Document:

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                                                                   Exhibit 10.22

                          ASSIGNMENT AND ASSUMPTION OF
                           REAL ESTATE SALE AGREEMENT

     This Assignment and Assumption of Agreement of Purchase and Sale
("Assignment") is entered into as of the 21st day of May, 2003, by and between
BCMR JACKSONVILLE, LLC, a Delaware limited liability company ("Assignor"), with
offices at c/o Boston Capital Corporation, One Boston Place, 201 Washington
Street, Boston, MA 02109 and BC-BAINBRIDGE SPICEWOOD LLC, with offices at c/o
The Bainbridge Companies, 12765 West Forest Hill Boulevard, Suite 1307,
Wellington, FL 33414 ("Assignee").

     WHEREAS, Assignor is Purchaser under that certain Real Estate Sale
Agreement dated April 2, 2003 by and between ERP Operating Limited Partnership
as seller and Bainbridge Communities Acquisition Corporation II as purchaser, as
amended by Amendment to Sales Contract dated May 2, 2003, as assigned to
Assignor by that certain Assignment of Sales Contract by and between Bainbridge
Communities Acquisition Corporation II and Assignor (as so amended and assigned,
the "Agreement") for the purchase of certain real property and the improvements
thereon known as Spicewood Springs Apartments, 445 Monument Road, Jacksonville,
Florida; and

     WHEREAS, Assignor desires to assign its interest as Purchaser under the
Agreement to BC-Bainbridge LLC, a Delaware limited liability company (the
"Venture") as part of Assignor's "Initial Capital Contribution" to the Venture
as described in Section 3.1 of the Limited Liability Company Agreement of the
Venture; and

     WHEREAS, the Venture has directed Assignor to instead assign its rights as
Purchaser under the Agreement to Assignee, a wholly owned subsidiary of the
Venture, and Assignee desires to accept such assignment.

     NOW, THEREFORE, for valuable consideration, the parties hereto, each
intending to be legally bound and to bind their respective successors and
assigns, hereby covenant and agree as follows:

1.   Assignor hereby assigns, transfers and sets over unto Assignee all of
Assignor's interests and rights as Purchaser in, to and under the Agreement.

2.   Assignee hereby accepts all of Assignor's liabilities, obligations, rights
and interests as Purchaser under the Agreement.

3.   This Assignment may be executed in multiple counterparts, each of which
shall be an original and all of which counterparts taken together shall
constitute one and the same agreement.

                     [Remainder of Page Intentionally Blank]

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     IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as
of the date first above written.

                                 ASSIGNOR

                                 BCMR JACKSONVILLE, LLC, a Delaware
                                 limited liability company

                                 By:   Boston Capital Real Estate Investment
                                       Trust, Inc., a Maryland corporation, its
                                       sole member

                                       By:   /s/ Jeffrey H. Goldstein
                                             -----------------------------------
                                             Jeffrey H. Goldstein, its President

                                 ASSIGNEE

                                 BC-BAINBRIDGE SPICEWOOD LLC, a
                                 Delaware limited liability company

                                 By:   BC-Bainbridge LLC, a Delaware limited
                                       liability company, its sole member

                                       By:   Bainbridge Jacksonville LLC, a
                                             Florida limited liability company,
                                             its manager

                                             By:   /s/ Richard A. Schechter
                                                   -----------------------------
                                                   Richard A. Schechter,
                                                   Manager

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                          ASSIGNMENT OF SALES CONTRACT

     THIS ASSIGNMENT ("Assignment"), dated and effective as of May 5, 2003 (the
"Assignment Effective Date"), by and among BAINBRIDGE COMMUNITIES ACQUISITION
CORPORATION II, a Florida corporation ("ASSIGNOR") and BCMR JACKSONVILLE, LLC
("ASSIGNEE").

                                   WITNESSETH:

     WHEREAS, Assignor is the Purchaser under that certain Real Estate Sales
Agreement dated April 2, 2003, as amended by Amendment to Sales Contract dated
as of the date hereof (as amended, the "SALES CONTRACT") to purchase the
property known as "Spicewood Springs Apartments" located at 445 Monument Road,
Jacksonville, Florida (the "PROPERTY"). Capitalized terms used herein and not
otherwise defined shall have the meaning ascribed to them in the Sales Contract;

     WHEREAS, pursuant to the terms of the Sales Contract, Assignor has
deposited with Escrow Agent Initial Earnest Money in the amount of $50,000;

     WHEREAS, Assignor and Assignee or their respective affiliates are
contemplating forming a joint venture to acquire the Property;

     WHEREAS, Assignor desires to transfer, assign and set over to Assignee and
Assignee desires to accept from Assignor, subject to the express retention by
Assignor of certain duties and obligations under the Sales Contract, all of
Assignor's right, title and interest in, to and under the Sales Contract; and

     WHEREAS, on the date hereof, Assignee funded by wire transfer (i) $50,000
to counsel for Assignor pursuant to the wire instructions on EXHIBIT A to be
used to reimburse Assignor for the Initial Earnest Money; and (ii) $200,000 to
the Escrow Agent to fund the Additional Earnest Money.

     NOW, THEREFORE, in consideration of the above recitals and other good and
valuable consideration, the receipt and sufficiency of which is hereby expressly
acknowledged by Assignor, the parties agree as follows:

1.   ASSIGNMENT OF SALES CONTRACT. Assignor hereby transfers, assigns and sets
     over unto Assignee any and all of Assignor's right, title and interest in,
     to and under the Sales Contract, including all of Assignor's right, title
     and interest in and to the Earnest Money. Except as expressly excluded
     herein, Assignee, for itself and its successors and assigns, does hereby
     expressly accept and assume and agree to perform and observe all of the
     terms, covenants and agreements contained in the Sales Contract.

2.   EXCLUSIONS FROM ASSIGNMENT OF SALES CONTRACT. Assignor and Assignee
     expressly agree that neither this Assignment nor any action by Assignee
     shall constitute an assumption by Assignee of any obligations of Assignor
     under the Sales Contract related to the indemnity

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     provisions of Purchaser for the benefit of Seller for any actions of
     Purchaser that occurred prior to the Assignment Effective Date (the
     "Exclusions").

3.   REPRESENTATION AND WARRANTIES OF ASSIGNOR. Assignor represents and warrants
     that (i) Assignor has the authority to execute, deliver and perform its
     representations and warranties pursuant to this Assignment; (ii) Assignor
     has not encumbered or assigned the Sales Contract in whole or in part and
     agrees to execute and deliver such additional documents as may be required
     to effectuate this Assignment; (iii) there are no amendments or
     modifications to the Sales Contract, and true, correct and complete copies
     of the Sales Contract are being delivered to Assignee simultaneously with
     the execution of this Assignment; and (iv) to Assignor's knowledge no
     dispute, right of set-off, claim, counterclaim or defense exists with
     respect to any provision of the Sales Contract.

4.   INDEMNITY BY ASSIGNOR. Assignor hereby agrees to and shall indemnify,
     defend and hold Assignee harmless from any and all obligations, claims,
     losses, damages, liabilities and expenses (including, without limitation,
     reasonable attorneys' and accountants' fees and disbursements) arising out
     of contractual obligations, acts or omissions of Assignor that occurred or
     accrued in connection with the performance of the rights and duties of
     Assignor under the Sales Contract related to the period (a) prior to the
     Assignment Effective Date hereof for all matters under the Sales Contract
     which are being assigned to Assignee pursuant to this Assignment, and (b)
     through the date of final completion of any right, duty or obligation
     retained by Assignor pertaining to the Exclusions.

5.   NOTICES. All notices hereunder shall be delivered in accordance with
     Section 14.7 of the Purchase Agreement, and if to Assignee:

     BCMR Special, Inc.
     c/o Boston Capital Corporation
     One Boston Place
     201 Washington Street
     Boston, MA 02108
     Attention:  Mark W. Dunne

     with a copy to:

     Goodwin Procter LLP
     Exchange Place
     53 State Street
     Boston, MA 02109
     Attention:  Andrew C. Sucoff, P.C.

6.   BINDING EFFECT. This Assignment shall be binding upon and shall inure to
     the benefit of Assignor, Assignee and their respective successors and
     assigns.

7.   GOVERNING LAW. This Assignment and the rights and obligations of the
     parties will be subject to and construed and enforced under the laws of
     State of Florida.

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8.   COUNTERPARTS. This Assignment may be executed in counterpart originals and
     all of such counterpart originals shall constitute one and the same
     instrument; provided, however, this Assignment shall not be binding and in
     full force and effect until each and every party hereto has executed this
     Assignment in one or more of such counterparts.

                    [Remainder of page intentionally blank.]

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     IN WITNESS WHEREOF, the undersigned have executed this Assignment as of
the date and year first above written.

                                     ASSIGNOR:

                                     BAINBRIDGE COMMUNITIES ACQUISITION
                                     CORPORATION II, a Florida corporation

                                     By:    /s/ Sheila Mead
                                           -------------------------------
                                     Name:   Sheila Mead
                                     Title:  Vice President

                                     ASSIGNEE:

                                     BCMR JACKSONVILLE, LLC, a Delaware
                                     limited liability company

                                     By:   Boston Capital Real Estate Investment
                                           Trust Inc., a Maryland corporation

                                           By:   /s/ Jeffrey H. Goldstein
                                                --------------------------
                                                Jeffrey H. Goldstein
                                                President

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                                    EXHIBIT A

                               WIRING INSTRUCTIONS

                                       FOR

                                BROAD AND CASSEL
                           7777 GLADES ROAD, SUITE 300
                              BOCA RATON, FL 33434
                                 (561) 483-7000

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                           AMENDMENT TO SALES CONTRACT

     THIS AMENDMENT TO SALES CONTRACT (this "Amendment"), is dated as of this
2nd day of May, 2003 (the "Amendment Effective Date"), by and between ERP
OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership ("Seller"),
BAINBRIDGE COMMUNITIES ACQUISITION CORPORATION II, a Florida corporation
("Bainbridge") and BCMR JACKSONVILLE, LLC, a Delaware limited liability company
("Purchaser").

                                    RECITALS

     WHEREAS, Seller and Bainbridge have entered into that certain Real Estate
Sale Agreement dated April 2, 2003 (the "Sales Contract") for the purchase and
sale of the property known as "Spicewood Springs Apartments" located at 445
Monument Road, Jacksonville, Florida. Capitalized terms used herein without
definition shall have the meaning ascribed to them in the Sales Contract.

     WHEREAS, Bainbridge and Purchaser desire to enter into that certain
Assignment of Sales Contract (the "Assignment"), whereby Bainbridge will assign
its rights under the Sales Contract to Purchaser.

     WHEREAS, Purchaser has requested Seller's consent to the Assignment, and
Seller desires to consent to the Assignment.

     WHEREAS, Seller and Purchaser further desire to amend certain terms of the
Sales Contract.

                                   AGREEMENTS

     NOW THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Sellers and Purchaser hereby agree as follows:

     1.     RECITALS. The foregoing Recitals are true and correct and are
incorporated into this Amendment by this reference.

     2.     ADDITIONAL EARNEST MONEY. The second sentence of Section 2.1.1 of
the Sales Contract is hereby deleted and replaced with the following language:

            If Purchaser does not terminate this Agreement pursuant to and in
            accordance with Section 8 below, Purchaser shall, on or before 5
            p.m. on May 5, 2003, deposit with Escrowee additional earnest money
            (the "Additional Earnest Money") in the sum of Two Hundred Thousand
            and 00/100 Dollars ($200,000.00).

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     3.     TITLE. Seller acknowledges that Seller holds title to the Real
Property by virtue of a merger and that record title to the Property is
currently vested in Merry Land & Investment Company, Inc. Accordingly, Seller
agrees that, on or before the Closing Date, it will satisfy all requirements of
the Title Insurer in order to evidence that Seller holds title to the Real
Property, including without limitation, recording a certificate of merger and
paying all recording and transfer taxes and fees associated therewith, if any.

     4.     EXHIBIT A. Exhibit A to the Sales Contract is hereby deleted and
replaced with EXHIBIT A to this Amendment. Seller agrees to cooperate with
Purchaser, Title Insurer, and Purchaser's surveyors to develop a single metes
and bounds legal description for the Property to be used in the deed to be
delivered by Seller at Closing.

     5.     EXTENSION OF TITLE REVIEW PERIOD. Notwithstanding any provision to
the contrary in Section 3.3 of the Sales Contract, the Title Review Period is
hereby extended until 5 p.m. Eastern Daylight Time on May 12, 2003. Seller
agrees that it will use its best efforts to cause the Title Commitment and
legible copies of all documents and plans listed as exceptions on the Title
Commitment (the "Title Materials") to be delivered to Purchaser on or before 5
p.m. on May 5, 2003, and in the event that Purchaser does not receive the Title
Materials by such time, the Title Review Period shall be extended until 5 p.m.
on the date which is five (5) business days after Purchaser's receipt of the
Title Materials.

     6.     CLOSING. The first sentence of Section 4.1 of the Sales Contract is
hereby deleted and replaced with the following language:

            The "Closing" of the transaction contemplated by this Agreement
            (that is, the payment of the Purchase Price, the transfer of title
            to the Property, and the satisfaction of all other terms and
            conditions of this Agreement) shall occur on the day that is fifteen
            (15) days after the expiration of the Title Review Period, at the
            Chicago office of the Title Insurer, or at such other time and place
            as Seller and Purchaser shall agree in writing.

     The following language is hereby added at the end of Section 4.1:

            Purchaser shall have the one-time right, on or before the Closing
            Date, to extend the Closing Date for a period of fifteen (15) days
            by (i) giving written notice thereof to Seller, and (ii) depositing
            with Escrowee additional earnest money in the sum of Fifty Thousand
            Dollars ($50,000.00), which shall then be included within the
            definition of "Earnest Money" for all purposes of this Agreement.

     7.     CONSENT OF SELLER'S GENERAL PARTNER. Seller represents and warrants
to Purchaser that it has obtained the consent of its general partner as
described in Section 8.2 of the Sales Contract. Accordingly, Section 8.2 is
hereby deleted.

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     8.     ASSIGNMENT. Section 14.3 is hereby amended by adding the following
at the end thereof:

            Notwithstanding the foregoing, Seller hereby consents to the
            assignment of this Agreement to BCMR Jacksonville LLC as well as any
            further assignments of this Agreement to Boston Capital Companion
            Limited Partnership, Boston Capital Real Estate Investment Trust,
            Inc., BC-Bainbridge LLC (collectively, "Boston Capital"),
            Bainbridge, or any entity in which Boston Capital or Bainbridge has
            an ownership interest. Upon any assignment as permitted hereunder,
            the assignee ("Assignee") shall deliver to Seller a copy of the
            assignment document. From and after receipt of such assignment
            document, Seller agrees (a) to deliver any notices in connection
            with the Agreement to the Assignee as well as to Bainbridge, and (b)
            in the event that Assignee and Bainbridge deliver conflicting
            instructions to Seller, Seller shall comply with the instructions or
            directions delivered by Assignee.

     9.     NEW LEASES. Section 13.2 of the Sales Contract is hereby deleted in
its entirety and replaced with the following:

            Without notice to and the prior written consent of Purchaser, Seller
            shall not terminate, modify, extend, amend or renew any Lease or
            enter into any new Lease except in accordance with its customary
            business practices; provided however, any concessions being given at
            the Property shall not be materially different than those generally
            offered by Seller as of the date hereof, but in no event shall
            Seller be prohibited from offering concessions required to be
            competitive in the Jacksonville market.

     10.    CONFIDENTIALITY. Section 14.9 of the Sales Contract is hereby
amended by adding the following sentence at the end thereof:

            Notwithstanding the foregoing, Purchaser shall have the right to
            disclose any of the information described in this paragraph to its
            investors, lenders, and their respective attorneys and consultants.

     11.    OTHER DILIGENCE. Sellers agree to deliver a legible, true, correct
and complete copy of the Military Rental Agreement currently in effect for the
Property, together with all exhibits, schedules and amendments to date to
Purchaser on or before May 9, 2003.

     12.    PLANS AND SPECIFICATIONS. Section 1 of the Sales Contract is hereby
amended by adding to the definition of Property all plans and specifications for
the Property which are currently in Seller's possession.

     13.    EFFECT ON THE AGREEMENT. All terms and conditions of the Sales
Contract shall remain in full force and effect as written except as expressly
modified by this Amendment.

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     14.    COUNTERPARTS AND EFFECTIVENESS. This Amendment may be executed in
several counterparts. All such counterparts shall constitute the same Amendment.
This Amendment is entered into and is effective as of the Amendment Effective
Date.

                    [Remainder of page intentionally blank.]

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     IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment
effective as of the Amendment Effective Date.

                                 SELLER:

                                 ERP OPERATING LIMITED PARTNERSHIP, an
                                 Illinois limited partnership

                                 By:  Equity Residential, a Maryland real estate
                                      investment trust, its general partner

                                      By:   /s/ [ILLEGIBLE]
                                         ------------------------------
                                      Name:  [ILLEGIBLE]
                                      Title: EVP

                                 BAINBRIDGE:

                                 BAINBRIDGE COMMUNITIES ACQUISITION
                                 CORPORATION II, a Florida corporation

                                 By:    /s/ Sheila Mead
                                      --------------------------------
                                 Name:   Sheila Mead
                                 Title:  Vice President

                                 PURCHASER:

                                 BCMR JACKSONVILLE, LLC, a Delaware limited
                                 liability company

                                 By:  Boston Capital Real Estate Investment
                                      Trust Inc., a Maryland corporation

                                      By:    /s/ Jeffrey H. Goldstein
                                           -----------------------------------
                                           Jeffrey H. Goldstein
                                           President

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                                    EXHIBIT A

                                Legal Description

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                          SPICEWOOD SPRINGS APARTMENTS
                              JACKSONVILLE, FLORIDA

                           REAL ESTATE SALE AGREEMENT

     THIS REAL ESTATE SALE AGREEMENT (this "Agreement") is made as of the 2nd
day of April, 2003, by and between ERP OPERATING LIMITED PARTNERSHIP, an
Illinois limited partnership ("Seller"), with an office at c/o Equity
Residential, Two North Riverside Plaza, Suite 400, Chicago, Illinois 60606, and
BAINBRIDGE COMMUNITIES ACQUISITION CORPORATION II, a Florida corporation
("Purchaser"), with an office at 12791 W Forest Hill Boulevard, Wellington,
Florida 33414.

                                    RECITALS

     A.     Seller is the owner of a certain parcel of real estate (the
"Real Property") in the City of Jacksonville, County of Duval, State of Florida,
which parcel is more particularly described in attached EXHIBIT A, and upon
which is located a multi-family residential apartment community commonly known
as "Spicewood Springs Apartments".

     B.     Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, the Property (as such term is hereinafter defined), each
in accordance with and subject to the terms and conditions set forth in this
Agreement.

     THEREFORE, in consideration of the above Recitals, the mutual covenants and
agreements herein set forth and the benefits to be derived therefrom, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Purchaser and Seller agree as follows:

     1.     PURCHASE AND SALE.

            Subject to and in accordance with the terms and conditions set forth
in this Agreement, Purchaser shall purchase from Seller and Seller shall sell to
Purchaser the Real Property, together with: (i) all buildings and improvements
owned by Seller and any and all of Seller's rights, easements, licenses and
privileges presently thereon or appertaining thereto; (ii) Seller's right, title
and interest in and to the leases (the "Leases") affecting the Property or any
part thereof, other than any Former Tenant Lease Files (as defined in Section
14.11 below); (iii) all furniture, furnishings, fixtures, equipment, (excluding
computer hardware and software), tools and other tangible property (excluding
the EQR legal manual and any marketing information containing a logo)
(collectively, the "Personal Property") owned by Seller, located on the Real
Property and used solely in connection therewith, a list of which is attached
hereto as EXHIBIT B; and (iv) all right, title and interest of Seller under any
and all of the union, maintenance, service, advertising and other like contracts
and agreements with respect to the ownership and operation of the Property
(collectively, the "Service Contracts"), a list of which is attached hereto AS
EXHIBIT C; all to the extent applicable to the period from and after the Closing
(as such term is hereinafter defined); (items (i) through (iv) above, together
with the Real Property, are collectively referred to in this Agreement as the
"Property"). All of the foregoing expressly excludes all property owned by
tenants or other users or occupants of the Property.

