordinate to the Securities) shall be secured equally and ratably
with (or prior to) such secured Debt (for the purpose of providing such equal
and ratable security, the principal amount of Outstanding Securities of any
series of Original Issue Discount Securities shall be such portion of the
principal amount as may be specified in the terms of that series that would be
payable upon acceleration of the Maturity thereof at the time of such
determination), so long as such secured Debt shall be so secured, unless, after
giving effect thereto, the aggregate amount of all such secured Debt plus all
Attributable Debt of the Company and its Domestic Subsidiaries in respect of
sale and leaseback transactions (as defined in Section 10.9) would not exceed
10% of Consolidated Net Assets; PROVIDED, HOWEVER, that this Section shall not
apply to, and there shall be excluded from secured Debt in any computation under
this Section, Debt secured by:

               (1)      Mortgages on property of, or on any shares of stock or
       Debt of, any corporation existing at the time such corporation becomes a
       Domestic Subsidiary;

               (2)      Mortgages in favor of the Company or any Domestic
       Subsidiary;

               (3)      Mortgages on property of the Company or a Domestic
       Subsidiary in favor of the United States of America or any State thereof,
       or any department, agency or instrumentality or political subdivision of
       the United States of America or any State thereof, or in favor of any
       other country, or any political subdivision thereof, to secure partial,
       progress, advance or other payments pursuant to any contract or statute;

               (4)      Mortgages on property, shares of stock or Debt existing
       at the time of acquisition thereof (including acquisition through merger
       or consolidation), purchase money Mortgages and construction cost
       Mortgages existing at or incurred within 120 days after the time of
       acquisition;

               (5)      Mortgages existing on the first date on which a Security
       is authenticated by the Trustee hereunder;

                                       42
<Page>

               (6)      Mortgages incurred in connection with pollution control,
       industrial revenue or similar financing; and

               (7)      Any extension, renewal or replacement (or successive
       extensions, renewals or replacements), as a whole or in part, of any Debt
       secured by any Mortgage referred to in the foregoing clauses (1) through
       (6), inclusive; PROVIDED, that (i) such extension, renewal or replacement
       Mortgage shall be limited to all or a part of the same property, shares
       of stock or debt that secured the Mortgage extended, renewed or replaced
       (plus improvements on such property) and (ii) the Debt secured by such
       Mortgage at such time is not increased.

       Section 10.9     LIMITATION ON SALES AND LEASEBACKS.

       The Company will not itself, and it will not permit any Domestic
Subsidiary to, enter into any arrangement with any bank, insurance company or
other lender or investor (not including the Company or any Subsidiary) or to
which any such lender or investor is a party, providing for the leasing by the
Company or any Domestic Subsidiary of any Principal Domestic Property which has
been or is to be sold or transferred, more than 120 days after the acquisition
thereof or the completion of construction and commencement of full operation
thereof, by the Company or any Domestic Subsidiary to such lender or investor or
to any person to whom funds have been or are to be advanced by such lender or
investor on the security of such Principal Domestic Property (herein referred to
as a "sale and leaseback transaction") unless either:

               (1)      the Company or such Domestic Subsidiary could create
       Debt secured by a Mortgage pursuant to Section 10.8 on the Principal
       Domestic Property to be leased back in an amount equal to the
       Attributable Debt with respect to such sale and leaseback transaction
       without equally and ratably securing Outstanding Securities, or

               (2)      the Company, within 120 days after the sale or transfer
       shall have been made by the Company or by any such Domestic Subsidiary,
       applies an amount equal to the greater of (i) the net proceeds of the
       sale of the Principal Domestic Property sold and leased back pursuant to
       such arrangement or (ii) the fair market value of the Principal Domestic
       Property so sold and leased back at the time of entering into such
       arrangements (as determined by any two of the following: the Chairman of
       the Board of the Company, its Chief Executive Officer, a Senior Vice
       President or a Corporate Vice President, and the Chief Financial Officer,
       the Treasurer or an Assistant Treasurer) to the retirement of Funded
       Debt; PROVIDED, that the amount to be applied to the retirement of Funded
       Debt shall be reduced by (a) the principal amount of any Securities
       delivered with 120 days after such sale to the Trustee for retirement and
       cancellation, and (b) the principal amount of such Funded Debt, other
       than Securities, voluntarily retired by the Company within 120 days after
       such sale. Notwithstanding the foregoing, no retirement referred to in
       this clause (2) may be effected by payment at maturity or pursuant to any
       mandatory sinking fund payment or any mandatory prepayment provision.

       Section 10.10    WAIVER OF CERTAIN COVENANTS.

