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                                                                     EXHIBIT 4.3

                                                                  EXECUTION COPY

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                           APRIA HEALTHCARE GROUP INC.

                                       TO

                         U.S. BANK NATIONAL ASSOCIATION,
                                   as Trustee

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

                                    INDENTURE

                                   Dated as of

                                 August 20, 2003

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

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                                                                  EXECUTION COPY

                    3-3/8% CONVERTIBLE SENIOR NOTES DUE 2033

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                                TABLE OF CONTENTS

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                                    ARTICLE 1
                                   DEFINITIONS

Section 1.01. Definitions.........................................................................        1
Section 1.02. Other Definitions...................................................................        9

                                    ARTICLE 2
        ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

Section 2.01. Designation Amount and Issue of Notes...............................................       10
Section 2.02. Form of Notes.......................................................................       10
Section 2.03. Date and Denomination of Notes; Payments of Interest................................       11
Section 2.04. Execution of Notes..................................................................       12
Section 2.05. Exchange and Registration of Transfer of Notes; Restrictions on Transfer............       13
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes..........................................       19
Section 2.07. Temporary Notes.....................................................................       20
Section 2.08. Cancellation of Notes...............................................................       20
Section 2.09. CUSIP Numbers.......................................................................       20
Section 2.10. Ranking.............................................................................       21

                                    ARTICLE 3
                       REDEMPTION AND REPURCHASE OF NOTES

Section 3.01. Company's Right to Redeem...........................................................       21
Section 3.02. Notice of Optional Redemption; Selection of Notes...................................       21
Section 3.03. Payment of Notes Called for Redemption by the Company...............................       23
Section 3.04. Conversion Arrangement on Call for Redemption.......................................       24
Section 3.05. Repurchase of Notes by the Company at Option of Holders upon a Fundamental Change...       24
Section 3.06. Repurchase of Notes by the Company at Option of Holders on Specified Dates..........       26
Section 3.07. Company's Right to Elect Manner of Payment of Repurchase Price......................       29
Section 3.08. Conditions and Procedures for Repurchase at Option of Holders.......................       31
Section 3.09. Final Maturity Notice...............................................................       34

                                   ARTICLE 4
                                    INTEREST

Section 4.01. Contingent Interest.................................................................       34
Section 4.02. Payment of Contingent Interest......................................................       35
Section 4.03. Contingent Interest Notification....................................................       35
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                                    ARTICLE 5
                       PARTICULAR COVENANTS OF THE COMPANY

Section 5.01. Payment of Principal and Interest...................................................       35
Section 5.02. Maintenance of Office or Agency.....................................................       35
Section 5.03. Appointments to Fill Vacancies in Trustee's Office..................................       36
Section 5.04. Provisions as to Paying Agent.......................................................       36
Section 5.05. Existence...........................................................................       37
Section 5.06. Rule 144A Information Requirement...................................................       37
Section 5.07. Stay, Extension and Usury Laws......................................................       37
Section 5.08. Compliance Certificate..............................................................       37
Section 5.09. Additional Amounts Notice...........................................................       38
Section 5.10. Contingent Debt Tax Treatment.......................................................       38

                                    ARTICLE 6
          NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

Section 6.01. Noteholders' Lists..................................................................       38
Section 6.02. Preservation and Disclosure of Lists................................................       39
Section 6.03. Reports by Trustee..................................................................       39
Section 6.04. Reports by Company..................................................................       39

                                    ARTICLE 7
         REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT

Section 7.01. Events of Default...................................................................       40
Section 7.02. Payments of Notes on Default; Suit Therefor.........................................       42
Section 7.03. Application of Monies Collected by Trustee..........................................       43
Section 7.04. Proceedings by Noteholder...........................................................       44
Section 7.05. Proceedings by Trustee..............................................................       45
Section 7.06. Remedies Cumulative and Continuing..................................................       45
Section 7.07. Direction of Proceedings and Waiver of Defaults by Majority of Noteholders..........       45
Section 7.08. Statements as to Performance by the Company; Notice of Defaults by the Trustee......       46
Section 7.09. Undertaking to Pay Costs............................................................       46

                                    ARTICLE 8
                                   THE TRUSTEE

Section 8.01. Duties and Responsibilities of Trustee..............................................       46
Section 8.02. Reliance on Documents, Opinions, Etc................................................       48
Section 8.03. No Responsibility for Recitals, Etc.................................................       49
Section 8.04. Trustee, Paying Agents, Conversion Agents or Registrar May Own Notes................       49
Section 8.05. Monies to Be Held in Trust..........................................................       49
Section 8.06. Compensation and Expenses of Trustee................................................       49
Section 8.07. Officers' Certificate as Evidence...................................................       50
Section 8.08. Conflicting Interests of Trustee....................................................       50
Section 8.09. Eligibility of Trustee..............................................................       50
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Section 8.10. Resignation or Removal of Trustee...................................................       50
Section 8.11. Acceptance by Successor Trustee.....................................................       52
Section 8.12. Succession by Merger................................................................       52
Section 8.13. Preferential Collection of Claims...................................................       53

                                    ARTICLE 9
                                 THE NOTEHOLDERS

Section 9.01. Action by Noteholders...............................................................       54
Section 9.02. Proof of Execution by Noteholders...................................................       54
Section 9.03. Who Are Deemed Absolute Owners......................................................       54
Section 9.04. Company-owned Notes Disregarded.....................................................       54
Section 9.05. Revocation of Consents, Future Holders Bound........................................       55

                                   ARTICLE 10
                             MEETINGS OF NOTEHOLDERS

Section 10.01. Purpose of Meetings................................................................       55
Section 10.02. Call of Meetings by Trustee........................................................       55
Section 10.03. Call of Meetings by Company or Noteholders.........................................       56
Section 10.04. Qualifications for Voting..........................................................       56
Section 10.05. Regulations........................................................................       56
Section 10.06. Voting.............................................................................       57
Section 10.07. No Delay of Rights by Meeting......................................................       57

                                   ARTICLE 11
                             SUPPLEMENTAL INDENTURES

Section 11.01. Supplemental Indentures Without Consent of Noteholders.............................       57
Section 11.02. Supplemental Indenture with Consent of Noteholders.................................       59
Section 11.03. Effect of Supplemental Indenture...................................................       59
Section 11.04. Notation on Notes..................................................................       60
Section 11.05. Evidence of Compliance of Supplemental Indenture to Be Furnished to Trustee........       60

                                   ARTICLE 12
                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

Section 12.01. Company May Consolidate on Certain Terms...........................................       60
Section 12.02. Successor to Be Substituted........................................................       61
Section 12.03. Opinion of Counsel to Be Given Trustee.............................................       61

                                   ARTICLE 13
                     SATISFACTION AND DISCHARGE OF INDENTURE

Section 13.01. Discharge of Indenture.............................................................       61
Section 13.02. Paying Agent to Repay Monies Held..................................................       62
Section 13.03. Return of Unclaimed Monies.........................................................       62
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                                   ARTICLE 14
         IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

Section 14.01. Indenture and Notes Solely Corporate Obligations...................................       62

                                   ARTICLE 15
                               CONVERSION OF NOTES

Section 15.01. Right to Convert...................................................................       63
Section 15.02. Exercise of Conversion Privilege; Issuance of Common Stock on Conversion; No
                  Adjustment for Interest or Dividends; Settlement of Cash or Common Stock Upon
                  Conversion......................................................................       65
Section 15.03. Cash Payments in Lieu of Fractional Shares.........................................       69
Section 15.04. Conversion Rate....................................................................       69
Section 15.05. Adjustment of Conversion Rate......................................................       69
Section 15.06. Effect of Reclassification, Consolidation, Merger or Sale..........................       75
Section 15.07. Taxes on Shares Issued.............................................................       75
Section 15.08. Reservation of Shares, Shares to Be Fully Paid; Compliance with Governmental
                  Requirements; Listing of Common Stock...........................................       76
Section 15.09. Responsibility of Trustee..........................................................       76
Section 15.10. Notice to Holders Prior to Certain Actions.........................................       77
Section 15.11. Stockholder Rights Plans...........................................................       78

                                   ARTICLE 16
                            MISCELLANEOUS PROVISIONS

Section 16.01. Provisions Binding On Company's Successors.........................................       78
Section 16.02. Official Acts By Successor Corporation.............................................       78
Section 16.03. Addresses For Notices, Etc.........................................................       78
Section 16.04. Governing Law......................................................................       79
Section 16.05. Evidence of Compliance with Conditions Precedent, Certificates to Trustee..........       79
Section 16.06. Legal Holidays.....................................................................       79
Section 16.07. Company Responsible for Making Calculations........................................       79
Section 16.08. Trust Indenture Act................................................................       80
Section 16.09. No Security Interest Created.......................................................       80
Section 16.10. Benefits of Indenture..............................................................       80
Section 16.11. Table of Contents, Headings, Etc...................................................       80
Section 16.12. Authenticating Agent...............................................................       80
Section 16.13. Execution in Counterparts..........................................................       81
Section 16.14. Severability.......................................................................       81

Exhibit A Form of Note                                                                                  A-1
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                                    INDENTURE

         INDENTURE dated as of August 20, 2003 between Apria Healthcare Group
Inc., a Delaware corporation (hereinafter called the "COMPANY"), having its
principal office at 26220 Enterprise Court, Lake Forest, California 92630, and
U.S. Bank National Association, as trustee hereunder (hereinafter called the
"TRUSTEE").

                                   WITNESSETH:

         WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 3-3/8% Convertible Senior Notes due 2033
(hereinafter called the "NOTES"), in an aggregate principal amount not to exceed
$250,000,000, and, to provide the terms and conditions upon which the Notes are
to be authenticated, issued and delivered, the Company has duly authorized the
execution and delivery of this Indenture; and

         WHEREAS, the Notes, the certificate of authentication to be borne by
the Notes, a form of assignment, a form of fundamental change repurchase
election, a form of Company repurchase election and a form of conversion notice
to be borne by the Notes are to be substantially in the forms hereinafter
provided for; and

         WHEREAS, all acts and things necessary to make the Notes, when executed
by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute this Indenture a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized,

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration of
the premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:

                                   ARTICLE 1
                                   DEFINITIONS

         Section 1.01. Definitions. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture that are defined in the Trust Indenture Act
or which are by reference therein defined in the Securities Act (except as
herein otherwise expressly provided or unless the context otherwise requires)
shall have the meanings assigned to such terms in the Trust Indenture Act and in
the Securities Act as in force at the date of the execution of this Indenture.
The words "HEREIN", "HEREOF", "HEREUNDER" and words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
Subdivision. The terms defined in this Article include the plural as well as the
singular.

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         "ADDITIONAL AMOUNTS" has the meaning specified for "ADDITIONAL AMOUNTS"
in Section 2(e) of the Registration Rights Agreement.

         "AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL", when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms "CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing.

         "APPLICABLE FIVE-DAY TRADING PERIOD" means, with respect to any
Interest Period as to which Contingent Interest may be payable, the five Trading
Days ending on the third day immediately preceding the first day of such
Interest Period.

         "BID SOLICITATION AGENT" means such Person (other than any Affiliate of
the Company) as the Company may designate as Bid Solicitation Agent from time to
time, and shall initially mean the Trustee.

         "BOARD OF DIRECTORS" means the Board of Directors of the Company or a
committee of such Board duly authorized to act for it hereunder.

         "BUSINESS DAY" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close in The City of New York.

         "CAPITAL STOCK" of any Person means any and all shares (including
ordinary shares of American Depositary Shares), interests, participations or
other equivalents however designated of corporate stock or other equity
participations, including partnership interests, whether general or limited, of
such Person and any rights (other than debt securities convertible or
exchangeable into an equity interest), warrants or options to acquire an equity
interest in such Person.

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

         "COMMON STOCK" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to the provisions
of Section 15.06, however, shares issuable on conversion of Notes shall include
only shares of the class designated as common stock of the Company at the date
of this Indenture (namely, the Common Stock, par value $.001) or shares of any
class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which are not subject to redemption by the
Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable on conversion
shall be substantially

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in the proportion which the total number of shares of such class resulting from
all such reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications.

         "COMPANY" means the corporation named as the "COMPANY" in the first
paragraph of this Indenture, and, subject to the provisions of Article 12 and
Section 15.06, shall include its successors and assigns.

         "CONVERSION AGENT" means the Trustee or such other office or agency
designated by the Company where Notes may be presented for conversion.

         "CONVERSION PRICE" as of any day means $1,000 divided by the Conversion
Rate as of such date and rounded to the nearest cent. The Conversion Price shall
initially be $34.86 per share of Common Stock.

         "CORPORATE TRUST OFFICE" or other similar term, means the designated
office of the Trustee at which at any particular time its corporate trust
business as it relates to this Indenture shall be administered, which office is,
at the date as of which this Indenture is dated, located at 60 Livingston
Avenue, St. Paul, Minnesota, 55107, attn: Corporate Trust Department.

         "CURRENT MARKET PRICE" per share of Common Stock means, with respect to
any date of determination, the average of the Last Reported Sale Price for the
five consecutive Trading Days selected by the Company commencing not more than
10 Trading Days from and including the Ex-Dividend Date with respect to the
issuance or distribution requiring such computation. If another issuance or
distribution to which Section 15.05 applies occurs during the period applicable
for calculating "CURRENT MARKET PRICE" pursuant to this definition, "CURRENT
MARKET PRICE" shall be calculated for such period in a manner determined by the
Board of Directors to reflect the impact of such issuance, distribution,
subdivision or combination on the Last Reported Sale Price of the Common Stock
during such period.

         "CUSTODIAN" means U.S. Bank National Association, as custodian with
respect to the Notes in global form, or any successor entity thereto.

         "DEFAULT" means any event that is, or after notice or passage of time,
or both, would be, an Event of Default.

         "DEPOSITARY" means, the clearing agency registered under the Exchange
Act that is designated to act as the Depositary for the Global Notes. The
Depository Trust Company shall be the initial Depositary, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, "DEPOSITARY" shall mean or include such
successor.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as in effect from time to
time.

         "EX-DIVIDEND DATE" means, with respect to any issuance or distribution
on shares of Common Stock, the first date on which the shares of Common Stock
trade regular way on the

                                       3
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principal securities market on which the shares of Common Stock are then traded
without the right to receive such issuance or distribution.

         "FUNDAMENTAL CHANGE" means the occurrence of any of the following:

         (i)      a "person" or "group" within the meaning of Section 13(d) of
the Exchange Act other than the Company, its subsidiaries or the Company or its
subsidiaries employee benefit plans, files a Schedule TO or any other schedule,
form or report under the Exchange Act disclosing that such person or group has
become the direct or indirect ultimate "beneficial owner," as defined in Rule
13d-3 under the Exchange Act, of more than 50% of the total voting power of all
shares of the Company's capital stock that are entitled to vote generally in the
election of directors; or

         (ii)     consummation of any share exchange, consolidation or merger of
the Company or any sale, lease or other transfer in one transaction or a series
of transactions of all or substantially all of the consolidated assets of the
Company and its subsidiaries, taken as a whole, to any person other than the
Company or one or more of its subsidiaries, pursuant to which the Common Stock
will be converted into cash, securities or other property; provided, however,
that a transaction where the holders of the Company's voting capital stock
immediately prior to such transaction have directly or indirectly more than 50%
of the aggregate voting power of all shares of capital stock of the continuing
or surviving corporation or transferee entitled to vote generally in the
election of directors immediately after such event shall not be a Fundamental
Change.