     2.     PURCHASE PRICE.

            The total consideration to be paid by Purchaser to Seller for the
Property is Twenty-Eight Million and 00/100 Dollars ($28,000,000.00) (the
"Purchase Price"). The Purchase Price shall be paid as follows:

            2.1    EARNEST MONEY.

                   2.1.1    Seller, Purchaser and a duly authorized
representative of the Chicago Office of Chicago Title Insurance Company
("Escrowee") shall concurrently herewith execute Earnest Money Escrow
Instructions, in the form attached hereto as EXHIBIT D, pursuant to which
Purchaser shall deliver to Escrowee initial earnest money (the "Initial Earnest
Money") in the sum of Fifty Thousand and 00/100 Dollars ($50,000.00). If
Purchaser does not terminate this Agreement pursuant to and in accordance with
Section 8 below, Purchaser shall, on or before the thirtieth (30th) day after
the date of this Agreement, deposit with the Escrowee additional earnest money
(the "Additional Earnest Money") in the sum of Two Hundred Thousand and 00/100
Dollars ($200,000.00). The Initial Earnest Money

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and, if deposited or required to be deposited with the Escrowee, the Additional
Earnest Money, together with any interest earned thereon net of investment
costs, are referred to in this Agreement as the "Earnest Money". The Earnest
Money shall be invested as Seller and Purchaser so direct. Any and all interest
earned on the Earnest Money shall be reported to Purchaser's federal tax
identification number.

                   2.1.2    If the transaction  closes in accordance  with the
terms of this Agreement, at Closing, the Earnest Money shall be delivered by
Escrowee to Seller as part payment of the Purchase Price. If the transaction
fails to close due to a default on the part of Purchaser, Seller shall have the
remedy provided for in Section 7.2 below. If the transaction fails to close due
to a default on the part of Seller, Purchaser shall have the remedy options
provided for in Section 7.1 below.

            2.2    CASH AT CLOSING. At Closing, Purchaser shall pay to
Seller, with current, federal funds wire transferred to an account designated by
Seller in writing, an amount equal to the Purchase Price, minus the sum of the
Earnest Money which Seller shall receive at Closing from the Escrowee, and plus
or minus, as the case may require, the closing prorations and adjustments to be
made pursuant to Section 4.4 below.

     3.     EVIDENCE OF TITLE.

            3.1    TITLE INSURANCE. Seller shall, within fifteen (15) days after
the date of this Agreement, deliver to Purchaser a current commitment for an
ALTA Owner's Title Insurance Policy (the "Title Commitment"), in the amount of
the Purchase Price, issued by the Chicago Office of Chicago Title Insurance
Company (the "Title Insurer"). Seller shall cause the Title Insurer to agree to
issue to the Purchaser as soon as practicable after Closing, an updated ALTA
Standard Coverage Owner's Policy of Title Insurance for the Real Property and
Improvements (the "Owner's Policy"), dated as of the Closing Date (as
hereinafter defined), in the amount of the Purchase Price, and insuring good and
indefeasible fee simple title to the Real Property and Improvements to be in
Purchaser. Purchaser may request that the Title Company issue, but Seller shall
have no obligation to pay for or to cause the Title Company to issue, other
available endorsements to the Owner's Policy. Upon issuance, the Owner's Policy
will except from coverage only the non-deleted general exceptions and Permitted
Exceptions (as defined in Section 3.3 below). Except as permitted under this
Agreement, no additional encumbrances may be created on the Property by Seller
after the date of this Agreement without the prior consent of Purchaser, which
consent may not be unreasonably withheld, conditioned, or delayed.

            3.2    SURVEY. Within five (5) days of the date of this Agreement,
Seller shall deliver to Purchaser one copy of the most recent existing plat of
survey (if any) of the Real Property (the "Existing Survey") in Seller's
possession and control. Purchaser may obtain, at Purchaser's sole option,
election and expense, and deliver to Seller, and the Title Insurer, on or before
the date that is ten (10) days prior to the last day of the Review Period (as
hereinafter defined) an updated or new as-built survey of the Real Property (the
"Updated Survey") prepared by the surveyor who provided the Existing Survey or
another surveyor selected by Purchaser.

            3.3    TITLE REVIEW. Purchaser shall have ten (10) days after its
receipt of the last of the Title Commitment and the copies of each title
exception document, but in no event later than the expiration of the Review
Period (the "Title Review Period"), to give Seller a detailed notice objecting
to any exception or condition contained in the Title Commitment or shown on the
Updated Survey, if any. If Purchaser does not give notice of any objections to
Seller within the Title Review Period, Purchaser shall be deemed to have
approved the title as shown in the Title Commitment, the title exceptions, and
all matters shown on the Updated Survey. If Purchaser provides timely
objections, Seller shall have five (5) days after receipt of Purchaser's notice
(the "Title Cure Period") in which to cure or attempt to cure Purchaser's
objections; provided, however that Seller shall not have any obligation to cure
any of Purchaser's objections. Seller may bond around any mechanics' or
materialmen's lien(s) and abstract(s) of judgment to the Title Company's
reasonable satisfaction. If Purchaser provides timely objections and all of
Purchaser's objections are not cured within the Title Cure Period for any
reason, then, within five (5) days after the last day of the Title Cure Period,
Purchaser shall, as its sole and exclusive remedy, waiving all other remedies,
either: (a) terminate this Agreement by giving a termination notice to Seller,
at which time Escrowee shall return the Earnest Money to Purchaser and the
parties shall have no further rights, liabilities, or obligations under this
Agreement (other than those that expressly survive termination); or (b) waive
the uncured objections by proceeding to Closing and thereby be deemed to have
approved the Purchaser's title as shown in the Title

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Commitment, the title exception documents, and the Updated Survey, if any. If
Seller does not timely receive notice of Purchaser's election to terminate under
this Section 3.3, Purchaser will be deemed to have waived the uncured objections
and to approve the Partnership's title as shown in the Commitment, the title
exception documents, and the Updated Survey. All exceptions shown on the
Existing Survey, the Title Commitment, the title exception documents, or the
Updated Survey that are not cured within the Title Cure Period shall be the
"Permitted Exceptions".

     4.     CLOSING.

            4.1    CLOSING DATE. The "Closing" of the transaction
contemplated by this Agreement (that is, the payment of the Purchase Price, the
transfer of title to the Property, and the satisfaction of all other terms and
conditions of this Agreement) shall occur at 11:00 a.m. on the fifteenth (15th)
day after the expiration of the Review Period (as defined in Section 8.1.1
below), at the Chicago office of the Title Insurer, or at such other time and
place as Seller and Purchaser shall agree in writing. The "Closing Date" shall
be the date of Closing. If the date for Closing above provided for falls on a
Saturday, Sunday or legal holiday, then the Closing Date shall be the next
business day.

            4.2    SELLER'S  CLOSING  DELIVERIES.   At  Closing,   Seller  shall
execute and deliver to Purchaser the following:

                            4.2.1   a "special" Warranty Deed, subject to the
            Permitted Exceptions in the form attached hereto as EXHIBIT E and
            acceptable to the Title Insurer;

                            4.2.2   a Bill of Sale in the form attached hereto
            as EXHIBIT F;

                            4.2.3   a letter advising tenants under the Leases
            of the change in ownership of the Property in the form attached
            hereto as EXHIBIT G;

                            4.2.4   an Assignment and Assumption of Leases,
            Security  Deposits  and  Service Contracts in the form attached
            hereto as EXHIBIT H;

                            4.2.5   an affidavit stating, under penalty of
            perjury, Seller's U.S. taxpayer identification number and that
            Seller is not a foreign person within the meaning of Section 1445 of
            the Internal Revenue Code;

                            4.2.6   such evidence of Seller's power and
            authority as the Title Insurer may reasonably require;

                            4.2.7   a closing statement ("Closing Statement")
            setting forth the prorations and adjustments to the Purchase Price
            as required by Section 4.4 below; and

                            4.2.8   an update of the Rent Roll (hereinafter
            defined) in the form of the Rent Roll attached hereto as EXHIBIT J,
            dated no earlier than two (2) business days prior to the Closing
            Date, certified by Seller to be to Seller's knowledge, true and
            complete in all material respects, and subject to the limitations on
            survival and liability provided in Section 10 and Section 12 below.

                   4.3      PURCHASER'S CLOSING DELIVERIES. At Closing,
Purchaser shall execute and deliver to Seller the following:

                            4.3.1   the funds required pursuant to Section 2.2
            above;

                            4.3.2   a counterpart original of the Closing
            Statement referenced in 4.2.7 above;

                            4.3.3   counterpart originals of the Assignment and
            Assumption of Leases, Security Deposits and Service Contracts
            referenced in Section 4.2.4 above); and

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                            4.3.4   such evidence of Purchaser's power and
            authority as the Title Insurer may reasonably require.

            4.4    CLOSING PRORATIONS AND ADJUSTMENTS. Seller shall prepare
the Closing Statement of the prorations and adjustments required by this
Agreement and submit it to Purchaser at least one (1) business day prior to the
Closing Date. The following items are to be prorated, adjusted or credited (as
appropriate) as of the close of business on the Closing Date, it being
understood that for purposes of prorations and adjustments, Seller shall be
deemed the owner of the Property on such day and Purchaser shall be deemed the
owner of the Property as of the day after the Closing Date:

                   4.4.1    real estate and personal property taxes and
assessments (on the basis of the most recent ascertainable tax bill if the
current bill is not then available, and in any case, calculated taking into
account the 4% discount available for payment of real estate taxes prior to
December; provided, however, in the event the Closing takes place after the
period of time for the 4% discount has expired, the discount shall be applied
only in the event Seller took advantage of such discount when it paid the real
estate taxes);

                   4.4.2    the rent payable by tenants under the Leases;
provided, however, that rent and all other sums which are due and payable to
Seller by any tenant but uncollected as of the Closing shall not be adjusted,
but Purchaser shall cause the rent and other sums for the period prior to
Closing to be remitted to Seller if, as and when collected. At Closing, Seller
shall deliver to Purchaser a schedule of all such past due but uncollected rent
and other sums owed by tenants. Purchaser shall include the amount of such rent
and other sums in the first bills thereafter submitted to the tenants in
question after the Closing, and shall continue to do so for nine (9) months
thereafter. Purchaser shall promptly remit to Seller any such rent or other sums
paid by scheduled tenants;

                   4.4.3    the amount of unapplied security deposits held by
Seller under the Leases;

                   4.4.4    water, electric, telephone and all other utility and
fuel charges, fuel on hand (at cost plus sales tax); provided, however, that any
deposits with utility companies shall remain the property of the Seller and
shall not be prorated or credited (to the extent possible, utility prorations
will be handled by meter readings on the day immediately preceding the Closing
Date);

                   4.4.5    amounts due and prepayments under the Service
Contracts;

                   4.4.6    assignable license and permit fees; and

                   4.4.7    other similar items of income and expenses of
operation.

     Except with respect to general real estate and personal property taxes
(which shall be reprorated upon the issuance of the actual bills, if necessary),
any proration which must be estimated at Closing shall be reprorated and finally
adjusted as soon as practicable after the Closing Date; otherwise, subject to
the provisions of Section 4.4.2 above, all prorations shall be final. In
addition, notwithstanding anything to the contrary contained in this Section 4,
Seller reserves the right (i) to meet with governmental officials and to contest
any reassessment governing or affecting Seller's obligations under Section 4.4.1
above and (ii) to contest any assessment of the Property or any portion thereof
and to attempt to obtain a refund for any taxes previously paid. Seller shall
retain all rights with respect to any refund of taxes applicable to any period
prior to the Closing Date.

            4.5    TRANSACTION COSTS.

     Seller shall pay for any base premium due in connection with the Owner's
Policy (the "Base Premium") which shall be net of any reissue discount which may
be available from the Title Insurer in connection with the delivery of an
existing owner's policy of title insurance, one-half (1/2) of any transfer taxes
and documentary stamps related to the transfer of the Property (but not any
mortgage stamps related to Purchaser's loan) and one-half (1/2) of Escrowee's
standard escrow fees. All other closing and transaction costs (including,
without limitation, title insurance premiums or other title costs in excess of
the Base Premium including premiums for any loan policy or endorsements thereto
required by Purchaser's lender, recording charges, any costs relating to the
Updated Survey, any and all transfer taxes and documentary stamps, one-half
(1/2) of any transfer taxes and documentary stamps related to the transfer of
the Property

                                        4
<Page>

(and all mortgage stamps related to Purchaser's loan) and one-half (1/2) of
Escrowee's standard escrow fees) shall be paid by Purchaser, whether or not the
Closing occurs. Seller and Purchaser shall, however, be responsible for the fees
of their respective attorneys and the payment of any brokerage commissions due
any broker hired by Seller or Purchaser, respectively, to represent it in
connection with this transaction.

            4.6    POSSESSION.

                   Upon Closing, Seller shall deliver to Purchaser possession of
the Property, subject to such matters as are permitted by or pursuant to this
Agreement.

     5.     CASUALTY LOSS AND CONDEMNATION. Prior to Closing, the risk of loss
shall remain with Seller. If, prior to Closing, the Property or any part thereof
shall be condemned, or destroyed or damaged by fire or other casualty, Seller
shall promptly so notify Purchaser. If the Property or any part thereof shall be
condemned such that damages are in excess of $500,000 (as determined by Seller
in good faith) or if the Property or any part thereof shall be destroyed or
damaged by fire or other casualty the repair of which would cost in excess of
$500,000 (as determined by Seller in good faith), then, at the option of
Purchaser, which option shall be exercisable, if at all, by written notice
thereof to Seller within ten (10) business days after Purchaser receives written
notice of such fire, earthquake or other casualty or condemnation and Seller's
good faith determination of resulting damages, this Agreement may be terminated.
If Purchaser elects to terminate this Agreement, the Earnest Money shall be
returned to Purchaser by Escrowee, in which event this Agreement shall, without
further action of the parties, become null and void and neither party shall have
any rights or obligations under this Agreement. In the event that Purchaser does
not exercise the option to terminate the Agreement set forth above, or if the
condemnation or casualty is below the $500,000 threshold described above, then
the Closing shall take place on the Closing Date and Purchaser shall be entitled
to receive the condemnation proceeds in the event of a condemnation, or in the
event of a casualty, a credit against the Purchase Price payable at Closing in
the total amount of the estimated proceeds to Seller under any applicable hazard
or other insurance policy or policies in effect with respect to the Property,
(including, without limitation, a credit for the estimated amount of lost rental
income subsequent to the Closing Date, if any,) all as determined by the
applicable insurance representatives, PLUS the amount of any applicable
deductibles MINUS any sums expended by Seller in repairs or restoration;
provided, however that in no event shall the total credit to Purchaser exceed
the amount of the loss. In addition, in the event of the foregoing, Purchaser
shall deliver to Seller at Closing a release in form reasonably satisfactory to
Seller whereby Purchaser releases Seller from all ongoing liability and/or
claims in connection with such condemnation or casualty.

     Notwithstanding anything to the contrary contained in this Section 5,
in the event any condemnation below the $500,000 threshold described above
either (i) prohibits, as a matter of applicable law, the rebuilding or repair of
the Property as it currently exists or (ii) prevents access to the Property from
a publicly dedicated street, then Purchaser may elect to terminate this
Agreement by written notice thereof to Seller within ten (10) business days of
such determination, and upon the exercise of such option by Purchaser, this
Agreement shall become null and void, the Earnest Money shall be returned to
Purchaser and neither party shall have any further liability or obligations
hereunder, except those that expressly survive termination.

     6.     BROKERAGE.

            Seller agrees to pay upon Closing (but not otherwise) a brokerage
commission due to Bart Walchle of Walchle Investment Group pursuant to a
separate agreement for services rendered in connection with the sale and
purchase of the Property. Seller and Purchaser shall each indemnify and hold the
other harmless from and against any and all claims of all other brokers and
finders claiming by, through or under the indemnifying party and in any way
related to the sale and purchase of the Property, this Agreement or otherwise,
including, without limitation, attorneys' fees and expenses incurred by the
indemnified party in connection with such claim. This Section 6 shall survive
the termination of this Agreement.

     7.     DEFAULT AND REMEDIES.

            7.1    PURCHASER'S PRE-CLOSING REMEDIES. Notwithstanding anything
to the contrary contained in this Agreement, if Seller fails to perform in
accordance with the terms of this Agreement at or prior to Closing, then, as
Purchaser's sole and exclusive remedy hereunder and at Purchaser's option,
either (i) the Earnest Money shall be returned

                                        5
<Page>

to Purchaser, in which event this Agreement shall be null and void, and neither
party shall have any rights or obligations under this Agreement except those
which expressly survive termination, and Purchaser may pursue an action for
reimbursement of the reasonable actual expenses (including reasonable attorneys'
fees) incurred by it under the Agreement, such amount to be limited to
$25,000.00, or (ii) upon notice to Seller not more than ten (10) days after
Purchaser becomes aware of which failure, and provided an action is filed within
thirty (30) days thereafter, Purchaser may seek specific performance of this
Agreement, but not damages. Purchaser's failure to seek specific performance as
aforesaid shall constitute its election to proceed under clause (i) above.

            7.2    SELLER'S PRE-CLOSING REMEDIES. If Purchaser fails to
perform in accordance with the terms of this Agreement, Seller shall have the
right to terminate this Agreement by delivering written notice to Purchaser
whereupon the Earnest Money shall be forfeited to Seller as liquidated damages
(which shall be Seller's sole and exclusive remedy against Purchaser), it being
agreed between the parties hereto that the actual damages to Seller in such
event are impractical to ascertain and the amount of the Earnest Money is a
reasonable estimate thereof and shall be and constitute valid liquidated
damages, at which time this Agreement shall be null and void and neither party
shall have any rights or obligations under this Agreement; provided, however, if
Purchaser is required to but does not deposit with the Escrowee the Additional
Earnest Money as provided for in Section 2.1.1 above, the sum of $250,000.00
shall nonetheless be recoverable by Seller from Purchaser as Earnest Money.

            7.3    PRE-CLOSING KNOWLEDGE. If at any time after the execution
of this Agreement, either Purchaser or Seller becomes aware of information which
makes a representation and warranty contained in this Agreement to become untrue
in any material respect, said party shall promptly disclose said information in
writing to the other party hereto. Provided, that the party making the
representation has taken no willful act to cause the representation to become
untrue, said party shall not be in default under this Agreement and the sole
remedy of the other party shall be to either (i) terminate this Agreement by
written notice, in which event this Agreement, without further action of the
parties, shall become null and void such that neither party shall have any
further rights or obligations under this Agreement except for those rights and
obligations which by their terms expressly survive any such termination, or (ii)
elect to proceed to Closing, in which case such party shall be deemed to have
waived its rights with respect to any such breach of representation or warranty.
Notwithstanding anything to the contrary set forth in this Agreement, Purchaser
and Seller are prohibited from making any claims against the other party hereto
after the Closing with respect to any breaches of the other party's
representations and warranties contained in this Agreement that the claiming
party has actual knowledge of prior to the Closing.

            7.4    POST-CLOSING REMEDIES. From and after the Closing, Seller
and Purchaser shall, subject to the terms and conditions of this Agreement, have
such rights and remedies as are available at law or in equity, except that
neither Seller nor Purchaser shall be entitled to recover from the other
consequential or special damages.