       The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 10.8 to 10.9, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver

                                       43
<Page>

shall become effective, the obligations of the Company and the duties of the
Trustee in respect of any such term, provision or condition shall remain in full
force and effect.

                                   ARTICLE XI

                            REDEMPTION OF SECURITIES

       Section 11.1     APPLICABILITY OF ARTICLE.

       Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.1 for Securities of any series)
in accordance with this Article.

       Section 11.2     ELECTION TO REDEEM; NOTICE TO TRUSTEE.

       The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution. In case of any redemption at the election of the Company
of less than all the Securities of any series, the Company shall, at least 60
days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date, of the principal amount of Securities of such series to be redeemed and,
if applicable, of the tenor of the Securities to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.

       Section 11.3     SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.

       If less than all the Securities of any series are to be redeemed (unless
all of the Securities of such series and of a specified tenor are to be
redeemed), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series. If less than
all of the Securities of such series and of a specified tenor are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series and specified tenor not previously called for
redemption in accordance with the preceding sentence.

       The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.

       For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.

       Section 11.4     NOTICE OF REDEMPTION.

       Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.

                                       44
<Page>

               All notices of redemption shall state:

               (1)      the Redemption Date,

               (2)      the Redemption Price,

               (3)      if less than all the Outstanding Securities of any
       series are to be redeemed, the identification (and, in the case of
       partial redemption of any Securities, the principal amounts) of the
       particular Securities to be redeemed,

               (4)      that on the Redemption Date the Redemption Price will
       become due and payable upon each such Security to be redeemed and, if
       applicable, that interest thereon will cease to accrue on and after said
       date,

               (5)      the place or places where such Securities are to be
       surrendered for payment of the Redemption Price, and

               (6)      that the redemption is for a sinking fund, if such is
       the case.

       Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.

       Section 11.5     DEPOSIT OF REDEMPTION PRICE.

       Prior to any Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 10.3) an amount of money
sufficient to pay the Redemption Price and (except if the Redemption Date shall
be an Interest Payment Date) accrued interest on, all the Securities which are
to be redeemed on that date.

       Section 11.6     SECURITIES PAYABLE ON REDEMPTION DATE.

       Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; PROVIDED, HOWEVER, that, unless otherwise specified as
contemplated by Section 3.1, installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 3.7.

       If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.

                                       45
<Page>

       Section 11.7     SECURITIES REDEEMED IN PART.

       Any Security which is to be redeemed only in part shall be surrendered at
a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered. If a Book-Entry Security is so surrendered, such
new Security so issued shall be a new Book-Entry Security.

                                   ARTICLE XII

                                  SINKING FUNDS

       Section 12.1     APPLICABILITY OF ARTICLE.

       The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 3.1 for Securities of such series.

       The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 12.2. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series.

       Section 12.2     SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.

       The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; PROVIDED that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.

       Section 12.3     REDEMPTION OF SECURITIES FOR SINKING FUND.

       Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 12.2 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 45 days before each such sinking fund payment
date the

                                       46
<Page>

Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 11.3 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 11.4. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 11.6 and 11.7.

                                  ARTICLE XIII

                       DEFEASANCE AND COVENANT DEFEASANCE

       Section 13.1     APPLICABILITY OF ARTICLE; COMPANY'S OPTION TO EFFECT
DEFEASANCE OR COVENANT DEFEASANCE.

       If pursuant to Section 3.1 provision is made for either or both of (a)
defeasance of the Securities of a series under Section 13.2 or (b) covenant
defeasance of the Securities of a series under Section 13.3, then the provisions
of such Section or Sections, as the case may be, together with the other
provisions of this Article Thirteen, shall be applicable to the Securities of
such series, and the Company may at its option by Board Resolution, at any time,
with respect to the Securities of such series, elect to have either Section 13.2
(if applicable) or Section 13.3 (if applicable) be applied to the Outstanding
Securities of such series upon compliance with the conditions set forth below in
this Article Thirteen.

       Section 13.2     DEFEASANCE AND DISCHARGE.

       Upon the Company's exercise of the above option applicable to this
Section, the Company shall be deemed to have been discharged from its
obligations with respect to the Outstanding Securities of such series on and
after the date the conditions precedent set forth below are satisfied
(hereinafter, "defeasance"). For this purpose, such defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by the Outstanding Securities of such series and to have satisfied
all its other obligations under such Securities and this Indenture insofar as
such Securities are concerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
thereunder: (A) the rights of Holders of Outstanding Securities of such series
to receive, solely from the trust fund described in Section 13.4 as more fully
set forth in such Section, payments of the principal of (and premium and
interest, if any, on) such Securities when such payments are due, (B) the
Company's obligations with respect to such Securities under Sections 3.4, 3.5,
3.6, 10.2 and 10.3 and such obligations as shall be ancillary thereto, (C) the
rights, powers, trusts, duties, immunities and other provisions in respect of
the Trustee hereunder and (D) this Article Thirteen. Subject to compliance with
this Article Thirteen, the Company may exercise its option under this Section
13.2 notwithstanding the prior exercise of its option under Section 13.3 with
respect to the Securities of such series.