         A Fundamental Change will not be deemed to have occurred in respect of
either of the foregoing, however, if either:

         (i)      the Last Reported Sale Price of the Common Stock for any five
Trading Days within the 10 consecutive Trading Days ending immediately before
the later of the Fundamental Change or the public announcement thereof, equals
or exceeds 105% of the Conversion Price of the Notes immediately before the
Fundamental Change or the public announcement thereof; or

         at least 90% of the consideration, excluding cash payments for
fractional shares, in the transaction or transactions constituting the
Fundamental Change consists of shares of capital stock traded on a national
securities exchange or quoted on the Nasdaq National Market or which will be so
traded or quoted when issued or exchanged in connection with a Fundamental
Change (these securities being referred to as "publicly traded securities") and
as a result of this transaction or transactions the Notes become convertible
into such publicly traded securities.

         "INDENTURE" means this instrument as originally executed or, if amended
or supplemented as herein provided, as so amended or supplemented.

         "INITIAL PURCHASERS" means each of Banc of America Securities LLC, J.P.
Morgan Securities Inc., Morgan Stanley & Co. Incorporated, Credit Lyonnais
Securities (USA) Inc., Scotia Capital (USA) Inc. and Fleet Securities, Inc.
(each an "INITIAL PURCHASER").

         "INTEREST" means, when used with reference to the Notes, any interest
payable under the terms of the Notes, including Contingent Interest, if any, and
Additional Amounts, if any, payable under the terms of the Registration Rights
Agreement.

                                       4
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         "INTEREST PAYMENT DATE" means September 1 and March 1 of each year,
commencing March 1, 2004.

         "INTEREST PERIOD" means (i) with respect to the first interest period,
the period from the first Original Issuance Date of the Notes to and including
February 28, 2004 and (ii) thereafter, any six-month period from March 1 to and
including August 31 and from September 1 to and including the last day of
February, commencing on or after March 1, 2004 and ending before September 1,
2033, except that with respect to the first period for which Contingent Interest
is payable, such period shall be from September 8, 2010 to and including
February 28, 2011.

         "LAST REPORTED SALE PRICE" of the Common Stock on any date means the
closing sale price per share (or if no closing sale price is reported, the
average of the bid and asked prices or, if more than one in either case, the
average of the average bid and the average asked prices) on that date as
reported in composite transactions for the principal U.S. securities exchange on
which the Common Stock is traded or, if the Common Stock is not listed on a U.S.
national or regional securities exchange, as reported by the Nasdaq National
Market. If the Common Stock is not listed for trading on a U.S. national or
regional securities exchange and not reported by the Nasdaq National Market on
the relevant date, the "Last Reported Sale Price" will be the last quoted bid
price for the Common Stock in the over-the-counter market on the relevant date
as reported by the National Quotation Bureau Incorporated or similar
organization. If the Common Stock is not so quoted, the "Last Reported Sale
Price" will be the average of the mid-point of the last bid and asked prices for
the Common Stock on the relevant date quoted by each of at least three
nationally recognized independent investment banking firms selected by the
Company for this purpose.

         "MARKET PRICE" means, with respect to any Company Repurchase Date, the
average of the Last Reported Sale Price of the Common Stock for the 20
consecutive Trading Days ending on the third Business Day prior to the
applicable Company Repurchase Date (or, if such third Business Day prior to the
applicable Company Repurchase Date is not a Trading Day, then ending on the last
Trading Day prior to such third Business Day), appropriately adjusted to take
into account the occurrence, during the period commencing on the first Trading
Day during the period of 20 consecutive Trading Days and ending on the Company
Repurchase Date, of any event described in Section 15.05 or Section 15.06.

         "NOTE" or "NOTES" means any Note or Notes, as the case may be,
authenticated and delivered under this Indenture, including any Global Note.

         "NOTEHOLDER" or "HOLDER" as applied to any Note, or other similar terms
(but excluding the term "BENEFICIAL HOLDER"), means any Person in whose name at
the time a particular Note is registered on the Note Registrar's books.

         "OFFICERS' CERTIFICATE", when used with respect to the Company, means a
certificate signed by any two of the Chairman of the Board, the Chief Executive
Officer, the Chief Operating Officer, the President, the Chief Financial
Officer, any Vice President (whether or not designated by a number or numbers or
word or words added before or after the title "Vice President"), the Treasurer
or the Secretary of the Company; provided that the Officer's

                                       5
<PAGE>

Certificate delivered on the date hereof pursuant to Section 16.05 may be signed
by any one of the foregoing.

         "OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or other counsel
reasonably acceptable to the Trustee.

         "ORIGINAL ISSUE DATE" means August 20, 2003.

         "OUTSTANDING", when used with reference to Notes and subject to the
provisions of Section 9.04, means, as of any particular time, all Notes
authenticated and delivered by the Trustee under this Indenture, except:

         (a)      Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;

         (b)      Notes, or portions thereof, (i) for the redemption of which
monies in the necessary amount shall have been deposited in trust with the
Trustee or with any Paying Agent (other than the Company) or (ii) which shall
have been otherwise discharged in accordance with Article 13;

         (c)      Notes in lieu of which, or in substitution for which, other
Notes shall have been authenticated and delivered pursuant to the terms of
Section 2.06; and

         (d)      Notes converted into Common Stock pursuant to Article 15 and
Notes deemed not outstanding pursuant to Article 3.

         "PAYING AGENT" means the Trustee or such other office or agency
designated by the Company where Notes may be presented for payment.

         "PERSON" means a corporation, an association, a partnership, a limited
liability company, an individual, a joint venture, a joint stock company, a
trust, an unincorporated organization or a government or an agency or a
political subdivision thereof.

         "PORTAL MARKET" means The Portal Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.

         "PREDECESSOR NOTE" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note, and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.06 in lieu of a lost, destroyed or
stolen Note shall be deemed to evidence the same debt as the lost, destroyed or
stolen Note that it replaces.

         "QIB" means a "QUALIFIED INSTITUTIONAL BUYER" as defined in Rule 144A.

         "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of August 20, 2003, among the Company and the Initial
Purchasers, as amended from time to time in accordance with its terms.

                                       6
<PAGE>

         "REGULAR RECORD DATE" means, with respect to each Interest Payment
Date, the close of business on the August 15 or February 15 next preceding such
Interest Payment Date (whether or not a Business Day).

         "REPURCHASE DATE" means the Fundamental Change Repurchase Date or the
Company Repurchase Date, as applicable.

         "REPURCHASE ELECTION" means the Fundamental Change Repurchase Election
or the Company Repurchase Election, as applicable.

         "REPURCHASE PRICE" means the Fundamental Change Repurchase Price or the
Company Repurchase Price, as applicable.

         "RESPONSIBLE OFFICER" means, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee with direct
responsibility for the administration of this Indenture and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of such person's knowledge of any familiarity with
the particular subject.

         "RULE 144A" means Rule 144A as promulgated under the Securities Act.

         "SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.

         "SPIN-OFF MARKET PRICE" per share of Common Stock of the Company or the
capital stock of, or similar equity interests in, a Subsidiary or other business
unit of the Company on any day means the average of the daily Last Reported Sale
Price for the 10 consecutive Trading Days commencing on and including the fifth
Trading Day after the Ex-Dividend Date with respect to the issuance or
distribution requiring such computation.

         "STATED MATURITY" means September 1, 2033.

         "STOCK RECORD DATE" means, with respect to any dividend, distribution
or other transaction or event in which the holders of Common Stock have the
right to receive any cash, securities or other property or in which the Common
Stock (or other applicable security) is exchanged for or converted into any
combination of cash, securities or other property, the date fixed for
determination of stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).

         "SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such Person or a
subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more subsidiaries of such Person (or any combination
thereof).

                                       7
<PAGE>

         "TRADING DAY" means a day during which trading in securities generally
occurs on the New York Stock Exchange or, if the Common Stock is not listed on
the New York Stock Exchange, on the principal other national or regional
securities exchange on which the Common Stock are then listed or, if the Common
Stock are not listed on a national or regional securities exchange, on the
National Association of Securities Dealers Automated Quotation System or, if the
Common Stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on the principal other market on which the Common
Stock are then traded (provided that no day on which trading of the Common Stock
is suspended on such exchange or other trading market will count as a Trading
Day).

         "TRADING PRICE" of a Notes means (a) for purposes of Section 4.01
hereof, as of any date of determination, the average of the secondary market bid
quotations per $1,000 principal amount of Notes obtained by the Bid Solicitation
Agent for $5,000,000 aggregate principal amount of Notes at approximately 3:30
p.m., New York City time, on such determination date from three nationally
recognized securities dealers (none of which shall be an Affiliate of the
Company) selected by the Company; provided, however, if (i) at least three such
bids are not obtained by the Bid Solicitation Agent or (ii) in the Company's
reasonable judgment, the bid quotations are not indicative of the secondary
market value of the Notes as of such determination date, then the Trading Price
per $1,000 principal amount of the Notes for such determination date shall equal
(1) the Conversion Rate in effect as of such determination date multiplied by
(2) the average Last Reported Sale Price of the Common Stock for the five
Trading Days ending on such determination date, appropriately adjusted to take
into account the occurrence, during the period commencing on the first of such
Trading Days during such five Trading Day period and ending on such
determination date, of any event described in Section 15.05 or Section 15.06 and
(b) for purposes of Section 15.01 hereof, as of any date of determination, the
average of the secondary market bid quotations per $1,000 principal amount of
Notes obtained by the Bid Solicitation Agent for $5,000,000 aggregate principal
amount of Notes at approximately 3:30 p.m., New York City time, on such
determination date from three nationally recognized securities dealers (none of
which shall be an Affiliate of the Company) selected by the Company; provided,
however, if (i) at least three such bids are not obtained by the Bid
Solicitation Agent, but two such bids are obtained, then the average of the two
bids shall be used, (ii) only one such bid can be reasonably obtained by the Bid
Solicitation Agent, then that one bid shall be used, and (iii) the Bid
Solicitation Agent cannot reasonably obtain at least one bid, then the Trading
Price per $1,000 principal amount of the Notes for such determination date shall
be deemed to be less than 98% of the product of the Last Reported Sale Price of
the Common Stock and the Conversion Rate. The Bid Solicitation Agent shall
solicit bids from securities dealers that the Company believes to be willing to
bid for Notes. Except in the case of (b)(iii) above, the Trading Price shall be
determined by the Company, using the bids obtained by the Bid Solicitation
Agent.

         "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended, as it was in force at the date of this Indenture, except as provided in
Sections 11.03 and 15.06; provided that if the Trust Indenture Act of 1939 is
amended after the date hereof, the term "TRUST INDENTURE ACT" shall mean, to the
extent required by such amendment, the Trust Indenture Act of 1939 as so
amended.

                                       8
<PAGE>

         "TRUSTEE" means U.S. Bank National Association and its successors and
any corporation resulting from or surviving any consolidation or merger to which
it or its successors may be a party and any successor trustee at the time
serving as successor trustee hereunder.

Section 1.02.     Other Definitions.

<TABLE>
<CAPTION>
                                                            Defined in
           Term                                              Section
           ----                                              -------
<S>                                                         <C>
"Additional Amounts Notice"........................         5.09
"Adjustment Event".................................         15.05(l)
"Agent Members"....................................         2.05(b)
"cash".............................................         3.07(a)
"Cash Amount"......................................         15.02(h)
"Cash Settlement Averaging Period".................         15.02(g)(i)
"Cash Settlement Notice Period"....................         15.02(g)(i)
"Company Repurchase Date"..........................         3.06(a)
"Company Repurchase Election"......................         3.06(c)(i)
"Company Repurchase Notice"........................         3.06(b)
"Company Repurchase Price".........................         3.06(a)
"Contingent Interest"..............................         4.01
"Conversion Date"..................................         15.02(c)
"Conversion Notice"................................         15.02(a)
"Conversion Obligation"............................         15.02(g)(i)
"Conversion Rate"..................................         15.04
"Conversion Retraction Period".....................         15.02(g)(i)
"Defaulted Interest"...............................         2.03
"Determination Date"...............................         15.05(l)
"Event of Default".................................         7.01
"Expiration Time"..................................         15.05(e)
"Final Maturity Notice"............................         3.09
"Final Notice Date"................................         15.02(g)
"Fundamental Change Repurchase Election"...........         3.05(c)(i)
"Fundamental Change Repurchase Date"...............         3.05(a)
"Fundamental Change Repurchase Notice".............         3.05(b)
"Fundamental Change Repurchase Price"..............         3.05(a)
"Global Note"......................................         2.02
"Moody's"..........................................         15.01(a)(v)
"non-electing share"...............................         15.06
"Note Register"....................................         2.05
"Note Registrar"...................................         2.05
"Purchased Shares".................................         15.05(e)(i)
"Redemption Date"..................................         3.02(a)
"Redemption Notice"................................         3.02(a)
"Redemption Price".................................         3.01
"Restricted Securities"............................         2.05(c)
"Special Record Date"..............................         2.03
</TABLE>

                                       9
<PAGE>

<TABLE>
<S>                                                         <C>
"S&P"..............................................         15.01(a)(v)
</TABLE>

                                    ARTICLE 2
        ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

         Section 2.01. Designation Amount and Issue of Notes. The Notes shall be
designated as "3-3/8% CONVERTIBLE SENIOR NOTES DUE 2033". Notes not to exceed
the aggregate principal amount of $250,000,000 (except pursuant to Sections
2.05, 2.06, 3.05, 3.06 and 15.02 hereof) upon the execution of this Indenture,
or from time to time thereafter, may be executed by the Company and delivered to
the Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Notes to or upon the written order of the Company, signed by its
Chairman of the Board, its Chief Executive Officer, its Chief Operating Officer,
its President, its Chief Financial Officer, any Vice President (whether or not
designated by a number or numbers or word or words added before or after the
title "Vice President"), its Treasurer, its Secretary or any Assistant
Secretary, without any further action by the Company hereunder.

         Section 2.02. Form of Notes. The Notes and the Trustee's certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A. The terms and provisions contained in the form of Note
attached as Exhibit A hereto shall constitute, and are hereby expressly made, a
part of this Indenture and, to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.

         Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends, endorsements or changes as the
officers executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required by the Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Notes to be
tradable on The Portal Market or as may be required for the Notes to be tradable
on any other market developed for trading of securities pursuant to Rule 144A 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
securities exchange or automated quotation system on which the Notes may be
listed, or to conform to usage, or to indicate any special limitations or
restrictions to which any particular Notes are subject.