     8.     CONDITIONS PRECEDENT.

            8.1    CONDITION PRECEDENT - PURCHASER.

                   8.1.1    Purchaser shall have until 5:00 p.m. (Central
Standard Time) on the thirtieth (30th) day after the date of this Agreement
within which to inspect the Property (the "Review Period"). If Purchaser
determines that the Property is unsuitable for its purposes and so notifies
Seller in writing within the Review Period, the Earnest Money shall be returned
to Purchaser, at which time this Agreement shall be null and void and neither
party shall have any further rights or obligations under this Agreement except
those which expressly survive termination. Purchaser's failure to terminate this
Agreement within the Review Period shall be conclusively deemed a waiver by
Purchaser of the condition contained in this Section 8.

                   8.1.2    Purchaser's right of inspection pursuant to this
Section 8 shall be subject to the rights of tenants under the Leases and other
occupants and users of the Property. Before entering upon the Property,
Purchaser shall furnish to Seller evidence of general liability insurance
coverage (naming Seller as an additional insured) of not less than $2,000,000.
No inspection shall be undertaken without reasonable prior notice to Seller.
Seller shall have the right to be present at any or all inspections. Neither
Purchaser nor its agents or representatives shall contact any tenants without
the prior consent of Seller. No inspection shall involve the taking of samples
or other physically invasive procedures without the prior written consent of
Seller, such consent not to be unreasonably withheld. Notwithstanding anything
to the contrary contained in this Agreement, Purchaser shall indemnify, defend
(with counsel acceptable to

                                        6
<Page>

Seller) and hold Seller and its employees and agents, and each of them, harmless
from and against any and all losses, claims, damages and liabilities (including,
without limitation, attorneys' fees incurred in connection therewith) arising
out of or resulting from Purchaser's exercise of its rights under this
Agreement, including, without limitation, its right of inspection as provided
for in this Section 8. The indemnification obligation of Purchaser in this
Section 8.1.2 shall survive termination of this Agreement.

                   8.1.3    At Closing, all management contracts relating to the
Property shall be terminated.

            8.2    CONDITION PRECEDENT - SELLER.  It shall be a condition
precedent of Seller's obligation to close the purchase and sale transaction
contemplated by this Agreement that it receives approval from the Board of
Trustees of Equity Residential, the general partner of the Seller, on or before
the end of the Review Period to complete the transaction described herein on the
terms and conditions set forth in this Agreement.

     9.     SECTION 1031 EXCHANGE.

            Seller may structure the disposition of the Property as a like-kind
exchange under Internal Revenue Code Section 1031 at Seller's sole cost and
expense. Purchaser shall reasonably cooperate therein, provided that Purchaser
shall incur no material costs, expenses or liabilities in connection with
Seller's exchange. Seller shall indemnify, defend and hold Purchaser harmless
therefrom and Purchaser shall not be required to take title to or contract for
purchase of any other property. If Seller uses a qualified intermediary to
effectuate the exchange, any assignment of the rights or obligations of Seller
hereunder shall not relieve, release or absolve Seller of its obligations to
Purchaser.

     10.    REPRESENTATIONS AND WARRANTIES.

            10.1   SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents
and warranties to Purchaser on the date of this Agreement as follows:

                   10.1.1   Seller is a limited partnership, duly organized,
validly existing and in good standing under the laws of the State of Illinois.

                   10.1.2   Seller has full power, right and authority to enter
into and perform its obligations under this Agreement. The execution, delivery
and performance of this Agreement by Seller have been duly and properly
authorized by proper corporate action in accordance with applicable law and with
the Partnership Agreement of Seller.

                   10.1.3   To the Seller's knowledge, except as set forth on
EXHIBIT J, attached hereto Seller has received no written notice of any pending
litigation with respect to Seller or the Property which would affect the
Property after Closing.

                   10.1.4   To Seller's knowledge, other than with respect to
matters set forth on EXHIBIT K, it has not received from any governmental
authority written notice of any violation of any building, fire or health code
or any other statute applicable to the Property; provided, however, Seller makes
no representation or warranty with respect to the Property's compliance with the
Americans with Disabilities Act.

                   10.1.5   To Seller's knowledge, EXHIBIT C attached hereto
lists all of the Service Contracts affecting the Property and the vendor under
each Service Contract.

                   10.1.6   To Seller's knowledge, EXHIBIT I attached hereto
describes, in all material respects, the following information concerning the
Leases affecting the Property as of the date hereof: (a) unit number, (b) name
of tenant, (c) rental rate, (d) expiration date of the Lease, (e) amount of
security deposit, and (f) move-in date. Seller makes no representation with
respect to any rental rate or other information provided in EXHIBIT I that is
not described in the preceding sentence.

                                        7
<Page>

            10.2   SELLER'S KNOWLEDGE. When used in this Agreement, the term "to
Seller's knowledge" shall mean shall mean and be limited to the actual (and not
imputed, implied or constructive) current knowledge of Alec Brackenridge, Senior
Vice President of Equity Residential and Tom Lebling, Regional Vice President of
Equity Residential. Notwithstanding anything to the contrary set forth in this
Agreement, none of the foregoing individuals shall have any personal liability
or liability whatsoever with respect to any matters set forth in this Agreement
or any of Seller's representations and/or warranties herein being or becoming
untrue, inaccurate or incomplete.

            10.3   SURVIVAL. The representations and warranties set forth in
this Section 10 shall, shall be deemed to be remade as of Closing and shall
survive the Closing and the delivery of the Deed for a period of one hundred
eighty (180) days from the Closing Date. Notice of any claim as to a breach of
any representation or warranties must be made to Seller prior to the expiration
of such one hundred eighty (180) day period or it shall be deemed a waiver of
the right to assert such claim.

     11.    AS-IS.

            11.1   AS-IS CONDITION. ACKNOWLEDGING THE PRIOR USE OF THE PROPERTY
AND PURCHASER'S OPPORTUNITY TO INSPECT THE PROPERTY, PURCHASER AGREES TO TAKE
THE PROPERTY "AS IS", "WHERE IS", WITH ALL FAULTS AND CONDITIONS THEREON. ANY
INFORMATION, REPORTS, STATEMENTS, DOCUMENTS OR RECORDS ("DISCLOSURES") PROVIDED
OR MADE TO PURCHASER OR ITS CONSTITUENTS BY SELLER, ITS AGENTS OR EMPLOYEES
CONCERNING THE CONDITION (INCLUDING, BUT NOT LIMITED TO, THE ENVIRONMENTAL
CONDITION) OF THE PROPERTY SHALL NOT BE REPRESENTATIONS OR WARRANTIES, UNLESS
SPECIFICALLY SET FORTH IN THIS AGREEMENT. PURCHASER SHALL NOT RELY ON SUCH
DISCLOSURES, BUT RATHER, PURCHASER SHALL RELY ONLY ON ITS OWN INSPECTION OF THE
PROPERTY. PURCHASER ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS AND TAKES INTO
ACCOUNT THAT THE PROPERTY IS BEING SOLD "AS IS".

            11.2   NO ADDITIONAL REPRESENTATIONS. PURCHASER ACKNOWLEDGES AND
AGREES THAT EXCEPT AS SPECIFICALLY SET FORTH IN SECTION 10 OF THIS AGREEMENT
SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY DISCLAIMS ANY
REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF
ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN,
PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (A) THE
NATURE, QUALITY OR CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE
WATER, SOIL AND GEOLOGY, (B) THE INCOME TO BE DERIVED FROM THE PROPERTY, (C) THE
SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH PURCHASER
MAY CONDUCT THEREON, (D) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION
WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL
AUTHORITY OR BODY, (E) THE HABITABILITY, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OF THE PROPERTY, OR (F) ANY OTHER MATTER WITH RESPECT TO THE
PROPERTY, AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS REGARDING TERMITES OR
WASTES, AS DEFINED BY THE U.S. ENVIRONMENTAL PROTECTION AGENCY REGULATIONS AT 40
C.F.R., OR ANY HAZARDOUS SUBSTANCE, AS DEFINED BY THE COMPREHENSIVE
ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT OF 1980 ("CERCLA"), AS
AMENDED, AND REGULATIONS PROMULGATED THEREUNDER. PURCHASER, ITS SUCCESSORS AND
ASSIGNS, HEREBY WAIVE, RELEASE AND AGREE NOT TO MAKE ANY CLAIM OR BRING ANY COST
RECOVERY ACTION OR CLAIM FOR CONTRIBUTION OR OTHER ACTION OR CLAIM AGAINST
SELLER OR ITS AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS, OR
ASSIGNS (COLLECTIVELY, "SELLER AND ITS AFFILIATES") BASED ON (A) ANY FEDERAL,
STATE, OR LOCAL ENVIRONMENTAL OR HEALTH AND SAFETY LAW OR REGULATION, INCLUDING
CERCLA OR ANY STATE EQUIVALENT, OR ANY SIMILAR LAW NOW EXISTING OR HEREAFTER
ENACTED, (B) ANY DISCHARGE, DISPOSAL, RELEASE, OR ESCAPE OF ANY CHEMICAL, OR ANY
MATERIAL WHATSOEVER, ON, AT, TO, OR FROM THE PROPERTY; OR

                                        8
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(C) ANY ENVIRONMENTAL CONDITIONS WHATSOEVER ON, UNDER, OR IN THE VICINITY OF THE
PROPERTY.

            11.3   PURCHASER'S DUE DILIGENCE. PURCHASER REPRESENTS TO SELLER
THAT PURCHASER HAS CONDUCTED, OR WILL CONDUCT PRIOR TO CLOSING, SUCH
INVESTIGATIONS OF THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND
ENVIRONMENTAL CONDITIONS THEREOF, AS PURCHASER DEEMS NECESSARY OR DESIRABLE TO
SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE EXISTENCE OR
NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY HAZARDOUS OR
TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY, AND WILL RELY SOLELY UPON
SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS
AGENTS OR EMPLOYEES WITH RESPECT THERETO. UPON CLOSING, PURCHASER SHALL ASSUME
THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION
DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN
REVEALED BY PURCHASER'S INVESTIGATIONS, AND PURCHASER, UPON CLOSING, SHALL BE
DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER'S OFFICERS,
DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY AND ALL
CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES,
DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES)
OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH PURCHASER MIGHT HAVE
ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER'S OFFICERS, DIRECTORS,
SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR ARISING OUT OF
ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, VIOLATIONS OF
ANY APPLICABLE LAWS AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES
OR MATTERS REGARDING THE PROPERTY.

            THE PROVISIONS OF THIS SECTION 11 SHALL SURVIVE THE CLOSING OR ANY
TERMINATION OF THIS AGREEMENT.

     12.    LIMITATION OF LIABILITY.

            12.1   LIMITATION OF LIABILITY. Notwithstanding anything to the
contrary contained herein, if the Closing shall have occurred (and Purchaser
shall not have waived, relinquished or released any applicable rights in further
limitation), the aggregate liability of Seller arising pursuant to or in
connection with the representations, warranties, indemnifications, covenants or
other obligations (whether express or implied) of Seller under this Agreement
(or any document executed or delivered in connection herewith) shall not exceed
$250,000.

            12.2   NO PERSONAL LIABILITY OF SELLER'S DIRECTORS AND EMPLOYEES. No
constituent partner in or agent of Seller, nor any advisor, trustee, director,
officer, employee, beneficiary, shareholder, participant, representative or
agent of any corporation or trust that is or becomes a constituent partner in
Seller (including, but not limited to, Equity Residential) shall have any
personal liability, directly or indirectly, under or in connection with this
Agreement or any agreement made or entered into under or pursuant to the
provisions of this Agreement, or any amendment or amendments to any of the
foregoing made at any time or times, heretofore or hereafter, and Purchaser and
its successors and assigns and, without limitation, all other persons and
entities, shall look solely to Seller's assets for the payment of any claim or
for any performance, and Purchaser, on behalf of itself and its successors and
assigns, hereby waives any and all such personal liability. Notwithstanding
anything to the contrary contained in this Agreement, neither the negative
capital account of any constituent partner in Seller (or in any other
constituent partner of Seller), nor any obligation of any constituent partner in
Seller (or in any other constituent partner of Seller) to restore a negative
capital account or to contribute capital to Seller (or to any other constituent
partner of Seller), shall at any time be deemed to be the property or an asset
of Seller or any such other constituent partner (and neither Purchaser nor any
of its successors or assigns shall have any right to collect, enforce or proceed
against or with respect to any such negative capital account of partner's
obligations to restore or contribute). The provisions of this Section 12.2 shall
survive the Closing or any termination of this Agreement.

                                        9
<Page>

     13.    OPERATION OF THE PROPERTY

            From and after the date hereof until the Closing Date or earlier
termination of this Agreement:

            13.1   ORDINARY COURSE OF BUSINESS. Seller shall operate the
Property in its ordinary course of business and shall not sell, further pledge,
or otherwise transfer or dispose of all or any part of any Property (except for
such items of Personal Property as become obsolete or are disposed of in the
ordinary course), subject to the provisions of Section 5 above.

            13.2   NEW LEASES. Seller shall keep, observe, and perform its
obligations as landlord under the Leases, and not enter into, or alter, amend or
otherwise modify or supplement any existing Lease to provide for a term in
excess of one (1) year, without the prior written consent of Purchaser.

            13.3   SERVICE CONTRACTS. Seller shall not enter into any new
written service contract with respect to the Property that will not be
cancelable by Purchaser without penalty upon no greater than thirty (30) days
notice, without the prior written consent of Purchaser.

            13.4   PROPERTY INSURANCE. Seller shall maintain in full force and
effect property insurance on the Property.

     14.    MISCELLANEOUS.

            14.1   INDEMNIFICATION CLAIMS. The indemnifications contained in
this Agreement shall be subject to the following provisions: the indemnitee
shall notify indemnitor of any such claim against indemnitee within thirty (30)
days after it has written notice of such claim, but failure to notify indemnitor
shall in no case prejudice the rights of indemnitee under this Agreement unless
indemnitor shall be prejudiced by such failure and then only to the extent of
such prejudice. Should indemnitor fail to discharge or undertake to defend
indemnitee against such liability within fifteen (15) business days after the
indemnitee gives the indemnitor written notice of the same, then indemnitee may
settle such liability, and indemnitor's liability to indemnitee shall be
conclusively established by such settlement, the amount of such liability to
include both the settlement consideration and the reasonable costs and expenses,
including attorneys' fees, incurred by indemnitee in effecting such settlement.
The obligations set forth in this Section 14.1 shall survive the Closing or
earlier termination of this Agreement.

            14.2   ENTIRE AGREEMENT. All understandings and agreements
heretofore had between Seller and Purchaser with respect to the Property are
merged in this Agreement, which alone fully and completely expresses the
agreement of the parties.

            14.3   ASSIGNMENT. Neither this Agreement nor any interest hereunder
shall be assigned or transferred by Purchaser; provided, however, that Purchaser
may make a one-time assignment of this Agreement to any entity in which Richard
Schechter or Sheila Meade have a material ownership or control position. Subject
to the foregoing, this Agreement shall inure to the benefit of and shall be
binding upon Seller and Purchaser and their respective successors and assigns.

            14.4   NO MODIFICATION. This Agreement shall not be modified or
amended except in a written document signed by Seller and Purchaser.

            14.5   TIME OF THE ESSENCE. Time is of the essence of this
Agreement.

            14.6   GOVERNING LAW. This Agreement shall be governed and
interpreted in accordance with the laws of the State in which the Property is
located.

            14.7   NOTICE. All notices, requests, demands or other
communications required or permitted under this Agreement shall be in writing
and delivered personally, by certified mail, return receipt requested, postage
prepaid, by overnight courier (such as Federal Express), or by facsimile
transmission with a copy to follow by certified mail, return receipt requested,
postage paid or by overnight courier, addressed as follows:

                                       10
<Page>

                   1.       If to Seller:

                            c/o Equity Residential
                            Two North Riverside Plaza
                            Suite 400
                            Chicago, Illinois 60606
                            Telephone: 312.928.1382
                            Facsimile: 312.454.1962
                            Attention:  David Carlson

                            With a copy to:

                            Equity Residential
                            Two North Riverside Plaza
                            Suite 400
                            Chicago, Illinois  60606
                            Telephone: 312.928.1175
                            Facsimile: 312.454.0039
                            Attention:  Shelley L Dunck

                            And a copy to:

                            Law Offices of Daniel L. Baskes
                            300 West Adams Street
                            Suite 529
                            Chicago, Illinois  60606
                            Telephone:  312.236.2696
                            Facsimile : 312.236.2699
                            Attention:  Daniel L Baskes

                   2.       If to Purchaser:

                            Bainbridge Companies
                            12791 W. Forest Hill Boulevard
                            Wellington, Florida 33414
                            Telephone:  561.793.8959
                            Facsimile:  561.793.6820
                            Attention:  Sheila Meade

                            And a copy to:

                            Broad and Cassell
                            7777 Glades Road
                            Suite 300
                            Boca Raton, Florida 33434
                            Telephone:   561.483.7000
                            Facsimile:   561.218.8954
                            Attention:  Jeffrey A. Deutch

All notices given in accordance with the terms hereof shall be deemed received
on the next business day if sent by overnight courier, on the same day if sent
by facsimile before 5 P.M. (Central Standard Time) on a business day, on the
third (3rd) business day following deposit with the United States Mail as a
registered or certified matter with postage prepaid, or when delivered
personally or otherwise received. Either party hereto may change the address for
receiving notices, requests, demands or other communication by notice sent in
accordance with the terms of this Section 14.7.

                                       11
<Page>

            14.8   WAIVER OF TRIAL BY JURY. In any lawsuit or other proceeding
initiated by Purchaser under or with respect to this Agreement, Purchaser waives
any right it may have to trial by jury. In addition, Purchaser waives any right
to seek rescission of the transaction provided for in this Agreement.

            14.9   CONFIDENTIALITY. Except as may be required by law, without
the prior written consent of Seller, and unless the Closing occurs, Purchaser
shall not disclose to any third party the existence of this Agreement or any
term or condition thereof or the results of any inspections or studies
undertaken in connection herewith. Purchaser agrees to keep confidential and not
to use, other than in connection with its determination whether to proceed with
the purchase of the Property in accordance with Section 8 hereof, any of the
documents, material or information regarding the Property supplied to Purchaser
by Seller or by any third party at the request of Seller, including, without
limitation any environmental site assessment reports furnished to Purchaser,
except Purchaser may share such documents, material and information with
Purchaser's consultants on a "need to know" basis, unless Purchaser is compelled
to disclose such documents, material or information by law or by subpoena.
Purchaser agrees to indemnify and hold harmless Seller from and against any and
all losses, damages, claims and liabilities of any kind (including, without
limitation, reasonable attorneys' fees) arising out of Purchaser's breach of
this Section 14.9. In the event that the Closing does not occur in accordance
with the terms of this Agreement, Purchaser shall promptly return to Seller all
of the documents, materials and information regarding the Property supplied to
Purchaser by Seller or at the request of Seller. The provisions of this Section
14.9 shall survive the termination of this Agreement.

            14.10  ASSIGNMENT OF INTEREST IN REPORTS AND STUDIES. If for any
reason Purchaser does not consummate the Closing, then Purchaser shall, upon
Seller's request, assign and transfer to Seller all of its right, title and
interest in and to any and all studies, reports, surveys and other information,
data and/or documents relating to the Property or any part thereof prepared by
or at the request of Purchaser, its employees and agents, and shall deliver to
Seller copies of all of the foregoing.

            14.11  FORMER TENANT LEASE FILES. Notwithstanding anything to the
contrary set forth in this Agreement, any and all files at the Property that
relate to tenants who have vacated their units at the Property and with whom
there exists a dispute or a set of facts that could lead to a dispute between
Seller and such tenant regarding the payment of sums due and owing to Seller
(collectively, "Former Tenant Lease Files"), together with any and all rights,
causes of action and/or claims relating thereto shall not be transferred or
assigned to Purchaser at Closing but shall remain the property of Seller. Any
and all such Former Tenant Lease Files shall be removed from the Property by
Seller on or before the Closing Date.