       Section 13.3     COVENANT DEFEASANCE.

       Upon the Company's exercise of the above option applicable to this
Section, the Company shall be released from its obligations under Sections 8.1,
10.8 and 10.9 (and any covenant applicable to such Securities that are
determined pursuant to Section 3.1 to be subject to this provision) and the
occurrence of an event specified in Section 5.1(4) (with respect to any of
Sections 8.1, 10.8 or 10.9) (and any other Event of Default applicable to such
Securities that are determined pursuant to Section 3.1 to be subject to this
provision) shall not be deemed to be an Event of Default with respect to the
Outstanding Securities of such series on and after the date the conditions set
forth below are satisfied (hereinafter, "covenant defeasance"). For this
purpose, such covenant defeasance means that, with respect to the Outstanding
Securities of such series, the Company may omit to comply with and shall have no
liability in respect of

                                       47
<Page>

any term, condition or limitation set forth in any such Section or clause
whether directly or indirectly by reason of any reference elsewhere herein to
any such Section or clause or by reason of any reference in any such Section or
clause to any other provision herein or in any other document, but the remainder
of this Indenture and such Securities shall be unaffected thereby.

       Section 13.4     CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.

       The following shall be the conditions precedent to application of either
Section 13.2 or Section 13.3 to the Outstanding Securities of such series:

               (1)      The Company shall irrevocably have deposited or caused
       to be deposited with the Trustee (or another trustee satisfying the
       requirements of Section 6.9 who shall agree to comply with the provisions
       of this Article Thirteen applicable to it) as trust funds in trust for
       the purpose of making the following payments, specifically pledged as
       security for, and dedicated solely to, the benefit of the Holders of such
       Securities, (A) money in an amount, or (B) U.S. Government Obligations
       which through the scheduled payment of principal and interest in respect
       thereof in accordance with their terms will provide, not later than one
       day before the due date of any payment, money in an amount, or (C) a
       combination thereof, sufficient, without reinvestment, in the opinion of
       a nationally recognized firm of independent public accountants expressed
       in a written certification thereof delivered to the Trustee, to pay and
       discharge, and which shall be applied by the Trustee (or other qualifying
       trustee) to pay and discharge, the principal of (and premium and
       interest, if any on) the Outstanding Securities of such series on the
       Maturity of such principal, or premium and interest, if any. Before such
       a deposit the Company may make arrangements satisfactory to the Trustee
       for the redemption of Securities at a future date or dates in accordance
       with Article Eleven, which shall be given effect in applying the
       foregoing. For this purpose, "U.S. Government Obligations" means
       securities that are (x) direct obligations of the United States of
       America for the payment of which its full faith and credit is pledged or
       (y) obligations of a Person controlled or supervised by and acting as an
       agency or instrumentality of the United States of America the payment of
       which is unconditionally guaranteed as a full faith and credit obligation
       by the United States of America, which, in either case, are not callable
       or redeemable at the option of the issuer thereof, and shall also include
       a depository receipt issued by a bank (as defined in section 3(a)(2) of
       the Securities Act of 1933, as amended) as custodian with respect to any
       such U.S. Government Obligation or a specific payment of principal of or
       interest on any such U.S. Government Obligation held by such custodian
       for the account of the holder of such depository receipt, provided that
       (except as required by law) such custodian is not authorized to make any
       deduction from the amount payable to the holder of such depositary
       receipt from any amount received by the custodian in respect of the U.S.
       Government Obligation or the specific payment of principal of or interest
       on the U.S. Government Obligation evidenced by such depositary receipt.

               (2)      No Event of Default or event which with notice or lapse
       of time or both would become an Event of Default with respect to the
       Securities of such series shall have occurred and be continuing (A) on
       the date of such deposit or (B) insofar as subsections 501(5) and (6) are
       concerned, at any time during the period ending on the 121st day after
       the date of such deposit or, if longer, ending on the day following the
       expiration of the longest preference period applicable to the Company in
       respect of such deposit (it being understood that the condition in this
       condition shall not be deemed satisfied until the expiration of such
       period).