         So long as the Notes are eligible for book-entry settlement with the
Depositary, or unless otherwise required by law, or otherwise contemplated by
Section 2.05(a), all of the Notes will be represented by one or more Notes in
global form registered in the name of the Depositary or the nominee of the
Depositary (a "GLOBAL NOTE"). The transfer and exchange of beneficial interests
in any such Global Note shall be effected through the Depositary in accordance
with this Indenture and the applicable procedures of the Depositary. Except as
provided in Section 2.05(a), beneficial holders of a Global Note shall not be
entitled to have certificates registered in their names, will not receive or be
entitled to receive physical delivery of certificates in definitive form and
will not be considered holders of such Global Note.

                                       10
<PAGE>

         Any Global Note shall represent such of the outstanding Notes as shall
be specified therein and shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be increased or reduced to reflect redemptions, repurchases, conversions,
transfers or exchanges permitted hereby. Any endorsement of a Global Note to
reflect the amount of any increase or decrease in the amount of outstanding
Notes represented thereby shall be made by the Trustee or the Custodian, at the
direction of the Trustee, in such manner and upon instructions given by the
holder of such Notes in accordance with this Indenture. Payment of principal of
and Interest on any Global Note shall be made to the holder of such Note.

         Section 2.03. Date and Denomination of Notes; Payments of Interest. The
Notes shall be issuable in registered form without coupons in denominations of
$1,000 principal amount and integral multiples thereof. Each Note shall be dated
the date of its authentication and shall bear interest from the date specified
on the face of the form of Note attached as Exhibit A hereto. Interest on the
Notes shall be computed on the basis of a 360-day year comprised of twelve
30-day months.

         The Person in whose name any Note (or its Predecessor Note) is
registered on the Note Register at the close of business on the Regular Record
Date with respect to an Interest Payment Date shall be entitled to receive the
Interest payable on such Interest Payment Date, except that the Interest payable
upon redemption or repurchase will be payable to the Person to whom principal is
payable pursuant to such redemption or repurchase (unless the Redemption Date or
the Repurchase Date, as the case may be, is an Interest Payment Date, in which
case the semi-annual payment of interest becoming due on such date shall be
payable to the holders of such Notes registered as such on the applicable
Regular Record Date). Notwithstanding the foregoing, if any Note (or portion
thereof) is converted into Common Stock during the period after a Regular Record
Date to, but excluding, the next succeeding Interest Payment Date and such Note
(or portion thereof) has been called or tendered for redemption on a Redemption
Date which occurs during such period, the Company shall not be required to pay
interest on such Interest Payment Date in respect of any such Note (or portion
thereof), except as provided in Section 15.02. Interest shall be payable at the
office of the Company maintained by the Company for such purposes in the Borough
of Manhattan, City of New York, which shall initially be an office or agency of
the Trustee. The Company shall pay Interest (i) on any Notes in certificated
form by check mailed to the address of the Person entitled thereto as it appears
in the Note Register (or upon written notice from the registered holder thereof,
by wire transfer in immediately available funds, if such Person is entitled to
Interest on Notes with an aggregate principal amount in excess of $2,000,000) or
(ii) on any Global Note by wire transfer of immediately available funds to the
account of the Depositary or its nominee.

         Any Interest on any Note which is payable, but is not punctually paid
or duly provided for, on any September 1 or March 1 (herein called "DEFAULTED
INTEREST") shall forthwith cease to be payable to the Noteholder on the relevant
Regular Record Date by virtue of his having been such Noteholder, and such
Defaulted Interest shall be paid by the Company, at its election in each case,
as provided in clause (1) or (2) below:

                                       11
<PAGE>

         (1)      The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on a "SPECIAL RECORD
DATE" for the payment of such Defaulted Interest, which shall be the date fixed
in the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Note and the date of
the proposed payment (which shall be not less than 25 days after the receipt by
the Trustee of such notice, unless the Trustee shall consent to an earlier
date), and at the same time the Company shall deposit with the Trustee an amount
of money equal to the aggregate amount to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
on or prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted Interest
as in this clause provided. Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest that shall be not more than 15
days and not less than ten days prior to the date of the proposed payment, and
not less than ten days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such Special
Record Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to each holder at his
address as it appears in the Note Register, not less than ten days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Notes (or their
respective Predecessor Notes) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the following
clause (2) of this Section 2.03.

         (2)      The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange or automated quotation system on which the Notes may be listed or
designated for issuance, and upon such notice as may be required by such
exchange or automated quotation system, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.

         Section 2.04. Execution of Notes. The Notes shall be signed in the name
and on behalf of the Company by the manual or facsimile signature of its
President, any Vice President (whether or not designated by a number or numbers
or word or words added before or after the title "Vice President"), its
Treasurer, its Secretary or any Assistant Secretary. Only such Notes as shall
bear thereon a certificate of authentication substantially in the form set forth
on the form of Note attached as Exhibit A hereto, manually executed by the
Trustee (or an authenticating agent appointed by the Trustee as provided by
Section 16.12), shall be entitled to the benefits of this Indenture or be valid
or obligatory for any purpose. Such certificate by the Trustee (or such an
authenticating agent) upon any Note executed by the Company shall be conclusive
evidence that the Note so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the benefits of this
Indenture.

         In case any officer of the Company who shall have signed any of the
Notes shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such

                                       12
<PAGE>

officer of the Company, and any Note may be signed on behalf of the Company by
such persons as, at the actual date of the execution of such Note, shall be the
proper officers of the Company, although at the date of the execution of this
Indenture any such person was not such an officer.

         Section 2.05. Exchange and Registration of Transfer of Notes;
Restrictions on Transfer. (a) The Company shall cause to be kept at the
Corporate Trust Office a register (the register maintained in such office and in
any other office or agency of the Company designated pursuant to Section 5.02
being herein sometimes collectively referred to as the "NOTE REGISTER") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Notes and of transfers of Notes. The Note
Register shall be in written form or in any form capable of being converted into
written form within a reasonably prompt period of time. The Trustee is hereby
appointed "NOTE REGISTRAR" for the purpose of registering Notes and transfers of
Notes as herein provided. The Company may appoint one or more co-registrars in
accordance with Section 5.02.

         Upon surrender for registration of transfer of any Note to the Note
Registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.05, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Notes of any authorized denominations and of a
like aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.

         Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 5.02. Whenever any Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Notes that
the Noteholder making the exchange is entitled to receive bearing registration
numbers not contemporaneously outstanding.

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

         All Notes presented or surrendered for registration of transfer or for
exchange, redemption, repurchase or conversion shall (if so required by the
Company or the Note Registrar) be duly endorsed, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company, duly
executed by the Noteholder thereof or his attorney duly authorized in writing.

         No service charge shall be made to any holder for any registration of,
transfer or exchange of Notes, but the Company may require payment by the holder
of a sum sufficient to cover any tax, assessment or other governmental charge
that may be imposed in connection with any registration of transfer or exchange
of Notes.

         Neither the Company nor the Trustee nor any Note Registrar shall be
required to exchange or register a transfer of (a) any Notes for a period of 15
days next preceding any selection of Notes to be redeemed, (b) any Notes or
portions thereof called for redemption

                                       13
<PAGE>

pursuant to Section 3.01 (c) any Notes or portions thereof surrendered for
conversion pursuant to Article 15, (d) any Notes or portions thereof tendered
for repurchase (and not withdrawn) pursuant to Section 3.05 or (e) any Notes or
portions thereof tendered for repurchase (and not withdrawn) pursuant to Section
3.06.

         (b)      The following provisions shall apply only to Global Notes:

                  (i)      Each Global Note authenticated under this Indenture
         shall be registered in the name of the Depositary or a nominee thereof
         and delivered to such Depositary or a nominee thereof or Custodian
         therefor, and each such Global Note shall constitute a single Note for
         all purposes of this Indenture.

                  (ii)     Notwithstanding any other provision in this
         Indenture, no Global Note may be exchanged in whole or in part for
         Notes registered, and no transfer of a Global Note in whole or in part
         may be registered, in the name of any Person other than the Depositary
         or a nominee thereof unless (A) the Depositary (i) has notified the
         Company that it is unwilling or unable to continue as Depositary for
         such Global Note and a successor depositary has not been appointed by
         the Company within ninety days or (ii) has ceased to be a clearing
         agency registered under the Exchange Act, (B) an Event of Default has
         occurred and is continuing or (C) the Company, in its sole discretion,
         notifies the Trustee in writing that it no longer wishes to have all
         the Notes represented by Global Notes. Any Global Note exchanged
         pursuant to clause (A) or (B) above shall be so exchanged in whole and
         not in part and any Global Note exchanged pursuant to clause (C) above
         may be exchanged in whole or from time to time in part as directed by
         the Company. Any Note issued in exchange for a Global Note or any
         portion thereof shall be a Global Note; provided that any such Note so
         issued that is registered in the name of a Person other than the
         Depositary or a nominee thereof shall not be a Global Note.

                  (iii)    Securities issued in exchange for a Global Note or
         any portion thereof pursuant to clause (ii) above shall be issued in
         definitive, fully registered form, without interest coupons, shall have
         an aggregate principal amount equal to that of such Global Note or
         portion thereof to be so exchanged, shall be registered in such names
         and be in such authorized denominations as the Depositary shall
         designate and shall bear any legends required hereunder. Any Global
         Notes to be exchanged in whole shall be surrendered by the Depositary
         to the Trustee, as Note Registrar. With regard to any Global Note to be
         exchanged in part, either such Global Note shall be so surrendered for
         exchange or, if the Trustee is acting as Custodian for the Depositary
         or its nominee with respect to such Global Note, the principal amount
         thereof shall be reduced, by an amount equal to the portion thereof to
         be so exchanged, by means of an appropriate adjustment made on the
         records of the Trustee. Upon any such surrender or adjustment, the
         Trustee shall authenticate and make available for delivery the Note
         issuable on such exchange to or upon the written order of the
         Depositary or an authorized representative thereof.

                  (iv)     In the event of the occurrence of any of the events
         specified in clause (ii) above, the Company will promptly make
         available to the Trustee a reasonable supply of certificated Notes in
         definitive, fully registered form, without interest coupons.

                                       14
<PAGE>

                  (v)      Neither any members of, or participants in, the
         Depositary ("AGENT MEMBERS") nor any other Persons on whose behalf
         Agent Members may act shall have any rights under this Indenture with
         respect to any Global Note registered in the name of the Depositary or
         any nominee thereof, and the Depositary or such nominee, as the case
         may be, may be treated by the Company, the Trustee and any agent of the
         Company or the Trustee as the absolute owner and holder of such Global
         Note for all purposes whatsoever. Notwithstanding the foregoing,
         nothing herein shall prevent the Company, the Trustee or any agent of
         the Company or the Trustee from giving effect to any written
         certification, proxy or other authorization furnished by the Depositary
         or such nominee, as the case may be, or impair, as between the
         Depositary, its Agent Members and any other Person on whose behalf an
         Agent Member may act, the operation of customary practices of such
         Persons governing the exercise of the rights of a beneficial holder of
         any Note.

                  (vi)     At such time as all interests in a Global Note have
         been redeemed, repurchased, converted, canceled or exchanged for Notes
         in certificated form, such Global Note shall, upon receipt thereof, be
         canceled by the Trustee in accordance with standing procedures and
         instructions existing between the Depositary and the Custodian. At any
         time prior to such cancellation, if any interest in a Global Note is
         redeemed, repurchased, converted, canceled or exchanged for Notes in
         certificated form, the principal amount of such Global Note shall, in
         accordance with the standing procedures and instructions existing
         between the Depositary and the Custodian, be appropriately reduced, and
         an endorsement shall be made on such Global Note, by the Trustee or the
         Custodian, at the direction of the Trustee, to reflect such reduction.

         (c)      Every Note that bears or is required under this Section
2.05(c) to bear the legend set forth in this Section 2.05(c) (together with any
Common Stock issued upon conversion of the Notes and required to bear the legend
set forth in Section 2.05(d), collectively, the "RESTRICTED SECURITIES") shall
be subject to the restrictions on transfer set forth in this Section 2.05(c)
(including those set forth in the legend below) unless such restrictions on
transfer shall be waived by written consent of the Company, and the holder of
each such Restricted Security, by such holder's acceptance thereof, agrees to be
bound by all such restrictions on transfer. As used in Section 2.05(c) and
2.05(d), the term "TRANSFER" encompasses any sale, pledge, loan, transfer or
other disposition whatsoever of any Restricted Security or any interest therein.

         Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Note (and all securities issued in exchange therefor
or substitution thereof, other than Common Stock, if any, issued upon conversion
thereof, which shall bear the legend set forth in Section 2.05(d), if
applicable) shall bear a legend in substantially the following form, unless such
Note has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer) or pursuant to Rule 144 under the Securities Act or any
similar provision then in force, or unless otherwise agreed by the Company in
writing, with written notice thereof to the Trustee:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY

                                       15
<PAGE>

STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS
A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A")); (2) AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR
ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH
SECURITY, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF
THIS SECURITY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), ONLY (A) TO APRIA HEALTHCARE GROUP INC. (THE "ISSUER"), (B) PURSUANT
TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER), (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, IN COMPLIANCE WITH RULE 144A TO A PERSON IT REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (D) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM;
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND
WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS SECURITY PURSUANT TO
CLAUSE 2(B) ABOVE OR UPON ANY TRANSFER OF THIS SECURITY UNDER RULE 144 UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION).

THIS NOTE IS SUBJECT TO UNITED STATES FEDERAL INCOME TAX REGULATIONS GOVERNING
CONTINGENT PAYMENT DEBT INSTRUMENTS. FOR PURPOSES OF SECTIONS 1272, 1273 AND
1275 OF THE INTERNAL REVENUE CODE, THE COMPARABLE YIELD OF THIS NOTE IS 8.625%,
COMPOUNDED SEMI-ANNUALLY (WHICH WILL BE TREATED AS THE YIELD TO MATURITY FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES).