            14.12  NO MEMORANDUM OF AGREEMENT. This Agreement or any notice or
memorandum hereof shall not be recorded in any public record. A violation of
this prohibition shall constitute a material breach by Purchaser, entitling
Seller to terminate this Agreement.

            14.13  PREVAILING PARTY ATTORNEY FEES. If either Seller or Purchaser
files suit to enforce the obligations of the other party under this Agreement,
the prevailing party shall be entitled to recover the reasonable fees and
expenses of its attorneys.

            14.14  COUNTERPART SIGNATURES. This Agreement may be signed in any
number of counterparts each of which shall be deemed to be an original and all
of which taken together shall constitute one and the same instrument.

            14.15  DESIGNATION OF ESCROWEE AS REPORTING PERSON. Seller and
Purchaser hereby designate Escrowee to act as and perform the duties and
obligations of the "reporting person" with respect to the transaction
contemplated by this Agreement for purposes of 26 C.F.R. Section 1.6045-4(e)(5)
relating to the requirements for information reporting on real estate
transaction closed on or after January 1, 1991. In this regard, Seller and
Purchaser each agree to execute at Closing, and to cause the Escrowee to execute
at Closing, a Designation Agreement, designating Escrowee as the reporting
person with respect to the transaction contemplated by this Agreement.

            14.15  RADON GAS. Pursuant to Section 404.05618, Florida Statues
(1988), the following notification regarding radon gas is hereby made, and all
parties executing this Agreement acknowledge receipt of this notification:

                                       12
<Page>

                   RADON GAS: "RADON IS A NATURALLY OCCURRING RADIOACTIVE GAS
                   THAT, WHEN IT HAS ACCUMULATED IN A BUILDING IN SUFFICIENT
                   QUANTITIES, MAY PRESENT HEALTH RISKS TO PERSONS WHO ARE
                   EXPOSED TO IT OVER TIME. LEVELS OF RADON THAT EXCEED FEDERAL
                   AND STATE GUIDELINES HAVE BEEN FOUND IN BUILDINGS IN FLORIDA.
                   ADDITIONAL INFORMATION REGARDING RADON AND RADON TESTING MAY
                   BE OBTAINED FROM YOUR COUNTY PUBLIC HEALTH UNIT".

     IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered this
Agreement as of the date first above written.

                               SELLER:

                               ERP OPERATING LIMITED PARTNERSHIP,
                               an Illinois limited partnership

                               By:      Equity Residential, a Maryland real
                                        estate investment trust,
                                        its general partner

                                        By: /s/ Shelley L Duck
                                           -------------------------------------
                                            Shelley L Duck, First Vice President

                               PURCHASER:

                               BAINBRIDGE COMMUNITIES ACQUISITION CORPORATION
                               II, a Florida corporation

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

                                    EXHIBITS

                    A - Legal Description
                    B - List of Personal Property
                    C - List of Service Contracts
                    D - Earnest Money Escrow Instructions
                    E - Special Warranty Deed
                    F - Bill of Sale
                    G - Notice to Tenants
                    H - Assignment and Assumption of Leases, Security Deposits
                        and Service Contracts
                    I - Rent Roll
                    J - Pending Litigation
                    K - Notice of Code Violations

                                       13
<Page>

                   RADON GAS: "RADON IS A NATURALLY OCCURRING RADIOACTIVE GAS
                   THAT, WHEN IT HAS ACCUMULATED IN A BUILDING IN SUFFICIENT
                   QUANTITIES, MAY PRESENT HEALTH RISKS TO PERSONS WHO ARE
                   EXPOSED TO IT OVER TIME. LEVELS OF RADON THAT EXCEED FEDERAL
                   AND STATE GUIDELINES HAVE BEEN FOUND IN BUILDINGS IN FLORIDA.
                   ADDITIONAL INFORMATION REGARDING RADON AND RADON TESTING MAY
                   BE OBTAINED FROM YOUR COUNTY PUBLIC HEALTH UNIT".

     IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered this
Agreement as of the date first above written.

                          SELLER:

                          ERP OPERATING LIMITED PARTNERSHIP,
                          an Illinois limited partnership

                          By:      Equity Residential, a Maryland real
                                   estate investment trust,
                                   its general partner

                                   By:
                                      ------------------------------------------
                                        Alec Brackenridge, Senior Vice President

                          PURCHASER:

                          BAINBRIDGE COMMUNITIES ACQUISITION CORPORATION
                          II, a Florida corporation

                          By:  /s/ Sheila Mead
                              -------------------------
                          Name:   Sheila Mead
                               ------------------------
                          Title:  Vice President
                                -----------------------

                                    EXHIBITS

                    A - Legal Description
                    B - List of Personal Property
                    C - List of Service Contracts
                    D - Earnest Money Escrow Instructions
                    E - Special Warranty Deed
                    F - Bill of Sale
                    G - Notice to Tenants
                    H - Assignment and Assumption of Leases, Security Deposits
                        and Service Contracts
                    I - Rent Roll
                    J - Pending Litigation
                    K - Notice of Code Violations

                                       14
<Page>

                                    EXHIBIT A

                          SPICEWOOD SPRINGS APARTMENTS
                              JACKSONVILLE, FLORIDA

                                LEGAL DESCRIPTION

                                       14
<Page>

                                    EXHIBIT B

                          SPICEWOOD SPRINGS APARTMENTS
                              JACKSONVILLE, FLORIDA

                            LIST OF PERSONAL PROPERTY

                                       15
<Page>

                                    EXHIBIT C

                          SPICEWOOD SPRINGS APARTMENTS
                              JACKSONVILLE, FLORIDA

                            LIST OF SERVICE CONTRACTS

                                       16
<Page>

                                    EXHIBIT D

                          SPICEWOOD SPRINGS APARTMENTS
                              JACKSONVILLE, FLORIDA

                        EARNEST MONEY ESCROW INSTRUCTIONS

                                Escrow Officer:
                                               -----------------------------
                                Escrow No.:
                                           ---------------------------------
                                Phone No.:
                                          ----------------------------------
                                Facsimile No.:
                                              ------------------------------
                                Date:   April ________, 2003

TO:
     -----------------------------------

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

     -----------------------------------
         Attn:
               -----------------------------

The amount of Fifty Thousand and 00/100 Dollars ($50,000.00) (the "Escrow
Deposit") is deposited with the Chicago office of Chicago Title Insurance
Company in escrow by BAINBRIDGE COMMUNITIES ACQUISITION CORPORATION II, a
Florida corporation, the "Purchaser" under that certain Agreement for Purchase
of Real Estate and Related Property (the "Agreement"), dated March ____, 2003,
with ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership, as the
"Seller".

As escrowee, you are hereby directed to hold, deal with and dispose of the
Escrow Deposit in accordance with the following terms and conditions:

1.   You are to hold the Escrow Deposit until:  (a) you are in receipt of a
     joint order by the undersigned Seller and Purchaser as to the disposition
     of the Escrow Deposit; or (b) you are in receipt of a written demand (the
     "Demand") from either Seller or Purchaser for the payment of the Escrow
     Deposit or any portion thereof. If you receive a Demand from Purchaser on
     or before the expiration of the Review Period, as such term is defined in
     the Agreement (as the same may be amended), then you shall immediately
     comply with the Demand without the necessity of giving notice to Seller and
     notwithstanding any contrary instruction you may receive from Seller. Upon
     receipt of any Demand (other than a Demand from Purchaser on or before the
     expiration of the Review Period as provided above), you are directed to so
     notify the other party, enclosing a copy of the Demand. If within five (5)
     days after the non-demanding party has received or is deemed to have
     received your notice of your receipt of the Demand, you have not received
     from the non-demanding party its notice of objection to the Demand, then
     you are to disburse the Escrow Deposit as requested by the Demand. If
     within said five-day period you receive from the non-demanding party its
     notice of objection to the Demand, then you are to continue to hold the
     Escrow Deposit until you are in receipt of a joint order as aforesaid, but
     after sixty (60) days you may deposit the Escrow Deposit with a Court of
     competent jurisdiction.

2.   Notwithstanding the foregoing, as escrowee, you are hereby expressly
     authorized to regard and to comply with and obey any and all orders,
     judgments or decrees entered or issued by any Court, and in case you obey
     or comply with any such order, judgment or decree of any Court, you shall
     not be liable to either of the parties hereto or any other person or entity
     by reason of such compliance, notwithstanding any such order, judgment or
     decree be entered without jurisdiction or be subsequently reversed,
     modified, annulled, set aside or vacated. In case of any suit or proceeding
     regarding these Escrow Instructions, to which you are or may at any time be
     a party, the undersigned Seller and Purchaser agree that the non-prevailing
     party shall pay to you upon demand all reasonable costs and expenses
     incurred by you in connection herewith.

                                       17
<Page>

3.   Any escrow fee to be charged by you is to be borne equally by the
     undersigned Seller and Purchaser.

4.   As escrowee, you shall invest the Escrow Deposit in an interest-bearing
     savings or money market account or short term U.S. Treasury Bills or
     similar cash equivalent securities, as the undersigned Purchaser may
     direct. Any interest earned on the Escrow Deposit, after you deduct your
     customary investment charges, shall become and be deemed to be a part of
     the Escrow Deposit.

5.   All notices or other communications hereunder shall be in writing and shall
     be personally delivered or sent by overnight courier (such as Federal
     Express), by facsimile transmission or by first class United States Mail,
     postage prepaid, registered or certified (return receipt requested) to the
     respective addresses for the Seller, Purchaser and escrowee as herein
     provided. A notice is given on the date it is personally delivered, sent by
     overnight courier or facsimile transmission, or deposited with the United
     States Mail for delivery as aforesaid. A notice is received on the date it
     is personally delivered, the day after sent if sent by overnight courier or
     facsimile transmission or, if sent by mail as aforesaid, on the date noted
     on the return receipt.

6.   Purchaser and Seller may act hereunder either directly or through their
     respective attorneys:

     The Seller's attorney is:

                                Law Offices of Daniel L. Baskes
                                300 West Adams Street
                                Suite 529
                                Chicago, Illinois 60606
                                Telephone: 312.236.2696
                                Facsimile : 312.236.2699
                                Attn: Daniel L. Baskes

     The Purchaser's attorney is:

                                Broad and Cassell
                                7777 Glades Road
                                Suite 300
                                Boca Raton, Florida 33434
                                Telephone:  561.483.7000
                                Facsimile:  561.218.8954
                                Attention: Jeffrey A. Deutch

7.   This Escrow Agreement is being entered into to implement the Agreement and
     shall not (nor be deemed to) amend, modify or supersede the Agreement or
     act as a waiver of any rights, obligations or remedies set forth therein;
     provided, however, that you may rely solely upon these Escrow Instructions.

8.   In case of any suit or proceeding at law or in equity regarding the Earnest
     Money or these Escrow Instructions, the non-prevailing party shall pay the
     prevailing party all costs and expenses (including, but not limited to,
     attorney's fees) incurred by the prevailing party, and if such prevailing
     party shall recover judgment in any such suit or preceding, such costs and
     expenses (including but not limited to attorneys' fees) shall be included
     in and as a part of such judgment.

9.   This Escrow Agreement may be signed in any number of counterparts each of
     which shall be deemed to be an original and all of which taken together
     shall constitute one and the same instrument.

                                       18
<Page>

Agreed and Acknowledged this _____ day of April, 2003.

PURCHASER:                                  SELLER:

BAINBRIDGE COMMUNITIES ACQUISITION          ERP OPERATING LIMITED PARTNERSHIP,
CORPORATION II, a Florida corporation       an Illinois limited partnership

                                            By:  Equity Residential, a  Maryland
                                                 real  estate investment trust,
                                                 its general partner
By:
   ---------------------------------
Name:
     -------------------------------
Title:                                           By:
      ------------------------------                ----------------------------
                                                    Alec Brackenridge, Senior VP

Address:                              Address:

Bainbridge Companies                  c/o Equity Residential
12791 W Forest Hill Boulevard         Two North Riverside Plaza, Suite 400
Wellington , Florida 33414            Chicago, Illinois 60606
Attn:  Sheila Meade                   Attn:  David Carlson
Phone:  561.793.8959                  Phone:  312.928.1382

Agreed and Acknowledged this ______ day of March, 2003.

CHICAGO TITLE INSURANCE COMPANY

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

                                       19
<Page>

                                    EXHIBIT E

                          SPICEWOOD SPRINGS APARTMENTS
                              JACKSONVILLE, FLORIDA

                    [CONFORM TO JURISDICTIONAL REQUIREMENTS]

When Recorded, Mail to:

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

                              SPECIAL WARRANTY DEED

     For the consideration of the sum of Ten Dollars ($10.00) and other valuable
considerations received, ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited
partnership ("Grantor"), does hereby convey to BAINBRIDGE COMMUNITIES
ACQUISITION CORPORATION II, a Florida corporation ("Grantee"), all of Grantor's
right, title and interest in and to the following described real property (the
"Property") situated in Duval County, Florida, together with all improvements
thereon and all of Grantor's interest in any rights and privileges solely
appurtenant thereto:

            SEE EXHIBIT A ATTACHED HERETO AND BY THIS REFERENCE MADE A PART
            HEREOF.

     SUBJECT TO: the permitted exceptions set forth on EXHIBIT B attached hereto
and by this reference made a part hereof.

     AND GRANTOR hereby binds itself and its successors to warrant and defend
the title against all of the acts of Grantor and no other, subject to the
matters set forth above.

     IN WITNESS WHEREOF, Grantor has caused this Special Warranty Deed to be
executed this ______ day of May, 2003.

                          GRANTOR:

                          ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited
                          partnership, its general partner

                          By:   Equity Residential, a Maryland real estate
                                investment trust, its general partner

                                    By:
                                      ------------------------------------------
                                    Name:   Alec Brackenridge
                                    Title:  Senior Vice President

                                       20
<Page>

STATE OF ILLINOIS          )
                           )       ss.
COUNTY OF COOK             )

The foregoing instrument was acknowledged before me this ___ day of ______,

200_, by _______________, the of _______________, the general partner of

___________________________________________________________________________

________________, for and on behalf thereof.

                                    --------------------------------------------
                                    Notary Public

(SEAL)

My Commission Expires:

                                       21
<Page>

                                    EXHIBIT F

                          SPICEWOOD SPRINGS APARTMENTS
                              JACKSONVILLE, FLORIDA

                                  BILL OF SALE

     THIS BILL OF SALE (this "Bill of Sale") is executed as of the __ day of
May, 2003, by ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership
("Seller"), having offices at c/o Equity Residential at Two North Riverside
Plaza, Suite 400, Chicago, Illinois 60606, in favor of BAINBRIDGE COMMUNITIES
ACQUISITION CORPORATION II, a Florida corporation ("Purchaser"), having offices
at 12791 W Forest Hill Boulevard, Wellington, Florida 33414.

     1.     REAL PROPERTY. The "Real Property" shall mean the real property
located in the County of Duval, State of Florida, commonly known as "Spicewood
Springs Apartments" and located at 445 Monument Road, Jacksonville, Florida
32225.

     2.     PERSONAL PROPERTY. The "Personal Property" shall mean those certain
articles of personal property used in connection with the operation of the Real
Property which are described in EXHIBIT A attached to this Bill of Sale.

     3.     SALE. For good and valuable consideration received by Seller, the
receipt and sufficiency of which are hereby acknowledged, Seller hereby sells,
assigns and transfers the Personal Property to Purchaser. Seller covenants and
agrees to warrant and forever defend title to the Personal Property unto
Purchaser against any and all persons lawfully claiming the whole or any part
thereof by, through or under Seller, and none other. Except as set forth in the
immediately preceding sentence, Seller makes no warranties or representations as
to the Personal Property. The Personal Property is transferred "AS IS" and ALL
WARRANTIES OF QUALITY, FITNESS AND MERCHANTABILITY ARE HEREBY EXCLUDED.

     IN WITNESS WHEREOF, Seller has executed this Bill of Sale as of the day and
year first above written.

                            SELLER:

                            ERP OPERATING LIMITED PARTNERSHIP, an Illinois
                            limited partnership

                            By:   Equity Residential, a Maryland real estate
                                  investment trust, its general partner

                                  By:
                                    --------------------------------------
                                  Name:  Alec Brackenridge
                                  Title: Senior Vice President

                                       22
<Page>

                                    EXHIBIT G

                          SPICEWOOD SPRINGS APARTMENTS
                              JACKSONVILLE, FLORIDA

                              TENANT NOTICE LETTER

                                                                  ________, 2003

Dear Tenant:

         This is to advise you that as of _____, 2003, the Spicewood Springs
Apartment Complex has been sold by ERP Operating Limited Partnership to
Bainbridge Communities Acquisition Corporation II.

         All future payments of rent and other charges due under your lease,
including the rent payment due __________, 2003, should be paid to Spicewood
Springs Apartments and delivered to the rental office. Your security deposit, if
any, has also been transferred to Bainbridge Communities Acquisition Corporation
II, and the new owner will be responsible for its return to you pursuant to the
terms of your lease agreement.

                                    Very truly yours,

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

                                       23
<Page>

                                    EXHIBIT H

                          SPICEWOOD SPRINGS APARTMENTS
                              JACKSONVILLE, FLORIDA

                            ASSIGNMENT AND ASSUMPTION
               OF LEASES, SECURITY DEPOSITS AND SERVICE CONTRACTS

     THIS ASSIGNMENT AND ASSUMPTION OF LEASES, SECURITY DEPOSITS AND SERVICE
CONTRACTS (this "Assignment") is entered into as of the _______ day of May,
2003, between ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership
("Assignor"), having an office at c/o Equity Residential, Two North Riverside
Plaza, Suite 400, Chicago, Illinois 60606 and BAINBRIDGE COMMUNITIES ACQUISITION
CORPORATION II, a Florida corporation, ("Assignee") having an office at 12791 W
Forest Hill Boulevard, Wellington, Florida 33414.

     1.     PROPERTY. The "Property" means the real property located in the
City of Jacksonville, County of Duval, State of Florida, commonly known as
"Spicewood Springs Apartments", together with the building, structures and other
improvements located thereon.

     2.     LEASES. The "Leases" means those leases, tenancies, rental
agreements and occupancy agreements affecting the Property which are described
in EXHIBIT A attached to this Assignment.

     3.     SECURITY DEPOSITS. "Security Deposits" means those security deposits
held by or for Assignor on account of tenants under the Leases as such deposits
and with respect to which Assignee received a credit at the closing of the
transaction with respect to which this Assignment has been executed and
delivered. The Security Deposits are set forth on attached EXHIBIT A.

     4.     SERVICE CONTRACTS. "Service Contracts" means those maintenance,
supply and service contracts relating to the Property which are described in
EXHIBIT B attached to this Assignment.

     5.     ASSIGNMENT; INDEMNIFICATION. For good and valuable consideration
received by Assignor, the receipt and sufficiency of which are hereby
acknowledged, Assignor hereby grants, transfers and assigns to Assignee the
entire right, title and interest of Assignor in and to the Leases, the Security
Deposits and the Service Contracts, but reserving unto Assignor all uncollected
rent attributable to the period prior to the date hereof pursuant to Section
4.4.2 of that certain Real Estate Sale Agreement for the Property by and between
Assignor and Assignee (as may have been amended from time to time, the
"Agreement"). Assignor shall indemnify and hold Assignee harmless from and
against any and all losses, claims, damages and/or liabilities (including,
without limitation, attorneys' fees incurred in connection therewith) arising
out of or resulting from Assignor's interest in the Leases, Security Deposits
and Service Contracts and pertaining to the period prior to Closing.

     6.     ASSUMPTION; INDEMNIFICATION. Assignee hereby assumes the covenants,
agreements and obligations of Assignor as landlord or lessor under the Leases as
of the date of this Assignment, and Assignee further assumes all liability of
Assignor for the proper refund or return of the Security Deposits if, when and
as required by the Leases. Assignee hereby assumes the covenants, agreements and
obligations of Assignor under the Service Contracts which are applicable to the
period and required to be performed from and after the date of this Assignment,
but not otherwise. Assignee shall indemnify and hold Assignor harmless from and
against any and all losses, claims, damages and/or liabilities (including,
without limitation, attorneys' fees incurred in connection therewith) arising
out of or resulting from Assignee's interest in the Leases, Security Deposits
and Service Contracts and pertaining to the period from and after the Closing.