               (3)      Such defeasance or covenant defeasance shall not (A)
       cause the Trustee for the Securities of such series to have a conflicting
       interest as defined in Section 6.8 or for purposes of the Trust Indenture
       Act with respect to any securities of the Company or (B) result in the
       trust

                                       48
<Page>

       arising from such deposit to constitute, unless it is qualified as, a
       regulated investment company under the Investment Company Act of 1940, as
       amended.

               (4)      Such defeasance or covenant defeasance shall not result
       in a breach or violation of, or constitute a default under, this
       Indenture or any other agreement or instrument to which the Company is a
       party or by which it is bound.

               (5)      In the case of an election under Section 13.2, the
       Company shall have delivered to the Trustee an Opinion of Counsel stating
       that (x) the Company has received from, or there has been published by,
       the Internal Revenue Service a ruling, or (y) since the date of this
       Indenture there has been a change in the applicable Federal income tax
       law, in either case to the effect that, and based thereon such opinion
       shall confirm that, the Holders of the Outstanding Securities of such
       series will not recognize income, gain or loss for Federal income tax
       purposes as a result of such defeasance and will be subject to Federal
       income tax on the same amounts, in the same manner and at the same times
       as would have been the case if such defeasance had not occurred.

               (6)      In the case of an election under Section 13.3, the
       Company shall have delivered to the Trustee an Opinion of Counsel to the
       effect that the Holders of the Outstanding Securities of such series will
       not recognize income, gain or loss for Federal income tax purposes as a
       result of such covenant defeasance and will be subject to Federal income
       tax on the same amounts, in the same manner and at the same times as
       would have been the case if such covenant defeasance had not occurred.

               (7)      Such defeasance or covenant defeasance shall be effected
       in compliance with any additional terms, conditions or limitations which
       may be imposed on the Company in connection therewith pursuant to Section
       3.1.

               (8)      The Company shall have delivered to the Trustee an
       Officers' Certificate and an Opinion of Counsel, each stating that all
       conditions precedent provided for relating to either the defeasance under
       Section 13.2 or the covenant defeasance under Section 13.3 (as the case
       may be) have been complied with.

       Section 13.5     DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.

       Subject to the provisions of the last paragraph of Section 10.3, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee - collectively, for purposes of
this Section 13.5, the "Trustee") pursuant to Section 13.4 in respect of the
Outstanding Securities of such series shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent (but not
including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal (and premium, if any) and interest, but such
money need not be segregated from other funds except to the extent required by
law.

       The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the money or U.S. Government
Obligations deposited pursuant to Section 13.4 or the principal and interest
received in respect thereof.

       Anything herein to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon Company Request any money
or U.S. Government Obligations held by it as

                                       49
<Page>

provided in Section 13.4 which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance.

       Section 13.6     REINSTATEMENT.

       If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 13.2 or 13.3 by reason of any order or judgment or any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under the Securities of such
series shall be revived and reinstated as though no deposit had occurred
pursuant to this Article Thirteen until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 13.2 or 13.3;
PROVIDED, HOWEVER, that if the Company makes any payment of principal of (and
premium, if any) or interest on any such Security following the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money held by the Trustee or
the Paying Agent.

       This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

                                       50
<Page>

       IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

                                        HOSPIRA, INC.

                                        By /s/ Terrence C. Kearney
                                          ---------------------------------
                                           Name:  Terrence C. Kearney
                                           Title: Senior Vice President, Finance
                                                  and Chief Financial Officer

Attest:

/s/ Lori O. Carlson
-------------------
Name:  Lori O. Carlson
Title: Corporate Vice President
       and Treasurer

                                        LASALLE BANK NATIONAL ASSOCIATION
                                        as Trustee

                                        By /s/ Wayne Evans
                                          ---------------------------------
                                            Name:  Wayne Evans
                                            Title: First Vice President

Attest:

/s/ Christine Linde
-------------------
Name:  Christine Linde
Title: Vice President

                                       51
<Page>

STATE OF ILLINOIS       )
                        ) ss:
COUNTY OF LAKE          )

       On the 14th day of June, 2004, before me personally came Terrence C.
Kearney, to me known, who, being by me duly sworn, did depose and say that he is
Senior Vice President, Finance and Chief Financial Officer of Hospira, Inc., one
of the corporations described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.

                                        /s/ Donna Marie Harms
                                        --------------------------------

STATE OF ILLINOIS  )
                   ) ss:
COUNTY OF COOK     )

       On the 14th day of June, 2004, before me personally came Wayne Evans, to
me known, who, being by me duly sworn, did depose and say that he is First Vice
President of LaSalle Bank National Association, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that she signed his name thereto by like authority.

                                        /s/ Nancy L. Herman
                                        --------------------------------

                                       52

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