THE ISSUER AGREES, AND BY ACCEPTING A BENEFICIAL OWNERSHIP INTEREST IN THIS NOTE
EACH HOLDER AND ANY BENEFICIAL OWNER OF THIS NOTE WILL BE DEEMED TO HAVE AGREED,
FOR UNITED STATES FEDERAL INCOME TAX PURPOSES (1) TO TREAT THIS NOTE AS A DEBT
INSTRUMENT THAT IS SUBJECT TO TREAS. REG. SEC. 1.1275-4 (THE "CONTINGENT PAYMENT
REGULATIONS"), (2) TO TREAT THE FAIR MARKET VALUE OF ANY COMMON STOCK RECEIVED
UPON ANY

                                       16
<PAGE>

CONVERSION OF THIS NOTE OR UPON A PURCHASE OF THIS NOTE AT THE HOLDER'S OPTION
AS A CONTINGENT PAYMENT FOR PURPOSES OF THE CONTINGENT PAYMENT REGULATIONS, AND
(3) TO ACCRUE INTEREST WITH RESPECT TO THE NOTE AS ORIGINAL ISSUE DISCOUNT FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES ACCORDING TO THE "NONCONTINGENT BOND
METHOD," SET FORTH IN THE CONTINGENT PAYMENT REGULATIONS, AND TO BE BOUND BY THE
ISSUER'S DETERMINATION OF THE "COMPARABLE YIELD" AND "PROJECTED PAYMENT
SCHEDULE," WITHIN THE MEANING OF THE CONTINGENT PAYMENT REGULATIONS, WITH
RESPECT TO THIS NOTE. THE ISSUER AGREES TO PROVIDE PROMPTLY TO THE HOLDER OF
THIS NOTE, UPON WRITTEN REQUEST, THE ISSUE PRICE, ISSUE DATE, YIELD TO MATURITY,
COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE. ANY SUCH WRITTEN REQUEST SHOULD
BE SENT TO THE ISSUER AT THE FOLLOWING ADDRESS: APRIA HEALTHCARE GROUP INC.,
26220 Enterprise Court, Lake Forest, California 92630, ATTN: CHIEF FINANCIAL
OFFICER.

THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS
AGREEMENT DATED august 20, 2003 AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE
BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS
AGREEMENT.

         Any Note (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms or as to conditions for removal of the foregoing legend set forth
therein have been satisfied may, upon surrender of such Note for exchange to the
Note Registrar in accordance with the provisions of this Section 2.05, be
exchanged for a new Note or Notes, of like tenor and aggregate principal amount,
which shall not bear the restrictive legend required by this Section 2.05(c). If
the Restricted Security surrendered for exchange is represented by a Global Note
bearing the legend set forth in this Section 2.05(c), the principal amount of
the legended Global Note shall be reduced by the appropriate principal amount
and the principal amount of a Global Note without the legend set forth in this
Section 2.05(c) shall be increased by an equal principal amount. If a Global
Note without the legend set forth in this Section 2.05(c) is not then
outstanding, the Company shall execute and the Trustee shall authenticate and
deliver an unlegended Global Note to the Depositary.

         (d)      Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any stock certificate representing Common Stock issued upon conversion of any
Note shall bear a legend in substantially the following form, unless such Common
Stock has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer) or pursuant to Rule 144 under the Securities Act or any
similar provision then in force, or such Common Stock has been issued upon
conversion of Notes that have been transferred pursuant to a registration
statement that has been declared effective under the Securities Act or pursuant
to Rule 144 under the Securities Act or any similar provision then in force, or
unless otherwise agreed by the Company in writing with written notice thereof to
the transfer agent:

                                       17
<PAGE>

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY,
BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")); (2)
AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS
PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR
TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS SECURITY
UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), ONLY
(A) TO APRIA HEALTHCARE GROUP INC. (THE "ISSUER"), (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT
(AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER), (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, IN
COMPLIANCE WITH RULE 144A TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM; AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE 2(B) ABOVE
OR UPON ANY TRANSFER OF THIS SECURITY UNDER RULE 144 UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION).

THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS
AGREEMENT DATED august 20, 2003 AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE
BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS
AGREEMENT.

         Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.05(d).

                                       18
<PAGE>

         (e)      Any Note or Common Stock issued upon the conversion of a Note
that, prior to the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), is
purchased or owned by the Company or any Affiliate thereof may not be resold by
the Company or such Affiliate unless registered under the Securities Act or
resold pursuant to an exemption from the registration requirements of the
Securities Act in a transaction which results in such Notes or Common Stock, as
the case may be, no longer being "restricted securities" (as defined under Rule
144).

         The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Agent Members or
beneficial holders of interests in any Global Note) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.

         Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes. In case any
Note shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon its written request the Trustee or an
authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Note, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Note, or in lieu of
and in substitution for the Note so destroyed, lost or stolen. In every case,
the applicant for a substituted Note shall furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless for any loss,
liability, cost or expense caused by or connected with such substitution, and,
in every case of destruction, loss or theft, the applicant shall also furnish to
the Company, to the Trustee and, if applicable, to such authenticating agent
evidence to their satisfaction of the destruction, loss or theft of such Note
and of the ownership thereof.

         Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described in
the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Note and make available for delivery such
Note. Upon the issuance of any substituted Note, the Company may require the
payment by the holder of a sum sufficient to cover any tax, assessment or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. In case any Note which has matured or is about to
mature or has been called for redemption or has been tendered for repurchase
upon a Fundamental Change (and not withdrawn) or has been surrendered for
repurchase on a Repurchase Date (and not withdrawn) or is to be converted into
Common Stock shall become mutilated or be destroyed, lost or stolen, the Company
may, instead of issuing a substitute Note, pay or authorize the payment of or
convert or authorize the conversion of the same (without surrender thereof
except in the case of a mutilated Note), as the case may be, if the applicant
for such payment or conversion shall furnish to the Company, to the Trustee and,
if applicable, to such authenticating agent such security or indemnity as may be
required by them to save each of them harmless from any loss, liability, cost or
expense caused by or in connection with such substitution, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company, the
Trustee and, if

                                       19
<PAGE>

applicable, any Paying Agent or Conversion Agent evidence to their satisfaction
of the destruction, loss or theft of such Note and of the ownership thereof.

         Every substitute Note issued pursuant to the provisions of this Section
2.06 by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion or redemption
or repurchase of mutilated, destroyed, lost or stolen Notes and shall preclude
any and all other rights or remedies notwithstanding any law or statute existing
or hereafter enacted to the contrary with respect to the replacement or payment
or conversion or redemption or repurchase of negotiable instruments or other
securities without their surrender.

         Section 2.07. Temporary Notes. Pending the preparation of Notes in
certificated form, the Company may execute and the Trustee or any authenticating
agent appointed by the Trustee shall, upon the written request of the Company,
authenticate and deliver temporary Notes (printed or lithographed). Temporary
Notes shall be issuable in any authorized denomination, and substantially in the
form of the Notes in certificated form, but with such omissions, insertions and
variations as may be appropriate for temporary Notes, all as may be determined
by the Company. Every such temporary Note shall be executed by the Company and
authenticated by the Trustee or such authenticating agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the Notes in certificated form. Without unreasonable delay, the Company will
execute and deliver to the Trustee or such authenticating agent Notes in
certificated form and thereupon any or all temporary Notes may be surrendered in
exchange therefor, at each office or agency maintained by the Company pursuant
to Section 5.02 and the Trustee or such authenticating agent shall authenticate
and make available for delivery in exchange for such temporary Notes an equal
aggregate principal amount of Notes in certificated form. Such exchange shall be
made by the Company at its own expense and without any charge therefor. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits and subject to the same limitations under this Indenture as Notes in
certificated form authenticated and delivered hereunder.

         Section 2.08. Cancellation of Notes. All Notes surrendered for the
purpose of payment, redemption, repurchase, conversion, exchange or registration
of transfer shall, if surrendered to the Company or any Paying Agent or any Note
Registrar or any Conversion Agent, be surrendered to the Trustee and promptly
canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by
it, and no Notes shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture. The Trustee shall dispose of such
canceled Notes in accordance with its customary procedures. If the Company shall
acquire any of the Notes, such acquisition shall not operate as a redemption,
repurchase or satisfaction of the indebtedness represented by such Notes unless
and until the same are delivered to the Trustee for cancellation.

         Section 2.09. CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices

                                       20
<PAGE>

of redemption as a convenience to Noteholders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the "CUSIP" numbers.

         Section 2.10. Ranking. The indebtedness of the Company arising under or
in connection with this Indenture and every outstanding Security issued under
this Indenture from time to time constitutes and will constitute a senior
unsecured general obligation of the Company, ranking equally with other existing
and future senior unsecured Indebtedness of the Company and ranking senior in
right of payment to any future Indebtedness of the Company that is expressly
made subordinate to the Notes by the terms of such Indebtedness. For purposes of
this Section 2.10 only, "INDEBTEDNESS" means, without duplication, the principal
or face amount of (i) all obligations for borrowed money, (ii) all obligations
evidenced by notes, notes or other similar instruments, (iii) all obligations in
respect of letters of credit or bankers acceptances or similar instruments (or
reimbursement obligations with respect thereto), (iv) all obligations to pay the
deferred purchase price of property or services, (v) all obligations as lessee
which are capitalized in accordance with generally accepted accounting
principles, and (vi) all Indebtedness of others guaranteed by the Company or any
of its Subsidiaries or for which the Company or any of its Subsidiaries is
legally responsible or liable (whether by agreement to purchase indebtedness of,
or to supply funds or to invest in, others).

                                   ARTICLE 3
                       REDEMPTION AND REPURCHASE OF NOTES

         Section 3.01. Company's Right to Redeem. Prior to September 8, 2010,
the Notes will not be redeemable at the Company's option. At any time on or
after September 8, 2010 and prior to Stated Maturity, the Company, at its
option, may redeem the Notes in accordance with the provisions of Section 3.02,
Section 3.03 and Section 3.04 on the Redemption Date for cash, in whole or in
part, at a redemption price (the "REDEMPTION PRICE") equal to 100% of the
principal amount of the Notes to be redeemed together in each case with accrued
and unpaid Interest on the Notes redeemed to (but excluding) the Redemption
Date.

         Section 3.02. Notice of Optional Redemption; Selection of Notes.

         (a)      In case the Company shall desire to exercise the right to
redeem all or, as the case may be, any part of the Notes pursuant to Section
3.01, it shall fix a date for redemption (the "REDEMPTION DATE") and it or, at
its written request received by the Trustee not fewer than 35 days prior (or
such shorter period of time as may be acceptable to the Trustee) to the
Redemption Date, the Trustee in the name of and at the expense of the Company,
shall mail or cause to be mailed a notice of such redemption (a "REDEMPTION
NOTICE") not fewer than 30 nor more than 60 days prior to the Redemption Date to
each holder of Notes so to be redeemed as a whole or in part at its last address
as the same appears on the Note Register; provided that if the Company shall
give such notice, it shall also give written notice of the Redemption Date to
the Trustee. Such mailing shall be by first class mail. The notice, if mailed in
the manner herein provided, shall be conclusively presumed to have been duly
given, whether or not the holder receives such

                                       21
<PAGE>

notice. In any case, failure to give such notice by mail or any defect in the
notice to the holder of any Note designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption of any other
Note. Concurrently with the mailing of any such Redemption Notice, the Company
shall issue a press release announcing such redemption, the form and content of
which press release shall be determined by the Company in its sole discretion.
The failure to issue any such press release or any defect therein shall not
affect the validity of the Redemption Notice or any of the proceedings for the
redemption of any Note called for redemption.

         (b)      Each such Redemption Notice shall specify the aggregate
principal amount of Notes to be redeemed, the CUSIP number or numbers of the
Notes being redeemed, the Redemption Date (which shall be a Business Day), the
Redemption Price at which Notes are to be redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Notes, that Interest accrued to the Redemption Date will be paid as specified in
said notice, and that on and after said date Interest thereon or on the portion
thereof to be redeemed will cease to accrue. Such notice shall also state the
current Conversion Rate, the date on which the right to convert such Notes or
portions thereof into Common Stock will expire (which date shall not be later
than the close of business on the second Business Day prior to the Redemption
Date), whether the Company has elected to satisfy all or a portion of its
redemption obligation with cash and, if the Company has determined to satisfy
all or any portion of the conversion obligation in cash, the dollar amount of
the conversion to be satisfied in cash (which must be expressed either as 100%
of the conversion obligation or as a fixed dollar amount). If fewer than all the
Notes are to be redeemed, the Redemption Notice shall identify the Notes to be
redeemed (including CUSIP numbers, if any), in each case determined in
accordance with the procedure set forth in clause (d) hereof. In case any Note
is to be redeemed in part only, the Redemption Notice shall state the portion of
the principal amount thereof to be redeemed and shall state that, on and after
the Redemption Date, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion thereof will be issued by the
Company and authenticated by the Trustee (or an authenticating agent appointed
by the Trustee).

         (c)      On or prior to the Redemption Date specified in the Redemption
Notice given as provided in this Section 3.02, the Company will deposit with the
Trustee or with one or more Paying Agents (or, if the Company is acting as its
own Paying Agent, set aside, segregate and hold in trust as provided in Section
5.04 an amount of money in immediately available funds sufficient to redeem on
the Redemption Date all the Notes (or portions thereof) so called for redemption
(other than those theretofore surrendered for conversion into Common Stock) at
the appropriate Redemption Price; provided that if such payment is made on the
Redemption Date it must be received by the Trustee or Paying Agent, as the case
may be, by 10:00 a.m., New York City time, on such date. The Company shall be
entitled to retain any interest, yield or gain on amounts deposited with the
Trustee or any Paying Agent pursuant to this Section 3.02(c) in excess of
amounts required hereunder to pay the Redemption Price and accrued interest to,
but excluding, the Redemption Date. Subject to the last sentence of Section
8.05, if any Note called for redemption is converted pursuant hereto prior to
such Redemption Date, any money deposited with the Trustee or any Paying Agent
or so segregated and held in trust for the redemption of such Note shall be paid
to the Company upon its written request, or, if then held by the Company, shall
be discharged from such trust. Whenever any Notes are to be redeemed, the
Company will give the Trustee written notice in the form of an Officers'
Certificate not fewer

                                       22
<PAGE>

than 35 days (or such shorter period of time as may be acceptable to the
Trustee) prior to the Redemption Date as to the aggregate principal amount of
Notes to be redeemed.

         (d)      If less than all of the outstanding Notes are to be redeemed,
the Trustee shall select the Notes or portions thereof of the Global Note or the
Notes in certificated form to be redeemed (in principal amounts of $1,000 or
multiples thereof) by lot, on a pro rata basis or by another method the Trustee
deems fair and appropriate. If any Note selected for partial redemption is
submitted for conversion in part after such selection, the portion of such Note
submitted for conversion shall be deemed (so far as may be possible) to be from
the portion selected for redemption. The Notes (or portions thereof) so selected
shall be deemed duly selected for redemption for all purposes hereof,
notwithstanding that any such Note is submitted for conversion in part before
the mailing of the Redemption Notice.

         Upon any redemption of less than all of the outstanding Notes, the
Company and the Trustee may (but need not), solely for purposes of determining
the pro rata allocation among such Notes as are unconverted and outstanding at
the time of redemption, treat as outstanding any Notes surrendered for
conversion during the period of 15 days next preceding the mailing of a
Redemption Notice and may (but need not) treat as outstanding any Note
authenticated and delivered during such period in exchange for the unconverted
portion of any Note converted in part during such period.