     7.     ATTORNEYS' FEES. If either Assignee or Assignor, or their respective
successors or assigns, file suit to enforce the obligations of the other party
under this Assignment, the prevailing party shall be entitled to recover the
reasonable fees and expenses of its attorneys.

                                       24
<Page>

     8.     SUCCESSORS AND ASSIGNS. This Assignment shall be binding upon and
inure to the benefit of Assignor and Assignee and their respective successors
and assigns.

     9.     LIMITED LIABILITY. By accepting this Assignment, Assignee agrees
that it will look only to the proceeds of the Property for the performance or
liability for nonperformance of any and all obligations of Assignor hereunder,
it being expressly understood and agreed that neither Assignor nor any
shareholder, officer or director thereof or any other person or entity shall
have any personal liability or obligation of any kind or nature whatsoever under
this Assignment. This Paragraph 9 is subject to, and not in limitation of, the
limitations on liability provided in Section 12 of the Agreement.

     10.    COUNTERPARTS. This Assignment may be signed in any number of
            counterparts each of which shall be deemed to be an original and all
            of which taken together shall constitute one and the same
            instrument.

     IN WITNESS WHEREOF, Assignor and Assignee have executed and delivered
this Assignment the day and year first above written.

                          ASSIGNOR:

                          ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited
                          partnership

                          By:    Equity Residential, a Maryland real estate
                                 investment trust, its general partner

                                 By:
                                    -------------------------------
                                 Name:  Alec Brackenridge
                                 Title: Senior Vice President

                          ASSIGNEE:

                          BAINBRIDGE COMMUNITIES ACQUISITION CORPORATION II, a
                          Florida corporation

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

                                       25
<Page>

                                    EXHIBIT I

                          SPICEWOOD SPRINGS APARTMENTS
                              JACKSONVILLE, FLORIDA

                                    RENT ROLL

                                       26
<Page>

                                    EXHIBIT J

                          SPICEWOOD SPRINGS APARTMENTS
                              JACKSONVILLE, FLORIDA

                               PENDING LITIGATION

                                       27
<Page>

                                    EXHIBIT K

                          SPICEWOOD SPRINGS APARTMENTS
                              JACKSONVILLE, FLORIDA

                            NOTICE OF CODE VIOLATIONS

                                       28<Page>

                                                                   EXHIBIT 4.4

                                Hospira, Inc.

                                     and

                        EquiServe Trust Company, N.A.
                               as Rights Agent

                                  ----------

                               RIGHTS AGREEMENT

                        DATED AS OF [_________], 2004

<Page>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                               PAGE
<S>         <C>                                                                 <C>
SECTION 1.  CERTAIN DEFINITIONS..................................................1
SECTION 2.  APPOINTMENT OF RIGHTS AGENT..........................................7
SECTION 3.  ISSUE OF RIGHTS CERTIFICATES.........................................7
SECTION 4.  FORM OF RIGHTS CERTIFICATES..........................................8
SECTION 5.  COUNTERSIGNATURE AND REGISTRATION....................................9
SECTION 6.  TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF
            RIGHTS CERTIFICATES; MUTILATED, DESTROYED, LOST OR
            STOLEN RIGHTS CERTIFICATES...........................................9
SECTION 7.  EXERCISE OF RIGHTS; PURCHASE PRICE..................................10
SECTION 8.  CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES.................12
SECTION 9.  RESERVATION AND AVAILABILITY OF CAPITAL STOCK.......................12
SECTION 10. PREFERRED STOCK RECORD DATE.........................................14
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF
            SHARES OR NUMBER OF RIGHTS..........................................14
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
            SHARES..............................................................21
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS
            OR EARNING POWER....................................................22
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.............................24
SECTION 15. RIGHTS OF ACTION....................................................25
SECTION 16. AGREEMENT OF RIGHTS HOLDERS.........................................26
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER..................26
SECTION 18. CONCERNING THE RIGHTS AGENT.........................................26
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
            RIGHTS AGENT........................................................27
SECTION 20. DUTIES OF RIGHTS AGENT..............................................28
SECTION 21. CHANGE OF RIGHTS AGENT..............................................29
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.................................30
SECTION 23. REDEMPTION AND TERMINATION..........................................31
SECTION 24. EXCHANGE............................................................31
SECTION 25. NOTICE OF CERTAIN EVENTS............................................32
SECTION 26. NOTICES.............................................................33
</Table>

                                        i
<Page>

                                TABLE OF CONTENTS
                                   (continued)

<Table>
<Caption>
                                                                               PAGE
<S>         <C>                                                                 <C>
SECTION 27. SUPPLEMENTS AND AMENDMENTS..........................................34
SECTION 28. SUCCESSORS..........................................................34
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC...........34
SECTION 30. BENEFITS OF THIS AGREEMENT..........................................35
SECTION 31. SEVERABILITY........................................................35
SECTION 32. GOVERNING LAW.......................................................35
SECTION 33. COUNTERPARTS........................................................35
SECTION 34. DESCRIPTIVE HEADINGS ...............................................36
</Table>

                                       ii
<Page>

Exhibit A -  Form of Certificate of Designations of Series A Junior
             Participating Preferred Stock

Exhibit B -  Form of Rights Certificate

                                       iii
<Page>

                                RIGHTS AGREEMENT

     Rights Agreement, dated as of [________ __], 2004 (the "AGREEMENT"), by and
between Hospira, Inc., a Delaware corporation (the "COMPANY"), and EquiServe
Trust Company, N.A., a national banking association (the "RIGHTS AGENT").

                              W I T N E S S E T H:

     WHEREAS, the Board of Directors of the Company has authorized the issuance
of one Right in respect of, and to be issued together with, each share of common
stock, par value $0.01 per share, of the Company (the "COMMON STOCK") issued and
outstanding as of the close of business on [___________ __], 2004 (the "Record
Date"); and the Board of Directors of the Company has authorized the issuance of
one Right (as such number may hereinafter be adjusted pursuant to the provisions
of SECTION 11(p) hereof) for each share of Common Stock of the Company issued
(whether originally issued or delivered from the Company's treasury) between the
Record Date and the earlier of the Distribution Date (as hereinafter defined)
and the Expiration Date (as hereinafter defined), and, in certain circumstances
provided for in SECTION 22 hereof, after the Distribution Date, each Right
initially representing the right to purchase one Fractional Share (as
hereinafter defined) of Series A Junior Participating Preferred Stock of the
Company, upon the terms and subject to the conditions hereinafter set forth (the
"RIGHTS").

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

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

     "ACQUIRING PERSON" shall mean any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 15%
or more of the shares of Common Stock then outstanding, but shall not include
any Exempt Person; PROVIDED, HOWEVER, that a Person shall not be or become an
Acquiring Person if such Person, together with its Affiliates and Associates,
shall become the Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding solely as a result of a reduction in the number of shares of
Common Stock outstanding due to the repurchase of Common Stock by the Company
unless and until such time as such Person or any Affiliate or Associate of such
Person shall purchase or otherwise become the Beneficial Owner of additional
shares of Common Stock constituting 1% or more of the then-outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are) the
Beneficial Owner of shares of Common Stock constituting 1% or more of the
then-outstanding shares of Common Stock shall become an Affiliate or Associate
of such Person; and PROVIDED, FURTHER, that if the Board of Directors, with the
concurrence of a majority of the members of the Board of Directors who are not
such Person or representatives, nominees, Affiliates or Associates of such
Person, determines in good faith that a Person that would otherwise be an
"Acquiring Person" has become such inadvertently (including, without limitation,
because (1) such Person was unaware that it beneficially owned a percentage of
Common Stock that would otherwise cause such Person to be an "Acquiring Person"
or (2) such Person was aware of the extent of its Beneficial Ownership of Common
Stock but had no actual knowledge of the consequences of such Beneficial
Ownership under this Agreement) and

                                        1
<Page>

without any intention of changing or influencing control of the Company, and if
such Person as promptly as practicable divested or divests itself of Beneficial
Ownership of a sufficient number of shares of Common Stock so that such Person
would no longer be an "Acquiring Person," then such Person shall not be deemed
to be or to have become an "Acquiring Person" for any purposes of this
Agreement.

     "ADJUSTMENT SHARES" shall have the meaning set forth in SECTION 11(a)(ii)
hereof.

     "AFFILIATE" shall have the meaning ascribed to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date of this Agreement.

     "ASSOCIATE" shall mean, with reference to any Person, (1) any corporation,
firm, partnership, association, unincorporated organization or other entity
(other than the Company or a Subsidiary of the Company) of which such Person is
an officer or general partner (or officer or general partner of a general
partner) or is, directly or indirectly, the Beneficial Owner of 10% or more of
any class of equity securities, (2) any trust or other estate in which such
Person has a substantial beneficial interest or as to which such Person serves
as trustee or in a similar fiduciary capacity and (3) any relative or spouse of
such Person, or any relative of such spouse, who has the same home as such
Person.

     A Person shall be deemed the "BENEFICIAL OWNER" of, and shall be deemed to
"BENEFICIALLY OWN," any securities:

          (i)     that such Person or any of such Person's Affiliates or
     Associates, directly or indirectly, is the "beneficial owner" of (as
     determined pursuant to Rule 13d-3 of the General Rules and Regulations
     under the Exchange Act as in effect on the date of this Agreement) or
     otherwise has the right to vote or dispose of, including pursuant to any
     agreement, arrangement or understanding (whether or not in writing);
     PROVIDED, HOWEVER, that a Person shall not be deemed the "Beneficial Owner"
     of, or to "beneficially own," any security under this subparagraph (i) as a
     result of an agreement, arrangement or understanding to vote such security
     if such agreement, arrangement or understanding: (A) arises solely from a
     revocable proxy or consent given in response to a proxy or consent
     solicitation that is not exempted by Rule 14a-2(b)(2) of the General Rules
     and Regulations under the Exchange Act as in effect on the date of this
     Agreement and that is made pursuant to, and in accordance with, the
     applicable provisions of the General Rules and Regulations under the
     Exchange Act and (B) is not then reportable by such Person on Schedule 13D
     or 13G under the Exchange Act (or any comparable or successor report);

          (ii)    that such Person or any of such Person's Affiliates or
     Associates, directly or indirectly, has the right or obligation to acquire
     (whether such right or obligation is exercisable or effective immediately
     or only after the passage of time or the occurrence of an event) pursuant
     to any agreement, arrangement or understanding (whether or not in writing)
     or upon the exercise of conversion rights, exchange rights, other rights,
     warrants or options, or otherwise; PROVIDED, HOWEVER, that a Person shall
     not be deemed the "Beneficial Owner" of, or to "beneficially own," (A)
     securities tendered pursuant to a tender or exchange offer made by such
     Person or any of such Person's Affiliates or Associates until such tendered
     securities are accepted for purchase or exchange, (B)

                                        2
<Page>

     securities issuable upon exercise of Rights at any time prior to the
     occurrence of a Triggering Event, or (C) securities issuable upon exercise
     of Rights from and after the occurrence of a Triggering Event which Rights
     were acquired by such Person or any of such Person's Affiliates or
     Associates prior to the Distribution Date or pursuant to SECTION 3(a) or
     SECTION 22 hereof (the "ORIGINAL RIGHTS") or pursuant to SECTION 11(i) or
     (p) hereof in connection with an adjustment made with respect to any
     Original Rights; or

          (iii)   that are beneficially owned, directly or indirectly, by (A)
     any other Person (or any Affiliate or Associate thereof) with which
     such Person or any of such Person's Affiliates or Associates has any
     agreement, arrangement or understanding (whether or not in writing) for the
     purpose of acquiring, holding, disposing (except pursuant to a tender of
     securities pursuant to a tender or exchange offer prior to such tendered
     securities being accepted for purchase or exchange as described in the
     proviso to subparagraph (ii) of this definition) or voting (except pursuant
     to a revocable proxy or consent as described in the proviso to subparagraph
     (i) of this definition) of any voting securities of the Company or (B) any
     group (as that term is used in Rule 13d-5(b) of the General Rules and
     Regulations under the Exchange Act) of which such Person is a member;

PROVIDED, HOWEVER, that nothing in this definition shall cause a Person engaged
in business as an underwriter of securities to be the "Beneficial Owner" of, or
to "beneficially own," any securities acquired through such Person's
participation in good faith in a firm commitment underwriting (including,
without limitation, securities acquired pursuant to stabilizing transactions to
facilitate a public offering in accordance with Regulation M promulgated under
the Exchange Act, or to cover overallotments created in connection with a public
offering) until the expiration of forty days after the date of such acquisition.
For purposes of this Agreement, "voting" a security shall include voting,
granting a proxy, acting by consent, making a request or demand relating to
corporate action (including, without limitation, calling a stockholder meeting)
or otherwise giving an authorization (within the meaning of Section 14(a) of the
Exchange Act as in effect on the date of this Agreement) in respect of such
security.

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

     "CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m., eastern time,
on such date; PROVIDED, HOWEVER, that if such date is not a Business Day, it
shall mean 5:00 p.m., eastern time, on the next succeeding Business Day.

     "CLOSING PRICE" of a security for any day shall mean the last sales price,
regular way, on such day or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, on such day, in either
case as reported in the principal transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange, or, if
such security is not listed or admitted to trading on the New York Stock
Exchange, on the principal national securities exchange on which such security
is listed or admitted to trading, or, if such security is not listed or admitted
to trading on any national securities exchange but sales price information is
reported for such security, as reported by NASDAQ or such other self-regulatory
organization or registered securities information

                                        3
<Page>

processor (as such terms are used under the Exchange Act) that then reports
information concerning such security, or, if sales price information is not so
reported, the average of the high bid and low asked prices in the
over-the-counter market on such day, as reported by NASDAQ or such other entity,
or, if on such day such security is not quoted by any such entity, the average
of the closing bid and asked prices as furnished by a professional market maker
making a market in such security selected by the Board of Directors of the
Company, or, if on such day no market maker is making a market in such security,
the fair value of such security on such day as determined in good faith by the
Board of Directors of the Company.

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

     "COMMON STOCK EQUIVALENTS" shall have the meaning set forth in SECTION
11(a)(iii) hereof.

     "COMPANY" shall mean the Person named as the "Company" in the preamble of
this Agreement until a successor Person shall have become such or until a
Principal Party shall assume, and thereafter be liable for, all obligations and
duties of the Company hereunder, pursuant to the applicable provisions of this
Agreement, and thereafter "Company" shall mean such successor Person or
Principal Party.

     "CURRENT MARKET PRICE" shall have the meaning set forth in SECTION 11(d)
hereof.

     "CURRENT VALUE" shall have the meaning set forth in SECTION 11(a)(iii)
hereof.

     "DISTRIBUTION DATE" shall mean the earlier of (i) the close of business on
the tenth day (or, if such Stock Acquisition Date results from the consummation
of a Permitted Offer, such later date as may be determined by the Company's
Board of Directors as set forth below before the Distribution Date occurs) after
the Stock Acquisition Date or (ii) the close of business on the tenth Business
Day (or such later date as may be determined by the Company's Board of Directors
as set forth below before the Distribution Date occurs) after the date that a
tender offer or exchange offer by any Person (other than any Exempt Person) is
first published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act as then in effect, if upon
consummation thereof, such Person would be an Acquiring Person, other than a
tender or exchange offer that is determined before the Distribution Date occurs
to be a Permitted Offer. The Board of Directors of the Company may, to the
extent set forth in the preceding sentence, defer the date set forth in clause
(i) or (ii) of the preceding sentence to a specified later date or to an
unspecified later date to be determined by a subsequent action or event (but in
no event to a date later than the close of business on the tenth day after the
first occurrence of a Triggering Event).

     "EQUIVALENT PREFERRED STOCK" shall have the meaning set forth in SECTION
11(b) hereof.

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

                                        4
<Page>

     "EXCHANGE RATIO" shall have the meaning set forth in SECTION 24 hereof.

     "EXEMPT PERSON" shall mean the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company, and
any Person organized, appointed or established by the Company for or pursuant to
the terms of any such plan or for the purpose of funding any such plan or
funding other employee benefits for employees of the Company or any Subsidiary
of the Company.

     "EXPIRATION DATE" shall mean the earliest to occur of (i) the Final
Expiration Date, (ii) the time at which the Rights are redeemed as provided in
SECTION 23 hereof, (iii) the time at which the Rights expire pursuant to SECTION
13(d) hereof, and (iv) the time at which all Rights then outstanding and
exercisable are exchanged pursuant to SECTION 24 hereof.

     "FINAL EXPIRATION DATE" shall mean the close of business on [_______ __],
2014.

     "FLIP-IN EVENT" shall mean an event described in SECTION 11(a)(ii) hereof.

     "FLIP-IN TRIGGER DATE" shall have the meaning set forth in SECTION
11(a)(iii) hereof.

     "FLIP-OVER EVENT" shall mean any event described in clause (x), (y) or (z)
of SECTION 13(a) hereof, but excluding any transaction described in SECTION
13(d) hereof that causes the Rights to expire.

     "FRACTIONAL SHARE" with respect to the Preferred Stock shall mean one
one-hundredth of a share of Preferred Stock.

     "NASDAQ" shall mean the National Association of Securities Dealers, Inc.
Automated Quotations System.

     "ORIGINAL RIGHTS" shall have the meaning set forth in the definition of
"Beneficial Owner."

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

     "PERSON" shall mean any individual, firm, corporation, partnership, limited
liability company, association, trust, unincorporated organization or other
entity.

                                        5
<Page>

     "PREFERRED STOCK" shall mean shares of Series A Junior Participating
Preferred Stock, par value $0.01 per share, of the Company having the rights,
powers and preferences set forth in the form of Certificate of Designations
attached hereto as EXHIBIT A and, to the extent that there is not a sufficient
number of shares of Series A Junior Participating Preferred Stock authorized to
permit the full exercise of the Rights, any other series of Preferred Stock, par
value $0.01 per share, of the Company designated for such purpose containing
terms substantially similar to the terms of the Series A Junior Participating
Preferred Stock.

     "PRINCIPAL PARTY" shall have the meaning set forth in SECTION 13(b) hereof.

     "PURCHASE PRICE" shall have the meaning set forth in SECTION 4(a) hereof.

     "RECORD DATE" shall have the meaning set forth in the recitals clause at
the beginning of this Agreement.

     "REDEMPTION PRICE" shall have the meaning set forth in SECTION 23(a)
hereof.

     "RIGHTS" shall have the meaning set forth in the recitals clause at the
beginning of this Agreement.

     "RIGHTS AGENT" shall mean the Person named as the "Rights Agent" in the
preamble of this Agreement until a successor Rights Agent shall have become such
pursuant to the applicable provisions hereof, and thereafter "Rights Agent"
shall mean such successor Rights Agent. If at any time there is more than one
Person appointed by the Company as Rights Agent pursuant to the applicable
provisions of this Agreement, "Rights Agent" shall mean and include each such
Person.

     "RIGHTS CERTIFICATES" shall mean the certificates evidencing the Rights.

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

     "SPREAD" shall have the meaning set forth in SECTION 11(a)(iii) hereof.

     "STOCK ACQUISITION DATE" shall mean the first date of public announcement
(which, for purposes of this definition and SECTION 23, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such.

     "SUBSIDIARY" shall mean, with reference to any Person, any corporation or
other Person of which an amount of voting securities sufficient to elect at
least a majority of the directors or other persons performing similar functions
is beneficially owned, directly or indirectly, by such Person, or otherwise
controlled by such Person.

     "SUBSTITUTION PERIOD" shall have the meaning set forth in SECTION
11(a)(iii) hereof.