         Section 3.03. Payment of Notes Called for Redemption by the Company. If
notice of redemption has been given as provided in Section 3.02, the Notes or
portion of Notes with respect to which such notice has been given shall, unless
converted into Common Stock pursuant to the terms hereof, become due and payable
on the Redemption Date and at the place or places stated in such notice at the
applicable Redemption Price, and on and after the Redemption Date (unless the
Company shall default in the payment of such Notes at the Redemption Price)
Interest on the Notes or portion of Notes so called for redemption shall cease
to accrue and, after the close of business on the second Business Day
immediately preceding the Redemption Date (unless the Company shall default in
the payment of such Notes at the Redemption Price) such Notes shall cease to be
convertible into Common Stock and, except as provided in Section 8.05, to be
entitled to any benefit or security under this Indenture, and the holders
thereof shall have no right in respect of such Notes except the right to receive
the Redemption Price thereof. On presentation and surrender of such Notes at a
place of payment in said notice specified, the said Notes or the specified
portions thereof shall be paid and redeemed by the Company at the applicable
Redemption Price; provided that if the applicable Redemption Date is an Interest
Payment Date, the Interest payable on such Interest Payment Date shall be paid
on such Interest Payment Date to the holders of record of such Notes on the
applicable record date instead of the holders surrendering such Notes for
redemption on such date.

         Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Notes so presented.

         Notwithstanding the foregoing, the Trustee shall not redeem any Notes
or mail any Redemption Notice during the continuance of a default in payment of
Interest on the Notes. If

                                       23
<PAGE>

any Note called for redemption shall not be so paid upon surrender thereof for
redemption, the principal shall, until paid or duly provided for, continue to
bear interest at the rate borne by the Note, compounded semi-annually, and such
Note shall remain convertible into Common Stock until the principal and Interest
shall have been paid or duly provided for.

         Section 3.04. Conversion Arrangement on Call for Redemption. In
connection with any redemption of Notes, the Company may arrange for the
purchase and conversion of any Notes by an agreement with one or more investment
banks or other purchasers to purchase such Notes by paying to the Trustee in
trust for the Noteholders, on or before the Redemption Date, an amount not less
than the applicable Redemption Price of such Notes. Notwithstanding anything to
the contrary contained in this Article 3, the obligation of the Company to pay
the Redemption Price of such Notes shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers. If such an
agreement is entered into, a copy of which will be filed with the Trustee prior
to the Redemption Date, any Notes not duly surrendered for conversion by the
holders thereof may, at the option of the Company, be deemed, to the fullest
extent permitted by law, acquired by such purchasers from such holders and
(notwithstanding anything to the contrary contained in Article 15) surrendered
by such purchasers for conversion, all as of immediately prior to the close of
business on the Redemption Date (and the right to convert any such Notes shall
be extended through such time), subject to payment of the above amount as
aforesaid. At the direction of the Company, the Trustee shall hold and dispose
of any such amount paid to it in the same manner as it would monies deposited
with it by the Company for the redemption of Notes. Without the Trustee's prior
written consent, no arrangement between the Company and such purchasers for the
purchase and conversion of any Notes shall increase or otherwise affect any of
the powers, duties, responsibilities, obligations, liabilities or immunities of
the Trustee as set forth in this Indenture.

         Section 3.05. Repurchase of Notes by the Company at Option of Holders
upon a Fundamental Change.

         (a)      If a Fundamental Change shall occur at any time prior to
Stated Maturity, each holder shall have the right, at such holder's option, to
require the Company to repurchase all of such holder's Notes, or any portion
thereof that is a multiple of $1,000 principal amount, on the date specified in
the Fundamental Change Repurchase Notice, which date shall be no more than 30
days after the date of the Fundamental Change Repurchase Notice (subject to
extension to comply with applicable law) (the "FUNDAMENTAL CHANGE REPURCHASE
DATE"). The Company shall repurchase such Notes at a price (the "FUNDAMENTAL
CHANGE REPURCHASE PRICE") equal to 100% of the principal amount thereof plus any
accrued and unpaid Interest to but excluding the Fundamental Change Repurchase
Date; provided that if such Fundamental Change Repurchase Date falls on an
Interest Payment Date, then the Interest payable on such Interest Payment Date
shall be paid to the holders of record of the Notes on the applicable record
date instead of the holders surrendering the Notes for repurchase on such date.

         (b)      On or before the 15th day after the occurrence of a
Fundamental Change, the Company, or at its written request the Trustee in the
name of and at the expense of the Company (which request must be received by the
Trustee at least five Business Days prior to the date the Trustee is requested
to give notice as described below, unless the Trustee shall agree to a shorter
period), shall mail or cause to be mailed, by first class mail, to all holders
of record on such date

                                       24
<PAGE>

a notice (the "FUNDAMENTAL CHANGE REPURCHASE NOTICE") of the occurrence of such
Fundamental Change and of the repurchase right at the option of the holders
arising as a result thereof to each holder of Notes at its last address as the
same appears on the Note Register; provided that if the Company shall give such
notice, it shall also give written notice of the Fundamental Change to the
Trustee at such time as it is mailed to Noteholders. Such notice, if mailed in
the manner herein provided, shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice. Each Fundamental Change
Repurchase Notice shall state:

                  (i)      the Fundamental Change Repurchase Price, excluding
         accrued and unpaid Interest, the applicable Conversion Rate at the time
         of such notice (and any applicable adjustments to the Conversion Rate)
         and, to the extent known at the time of such notice, the amount of
         Interest that will be payable with respect to the Notes on the
         Fundamental Change Repurchase Date;

                  (ii)     the events causing the Fundamental Change and the
         date of the Fundamental Change;

                  (iii)    the Fundamental Change Repurchase Date;

                  (iv)     the last date on which a holder may exercise the
         repurchase right;

                  (v)      the name and address of the Paying Agent and the
         Conversion Agent;

                  (vi)     that Notes as to which a Fundamental Change
         Repurchase Election has been given by the holder may be converted only
         if the election has been withdrawn by the holder in accordance with the
         terms of this Indenture; provided that the Notes are otherwise
         convertible in accordance with Section 15.01;

                  (vii)    that the holder shall have the right to withdraw any
         Notes surrendered prior to the close of business on the Business Day
         immediately preceding the Fundamental Change Repurchase Date (or any
         such later time as may be required by applicable law);

                  (viii)   a description of the procedure which a Noteholder
         must follow to exercise such repurchase right or to withdraw any
         surrendered Notes;

                  (ix)     the CUSIP number or numbers of the Notes (if then
         generally in use); and

                  (x)      briefly, the conversion rights of the Notes and
         whether, at the time of such notice, the Notes are eligible for
         conversion.

         No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders' repurchase rights or affect the validity of
the proceedings for the repurchase of the Notes pursuant to this Section 3.05.

         (c)      Notes shall be repurchased pursuant to this Section 3.05 at
the option of the holder upon:

                                       25
<PAGE>

                  (i)      delivery to the Trustee (or other Paying Agent
         appointed by the Company) by a holder of a duly completed notice (a
         "FUNDAMENTAL CHANGE REPURCHASE ELECTION") in the form set forth on the
         reverse of the Note at any time prior to the close of business on the
         Business Day immediately preceding the Fundamental Change Repurchase
         Date stating:

                           (A)      if certificated, the certificate numbers of
                  the Notes which the holder shall deliver to be repurchased;

                           (B)      the portion of the principal amount of the
                  Notes that the holder shall deliver to be repurchased, which
                  portion must be $1,000 or an integral multiple thereof, and

                           (C)      that such Notes shall be repurchased as of
                  the Fundamental Change Repurchase Date pursuant to the terms
                  and conditions specified in the Notes and in the Indenture;
                  and

                  (ii)     delivery or book-entry transfer of the Notes to the
         Trustee (or other Paying Agent appointed by the Company) simultaneously
         with or at any time after delivery of the Fundamental Change Repurchase
         Election (together with all necessary endorsements) at the Corporate
         Trust Office of the Trustee (or other Paying Agent appointed by the
         Company) in the Borough of Manhattan, such delivery or transfer being a
         condition to receipt by the holder of the Fundamental Change Repurchase
         Price therefor; provided that such Fundamental Change Repurchase Price
         shall be so paid pursuant to this Section 3.05 only if the Notes so
         delivered or transferred to the Trustee (or other Paying Agent
         appointed by the Company) shall conform in all respects to the
         description thereof in the related Fundamental Change Repurchase
         Election. All questions as to the validity, eligibility (including time
         of receipt) and acceptance of any Note for repurchase shall be
         determined by the Company, whose determination shall be final and
         binding absent manifest error.

         Section 3.06. Repurchase of Notes by the Company at Option of Holders
on Specified Dates.

         (a)      On each of September 1, 2008, September 1, 2010, September 1,
2013, September 1, 2018, September 1, 2023 and September 1, 2028 (each, a
"COMPANY REPURCHASE DATE"), each holder shall have the right, at such holder's
option, to require the Company to repurchase all of such holder's Notes, or any
portion thereof that is a multiple of $1,000 principal amount. The Company shall
repurchase such Notes at a price (the "COMPANY REPURCHASE PRICE") equal to 100%
of the principal amount thereof plus any accrued and unpaid Interest to but
excluding the Company Repurchase Date; provided that if such Company Repurchase
Date falls on an Interest Payment Date, then the Interest payable on such
Interest Payment Date shall be paid to the holders of record of the Notes on the
applicable record date instead of the holders surrendering the Notes for
repurchase on such date.

         (b)      On or before the 25th Business Day prior to each Company
Repurchase Date, the Company, or at its written request the Trustee in the name
of and at the expense of the Company

                                       26
<PAGE>

(which request must be received by the Trustee at least five Business Days prior
to the date the Trustee is requested to give notice as described below, unless
the Trustee shall agree to a shorter period), shall mail or cause to be mailed,
by first class mail, to all holders of record on such date a notice (the
"COMPANY REPURCHASE NOTICE") to each holder of Notes at its last address as the
same appears on the Note Register; provided that if the Company shall give such
notice, it shall also give written notice to the Trustee at such time as it is
mailed to Noteholders. Such notice, if mailed in the manner herein provided,
shall be conclusively presumed to have been duly given, whether or not the
holder receives such notice. Each Company Repurchase Notice shall state:

                  (i)      the Company Repurchase Price, excluding accrued and
         unpaid Interest, the applicable Conversion Rate at the time of such
         notice (and any applicable adjustments to the Conversion Rate) and, to
         the extent known at the time of such notice, the amount of Interest
         that will be payable with respect to the Notes on the Company
         Repurchase Date;

                  (ii)     whether the Company elects to pay the Company
         Repurchase Price in cash, in shares of Common Stock or a combination
         thereof, specifying the percentage or amounts of each;

                  (iii)    if the Company elects to pay any portion of the
         Company Repurchase Price in shares of Common Stock, the method of
         calculating the Market Price of the Common Stock;

                  (iv)     the Company Repurchase Date;

                  (v)      the last date on which a holder may exercise the
         repurchase right;

                  (vi)     the name and address of the Paying Agent and the
         Conversion Agent;

                  (vii)    that Notes as to which a Company Repurchase Election
         has been given by the holder may be converted only if the election has
         been withdrawn by the holder in accordance with the terms of this
         Indenture; provided that the Notes are otherwise convertible in
         accordance with Section 15.01;

                  (viii)   that the holder shall have the right to withdraw any
         Notes surrendered prior to the close of business on the Business Day
         immediately preceding the Company Repurchase Date (or any such later
         time as may be required by applicable law);

                  (ix)     a description of the procedure which a Noteholder
         must follow to exercise such repurchase right or to withdraw any
         surrendered Notes;

                  (x)      the CUSIP number or numbers of the Notes (if then
         generally in use); and

                  (xi)     briefly, the conversion rights of the Notes and
         whether, at the time of such notice, the Notes are eligible for
         conversion.

         No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders' repurchase rights or affect the validity of
the proceedings for the repurchase of

                                       27
<PAGE>

the Notes pursuant to this Section 3.06. Simultaneously with providing such
notice, the Company will publish a notice containing this information in a
newspaper of general circulation in The City of New York or the Company will
issue a press release and publish the information on the Company's website or
through such other public medium as the Company may use at that time.

         (c)      Notes shall be repurchased pursuant to this Section 3.06 at
the option of the holder upon:

                  (i)      delivery to the Trustee (or other Paying Agent
         appointed by the Company) by a holder of a duly completed notice (a
         "COMPANY REPURCHASE ELECTION") in the form set forth on the reverse of
         the Note at any time from the opening of business on the 20th Business
         Day preceding the Company Repurchase Date until the close of business
         on the Business Day immediately preceding the Company Repurchase Date
         stating:

                           (A)      if certificated, the certificate numbers of
                  the Notes which the holder shall deliver to be repurchased;

                           (B)      the portion of the principal amount of the
                  Notes that the holder shall deliver to be repurchased, which
                  portion must be $1,000 or an integral multiple thereof,

                           (C)      that such Notes shall be repurchased as of
                  the Company Repurchase Date pursuant to the terms and
                  conditions specified in the Notes and in the Indenture; and

                           (D)      in the event the Company elects to pay the
                  Company Repurchase Price, in whole or in part, in shares of
                  Common Stock but such portion of the Company Repurchase Price
                  shall ultimately be paid to such holder entirely in cash
                  because any of the conditions to payment of the Company
                  Repurchase Price in shares of Common Stock is not satisfied
                  prior to the close of business on the Business Day prior to
                  the relevant Company Repurchase Date, whether such holder
                  elects (i) to withdraw the Company Repurchase Election as to
                  some or all of the Notes to which such election relates
                  (stating the principal amount and certificate numbers, if any,
                  of the Notes as to which such withdrawal shall relate), or
                  (ii) to receive cash in respect of the entire Repurchase Price
                  for all Notes (or portions thereof) to which such election
                  relates;; and

                  (ii)     delivery or book-entry transfer of the Notes to the
         Trustee (or other Paying Agent appointed by the Company) simultaneously
         with or at any time after delivery of the Company Repurchase Election
         (together with all necessary endorsements) at the Corporate Trust
         Office of the Trustee (or other Paying Agent appointed by the Company)
         in the Borough of Manhattan, such delivery or transfer being a
         condition to receipt by the holder of the Company Repurchase Price
         therefor; provided that such Company Repurchase Price shall be so paid
         pursuant to this Section 3.06 only if the Notes so delivered or
         transferred to the Trustee (or other Paying Agent appointed by the
         Company) shall conform in all respects to the description thereof in
         the related Company

                                       28
<PAGE>

         Repurchase Election. All questions as to the validity, eligibility
         (including time of receipt) and acceptance of any Note for repurchase
         shall be determined by the Company, whose determination shall be final
         and binding absent manifest error.

         If a holder fails to indicate on such holders' Company Repurchase
Election such holder's choice with respect to the election set forth in Section
3.06(c)(i)(D), such holder shall be deemed to have elected to receive cash in
respect of the entire Company Repurchase Price for all Notes subject to such
Company Repurchase Election in the circumstances set forth in Section
3.06(c)(i)(D).

         Section 3.07. Company's Right to Elect Manner of Payment of Repurchase
Price.

         (a)      The Notes to be repurchased by the Company on any Company
Repurchase Date pursuant to Section 3.06 (other than the Company Repurchase Date
occurring on September 1, 2008) may be paid for, in whole or in part, at the
election of the Company, in U.S. legal tender ("CASH") or shares of Common
Stock, or in any combination of cash and shares of Common Stock, subject to the
conditions set forth in Section 3.07(e). The Company Repurchase Price with
respect to the Company Repurchase Date occurring on September 1, 2008 and the
Notes to be repurchased by the Company on any Fundamental Change Repurchase Date
pursuant to Section 3.05 shall be paid only in cash. The Company shall designate
in its Repurchase Notice whether the Company will purchase the Notes for cash or
shares of Common Stock, or, if a combination thereof, the percentage of the
Repurchase Price that it will pay in cash and the percentage that it will pay in
shares of Common Stock; provided that the Company will pay cash for accrued and
unpaid Interest and for fractional interests in shares of Common Stock in an
amount based upon the Market Price of such fractional shares. For purposes of
determining the amount of any fractional interests, all Notes subject to
repurchase held by a holder shall be considered together (no matter how many
separate certificates are to be presented).

         (b)      Each holder whose Notes are repurchased pursuant to Section
3.05 or Section 3.06 shall receive the same percentage of cash or shares of
Common Stock in payment of the Repurchase Price for such Notes as any other
holder whose Notes are repurchased, except (i) as provided in Section 3.07(a)
with regard to the payment of cash in lieu of fractional shares of Common Stock
and (ii) in the event that the Company is unable to purchase the Notes of a
holder or holders for shares of Common Stock because any necessary
qualifications or registrations of the shares of Common Stock under applicable
state securities laws cannot be obtained, or because the conditions to
purchasing the Notes for shares of Common Stock set forth in Section 3.07(e)
have not been satisfied, the Company may purchase the Notes of such holder or
holders for cash. The Company may not change its election with respect to the
consideration (or components or percentages of components thereof) to be paid
once the Company has given its Repurchase Notice to holders except pursuant to
Section 3.07(e) in the event of a failure to satisfy, prior to the close of
business on the Business Day immediately preceding the Repurchase Date, any
condition to the payment of the Repurchase Price in whole or in part in shares
of Common Stock.

         (c)      At least three Business Days before the date of any Repurchase
Notice, the Company shall deliver an Officers' Certificate to the Trustee
specifying:

                                       29
<PAGE>

                  (i)      the manner of payment selected by the Company;

                  (ii)     the information required to be included in the
         Repurchase Notice;

                  (iii)    if the Company elects to pay the Repurchase Price, or
         a specified percentage thereof, in shares of Common Stock, that the
         conditions to such manner of payment set forth in Section 3.07(e) have
         been or will be complied with; and

                  (iv)     whether the Company desires the Trustee to give the
         Repurchase Notice required.

         (d)      If the Company elects to pay the Repurchase Price, or any
percentage thereof, with respect to a Repurchase Date in shares of Common Stock,
the number of shares of Common Stock to be delivered with respect to each $1,000
principal amount of Notes shall be equal to the quotient obtained by dividing
(i) the dollar amount of the Repurchase Price (not including any accrued and
unpaid Interest) to be paid in shares of Common Stock by (ii) the Market Price
with respect to such Repurchase Date, provided that no fractional shares will be
delivered.

         (e)      The Company's right to elect to pay some or all of the
Repurchase Price with respect to a Repurchase Date by delivering shares of
Common Stock shall be conditioned upon:

                  (i)      the Company giving timely notice of its election and
         not having previously given notice of an election to pay the Repurchase
         Price with respect to such Repurchase Date entirely in cash;

                  (ii)     the approval for listing of such shares of Common
         Stock on a national securities exchange or the approval for quotation
         of such shares of Common Stock in an inter-dealer quotation system of
         any registered United States national securities association;

                  (iii)    information necessary to calculate the Market Price
         being published in a daily newspaper of national circulation or being
         otherwise readily publicly available;

                  (iv)     the registration of such shares of Common Stock under
         the Securities Act and the Exchange Act, in each case if required;

                  (v)      any necessary qualification or registration under
         applicable state securities laws or the availability of an exemption
         from such qualification and registration; and

                  (vi)     the receipt by the Trustee of an Officers'
         Certificate and an Opinion of Counsel each stating that (A) the terms
         of the issuance of the shares of Common Stock are in conformity with
         this Indenture and (B) the shares of Common Stock to be issued by the
         Company in payment of the Repurchase Price in respect of Notes have
         been duly authorized and, when issued and delivered pursuant to the
         terms of this Indenture in payment of the Repurchase Price, will be
         validly issued, fully paid and non-assessable and free from preemptive
         rights under the Company's Certificate of Incorporation and By-laws and
         the Delaware General Corporation Law, and, in the case of such
         Officers' Certificate, stating that each of the conditions in clauses
         (i) through (v) above and the

                                       30
<PAGE>

         condition set forth in the second succeeding sentence have been
         satisfied and, in the case of such Opinion of Counsel, stating that the
         condition in clause (iv) above has been satisfied. Such Officers'
         Certificate shall also set forth the number of shares of Common Stock
         to be issued for each $1,000 principal amount of Notes and the Last
         Reported Sale Price on each Trading Day during the period during which
         the Market Price with respect to such Repurchase Date is to be
         calculated.

         If the foregoing conditions are not satisfied with respect to a holder
or holders prior to the close of business on the Business Day immediately
preceding the Repurchase Date, the Company shall pay the entire Repurchase Price
of the Notes of such holder or holders in cash.

         Upon determination of the actual number of shares of Common Stock to be
issued upon repurchase of Notes, the Company shall be required to disseminate a
press release through Dow Jones & Company, Inc. or Bloomberg Business News
containing this information or publish the information on the Company's Web site
or through such other public medium as the Company may use at that time.

         (f) All shares of Common Stock delivered upon purchase of the Notes
shall be newly issued shares or treasury shares, shall be duly authorized,
validly issued, fully paid and non-assessable, and shall be free from preemptive
rights and free of any lien or adverse claim.

         (g) If a holder is paid some or all of the Repurchase Price with
respect to such holder's Notes in shares of Common Stock, the Company shall pay
any documentary, stamp or similar issue or transfer tax due on such issue of
Common Stock; provided that the holder shall pay any such tax which is due
because the holder requests the Common Stock to be issued in a name other than
that of the holder. The Paying Agent may refuse to deliver the certificates
representing the shares of Common Stock being issued in a name other than the
holder's name until the Paying Agent receives a sum sufficient to pay any tax
which will be due because the shares of Common Stock are to be issued in a name
other than the holder's name. Nothing herein shall preclude any income tax
withholding required by law or regulations.

         Notwithstanding anything to the contrary in this Indenture, the Company
may, by execution and delivery to the Trustee of a supplemental indenture,
without the consent of any holders, extinguish the Company's right to pay any
part of the Purchase Price with Common Stock with respect to any purchase of
Notes by the Company at the option of the holders occurring on a date after the
date of such supplemental indenture, pursuant to Section 11.01.

         Section 3.08. Conditions and Procedures for Repurchase at Option of
Holders.

         (a)      The Company shall repurchase from the holder thereof, pursuant
to Section 3.05 or Section 3.06, a portion of a Note, if the principal amount of
such portion is $1,000 or a whole multiple of $1,000. Provisions of this
Indenture that apply to the repurchase of all of a Note also apply to the
repurchase of such portion of such Note. Upon presentation of any Note
repurchased in part only, the Company shall execute and the Trustee shall
authenticate and make available for delivery to the holder thereof, at the
expense of the Company, a new Note or Notes, of any authorized denomination, in
aggregate principal amount equal to the portion of the Notes presented not
repurchased.

                                       31
<PAGE>

         (b)      On or prior to a Repurchase Date, the Company will deposit
with the Trustee or with one or more Paying Agents (or, if the Company is acting
as its own Paying Agent, set aside, segregate and hold in trust as provided in
Section 5.04) an amount of cash and/or shares of Common Stock, as applicable,
sufficient to repurchase on the Repurchase Date all the Notes or portions
thereof to be repurchased on such date at the Repurchase Price; provided that if
such deposit is made on the Repurchase Date it must be received by the Trustee
or Paying Agent, as the case may be, by 10:00 a.m., New York City time, on such
date.

         If the Trustee or other Paying Agent appointed by the Company, or the
Company or an Affiliate of the Company, if it or such Affiliate is acting as the
Paying Agent, holds cash or shares of Common Stock sufficient to pay the
aggregate Repurchase Price of all the Notes or portions thereof that are to be
repurchased as of the Repurchase Date, on or after the Repurchase Date (i) such
Notes will cease to be outstanding, (ii) Interest on such Notes will cease to
accrue and (iii) all other rights of the holders of such Notes will terminate,
whether or not book-entry transfer of the Notes has been made or the Notes have
been delivered to the Trustee or Paying Agent, other than the right to receive
the Repurchase Price upon delivery of the Notes.

         (c)      Upon receipt by the Trustee (or other Paying Agent appointed
by the Company) of a Repurchase Election, the holder of the Note in respect of
which such Repurchase Election was given shall (unless such notice is validly
withdrawn) thereafter be entitled to receive solely the Repurchase Price with
respect to such Note. Such Repurchase Price shall be paid to such holder,
subject to receipt of funds and/or Notes by the Trustee (or other Paying Agent
appointed by the Company), promptly (but in no event more than five Business
Days) following the later of (x) the Repurchase Date with respect to such Note
(provided the holder has satisfied the conditions in Section 3.05(c) or Section
3.06(c), as applicable) and (y) the time of delivery of such Note to the Trustee
(or other Paying Agent appointed by the Company) by the holder thereof in the
manner required by Section 3.05(c) or Section 3.06(c), as applicable. Notes in
respect of which a Repurchase Election has been given by the holder thereof may
not be converted pursuant to Article 15 hereof on or after the date of the
delivery of such Repurchase Election unless such notice has first been validly
withdrawn.

         (d)      Notwithstanding anything herein to the contrary, any holder
delivering to the office of the Trustee (or other Paying Agent appointed by the
Company) a Repurchase Election shall have the right to withdraw such election at
any time prior to the close of business on the Business Day preceding the
Repurchase Date (or any such later time as may be required by applicable law) by
delivery of a written notice of withdrawal to the Trustee (or other Paying Agent
appointed by the Company) specifying:

                  (i)      the certificate number, if any, of the Note in
         respect of which such notice of withdrawal is being submitted, or the
         appropriate Depositary information if the Note in respect of which such
         notice of withdrawal is being submitted is represented by a Global
         Note,

                  (ii)     the principal amount of the Note with respect to
         which such notice of withdrawal is being submitted, and

                                       32
<PAGE>

                  (iii)    the principal amount, if any, of such Note which
         remains subject to the original Repurchase Election and which has been
         or will be delivered for repurchase by the Company.

         The Trustee (or other Paying Agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Repurchase Election or
written notice of withdrawal thereof.

         (e)      The Company will comply with the provisions of Rule 13e-4 and
any other tender offer rules under the Exchange Act to the extent then
applicable in connection with the repurchase rights of the holders of Notes in
the event of a Fundamental Change or on any Company Repurchase Date. If then
required by applicable law, the Company will file a Schedule TO or any other
schedule required in connection with such repurchase.

         (f)      There shall be no repurchase of any Notes pursuant to Section
3.05 or Section 3.06 if there has occurred at any time prior to, and is
continuing on, the Repurchase Date an Event of Default (other than an Event of
Default that is cured by the payment of the Repurchase Price with respect to
such Notes). The Paying Agent will promptly return to the respective holders
thereof any Notes (x) with respect to which a Repurchase Election has been
withdrawn in compliance with this Indenture, or (y) held by it during the
continuance of an Event of Default (other than a default in the payment of the
Repurchase Price with respect to such Notes) in which case, upon such return,
the Repurchase Election with respect thereto shall be deemed to have been
withdrawn.

         (g)      The Trustee (or other Paying Agent appointed by the Company)
shall return to the Company any cash that remains unclaimed as provided in
Section 13.03, together with interest, if any, thereon, held by them for the
payment of the Repurchase Price; provided that to the extent that the aggregate
amount of cash deposited by the Company pursuant to Section 3.08(b) exceeds the
aggregate Repurchase Price of the Notes or portions thereof which the Company is
obligated to purchase as of the Repurchase Date then, unless otherwise agreed in
writing with the Company, promptly after the Business Day following the
Repurchase Date, the Trustee shall return any such excess to the Company
together with interest, if any, thereon.

         (h)      In the case of a reclassification, change, consolidation,
merger, combination, sale or conveyance to which Section 15.06 applies, in which
the Common Stock of the Company is changed or exchanged as a result into the
right to receive stock, securities or other property or assets (including cash),
which includes shares of Common Stock of the Company or shares of common stock
of another Person that are, or upon issuance will be, traded on a United States
national securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares constitute
at the time such change or exchange becomes effective in excess of 50% of the
aggregate fair market value of such stock, securities or other property or
assets (including cash) (as determined by the Company, which determination shall
be conclusive and binding), then the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as the case may be,
shall execute and deliver to the Trustee a supplemental indenture (accompanied
by an Opinion of Counsel that such supplemental indenture complies with the
Trust Indenture Act as in force at the date of execution of such supplemental
indenture) modifying the provisions of this Indenture relating to the right of
holders of the Notes to cause the Company to repurchase the Notes following a

                                       33
<PAGE>

Fundamental Change and the provisions of this Indenture relating to the
Company's option to deliver shares of Common Stock in payment of the Repurchase
Price, including without limitation the applicable provisions of this Article 3
and the definitions of Common Stock and Fundamental Change, as appropriate, as
determined in good faith by the Company (which determination shall be conclusive
and binding), to make such provisions apply to such other Person if different
from the Company and the common stock issued by such Person (in lieu of the
Company and the Common Stock of the Company).

         Section 3.09. Final Maturity Notice. On the Final Notice Date, the
Company, or at its written request the Trustee in the name of and at the expense
of the Company (which request must received at least five Business Days prior to
the Final Notice Date (unless the Trustee shall agree to a shorter notice
period) shall mail or cause to be mailed, by first class mail, to all holders of
record on such Final Notice Date a notice (the "FINAL MATURITY NOTICE") of the
final maturity of the Notes to each holder of the Notes at its last address as
the same appears on the Note Register, provided that if the Company shall give
such notice, it shall also give written notice of the final maturity of the
Notes to the Trustee at the same time it is mailed to Noteholders. Such notice,
if mailed in the manner herein provided, shall be conclusively presumed to have
been duly given, whether or not the holder receives such notice. Such notice
shall state:

                  (i)      the final maturity date of the Notes;

                  (ii)     the CUSIP number or numbers of the Notes (if then
         generally in use);

                  (iii)    briefly, the conversion rights of the Notes and
         whether, at the time of such notice, the Notes are eligible for
         conversion; and

                  (iv)     if the Notes are eligible for conversion and the
         Company determines to satisfy all or any portion of the conversion
         obligation with respect to conversions after the Final Notice Date in
         cash, the dollar amount of the conversion to be satisfied in cash
         (which must be expressed either as 100% of the conversion obligation or
         as a fixed dollar amount).