     "TRADING DAY" with respect to a security shall mean a day on which the
principal national securities exchange on which such security is listed or
admitted to trading is open for the transaction of business, or, if such
security is not listed or admitted to trading on any national

                                        6
<Page>

securities exchange but is quoted by NASDAQ, a day on which NASDAQ reports
trades, or, if such security is not so quoted, a Business Day.

     "TRIGGERING EVENT" shall mean any Flip-In Event or any Flip-Over Event.

          Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent (i) to act as agent for the Company and (ii) to take certain
actions in respect of the holders of the Rights (who, in accordance with SECTION
3 hereof, shall prior to the Distribution Date also be the holders of the Common
Stock) (although it is expressly agreed that the Rights Agent shall not act as
agent for such holders) in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company may from time to
time appoint such co-Rights Agents as it may deem necessary or desirable, upon
ten (10) days' prior written notice to the Rights Agent. The Rights Agent shall
have no duty to supervise, and shall in no event be liable for, the acts or
omissions of any such co-Rights Agent.

          Section 3. ISSUE OF RIGHTS CERTIFICATES

          (a) Until the Distribution Date, (x) the Rights will be evidenced by
the certificates for Common Stock registered in the names of the holders of the
Common Stock and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company). As soon as practicable after
the Distribution Date, the Rights Agent will send by first-class, insured,
postage prepaid mail, to each record holder of the Common Stock as of the close
of business on the Distribution Date (other than any Person referred to in the
first sentence of SECTION 7(e)), at the address of such holder shown on the
records of the Company, one or more Rights Certificates, evidencing one Right
for each share of Common Stock so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to SECTION 11(p) hereof, at the time of
distribution of the Rights Certificates, the Company shall make the necessary
and appropriate rounding adjustments (in accordance with SECTION 14(a) hereof)
so that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.

          (b) One Right will be issued in respect of each share of Common Stock
issued and outstanding as of the close of business on the Record Date.
Certificates issued for such shares of Common Stock and for shares of Common
Stock that are issued or shall be transferred or exchanged after the Record Date
but prior to the earlier of the Distribution Date or the Expiration Date shall
also be deemed to be certificates for Rights, and shall bear the legend referred
to in paragraph (c) of this SECTION 3.

          (c) Rights shall be issued in respect of all shares of Common Stock
that are issued (whether originally issued or delivered from the Company's
treasury) after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date or, in certain circumstances provided in SECTION 22
hereof, after the Distribution Date. Certificates issued for shares of Common
Stock that shall so become outstanding or shall be transferred or exchanged

                                        7
<Page>

after the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date shall also be deemed to be certificates for Rights, and shall
bear the following legend:

          This certificate also evidences and entitles the holder hereof to
     certain Rights as set forth in the Rights Agreement between Hospira, Inc.
     (the "COMPANY") and EquiServe Trust Company, N.A. (the "RIGHTS AGENT"),
     dated as of [___], 2004, as it may from time to time be supplemented or
     amended (the "RIGHTS AGREEMENT"), the terms of which are hereby
     incorporated herein by reference and a copy of which is on file at the
     principal offices of the Company. Under certain circumstances, as set forth
     in the Rights Agreement, such Rights may be redeemed, may be exchanged, may
     expire or may be evidenced by separate certificates and will no longer be
     evidenced by this certificate. The Company or the Rights Agent will mail to
     the holder of this certificate a copy of the Rights Agreement, as in effect
     on the date of mailing, without charge promptly after receipt of a written
     request therefor. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS
     AGREEMENT, RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO ANY PERSON WHO
     IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF
     (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), AND CERTAIN
     TRANSFEREES THEREOF, WILL BECOME NULL AND VOID AND WILL NO LONGER BE
     TRANSFERABLE.

With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date or the Expiration Date, the Rights associated
with the Common Stock represented by such certificates shall be evidenced by
such certificates alone, and registered holders of Common Stock shall also be
the registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates.

          Section 4. FORM OF RIGHTS CERTIFICATES.

          (a) The Rights Certificates (and the forms of election to purchase and
of assignment to be printed on the reverse thereof), when, as and if issued,
shall be substantially in the form set forth in EXHIBIT B hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or quotation system
on which the Rights may from time to time be listed or quoted, or to conform to
usage. Subject to the provisions of SECTION 11 and SECTION 22 hereof, the Rights
Certificates, whenever issued, shall be dated as of the Record Date and on their
face shall entitle the holders thereof to purchase such number of Fractional
Shares of Preferred Stock as shall be set forth therein at the price set forth
therein (such exercise price per Fractional Share (or, as set forth in this
Agreement, for other securities), the "PURCHASE PRICE"), but the amount and type
of securities purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein.

          (b) Any Rights Certificate issued pursuant to SECTION 3(a) or SECTION
22 hereof that represents Rights beneficially owned by a Person described in the
first sentence of SECTION

                                        8
<Page>

7(e), and any Rights Certificate issued pursuant to SECTION 6 or SECTION 11
hereof upon transfer, exchange, replacement or adjustment of any such Rights,
shall contain (to the extent feasible) the following legend, modified as
applicable to apply to such Person:

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

The provisions of SECTION 7(e) of this Agreement shall be operative whether or
not the foregoing legend is contained on any such Rights Certificate. The
Company shall give notice to the Rights Agent promptly after it becomes aware of
the existence of any Acquiring Person or any Associate or Affiliate thereof.

          Section 5. COUNTERSIGNATURE AND REGISTRATION.

          (a) The Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its Chief Executive Officer, its President or any
Vice President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof, which shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Rights Certificates shall be
countersigned by the Rights Agent, either manually or by facsimile signature,
and shall not be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such officer of the Company; and
any Rights Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.

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

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

          (a) Subject to the provisions of SECTION 4(b), SECTION 7(e), SECTION
13(d), SECTION 14 and SECTION 24 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
Expiration Date, any Rights Certificate or Rights

                                        9
<Page>

Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Rights Certificates, entitling the registered holder to
purchase a like number of Fractional Shares of Preferred Stock (or, following a
Triggering Event, Common Stock, other securities, cash or other assets, as the
case may be) as the Rights Certificate or Rights Certificates surrendered then
entitled such holder (or former holder in the case of a transfer) to purchase.
Any registered holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Rights Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Rights Certificate or
Rights Certificates to be transferred, split up, combined or exchanged at the
principal office or offices of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) thereof or of the
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to SECTION 4(b), SECTION 7(e), SECTION
13(d), SECTION 14 and SECTION 24 hereof, countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment by the holder of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split-up, combination or exchange of Rights
Certificates.

          (b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will, subject to SECTION 4(b), SECTION 7(e), SECTION
13(d), SECTION 14 and SECTION 24, execute and deliver a new Rights Certificate
of like tenor to the Rights Agent for countersignature and delivery to the
registered owner in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.

          Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE.

          (a) Subject to SECTION 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in SECTION 9(c), SECTION 11(a)(iii) and SECTION 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly completed and executed, to the
Rights Agent at the principal office or offices of the Rights Agent designated
for such purpose, together with payment of the aggregate Purchase Price with
respect to the total number of Fractional Shares of Preferred Stock (or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the Expiration Date.

          (b) The Purchase Price for each Fractional Share of Preferred Stock
pursuant to the exercise of a Right shall initially be $[________], and shall be
subject to adjustment from

                                       10
<Page>

time to time as provided in SECTIONS 11 and 13(a) hereof and shall be payable in
accordance with paragraph (c) below.

          (c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate on the reverse
side thereof duly executed, accompanied by payment, with respect to each Right
so exercised, of the Purchase Price per Fractional Share of Preferred Stock (or
other shares, securities, cash or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any applicable transfer tax,
the Rights Agent shall, subject to SECTION 20(k) hereof, thereupon promptly
(i)(A) requisition from any transfer agent of the shares of Preferred Stock (or
make available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of Fractional Shares of Preferred Stock to be
purchased, and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) if the Company, in its sole discretion,
shall have elected to deposit the shares of Preferred Stock issuable upon
exercise of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing interests in such number of
Fractional Shares of Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company will direct the depositary agent to comply with such request, (ii)
requisition from the Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with SECTION 14 hereof, (iii) after receipt of
such certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the registered
holder of such Rights Certificate. The payment of the Purchase Price (as such
amount may be reduced pursuant to SECTION 11(a)(iii) hereof) may be made in cash
or by certified check, cashier's or official bank check or bank draft payable to
the order of the Company or the Rights Agent. In the event that the Company is
obligated to issue other securities (including Common Stock) of the Company, pay
cash and/or distribute other property pursuant to SECTION 11(a) or SECTION 13(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate. The Company reserves the right to require
prior to the occurrence of a Triggering Event that, upon exercise of Rights, a
number of Rights be exercised so that only whole shares of Preferred Stock would
be issued.

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

          (e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Triggering Event, any Rights beneficially
owned by or transferred to (i) an Acquiring Person or an Associate or Affiliate
of an Acquiring Person other than any such Person that became such pursuant to a
Permitted Offer and the Board of Directors in good faith determines was not
involved in and did not cause or facilitate, directly or indirectly, such
Triggering Event, (ii) a direct or indirect transferee of such Rights from such
Acquiring Person

                                       11
<Page>

(or any such Associate or Affiliate) who becomes a transferee after such
Triggering Event or (iii) a direct or indirect transferee of such Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with such Triggering Event and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from such Acquiring
Person (or such Affiliate or Associate) to holders of equity interests in such
Acquiring Person (or such Affiliate or Associate) or to any Person with whom
such Acquiring Person (or such Affiliate or Associate) has any continuing
agreement, arrangement or understanding regarding the transferred Rights or (B)
a transfer that the Board of Directors of the Company determines is part of a
plan, arrangement or understanding that has as a primary purpose or effect the
avoidance of this SECTION 7(e), shall become null and void without any further
action, no holder of such Rights shall have any rights whatsoever with respect
to such Rights, whether under any provision of this Agreement or otherwise, and
such Rights shall not be transferable. The Company shall use all reasonable
efforts to ensure that the provisions of this SECTION 7(e) and SECTION 4(b)
hereof are complied with, but shall have no liability to any holder of Rights
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder.

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

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

          Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.

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

                                       12
<Page>

          (b) So long as any shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities) issuable
and deliverable upon the exercise of the Rights are listed on any national
securities exchange or quoted on any trading system, the Company shall use its
best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such
exchange, or quoted on such system, upon official notice of issuance upon such
exercise. Following the occurrence of a Triggering Event, the Company will use
its best efforts to list (or continue the listing of) the Rights and the
securities issuable and deliverable upon the exercise of the Rights on one or
more national securities exchanges or to cause the Rights and the securities
purchasable upon exercise of the Rights to be reported by NASDAQ or such other
transaction reporting system then in use.

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

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

          (e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges that may be
payable in respect of

                                       13
<Page>

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

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

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

                  (a) (i) In the event the Company shall at any time (A) declare
     a dividend on the outstanding shares of Preferred Stock payable in shares
     of Preferred Stock, (B) subdivide the outstanding shares of Preferred
     Stock, (C) combine the outstanding shares of Preferred Stock into a smaller
     number of shares or (D) otherwise reclassify the outstanding shares of
     Preferred Stock (including any such reclassification in connection with a
     consolidation or merger in which the Company is the continuing or surviving
     corporation), except as otherwise provided in this SECTION 11(a) and
     SECTION 7(e) hereof, the Purchase Price in effect at the time of the record
     date for such dividend or of the effective date of such subdivision,
     combination or reclassification, and the number and

                                       14
<Page>

     kind of shares of Preferred Stock or capital stock, as the case may be,
     issuable on such date, shall be proportionately adjusted so that the holder
     of any Right exercised after such time shall be entitled to receive, upon
     payment of the Purchase Price then in effect, the aggregate number and kind
     of shares of Preferred Stock or capital stock, as the case may be, which,
     if such Right had been exercised immediately prior to such date and at a
     time when the Preferred Stock transfer books of the Company were open, he
     would have owned upon such exercise and been entitled to receive by virtue
     of such dividend, subdivision, combination or reclassification. If an event
     occurs that would require an adjustment under both this SECTION 11(a)(i)
     and SECTION 11(a)(ii) hereof, the adjustment provided for in this SECTION
     11(a)(i) shall be in addition to, and shall be made prior to, any
     adjustment required pursuant to SECTION 11(a)(ii) hereof.

                  (ii) Subject to SECTIONS 23 and 24 of this Agreement, in the
     event any Person shall, at any time after the Record Date, become an
     Acquiring Person, unless the event causing such Person to become an
     Acquiring Person is (1) a Flip-Over Event or (2) an acquisition of shares
     of Common Stock pursuant to a Permitted Offer (provided that this clause
     (2) shall cease to apply if such Acquiring Person thereafter becomes the
     Beneficial Owner of any additional shares of Common Stock other than
     pursuant to such Permitted Offer or a transaction set forth in SECTION
     13(a) or 13(d) hereof), then, (x) the Purchase Price shall be adjusted to
     be the Purchase Price immediately prior to the first occurrence of a
     Flip-In Event multiplied by the number of Fractional Shares of Preferred
     Stock for which a Right was exercisable immediately prior to such first
     occurrence and (y) each holder of a Right (except as provided below in
     SECTION 11(a)(iii) and in SECTION 7(e) hereof) shall thereafter have the
     right to receive, upon exercise thereof at a price equal to the Purchase
     Price in accordance with the terms of this Agreement, in lieu of shares of
     Preferred Stock, such number of shares of Common Stock of the Company as
     shall equal the result obtained by dividing the Purchase Price by 50% of
     the Current Market Price per share of Common Stock on the date of such
     first occurrence (such number of shares, the "ADJUSTMENT SHARES"); PROVIDED
     that the Purchase Price and the number of Adjustment Shares shall be
     further adjusted as provided in this Agreement to reflect any events
     occurring after the date of such first occurrence.

                  (iii) In the event that the number of shares of Common Stock
     that are authorized by the Company's certificate of incorporation but not
     outstanding or reserved for issuance for purposes other than upon exercise
     of the Rights is not sufficient to permit the exercise in full of the
     Rights in accordance with the foregoing subparagraph (ii) of this SECTION
     11(a), the Company shall, to the extent permitted by applicable law and
     regulation, (A) determine the excess of (1) the value of the Adjustment
     Shares issuable upon the exercise of a Right (computed using the Current
     Market Price used to determine the number of Adjustment Shares) (the
     "CURRENT VALUE") over (2) the Purchase Price (such excess is herein
     referred to as the "SPREAD"), and (B) with respect to each Right, make
     adequate provision to substitute for the Adjustment Shares, upon the
     exercise of the Rights and payment of the applicable Purchase Price, (1)
     cash, (2) a reduction in the Purchase Price, (3) Common Stock or other
     equity securities of the Company (including, without limitation, shares, or
     units of shares, of preferred stock (including, without limitation, the
     Preferred Stock) that the Board of Directors of the Company has

                                       15
<Page>

     determined to have the same value as shares of Common Stock (such shares of
     preferred stock are herein referred to as "COMMON STOCK EQUIVALENTS")), (4)
     debt securities of the Company, (5) other assets or (6) any combination of
     the foregoing, having an aggregate value equal to the Current Value, where
     such aggregate value has been determined by the Board of Directors of the
     Company based upon the advice of a nationally recognized investment banking
     firm selected by the Board of Directors of the Company; PROVIDED, HOWEVER,
     if the Company shall not have made adequate provision to deliver value
     pursuant to clause (B) above within 30 days following the later of (x) the
     first occurrence of a Flip-In Event and (y) the date on which the Company's
     right of redemption pursuant to SECTION 23(a) expires (the later of (x) and
     (y) being referred to herein as the "FLIP-IN TRIGGER DATE"), then the
     Company shall be obligated to deliver, upon the surrender for exercise of a
     Right and without requiring payment of the Purchase Price, shares of Common
     Stock (to the extent available) and then, if necessary, cash, which shares
     and/or cash have an aggregate value equal to the Spread. If the Board of
     Directors of the Company shall determine in good faith that it is likely
     that sufficient additional shares of Common Stock could be authorized for
     issuance upon exercise in full of the Rights, the 30-day period set forth
     above may be extended to the extent necessary, but not more than 90 days
     after the Flip-In Trigger Date, in order that the Company may seek
     stockholder approval for the authorization of such additional shares (such
     period, as it may be extended, the "SUBSTITUTION PERIOD"). To the extent
     that the Company or the Board of Directors determines that some action need
     be taken pursuant to the first and/or second sentences of this SECTION
     11(a)(iii), the Company (x) shall provide, subject to SECTION 7(e) hereof,
     that such action shall apply uniformly to all outstanding Rights, and (y)
     may suspend the exercisability of the Rights until the expiration of the
     Substitution Period in order to seek any authorization of additional shares
     and/or to decide the appropriate form of distribution to be made pursuant
     to such first sentence and to determine the value thereof. In the event of
     any such suspension, the Company shall issue a public announcement stating
     that the exercisability of the Rights has been temporarily suspended, as
     well as a public announcement at such time as the suspension is no longer
     in effect. For purposes of this SECTION 11(a)(iii), the value of the Common
     Stock shall be the Current Market Price per share of the Common Stock on
     the Flip-In Trigger Date and the value of any Common Stock Equivalent shall
     be deemed to have the same value as the Common Stock on such date.

          (b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within 45 calendar days after
such record date) Preferred Stock (or shares having substantially the same
rights, privileges and preferences as the shares of Preferred Stock ("EQUIVALENT
PREFERRED STOCK")) or securities convertible into Preferred Stock or Equivalent
Preferred Stock at a price per share of Preferred Stock or per share of
Equivalent Preferred Stock (or having a conversion price per share, if a
security convertible into Preferred Stock or Equivalent Preferred Stock) less
than the Current Market Price per share of Preferred Stock on such record date,
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares of Preferred
Stock that the aggregate offering price of the total

                                       16
<Page>

number of shares of Preferred Stock and/or Equivalent Preferred Stock so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Current Market Price, and
the denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional shares of
Preferred Stock and/or Equivalent Preferred Stock to be offered for subscription
or purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid by delivery
of consideration, part or all of which may be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Shares of Preferred Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price that would
then be in effect if such record date had not been fixed.

          (c) In case the Company shall fix a record date for a distribution to
all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in SECTION 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current Market
Price per share of Preferred Stock on such record date, less the fair market
value (as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent) of the portion of the cash,
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to a share of Preferred Stock and the denominator
of which shall be such Current Market Price per share of Preferred Stock. Such
adjustments shall be made successively whenever such a record date is fixed, and
in the event that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price that would have been in effect if such record
date had not been fixed.

          (d) (i) For the purpose of any computation hereunder, other than
     computations made pursuant to SECTION 11(a)(iii) hereof, the "CURRENT
     MARKET PRICE" per share of Common Stock of a Person on any date shall be
     deemed to be the average of the daily Closing Prices per share of such
     Common Stock for the 30 consecutive Trading Days immediately prior to such
     date, and for purposes of computations made pursuant to SECTION 11(a)(iii)
     hereof, the "CURRENT MARKET PRICE" per share of Common Stock on any date
     shall be deemed to be the average of the daily Closing Prices per share of
     such Common Stock for the 10 consecutive Trading Days immediately following
     such date; PROVIDED, HOWEVER, that in the event that the Current Market
     Price per share of Common Stock is determined during a period following the
     announcement of (A) a dividend or distribution on such Common Stock other
     than a regular quarterly cash dividend or the

                                       17
<Page>

     dividend of the Rights, or (B) any subdivision, combination or
     reclassification of such Common Stock, and the ex-dividend date for such
     dividend or distribution, or the record date for such subdivision,
     combination or reclassification, shall not have occurred prior to the
     commencement of the requisite 30 Trading Day or 10 Trading Day period, as
     set forth above, then, and in each such case, the Current Market Price
     shall be properly adjusted to take into account ex-dividend trading. If the
     Common Stock is not publicly held or not so listed or traded, "CURRENT
     MARKET PRICE" per share shall mean the fair value per share as determined
     in good faith by the Board of Directors of the Company, whose determination
     shall be described in a statement filed with the Rights Agent and shall be
     conclusive for all purposes.