                                   ARTICLE 4
                                    INTEREST

         Section 4.01. Contingent Interest. Additional interest ("CONTINGENT
INTEREST") will accrue on each Note beginning with the period commencing on
September 8, 2010 and ending on February 28, 2011, and for each of the six-month
periods thereafter commencing on March 1, 2011, if the average Trading Price of
the Notes during the Applicable Five-Day Trading Period with respect to such
Interest Period equals 120% or more of the principal amount of the Notes. If
Contingent Interest accrues during an Interest Period pursuant to the preceding
sentence, the amount of Contingent Interest payable with respect to such
Interest Period per $1,000 principal amount of Notes shall equal an annual rate
of 0.25% of the average Trading Price during the Applicable Five-Day Trading
Period with respect to such Interest Period.

         The Trustee's sole responsibility pursuant to this Section 4.01 shall
be to obtain the Trading Price of the Notes for each Trading Day during the
Applicable Five-Day Trading Period and to provide such information to the
Company, to the extent that the Trustee is then the Bid Solicitation Agent. The
Company shall determine whether holders are entitled to receive

                                       34
<PAGE>

Contingent Interest, and if so, provide notice pursuant to Section 4.03.
Notwithstanding any term contained in this Indenture or any other document to
the contrary, the Trustee shall have no responsibilities, duties or obligations
for or with respect to (i) determining whether the Company must pay Contingent
Interest or (ii) determining the amount of Contingent Interest, if any, payable
by the Company.

         Section 4.02. Payment of Contingent Interest. Contingent Interest for
any Interest Period shall be paid on the immediately succeeding Interest Payment
Date to the Person in whose name any Note (or its Predecessor Note) is
registered on the Note Register at the close of business on the corresponding
Regular Record Date. Contingent Interest due under this Article 4 shall be
treated for all purposes of this Indenture like any other interest accruing on
the Notes.

         Section 4.03. Contingent Interest Notification. No later than the first
Business Day of an Interest Period for which Contingent Interest will be
payable, the Company will disseminate a press release through Dow Jones &
Company, Inc. or Bloomberg Business News stating that Contingent Interest will
be paid on the Notes and identifying the Interest Period or publish the
information on its Web site or through such other public medium as it may use at
that time.

                                   ARTICLE 5
                       PARTICULAR COVENANTS OF THE COMPANY

         Section 5.01. Payment of Principal and Interest. The Company covenants
and agrees that it will duly and punctually pay or cause to be paid the
principal of (including any Redemption Price or Repurchase Price pursuant to
Article 3) and Interest on each of the Notes at the places, at the respective
times and in the manner provided herein and in the Notes.

         Section 5.02. Maintenance of Office or Agency. The Company will
maintain an office or agency in the Borough of Manhattan, The City of New York,
where the Notes may be surrendered for registration of transfer or exchange or
for presentation for payment or for conversion, redemption or repurchase and
where notices and demands to or upon the Company in respect of the Notes and
this Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency not designated or appointed by the Trustee. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office.

         The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations.
The Company will give prompt written notice of any such designation or
rescission and of any change in the location of any such other office or agency.

         The Company hereby initially designates the Trustee as Paying Agent,
Note Registrar, Custodian and Conversion Agent, and each of the Corporate Trust
Office and the office of agency of the Trustee in the Borough of Manhattan shall
be considered as one such office or agency of the Company for each of the
aforesaid purposes.

                                       35
<PAGE>

         So long as the Trustee is the Note Registrar, the Trustee agrees to
mail, or cause to be mailed, the notices set forth in Section 8.10(a) and the
third paragraph of Section 8.11. If co-registrars have been appointed in
accordance with this Section, the Trustee shall mail such notices only to the
Company and the holders of Notes it can identify from its records.

         Section 5.03. Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.

         Section 5.04. Provisions as to Paying Agent. (a) If the Company shall
appoint a Paying Agent other than the Trustee, or if the Trustee shall appoint
such a Paying Agent, the Company will cause such Paying Agent to execute and
deliver to the Trustee an instrument in which such Paying Agent shall agree with
the Trustee, subject to the provisions of this Section 5.04:

                  (1)      that it will hold all sums held by it as such agent
         for the payment of the principal of or Interest on the Notes (whether
         such sums have been paid to it by the Company or by any other obligor
         on the Notes) in trust for the benefit of the holders of the Notes;

                  (2)      that it will give the Trustee notice of any failure
         by the Company (or by any other obligor on the Notes) to make any
         payment of the principal of or Interest on the Notes when the same
         shall be due and payable; and

                  (3)      that at any time during the continuance of an Event
         of Default, upon request of the Trustee, it will forthwith pay to the
         Trustee all sums so held in trust.

         The Company shall, on or before each due date of the principal of or
Interest on the Notes, deposit with the Paying Agent a sum (in funds which are
immediately available on the due date for such payment) sufficient to pay such
principal or Interest, and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of any failure to take such action; provided
that if such deposit is made on the due date, such deposit shall be received by
the Paying Agent by 10:00 a.m., New York City time, on such date.

         (b)      If the Company shall act as its own Paying Agent, it will, on
or before each due date of the principal of or Interest on the Notes, set aside,
segregate and hold in trust for the benefit of the holders of the Notes a sum
sufficient to pay such principal or Interest so becoming due and will promptly
notify the Trustee of any failure to take such action and of any failure by the
Company (or any other obligor under the Notes) to make any payment of the
principal of or Interest on the Notes when the same shall become due and
payable.

         (c)      Anything in this Section 5.04 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any Paying Agent hereunder
as required by this Section 5.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any Paying Agent
to the Trustee, the Company or such Paying Agent shall be released from all
further liability with respect to such sums.

                                       36
<PAGE>

         (d)      Anything in this Section 5.04 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 5.04 is subject
to Sections 13.02 and 13.03.

         The Trustee shall not be responsible for the actions of any other
Paying Agents (including the Company if acting as its own Paying Agent) and
shall have no control of any funds held by such other Paying Agents.

         Section 5.05. Existence. Subject to Article 12, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided that the
Company shall not be required to preserve any such right if the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and that the loss thereof is not disadvantageous in
any material respect to the Noteholders.

         Section 5.06. Rule 144A Information Requirement. Within the period
prior to the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Notes or any Common Stock issued upon conversion thereof
which continue to be Restricted Securities in connection with any sale thereof
and any prospective purchaser of Notes or such Common Stock designated by such
holder or beneficial holder, the information required pursuant to Rule
144A(d)(4) under the Securities Act upon the request of any holder or beneficial
holder of the Notes or such Common Stock and it will take such further action as
any holder or beneficial holder of such Notes or such Common Stock may
reasonably request, all to the extent required from time to time to enable such
holder or beneficial holder to sell its Notes or Common Stock without
registration under the Securities Act within the limitation of the exemption
provided by Rule 144A, as such Rule may be amended from time to time. Upon the
request of any holder or any beneficial holder of the Notes or such Common
Stock, the Company will deliver to such holder a written statement as to whether
it has complied with such requirements.

         Section 5.07. Stay, Extension and Usury Laws. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of or
Interest on the Notes as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Indenture and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.

         Section 5.08. Compliance Certificate. The Company shall deliver to the
Trustee, within 120 days after the end of each fiscal year of the Company (which
fiscal year of the Company is presently the twelve calendar months ending
December 31), a certificate signed by either the principal executive officer,
principal financial officer or principal accounting officer of the Company,
stating whether or not to the best knowledge of the signer thereof the Company
is in

                                       37
<PAGE>

default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and the status thereof of
which the signer may have knowledge.

         The Company will deliver to the Trustee, promptly upon becoming aware
of (i) any default in the performance or observance of any covenant, agreement
or condition contained in this Indenture, or (ii) any Event of Default, an
Officers' Certificate specifying with particularity such default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.

         Any notice required to be given under this Section 5.08 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.

         Section 5.09. Additional Amounts Notice. In the event that the Company
is required to pay Additional Amounts to holders of Notes pursuant to the
Registration Rights Agreement, the Company will provide written notice
("ADDITIONAL AMOUNTS NOTICE") to the Trustee of its obligation to pay Additional
Amounts no later than 15 days prior to the proposed payment date for the
Additional Amounts, and the Additional Amounts Notice shall set forth the amount
of Additional Amounts to be paid by the Company on such payment date. The
Trustee shall not at any time be under any duty or responsibility to any holder
of Notes to determine the Additional Amounts, or with respect to the nature,
extent or calculation of the amount of Additional Amounts when made, or with
respect to the method employed in such calculation of the Additional Amounts.

         Section 5.10. Contingent Debt Tax Treatment. The Company agrees and, by
acceptance of a Note, each beneficial holder of a Note will be deemed to have
agreed to treat the Notes as indebtedness of the Company for U.S. federal income
tax purposes that are subject to the regulations governing contingent payment
debt instruments and to be bound (in the absence of an administrative
determination or judicial ruling to the contrary) by the Company's determination
of the comparable yield and projected payment schedule within the meaning of the
regulations governing contingent payment debt instruments. A holder of Notes may
obtain the amount of original issue discount, issue date, yield to maturity,
comparable yield and projected payment schedule for the Notes, determined by the
Company pursuant to Treas. Reg. Sec. 1.1275-4, by submitting a written request
for it to the Company at the following address: Apria Healthcare Group Inc.,
26220 Enterprise Court, Lake Forest, California 92630, Attention: Treasurer.

                                   ARTICLE 6
          NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

         Section 6.01. Noteholders' Lists. The Company covenants and agrees that
it will furnish or cause to be furnished to the Trustee, semiannually, not more
than 15 days after each September 1 and March 1 in each year beginning with
March 1, 2004, and at such other times as the Trustee may request in writing,
within 30 days after receipt by the Company of any such request (or such lesser
time as the Trustee may reasonably request in order to enable it to timely
provide any notice to be provided by it hereunder), a list in such form as the
Trustee may reasonably require of the names and addresses of the holders of
Notes as of a date not more than

                                       38
<PAGE>

15 days (or such other date as the Trustee may reasonably request in order to
so provide any such notices) prior to the time such information is furnished,
except that no such list need be furnished by the Company to the Trustee so long
as the Trustee is acting as the sole Note Registrar.

         Section 6.02. Preservation and Disclosure of Lists. (a) The Trustee
shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Notes contained in
the most recent list furnished to it as provided in Section 6.01 or maintained
by the Trustee in its capacity as Note Registrar or co-registrar in respect of
the Notes, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 6.01 upon receipt of a new list so furnished.

         (b)      The rights of Noteholders to communicate with other holders of
Notes with respect to their rights under this Indenture or under the Notes, and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.

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

         Section 6.03. Reports by Trustee. (a) Within 60 days after May 15 of
each year commencing with the year 2004, the Trustee shall transmit to holders
of Notes such reports dated as of May 15 of the year in which such reports are
made concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto. In the event that no events have occurred under the
applicable sections of the Trust Indenture Act, the Trustee shall be under no
duty or obligation to provide such reports.

         (b)      A copy of such report shall, at the time of such transmission
to holders of Notes, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Notes are listed and with the Company.
The Company will promptly notify the Trustee in writing when the Notes are
listed on any stock exchange or automated quotation system or delisted
therefrom.

         Section 6.04. Reports by Company. The Company shall file with the
Trustee (and the Commission if at any time after the Indenture becomes qualified
under the Trust Indenture Act), and transmit to holders of Notes, such
information, documents and other reports and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant to such Act, whether or not the Notes are governed by such
Act; provided that any such information, documents or reports required to be
filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the Trustee within 15 days after the same is so required to
be filed with the Commission. Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on an Officers' Certificates).

                                       39
<PAGE>

                                   ARTICLE 7
         REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT

         Section 7.01. Events of Default. In case one or more of the following
events (each, an "EVENT OF DEFAULT") (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) shall
have occurred and be continuing:

         (a)      default in the payment of any installment of Interest upon any
of the Notes as and when the same shall become due and payable, and continuance
of such default for a period of 30 days; or

         (b)      default in the payment of the principal of any of the Notes as
and when the same shall become due and payable either at maturity or in
connection with any redemption or repurchase, in each case pursuant to Article
3, by acceleration or otherwise; or

         (c)      default in the Company's obligation to convert the Notes into
Common Stock upon the exercise of a holder's rights pursuant to Article 15; or

         (d)      default in the Company's obligation to repurchase the Notes at
the option of a holder upon a Fundamental Change pursuant to Section 3.05 or on
specified dates pursuant to Section 3.06; or

         (e)      failure to provide notice of the occurrence of a Fundamental
Change on a timely basis as required by Section 3.05; or

         (f)      default in the Company's obligation to redeem the Notes after
it has exercised its option to redeem; or

         (g)      failure on the part of the Company duly to observe or perform
any other of the covenants or agreements on the part of the Company in the Notes
or in this Indenture (other than a covenant or agreement a default in whose
performance or whose breach is elsewhere in this Section 7.01 specifically dealt
with) continued for a period of 60 days after the date on which written notice
of such failure, requiring the Company to remedy the same, shall have been given
to the Company by the Trustee, or to the Company and a Responsible Officer of
the Trustee by the holders of at least 25% in aggregate principal amount of the
Notes at the time outstanding determined in accordance with Section 9.04; or

         (h)      default by the Company or any of its Subsidiaries in the
payment of the principal or interest on any mortgage, agreement or other
instrument under which there may be outstanding, or by which there may be
secured or evidenced, any of the indebtedness of the Company or any of its
Subsidiaries for money borrowed in excess of $10 million in the aggregate,
whether such indebtedness now exists or shall hereafter be created, resulting in
such indebtedness becoming or being declared due and payable, and such
acceleration shall not have been rescinded or annulled within 30 days after
written notice of such acceleration has been received by the Company or such
Subsidiary; or

                                       40
<PAGE>

         (i)      final unsatisfied judgments not covered by insurance
aggregating in excess of $10.0 million rendered against the Company or any of
its Subsidiaries and not stayed, bonded or discharged within 60 days of such
judgment; or

         (j)      the Company shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
the Company or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, or shall consent to any such
relief or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against the Company, or shall
make a general assignment for the benefit of creditors, or shall fail generally
to pay its debts as they become due; or

         (k)      an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief with
respect to the Company or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period of 60
consecutive days;

then, and in each and every such case (other than an Event of Default specified
in Section 7.01(j) or 7.01(k)), unless the principal of all of the Notes shall
have already become due and payable, either the Trustee or the holders of not
less than 25% in aggregate principal amount of the Notes then outstanding
hereunder determined in accordance with Section 9.04, by notice in writing to
the Company (and to the Trustee if given by Noteholders), may declare the
principal of all the Notes and the Interest accrued thereon to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture or in the Notes
contained to the contrary notwithstanding. If an Event of Default specified in
Section 7.01(j) or 7.01(k) occurs, the principal of all the Notes and the
Interest accrued thereon shall be immediately and automatically due and payable
without necessity of further action. This provision, however, is subject to the
conditions that if, at any time after the principal of the Notes shall have been
so declared due and payable, and before any judgment or decree for the payment
of the monies due shall have been obtained or entered as hereinafter provided,
the Company shall pay or shall deposit with the Trustee a sum sufficient to pay
all matured installments of Interest upon all Notes and the principal of any and
all Notes which shall have become due otherwise than by acceleration (with
interest on overdue installments of Interest (to the extent that payment of such
interest is enforceable under applicable law) and on such principal at the rate
borne by the Notes, to the date of such payment or deposit) and amounts due to
the Trustee pursuant to Section 8.06, and if any and all defaults under this
Indenture, other than the nonpayment of principal of and accrued Interest on
Notes which shall have become due by acceleration, shall have been cured or
waived pursuant to Section 7.07, then and in every such case the holders of a
majority in aggregate principal amount of the Notes then outstanding, by written
notice to the Company and to the Trustee, may waive all defaults or Events of
Default and rescind and annul such declaration and its consequences; but no such
waiver or rescission and annulment shall extend to or shall affect any
subsequent default or Event of Default, or shall impair any right consequent
thereon. The Company shall notify in

                                       41
<PAGE>

writing a Responsible Officer of the Trustee, promptly upon becoming aware
thereof, of any Event of Default.