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

          (e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; PROVIDED, HOWEVER,
that any adjustments that by reason of this SECTION 11(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this SECTION 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share of Common Stock or other share
or to the nearest ten-thousandth of a Fractional Share of Preferred Stock, as
the case may be. Notwithstanding the first sentence of this SECTION 11(e), any
adjustment required by this SECTION 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which mandates such
adjustment or (ii) the Expiration Date.

          (f) If as a result of an adjustment made pursuant to SECTION 11(a) or
SECTION 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive in respect of such Right any shares of capital stock other
than Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as

                                       18
<Page>

practicable to the provisions with respect to the Preferred Stock contained in
SECTIONS 11(a), (b), (c), (e), (f), (g), (h), (i), (j), (k) and (m) hereof, and
the provisions of SECTIONS 7, 9, 10, 13 and 14 hereof with respect to the
Preferred Stock shall apply on like terms to any such other shares.

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

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

          (i) The Company may elect, on or after the date of any adjustment of
the Purchase Price, to adjust the number of Rights in lieu of any adjustment in
the number of Fractional Shares of Preferred Stock purchasable upon the exercise
of a Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of Fractional Shares of Preferred
Stock for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued, shall be at least
10 days later than the date of the public announcement. If Rights Certificates
have been issued, upon each adjustment of the number of Rights pursuant to this
SECTION 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to SECTION 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Rights Certificates
so to be distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the public announcement.

          (j) Irrespective of any adjustment or change in the Purchase Price or
the number of Fractional Shares of Preferred Stock issuable upon the exercise of
the Rights, the Rights

                                       19
<Page>

Certificates theretofore and thereafter issued may continue to express the
Purchase Price per Fractional Share and the number of Fractional Shares that
were expressed in the initial Rights Certificates issued hereunder.

          (k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, or the stated capital of
the number of Fractional Shares of Preferred Stock or of the number of shares of
Common Stock or other securities issuable upon exercise of a Right, the Company
shall take any corporate action that may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable such number of Fractional Shares of Preferred Stock or such number
of shares of Common Stock or other securities at such adjusted Purchase Price.

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

          (m) Anything in this SECTION 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this SECTION 11, as and to
the extent that in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares
of Preferred Stock at less than the current market price, (iii) issuance wholly
for cash of shares of Preferred Stock or securities that by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
SECTION 11 hereafter made by the Company to holders of its Preferred Stock shall
not be taxable to such stockholders.

          (n) The Company covenants and agrees that it shall not, at any time
that there is an Acquiring Person, (i) consolidate with any other Person, (ii)
merge with or into any other Person, or (iii) sell, lease or transfer (or permit
one or more Subsidiaries to sell, lease or transfer), in one transaction or a
series of related transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person or Persons, if (x) at the time of or immediately
after such consolidation, merger, sale, lease or transfer there are any rights,
warrants or other instruments or securities of the Company or any other Person
outstanding or agreements, arrangements or understandings in effect that would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights, (y) prior to, simultaneously with or immediately after
such consolidation, merger, sale, lease or transfer, the stockholders or other
equity owners of the Person who constitutes, or would constitute, the "PRINCIPAL
PARTY" for purposes of SECTION 13(a) hereof shall have received a distribution
of Rights previously owned by such Person or any of its Affiliates or

                                       20
<Page>

Associates, or (z) the identity, form or nature of organization of the Principal
Party (including, without limitation, the selection of the Person that will be
the Principal Party as a result of the Company's entering into one or more
consolidations, mergers, sales, leases, transfers or transactions with more than
one party) would preclude or limit the exercise of Rights or otherwise diminish
substantially or eliminate the benefits intended to be afforded by the Rights.

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

          (p) Notwithstanding SECTION 3(c) hereof or any other provision of this
Agreement to the contrary, in the event that the Company shall at any time after
the Record Date and prior to the Distribution Date (i) declare a dividend on the
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, (iii) combine the outstanding
shares of Common Stock into a smaller number of shares or (iv) otherwise
reclassify the outstanding shares of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), the number of Rights
associated with each share of Common Stock then outstanding, or issued or
delivered thereafter with Rights, shall be proportionately adjusted so that the
number of Rights thereafter associated with each share of Common Stock following
any such event shall equal the result obtained by multiplying the number of
Rights associated with each share of Common Stock immediately prior to such
event by a fraction (the "ADJUSTMENT FRACTION") the numerator of which shall be
the total number of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number
of shares of Common Stock outstanding immediately following the occurrence of
such event. In lieu of such adjustment in the number of Rights associated with
one share of Common Stock, the Company may elect to adjust the number of
Fractional Shares of Preferred Stock purchasable upon the exercise of one Right
and the Purchase Price. If the Company makes such election, the number of Rights
associated with one share of Common Stock shall remain unchanged, and the number
of Fractional Shares of Preferred Stock purchasable upon exercise of one Right
and the Purchase Price shall be proportionately adjusted so that (i) the number
of Fractional Shares of Preferred Stock purchasable upon exercise of a Right
following such adjustment shall equal the product of the number of Fractional
Shares of Preferred Stock purchasable upon exercise of a Right immediately prior
to such adjustment multiplied by the Adjustment Fraction and (ii) the Purchase
Price following such adjustment shall equal the product of the Purchase Price
immediately prior to such adjustment multiplied by the Adjustment Fraction.

          Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in SECTION 11 or SECTION 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such certificate and (c) mail a
brief summary thereof to each registered holder of a Rights Certificate (or, if
prior to the

                                       21
<Page>

Distribution Date, to each registered holder of a certificate representing
shares of Common Stock) in accordance with SECTION 26 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained.

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

          (a) In the event that, from and after the time an Acquiring Person has
become such, directly or indirectly, (x) the Company shall consolidate with, or
merge with and into, any other Person, and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (y) any
Person shall consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such consolidation
or merger, and, in connection with such consolidation or merger, all or part of
the outstanding shares of Common Stock shall be changed into or exchanged for
stock or other securities of the Company or any other Person or cash or any
other property, or (z) the Company shall sell, lease or otherwise transfer (or
one or more of its Subsidiaries shall sell, lease or otherwise transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than the Company
or any wholly owned Subsidiary of the Company or any combination thereof in one
or more transactions each of which complies (and all of which together comply)
with SECTION 11(o) hereof), then, and in each such case (except as may be
contemplated by SECTION 13(d) hereof), proper provision shall be made so that:
(i) the Purchase Price shall be adjusted to be the Purchase Price immediately
prior to the first occurrence of a Triggering Event multiplied by the number of
Fractional Shares of Preferred Stock for which a Right was exercisable
immediately prior to such first occurrence; (ii) on and after the Distribution
Date, each holder of a Right, except as provided in SECTION 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof at the Purchase
Price in accordance with the terms of this Agreement, in lieu of shares of
Preferred Stock or Common Stock of the Company, such number of validly
authorized and issued, fully paid, nonassessable and freely tradeable shares of
Common Stock of the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by dividing the Purchase Price
by 50% of the Current Market Price per share of the Common Stock of such
Principal Party on the date of consummation of such Flip-Over Event; provided
that the Purchase Price and the number of shares of Common Stock of such
Principal Party issuable upon exercise of each Right shall be further adjusted
as provided in this Agreement to reflect any events occurring after the date of
such first occurrence of a Triggering Event or after the date of such Flip-Over
Event, as applicable; (iii) such Principal Party shall thereafter be liable for,
and shall assume, by virtue of such Flip-Over Event, all the obligations and
duties of the Company pursuant to this Agreement; (iv) the term "COMPANY" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of SECTION 11 hereof shall apply only to such
Principal Party following the first occurrence of a Flip-Over Event; (v) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of

                                       22
<Page>

Common Stock thereafter deliverable upon the exercise of the Rights; and (vi)
the provisions of SECTION 11(a)(ii) hereof shall be of no effect following the
occurrence of any Flip-Over Event.

          (b) "PRINCIPAL PARTY" shall mean

          (i) in the case of any transaction described in clause (x) or (y) of
     the first sentence of SECTION 13(a), (A) the Person that is the issuer of
     any securities into which shares of Common Stock of the Company are
     converted in such merger or consolidation, or, if there is more than one
     such issuer, the issuer the Common Stock of which has the greatest
     aggregate market value, or (B) if no securities are so issued, (x) the
     Person that survives such consolidation or is the other party to the merger
     and survives such merger, or, if there is more than one such Person, the
     Person the Common Stock of which has the greatest aggregate market value or
     (y) if the Person that is the other party to the merger does not survive
     the merger, the Person that does survive the merger (including the Company
     if it survives); and

          (ii) in the case of any transaction described in clause (z) of the
     first sentence of SECTION 13(a), the Person that is the party receiving the
     greatest portion of the assets or earning power transferred pursuant to
     such transaction or transactions, or, if each Person that is a party to
     such transaction or transactions receives the same portion of the assets or
     earning power so transferred, or if the Person receiving the greatest
     portion of the assets or earning power cannot be determined, the Person the
     Common Stock of which has the greatest aggregate market value;

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

          (c) The Company shall not consummate any Flip-Over Event unless each
Principal Party (or Person that may become a Principal Party as a result of such
Flip-Over Event) shall have a sufficient number of authorized shares of its
Common Stock that have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this SECTION 13 and unless
prior thereto the Company and each such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this SECTION 13 and further providing
that, as soon as practicable after the date of such Flip-Over Event, the
Principal Party at its own expense will

                                       23
<Page>

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

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

          (iii) use its best efforts, if the Common Stock of the Principal Party
     is or shall become listed on a national securities exchange, to list (or
     continue the listing of) the Rights and the securities purchasable upon
     exercise of the Rights on such securities exchange and, if the Common Stock
     of the Principal Party shall not be listed on a national securities
     exchange, to cause the Rights and the securities purchasable upon exercise
     of the Rights to be reported by NASDAQ or such other transaction reporting
     system then in use; and

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

The provisions of this SECTION 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Flip-Over Event
shall occur at any time after the occurrence of a Flip-In Event, the Rights that
have not theretofore been exercised shall thereafter become exercisable in the
manner described in SECTION 13(a).

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

          Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

          (a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in SECTION 11(p) hereof, or to
distribute Rights Certificates or scrip evidencing fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the Closing Price
of one

                                       24
<Page>

Right for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable.

          (b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than, except as provided in SECTION 7(c) hereof,
fractions that are integral multiples of a Fractional Share of Preferred Stock)
upon exercise of the Rights or to distribute certificates or scrip evidencing
fractional shares of Preferred Stock (other than, except as provided in SECTION
7(c) hereof, fractions that are integral multiples of a Fractional Share of
Preferred Stock). Interests in fractions of shares of Preferred Stock in
integral multiples of a Fractional Share of Preferred Stock may, at the election
of the Company in its sole discretion, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it, provided that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the shares of Preferred Stock
represented by such depositary receipts. In lieu of fractional shares of
Preferred Stock that are not integral multiples of a Fractional Share of
Preferred Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of one one-hundredth of the Closing Price of
a share of Preferred Stock for the Trading Day immediately prior to the date of
such exercise.

          (c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of shares of Common Stock upon exercise of
the Rights or to distribute certificates or scrip evidencing fractional shares
of Common Stock. In lieu of fractional shares of Common Stock, the Company may
pay to the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
Closing Price of one share of Common Stock for the Trading Day immediately prior
to the date of such exercise.

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

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

                                       25
<Page>

shall be entitled to recover the reasonable costs and expenses, including
attorneys' fees, incurred by them in any action to enforce the provisions of
this Agreement.

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

          (a) prior to the Distribution Date, the Rights will not be evidenced
by Rights Certificates and will be transferable only in connection with the
transfer of Common Stock;

          (b) after the Distribution Date, the Rights Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the form of assignment set forth on the reverse side thereof and the
certificate contained therein duly completed and fully executed;

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

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

          Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of Fractional
Shares of Preferred Stock or any other securities of the Company that may at any
time be issuable upon the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in SECTION 25 hereof),
or to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.

                                       26
<Page>

          Section 18. CONCERNING THE RIGHTS AGENT.

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

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

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

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

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

                                       27
<Page>

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

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

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

          (c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct. In no event shall the Rights Agent
be liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage and regardless of the
form of action.

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

          (e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of SECTION 11 or
SECTION 13 hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after receipt of actual knowledge of any such adjustment);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Preferred Stock
or Common Stock or other securities to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any shares of Preferred Stock or Common
Stock or other securities will, when so issued, be validly authorized and
issued, fully paid and nonassessable.

                                       28
<Page>

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

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

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

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

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

          (k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.

          Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company, and to each transfer
agent of the Common Stock and the Preferred Stock, by registered or certified
mail, and to the registered holders, if any, of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent (with or without cause) upon 30 days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and the Preferred Stock, by registered or
certified mail, and to the registered holders of the

                                       29
<Page>

Rights Certificates, if any, by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. Notwithstanding the foregoing
provisions of this SECTION 21, in no event shall the resignation or removal of a
Rights Agent be effective until a successor Rights Agent shall have been
appointed and have accepted such appointment. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the registered holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then the Rights Agent or the registered holder
of any Rights Certificate may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation or trust
company organized and doing business under the laws of the United States, in
good standing, which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $100,000,000 or (b) an affiliate of a
corporation or trust company described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and the
Preferred Stock, and mail a notice thereof in writing to the registered holders
of the Rights Certificates. Failure to give any notice provided for in this
SECTION 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.

          Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the Expiration Date, the Company (a) shall, with respect to
shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement granted or awarded on or prior
to the Distribution Date, or upon the exercise, conversion or exchange of
securities issued by the Company on or prior to the Distribution Date, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale; PROVIDED, HOWEVER,
that (i) no such Rights Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued, and (ii) no such Rights
Certificate shall be issued if, and to the

                                       30
<Page>

extent that, appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.

          Section 23. REDEMPTION AND TERMINATION.

          (a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the close of business on the tenth day
following the first date of public announcement of the occurrence of a Flip-In
Event and (ii) the Expiration Date, cause the Company to redeem all but not less
than all the then outstanding Rights at a redemption price of $0.01 per Right,
as such amount may be appropriately adjusted, if necessary, to reflect any stock
split, stock dividend or similar transaction (such redemption price being
hereinafter referred to as the "REDEMPTION PRICE"); PROVIDED, HOWEVER, that the
Rights may not be redeemed following any merger to which the Company is a party
that (i) occurs when there is an Acquiring Person and (ii) was not approved
prior to such merger by the Board of Directors of the Company and by the
stockholders of the Company at a stockholders' meeting. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Flip-In Event until such time as the Company's
right of redemption hereunder has expired. The Company may, at its option, pay
the Redemption Price in cash, shares of Common Stock (based on the Current
Market Price of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.

          (b) Immediately upon the effectiveness of the action of the Board of
Directors of the Company ordering the redemption of the Rights (the
effectiveness of which action may be conditioned on the occurrence of one or
more events or on the existence of one or more facts or may be effective at some
future time), evidence of which shall be filed with the Rights Agent and without
any further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price for each Right so held. Promptly after the
effectiveness of the action of the Board of Directors ordering the redemption of
the Rights, the Company shall give notice of such redemption to the Rights Agent
and the registered holders of the then outstanding Rights by mailing such notice
to all such holders at each holder's last address as it appears upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the Company for the Common Stock. Any notice that is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the method by
which the payment of the Redemption Price will be made.

          Section 24. EXCHANGE.

          (a) The Board of Directors of the Company may, at its option, at any
time and from time to time after the occurrence of a Flip-In Event, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of SECTION 7(e) hereof)
for shares of Common Stock or Common Stock Equivalents or any combination
thereof, at an exchange ratio of one share of Common Stock, or such number of
Common Stock Equivalents or units representing fractions thereof as would be
deemed to have the same value as one share of Common Stock, per Right,
appropriately adjusted, if necessary, to reflect any stock split, stock dividend
or similar transaction (such exchange ratio being hereinafter referred to as the
"EXCHANGE RATIO").

                                       31
<Page>

Notwithstanding the foregoing, the Board of Directors may not effect such
exchange at any time after (i) any Person (other than an Exempt Person),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the shares of Common Stock then outstanding
or (ii) the occurrence of a Flip-Over Event.

          (b) Immediately upon the effectiveness of the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to and in
accordance with subsection (a) of this SECTION 24 (the effectiveness of which
action may be conditioned on the occurrence of one or more events or on the
existence of one or more facts or may be effective at some future time) and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock and/or Common Stock
Equivalents equal to the number of such Rights held by such holder multiplied by
the Exchange Ratio. The Company shall promptly give public notice of any such
exchange; PROVIDED, HOWEVER, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the registered holders of
such Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the shares of Common
Stock and/or Common Stock Equivalents for Rights will be effected and, in the
event of any partial exchange, the number of Rights that will be exchanged. Any
partial exchange shall be effected as nearly pro rata as possible based on the
number of Rights (other than Rights that have become void pursuant to the
provisions of SECTION 7(e) hereof) held by each holder of Rights.

          (c) In the event that the number of shares of Common Stock that are
authorized by the Company's certificate of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit an exchange of Rights as contemplated in accordance with
this SECTION 24, the Company may, at its option, take all such action as may be
necessary to authorize additional shares of Common Stock for issuance upon
exchange of the Rights.

          (d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates or scrip evidencing fractional shares
of Common Stock upon exchange of the Rights. In lieu of such fractional shares
of Common Stock, the Company shall pay to the registered holders of Rights with
regard to which such fractional shares of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the value of a whole
share of Common Stock. For purposes of this SECTION 24, the value of a whole
share of Common Stock shall be the Closing Price per share of Common Stock for
the Trading Day immediately prior to the date of exchange pursuant to this
SECTION 24, and the value of any Common Stock Equivalent shall be deemed to have
the same value as the Common Stock on such date.

          Section 25. NOTICE OF CERTAIN EVENTS.

          (a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make

                                       32
<Page>

any other distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the Company), or
(ii) to offer to the holders of Preferred Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock or shares of stock
of any class or any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification involving
only the subdivision of outstanding shares of Preferred Stock), or (iv) to
effect any consolidation or merger into or with any other Person (other than a
wholly owned Subsidiary of the Company in a transaction that complies with
SECTION 11(o) hereof), or to effect any sale, lease or other transfer of all or
substantially all the Company's assets to any other Person or Persons (other
than a wholly owned Subsidiary of the Company in a transaction that complies
with SECTION 11(o) hereof), or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of record of a Rights Certificate, to the extent feasible and in
accordance with SECTION 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution of
rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, lease, transfer, liquidation, dissolution or winding up is to take
place and the date of participation therein by the holders of the shares of
Preferred Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least 20
days prior to the record date for determining holders of the shares of Preferred
Stock for purposes of such action, and in the case of any such other action, at
least 20 days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the shares of Preferred Stock,
whichever shall be the earlier. The failure to give notice required by this
SECTION 25 or any defect therein shall not affect the legality or validity of
the action taken by the Company or the vote upon any such action.

          (b) In case any Flip-In Event or Flip-Over Event shall occur, then (i)
the Company shall as soon as practicable thereafter give to each registered
holder of a Rights Certificate (or if occurring prior to the Distribution Date,
the registered holders of Common Stock), in accordance with SECTION 26 hereof, a
notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under SECTION 11(a)(ii) or
SECTION 13(a) hereof, and (ii) all references in the preceding paragraph to
Preferred Stock shall be deemed thereafter to refer to Common Stock and/or, if
appropriate, other securities.

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

          Hospira, Inc.
          [___________________]
          [___________________]
          Attention: [________]

Subject to the provisions of SECTION 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights

                                       33
<Page>

Agent shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Company)
as follows:

          EquiServe Trust Company, N.A.
          [___________________]
          [___________________]
          Attention: [________]

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

          Section 27. SUPPLEMENTS AND AMENDMENTS. Except as provided in the last
sentence of this SECTION 27, at any time when the Rights are then redeemable,
the Company may in its sole and absolute discretion and the Rights Agent shall,
if the Company so directs, supplement or amend any provision of this Agreement
in any respect without the approval of any holders of Rights or holders of
Common Stock. At any time when the Rights are not redeemable, except as provided
in the last sentence of this SECTION 27, the Company may and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein that may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder or (iv) to change or supplement the provisions hereunder
in any manner that the Company may deem necessary or desirable; provided that no
such amendment or supplement shall materially adversely affect the interests of
the holders of Rights (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person); and further provided that this Agreement may
not be supplemented or amended pursuant to this sentence to lengthen (A) a time
period relating to when the Rights may be redeemed or (B) any other time period
unless the lengthening of such other time period is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to, the
holders of Rights (other than any Acquiring Person and its Affiliates and
Associates). Upon the delivery of a certificate from an appropriate officer of
the Company which states that the proposed supplement or amendment is in
compliance with the terms of this SECTION 27, the Rights Agent shall execute
such supplement or amendment; PROVIDED, HOWEVER, that the Rights Agent may, but
shall not be obligated to, enter into any such supplement or amendment that
affects the Rights Agent's own rights, duties or immunities under this
Agreement. Notwithstanding anything contained in this Agreement to the contrary,
no supplement or amendment shall be made that decreases the Redemption Price.

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

          Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular

                                       34
<Page>

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

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

          Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, HOWEVER, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, then, unless there has occurred any merger referred to
in the proviso to the first sentence of SECTION 23(a), the right of redemption
set forth in SECTION 23 hereof shall be reinstated and shall not expire until
the close of business on the tenth day following the date of such determination
by the Board of Directors of the Company or, if earlier, immediately prior to
any such merger. Without limiting the foregoing, if any provision requiring that
a determination be made by less than the entire Board of Directors of the
Company is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, such determination shall then be made by the
entire Board of Directors of the Company.

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

                                       35
<Page>

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

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

                            [SIGNATURE PAGE FOLLOWS]

                                       36
<Page>

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

                                    Hospira, Inc.

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

                                    EquiServe Trust Company, N.A.

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

<Page>

                                                                       EXHIBIT A

                                     FORM OF
                           CERTIFICATE OF DESIGNATIONS

                                       of

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

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

         PURSUANT TO SECTION 151 OF THE DELAWARE GENERAL CORPORATION LAW

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

      Hospira, Inc. (the "CORPORATION"), a corporation organized and existing
under the Delaware General Corporation Law, in accordance with the provisions
of Section 103 thereof, DOES HEREBY CERTIFY:

     That pursuant to the authority vested in the Corporation's board of
directors in accordance with the provisions of the Restated Certificate of
Incorporation of the Corporation, the Corporation's board of directors on
[________ __], 2004, adopted the following resolution creating a series of _____
million (_____) shares of Preferred Stock designated as "Series A Junior
Participating Preferred Stock":

          RESOLVED, that, pursuant to the authority vested in the Board in
     accordance with the provisions of the Restated Certificate of
     Incorporation, a series of Preferred Stock, par value $0.01 per share, of
     the Corporation be and hereby is created, and that the designation and
     number of shares thereof and the voting and other powers, preferences and
     relative, participating, optional or other rights of the shares of such
     series and the qualifications, limitations and restrictions thereof are as
     follows:

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

          1. DESIGNATION AND AMOUNT. There shall be a series of Preferred Stock
that shall be designated as "Series A Junior Participating Preferred Stock," and
the number of shares constituting such series shall be _____ million (_____).
Such number of shares may be increased or decreased by resolution of the Board
of Directors; PROVIDED, HOWEVER, that no decrease shall reduce the number of
shares of Series A Junior Participating Preferred Stock to less than the number
of shares then issued and outstanding plus the number of shares issuable upon
exercise of outstanding rights, options or warrants or upon conversion of
outstanding securities issued by the Corporation.

          2. DIVIDENDS AND DISTRIBUTIONS.

          (A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series A Junior Participating

                                       A-1
<Page>

Preferred Stock with respect to dividends, the holders of shares of Series A
Junior Participating Preferred Stock, in preference to the holders of shares of
any class or series of stock of the Corporation ranking junior to the Series A
Junior Participating Preferred Stock, shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the 1st day of March, June,
September and December in each year (each such date being referred to herein as
a "QUARTERLY DIVIDEND PAYMENT DATE"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Junior Participating Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $1.00 or (b) the Adjustment
Number (as defined below) times the aggregate per share amount of all cash
dividends, and the Adjustment Number times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock, par value $0.01 per share, of the Corporation (the "COMMON STOCK")
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Junior Participating Preferred
Stock. The "ADJUSTMENT NUMBER" shall initially be 100. In the event the
Corporation shall at any time (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

          (B) The Corporation shall declare a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); PROVIDED that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series A Junior Participating Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.

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

                                       A-2
<Page>

amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Junior
Participating Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.

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

          (A) Each share of Series A Junior Participating Preferred Stock shall
entitle the holder thereof to a number of votes equal to the Adjustment Number
on all matters submitted to a vote of the stockholders of the Corporation.

          (B) Except as otherwise provided herein, in the Certificate of
Incorporation or by law, the holders of shares of Series A Junior Participating
Preferred Stock, the holders of shares of any other class or series entitled to
vote with the Common Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of stockholders of the
Corporation.

          (C) (i) If at any time dividends on any Series A Junior Participating
Preferred Stock shall be in arrears in an amount equal to six quarterly
dividends thereon, the occurrence of such contingency shall mark the beginning
of a period (herein called a "DEFAULT PERIOD") that shall extend until such time
when all accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all shares of Series A
Junior Participating Preferred Stock then outstanding shall have been declared
and paid or set apart for payment. During each default period, (1) the number of
Directors shall be increased by two, effective as of the time of election of
such Directors as herein provided, and (2) the holders of Preferred Stock
(including holders of the Series A Junior Participating Preferred Stock) upon
which these or like voting rights have been conferred and are exercisable (the
"VOTING PREFERRED STOCK") with dividends in arrears in an amount equal to six
quarterly dividends thereon, voting as a class, irrespective of series, shall
have the right to elect such two Directors.

                  (ii) During any default period, such voting right of the
holders of Series A Junior Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph (iii) of this
Section 3(C) or at any annual meeting of stockholders, and thereafter at annual
meetings of stockholders, provided that such voting right shall not be exercised
unless the holders of at least one-third in number of the shares of Voting
Preferred Stock outstanding shall be present in person or by proxy. The absence
of a quorum of the holders of Common Stock shall not affect the exercise by the
holders of Voting Preferred Stock of such voting right.

                  (iii) Unless the holders of Voting Preferred Stock shall,
during an existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than ten percent of the total
number of shares of Voting Preferred Stock outstanding, irrespective of series,
may request, the calling of a special meeting of the holders of Voting Preferred
Stock, which meeting

                                       A-3
<Page>

shall thereupon be called by the Chairman of the Board, the Chief Executive
Officer, the President, a Vice President or the Secretary of the Corporation.
Notice of such meeting and of any annual meeting at which holders of Voting
Preferred Stock are entitled to vote pursuant to this paragraph (C)(iii) shall
be given to each holder of record of Voting Preferred Stock by mailing a copy of
such notice to him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier than 20 days
and not later than 60 days after such order or request or, in default of the
calling of such meeting within 60 days after such order or request, such meeting
may be called on similar notice by any stockholder or stockholders owning in the
aggregate not less than ten percent of the total number of shares of Voting
Preferred Stock outstanding. Notwithstanding the provisions of this paragraph
(C)(iii), no such special meeting shall be called during the period within 60
days immediately preceding the date fixed for the next annual meeting of the
stockholders.

                  (iv) In any default period, after the holders of Voting
Preferred Stock shall have exercised their right to elect Directors voting as a
class, (x) the Directors so elected by the holders of Voting Preferred Stock
shall continue in office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y) any vacancy in
the Board of Directors may be filled by vote of a majority of the remaining
Directors theretofore elected by the holders of the class or classes of stock
which elected the Director whose office shall have become vacant. References in
this paragraph (C) to Directors elected by the holders of a particular class or
classes of stock shall include Directors elected by such Directors to fill
vacancies as provided in clause (y) of the foregoing sentence.

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

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

          4. CERTAIN RESTRICTIONS.

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

                                       A-4
<Page>

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

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

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

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

          5. REACQUIRED SHARES. Any shares of Series A Junior Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to any conditions and restrictions on issuance set forth
herein.

          6. LIQUIDATION, DISSOLUTION OR WINDING UP. (A) Upon any liquidation
(voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to
the Series A Junior Participating Preferred Stock unless, prior thereto, the
holders of shares of Series A Junior Participating Preferred Stock shall have
received $1.00 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "SERIES A LIQUIDATION PREFERENCE"). Following the payment
of the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "COMMON
ADJUSTMENT") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) the Adjustment Number. Following the payment
of the

                                       A-5
<Page>

full amount of the Series A Liquidation Preference and the Common Adjustment
in respect of all outstanding shares of Series A Junior Participating
Preferred Stock and Common Stock, respectively, holders of Series A Junior
Participating Preferred Stock and holders of shares of Common Stock shall,
subject to the prior rights of all other series of Preferred Stock, if any,
ranking prior thereto, receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment Number to 1
with respect to such Series A Junior Participating Preferred Stock and Common
Stock, on a per share basis, respectively.

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

          (C) Neither the merger or consolidation of the Corporation into or
with another corporation nor the merger or consolidation of any other
corporation into or with the Corporation shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of this Section
6, but the sale, lease or conveyance of all or substantially all the
Corporation's assets shall be deemed to be a liquidation, dissolution or winding
up of the Corporation within the meaning of this Section 6.

          7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share equal to the Adjustment
Number times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged.

          8. REDEMPTION. (A) The Corporation, at its option, may redeem shares
of the Series A Junior Participating Preferred Stock in whole at any time and in
part from time to time, at a redemption price equal to the Adjustment Number
times the current per share market price (as such term is hereinafter defined)
of the Common Stock on the date of the mailing of the notice of redemption,
together with unpaid accumulated dividends to the date of such redemption. The
"CURRENT PER SHARE MARKET PRICE" on any date shall be deemed to be the average
of the closing price per share of such Common Stock for the ten consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date; PROVIDED, HOWEVER, that in the event that the current per share market
price of the Common Stock is determined during a period following the
announcement of (A) a dividend or distribution on the Common Stock other than a
regular quarterly cash dividend or (B) any subdivision, combination or
reclassification of such Common Stock and the ex-dividend date for such dividend
or distribution, or the record date for such subdivision, combination or
reclassification, shall not have occurred prior to the commencement of such ten
Trading Day period, then, and in each such case, the current per share market
price shall be properly adjusted to take into account ex-dividend trading. The

                                       A-6
<Page>

closing price for each day shall be the last sales price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange, or, if the Common Stock is not listed or
admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which the Common Stock is listed or admitted to trading,
or, if the Common Stock is not listed or admitted to trading on any national
securities exchange but sales price information is reported for such security,
as reported by the National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or such other self-regulatory organization or
registered securities information processor (as such terms are used under the
Securities Exchange Act of 1934, as amended) that then reports information
concerning the Common Stock, or, if sales price information is not so reported,
the average of the high bid and low asked prices in the over-the-counter market
on such day, as reported by NASDAQ or such other entity, or, if on any such date
the Common Stock is not quoted by any such entity, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Common Stock selected by the Board of Directors of the Corporation. If on
any such date no such market maker is making a market in the Common Stock, the
fair value of the Common Stock on such date as determined in good faith by the
Board of Directors of the Corporation shall be used. The term "TRADING DAY"
shall mean a day on which the principal national securities exchange on which
the Common Stock is listed or admitted to trading is open for the transaction of
business, or, if the Common Stock is not listed or admitted to trading on any
national securities exchange but is quoted by NASDAQ, a day on which NASDAQ
reports trades, or, if the Common Stock is not so quoted, a Monday, Tuesday,
Wednesday, Thursday or Friday on which banking institutions in the State of New
York are not authorized or obligated by law or executive order to close.

          (B) In the event that fewer than all the outstanding shares of the
Series A Junior Participating Preferred Stock are to be redeemed, the number of
shares to be redeemed shall be determined by the Board of Directors and the
shares to be redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors or by any other method that may be
determined by the Board of Directors in its sole discretion to be equitable.

          (C) Notice of any such redemption shall be given by mailing to the
holders of the shares of Series A Junior Participating Preferred Stock to be
redeemed a notice of such redemption, first class postage prepaid, not later
than the fifteenth day and not earlier than the sixtieth day before the date
fixed for redemption, at their last address as the same shall appear upon the
books of the Corporation. Each such notice shall state: (i) the redemption date;
(ii) the number of shares to be redeemed and, if fewer than all the shares held
by such holder are to be redeemed, the number of such shares to be redeemed from
such holder; (iii) the redemption price; (iv) the place or places where
certificates for such shares are to be surrendered for payment of the redemption
price; and (v) that dividends on the shares to be redeemed will cease to accrue
on the close of business on such redemption date. Any notice that is mailed in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the stockholder received such notice, and failure duly to
give such notice by mail, or any defect in such notice, to any holder of
Series A Junior Participating Preferred Stock shall not affect the validity of
the proceedings for the redemption of any other shares of Series A Junior
Participating Preferred Stock that are to be redeemed. On or after the date
fixed for redemption as stated in such notice,

                                       A-7
<Page>

each holder of the shares called for redemption shall surrender the certificate
evidencing such shares to the Corporation at the place designated in such notice
and shall thereupon be entitled to receive payment of the redemption price. If
fewer than all the shares represented by any such surrendered certificate are
redeemed, a new certificate shall be issued representing the unredeemed shares.

          (D) The shares of Series A Junior Participating Preferred Stock shall
not be subject to the operation of any purchase, retirement or sinking fund.

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

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

          11. FRACTIONAL SHARES. Series A Junior Participating Preferred Stock
may be issued in fractions of a share that shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Junior Participating Preferred Stock.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate and does
affirm the foregoing as true this [____] day of [_________] 2004.

                                  --------------------------------------
                                        Chief Executive Officer

                                       A-8
<Page>

                                                                       EXHIBIT B

                          [Form of Rights Certificate]

Certificate No. R-                                               ________ Rights

NOT EXERCISABLE AFTER [_________ __], 20[__] OR EARLIER IF REDEEMED OR EXCHANGED
BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS, WAS OR BECOMES AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND
VOID AND WILL NO LONGER BE TRANSFERABLE.

                               RIGHTS CERTIFICATE

                                 Hospira, Inc.

     This certifies that _____________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of ________ __, 2004, as it may from time to time
be supplemented or amended (the "RIGHTS AGREEMENT"), between Hospira, Inc., a
Delaware corporation (the "COMPANY"), and EquiServe Trust Company, N.A., a
national banking association (the "RIGHTS AGENT"), to purchase from the Company
at any time prior to 5:00 p.m. (New York City time) on _________ __, 20__ at the
principal office or offices of the Rights Agent designated for such purpose, or
its successors as Rights Agent, one one-hundredth of a fully paid, nonassessable
share (a "FRACTIONAL SHARE") of Series A Junior Participating Preferred Stock
(the "PREFERRED STOCK") of the Company, at a purchase price of $______ per one
one-hundredth of a share (the "PURCHASE PRICE"), upon presentation and surrender
of this Rights Certificate with the Form of Election to Purchase and related
Certificate set forth on the reverse hereof duly executed. The Purchase Price
may be paid in cash or by certified check, cashier's or official bank check or
bank draft payable to the order of the Company or the Rights Agent. The number
of Rights evidenced by this Rights Certificate (and the number of shares which
may be purchased upon exercise thereof) set forth above, and the Purchase Price
per Fractional Share set forth above, are the number and Purchase Price as of
________ __, 2004, based on the Preferred Stock as constituted at such date. The
Company reserves the right to require prior to the occurrence of a Triggering
Event (as such term is defined in the Rights Agreement) that a number of Rights
be exercised so that only whole shares of Preferred Stock will be issued.

     From and after the first occurrence of a Triggering Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by or transferred to (i) an Acquiring Person
or an Associate or Affiliate of an Acquiring Person (as such terms are defined
in the Rights Agreement), (ii) a transferee of any such Acquiring Person,

                                       B-1
<Page>

Associate or Affiliate, or (iii) under certain circumstances specified in the
Rights Agreement, a transferee of a person who, concurrently with or after such
transfer, became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person, such Rights shall, with certain exceptions, become null and
void in the circumstances set forth in the Rights Agreement, and no holder
hereof shall have any rights whatsoever with respect to such Rights from and
after the occurrence of such Triggering Event.

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

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

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

     Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at its option at a
redemption price of $0.01 per Right, payable, at the election of the Company, in
cash or shares of Common Stock or such other consideration as the Board of
Directors may determine, at any time prior to the earlier of the close of
business on (a) the tenth day following the first public announcement of the
occurrence of a Flip-In Event (as such time period may be extended or shortened
pursuant to the Rights Agreement) and (b) the Expiration Date (as such term is
defined in the Rights Agreement) or (ii) may be exchanged in whole or in part
for shares of the Company's Common Stock, par value $0.01 per share, and/or
other equity securities of the Company deemed to have the same value as shares
of Common Stock, at any time prior to a person's becoming the beneficial owner
of 50% or more of the shares of Common Stock outstanding or the occurrence of a
Flip-Over Event.

     No fractional shares of Preferred Stock are required to be issued upon the
exercise of any Right or Rights evidenced hereby (other than, except as set
forth above, fractions that are integral multiples of a Fractional Share of
Preferred Stock, which may, at the election of the Company,

                                       B-2
<Page>

be evidenced by depositary receipts), but in lieu thereof a cash payment may be
made, as provided in the Rights Agreement.

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

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

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

Dated as of______

ATTEST:                                          Hospira, Inc.

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

Countersigned:

By:
    ----------------------------------
    Authorized Signature

                                       B-3
<Page>

                  [Form of Reverse Side of Rights Certificate]

                               FORM OF ASSIGNMENT

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

FOR VALUE RECEIVED ________________________________________ hereby sells,
assigns and transfers unto_____________________________________________________
__________________________________________________________________________
                  (Please print name and address of transferee)
_________ Rights evidenced by this Rights Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
__________________ Attorney, to transfer the said Rights on the books of the
within-named Company, with full power of substitution.

Dated:_________________, 20__

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

Signature Guaranteed:

Signatures must be guaranteed by a member firm of a national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another eligible guarantor institution (as defined pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended).

                                       B-4
<Page>
                                   CERTIFICATE

     The undersigned hereby certifies by checking the appropriate boxes that:

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

     (2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or who is a direct or indirect transferee of an
Acquiring Person or of an Affiliate or Associate of an Acquiring Person.

Dated:__________, _____                         --------------------------------
                                                Signature

Signature Guaranteed:

Signatures must be guaranteed by a member firm of a national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another eligible guarantor institution (as defined pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended).

                                     NOTICE

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

                                       B-5
<Page>

                          FORM OF ELECTION TO PURCHASE

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

To:  Hospira, Inc.

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

Please insert social security
or other identifying number

___________________________________________________________________________
                         (Please print name and address)

___________________________________________________________________________

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

Please insert social security
or other identifying number

___________________________________________________________________________
                         (Please print name and address)

___________________________________________________________________________

Dated:__________, _____

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

Signature Guaranteed:

Signatures must be guaranteed by a member firm of a national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another eligible guarantor institution (as defined pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended).

                                       B-6
<Page>

                                   CERTIFICATE

     The undersigned hereby certifies by checking the appropriate boxes that:

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

     (2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person or who is a direct or indirect transferee of an Acquiring
Person or of an Affiliate or Associate of an Acquiring Person.

Dated:__________, _____                         --------------------------------
                                                Signature

Signature Guaranteed:

Signatures must be guaranteed by a member firm of a national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another eligible guarantor institution (as defined pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended).

                                     NOTICE

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

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