         In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the holders of Notes, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Notes, and the Trustee shall
continue as though no such proceeding had been taken.

         Section 7.02. Payments of Notes on Default; Suit Therefor. The Company
covenants that (a) in case default shall be made in the payment of any
installment of Interest upon any of the Notes as and when the same shall become
due and payable, and such default shall have continued for a period of 30 days,
or (b) in case default shall be made in the payment of the principal of any of
the Notes as and when the same shall have become due and payable, whether at
maturity of the Notes or in connection with any redemption, repurchase,
acceleration, declaration or otherwise, then, upon demand of the Trustee, the
Company will pay to the Trustee, for the benefit of the holders of the Notes,
the whole amount that then shall have become due and payable on all such Notes
for principal or Interest, as the case may be, with interest upon the overdue
principal and (to the extent that payment of such interest is enforceable under
applicable law) upon the overdue installments of Interest at the rate borne by
the Notes, and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including reasonable compensation
to the Trustee, its agents, attorneys and counsel, and all other amounts due the
Trustee under Section 8.06. Until such demand by the Trustee, the Company may
pay the principal of and Interest on the Notes to the registered holders,
whether or not the Notes are overdue.

         In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.

         In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 7.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole

                                       42
<PAGE>

amount of principal and Interest owing and unpaid in respect of the Notes, and,
in case of any judicial proceedings, to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee and of the Noteholders allowed in such judicial proceedings
relative to the Company or any other obligor on the Notes, its or their
creditors, or its or their property, and to collect and receive any monies or
other property payable or deliverable on any such claims, and to distribute the
same after the deduction of any amounts due the Trustee under Section 8.06, and
to take any other action with respect to such claims, including participating as
a member of any official committee of creditors, as it reasonably deems
necessary or advisable, and, unless prohibited by law or applicable regulations,
and any receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, custodian or similar official is hereby authorized by each of the
Noteholders to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including counsel fees and
expenses incurred by it up to the date of such distribution. To the extent that
such payment of reasonable compensation, expenses, advances and disbursements
out of the estate in any such proceedings shall be denied for any reason,
payment of the same shall be secured by a lien on, and shall be paid out of, any
and all distributions, dividends, monies, securities and other property which
the holders of the Notes may be entitled to receive in such proceedings, whether
in liquidation or under any plan of reorganization or arrangement or otherwise.

         All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Notes.

         In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Notes, and it shall not be necessary to make any holders of the Notes
parties to any such proceedings.

         Section 7.03. Application of Monies Collected by Trustee. Any monies
collected by the Trustee pursuant to this Article 7 shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:

         FIRST: To the payment of all amounts due the Trustee under Section
8.06;

         SECOND: In case the principal of the outstanding Notes shall not have
become due and be unpaid, to the payment of Interest on the Notes in default in
the order of the maturity of the installments of such Interest, with interest
(to the extent that such interest has been collected by the Trustee) upon the
overdue installments of Interest at the rate borne by the Notes, such payments
to be made ratably to the Persons entitled thereto;

                                       43
<PAGE>

         THIRD: In case the principal of the outstanding Notes shall have become
due, by declaration or otherwise, and be unpaid, to the payment of the whole
amount then owing and unpaid upon the Notes for principal and Interest, with
interest on the overdue principal and (to the extent that such interest has been
collected by the Trustee) upon overdue installments of Interest at the rate
borne by the Notes, and in case such monies shall be insufficient to pay in full
the whole amounts so due and unpaid upon the Notes, then to the payment of such
principal and Interest without preference or priority of principal over
Interest, or of Interest over principal, or of any installment of Interest over
any other installment of Interest, or of any Note over any other Note, ratably
to the aggregate of such principal and accrued and unpaid Interest; and

         FOURTH: To the payment of the remainder, if any, to the Company or any
other Person lawfully entitled thereto.

         Section 7.04. Proceedings by Noteholder. No holder of any Note shall
have any right by virtue of or by reference to any provision of this Indenture
to institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable security
or indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding and no direction inconsistent with
such written request shall have been given to the Trustee pursuant to Section
7.07; it being understood and intended, and being expressly covenanted by the
taker and holder of every Note with every other taker and holder and the
Trustee, that no one or more holders of Notes shall have any right in any manner
whatever by virtue of or by reference to any provision of this Indenture to
affect, disturb or prejudice the rights of any other holder of Notes, or to
obtain or seek to obtain priority over or preference to any other such holder,
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all holders of Notes
(except as otherwise provided herein). For the protection and enforcement of
this Section 7.04, each and every Noteholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.

         Notwithstanding any other provision of this Indenture and any provision
of any Note, the right of any holder of any Note to receive payment of the
principal of (including any Redemption Price or Repurchase Price pursuant to
Article 3) and accrued Interest on such Note on or after the respective due
dates expressed in such Note, or to institute suit for the enforcement of any
such payment on or after such respective dates against the Company, shall not be
impaired or affected without the consent of such holder.

         Anything in this Indenture or the Notes to the contrary
notwithstanding, the holder of any Note, without the consent of either the
Trustee or the holder of any other Note, in its own behalf and for its own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.

                                       44
<PAGE>

         Section 7.05. Proceedings by Trustee. In case of an Event of Default,
the Trustee may, in its discretion, proceed to protect and enforce the rights
vested in it by this Indenture by such appropriate judicial proceedings as are
necessary to protect and enforce any of such rights, either by suit in equity or
by action at law or by proceeding in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
law.

         Section 7.06. Remedies Cumulative and Continuing. Except as provided in
Section 2.06, all powers and remedies given by this Article 7 to the Trustee or
to the Noteholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any thereof or of any other powers and remedies available
to the Trustee or the holders of the Notes, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any holder of any of the Notes to exercise any right or power accruing
upon any default or Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any such
default or any acquiescence therein, and, subject to the provisions of Section
7.04, every power and remedy given by this Article 7 or by law to the Trustee or
to the Noteholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Noteholders.

         Section 7.07. Direction of Proceedings and Waiver of Defaults by
Majority of Noteholders. The holders of a majority in aggregate principal amount
of the Notes at the time outstanding determined in accordance with Section 9.04
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee; provided that (a) such direction shall not be in
conflict with any rule of law or with this Indenture, (b) the Trustee may take
any other action which is not inconsistent with such direction and (c) the
Trustee may decline to take any action that would benefit some Noteholders to
the detriment of other Noteholders. The holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 9.04 may, on behalf of the holders of all of the Notes, waive any
past default or Event of Default hereunder and its consequences except (i) a
default in the payment of Interest on, or the principal of, the Notes, (ii) a
failure by the Company to convert any Notes into Common Stock, (iii) a default
in the payment of the Redemption Price pursuant to Section 3.03, (iv) a default
in the payment of the Fundamental Change Repurchase Price pursuant to Section
3.05 or Company Repurchase Price pursuant to Section 3.06 or (v) a default in
respect of a covenant or provisions hereof which under Article 11 cannot be
modified or amended without the consent of the holders of each or all Notes then
outstanding or affected thereby. Upon any such waiver, the Company, the Trustee
and the holders of the Notes shall be restored to their former positions and
rights hereunder; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon. Whenever any
default or Event of Default hereunder shall have been waived as permitted by
this Section 7.07, said default or Event of Default shall for all purposes of
the Notes and this Indenture be deemed to have been cured and to be not
continuing; but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.

                                       45
<PAGE>

         Section 7.08. Statements as to Performance by the Company; Notice of
Defaults by the Trustee. The Trustee shall, within 90 days after a Responsible
Officer of the Trustee has knowledge of the occurrence of a default, mail to all
Noteholders, as the names and addresses of such holders appear upon the Note
Register, notice of all defaults known to a Responsible Officer, unless such
defaults shall have been cured or waived before the giving of such notice;
provided that except in the case of default in the payment of the principal of
or Interest on any of the Notes, the Trustee shall be protected in withholding
such notice if and so long as a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Noteholders. For the purpose of this Section
7.08, the term "DEFAULT" means any event that is, or after notice or lapse of
time or both would become, an Event of Default.

         Section 7.09. Undertaking to Pay Costs. All parties to this Indenture
agree, and each holder of any Note by its acceptance thereof shall be deemed to
have agreed, that any court may, in its discretion, require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; provided that the provisions of this Section 7.09
(to the extent permitted by law) shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Noteholder, or group of Noteholders,
holding in the aggregate more than ten percent in principal amount of the Notes
at the time outstanding determined in accordance with Section 9.04, or to any
suit instituted by any Noteholder for the enforcement of the payment of the
principal of or Interest on any Note on or after the due date expressed in such
Note or to any suit for the enforcement of the right to convert any Note in
accordance with the provisions of Article 15.

                                   ARTICLE 8
                                   THE TRUSTEE

         Section 8.01. Duties and Responsibilities of Trustee. The Trustee,
prior to the occurrence of an Event of Default and after the curing of all
Events of Default that may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived), the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his own affairs.

         No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:

         (a)      prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:

                                       46
<PAGE>

                  (i)      the duties and obligations of the Trustee shall be
         determined solely by the express provisions of this Indenture and the
         Trust Indenture Act, and the Trustee shall not be liable except for the
         performance of such duties and obligations as are specifically set
         forth in this Indenture and no implied covenants or obligations shall
         be read into this Indenture and the Trust Indenture Act against the
         Trustee; and

                  (ii)     in the absence of bad faith on the part of the
         Trustee, the Trustee may conclusively rely as to the truth of the
         statements and the correctness of the opinions expressed therein, upon
         any certificates or opinions furnished to the Trustee and conforming to
         the requirements of this Indenture; but, in the case of any such
         certificates or opinions which by any provisions hereof are
         specifically required to be furnished to the Trustee, the Trustee shall
         be under a duty to examine the same to determine whether or not they
         conform to the requirements of this Indenture;

         (b)      the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Officers of the Trustee, unless the
Trustee was negligent in ascertaining the pertinent facts;

         (c)      the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the written
direction of the holders of not less than a majority in principal amount of the
Notes at the time outstanding determined as provided in Section 9.04 relating to
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture;

         (d)      the Trustee shall not be liable in respect of any payment (as
to the correctness of amount, entitlement to receive or any other matters
relating to payment) or notice effected by the Company or any Paying Agent or
any records maintained by any co-registrar with respect to the Notes; and

         (e)      if any party fails to deliver a notice relating to an event
the fact of which, pursuant to this Indenture, requires notice to be sent to the
Trustee, the Trustee may conclusively rely on its failure to receive such notice
as reason to act as if no such event occurred.

         The Trustee shall not be deemed to have knowledge or notice of any
default (as defined in Section 7.08) or Event of Default hereunder unless a
Responsible Officer of the Trustee shall have received at the Corporate Trust
Office written notice of such default or Event of Default from the Company or
the holders of at least 10% in aggregate principal amount of the Notes and such
notice refers to such default or Event of Default, the Notes and the Indenture.

         None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

                                       47
<PAGE>

         Whether or not therein provided, every provision of this Indenture
relating to the conduct or affecting the liability of, or affording protection
to, the Trustee shall be subject to the provisions of this Section 8.01.

         Section 8.02. Reliance on Documents, Opinions, Etc. Except as otherwise
provided in Section 8.01:

         (a)      the Trustee may conclusively rely and shall be protected in
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, note, note, coupon or other paper or
document (whether in its original or facsimile form) believed by it in good
faith to be genuine and to have been signed or presented by the proper party or
parties;

         (b)      any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
(unless other evidence in respect thereof be herein specifically prescribed);
and any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an Assistant Secretary of the
Company;

         (c)      the Trustee may consult with counsel of its own selection and
any advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;

         (d)      the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby;

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

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

         (g)      the Trustee shall not be liable for any action taken, suffered
or omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture;

         (h)      the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be

                                       48
<PAGE>

enforceable by, the Trustee in each of its capacities hereunder, and each agent,
custodian and other Person employed to act hereunder; and

         (i)      the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.

         Section 8.03. No Responsibility for Recitals, Etc. The recitals
contained herein and in the Notes (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.

         Section 8.04. Trustee, Paying Agents, Conversion Agents or Registrar
May Own Notes. The Trustee, any Paying Agent, any Conversion Agent or Note
Registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
Paying Agent, Conversion Agent or Note Registrar.

         Section 8.05. Monies to Be Held in Trust. Subject to the provisions of
Section 13.03, all monies received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received. Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
may be agreed in writing from time to time by the Company and the Trustee.

         Section 8.06. Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation for all services rendered by it
hereunder in any capacity (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) as mutually agreed
to from time to time in writing between the Company and the Trustee, and the
Company will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence, willful misconduct, recklessness or
bad faith. The Company also covenants to indemnify the Trustee and any
predecessor Trustee (or any officer, director or employee of the Trustee), in
any capacity under this Indenture and its agents and any authenticating agent
for, and to hold them harmless against, any and all loss, liability, damage,
claim or expense including taxes (other than taxes based on the income of the
Trustee) incurred without negligence, willful misconduct, recklessness or bad
faith on the part of the Trustee or such officers, directors, employees and
agent or authenticating agent, as the case may be, and arising out of or in
connection with the acceptance or administration of this trust or in any other
capacity hereunder, including the costs and expenses

                                       49
<PAGE>

of defending themselves against any claim (whether asserted by the Company, any
holder or any other Person) of liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligations of the
Company under this Section 8.06 to compensate or indemnify the Trustee and to
pay or reimburse the Trustee for expenses, disbursements and advances shall be
secured by a lien prior to that of the Notes upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the holders of particular Notes. The obligation of the Company under this
Section shall survive the satisfaction and discharge of this Indenture.

         When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
7.01(j) or Section 7.01(k) with respect to the Company occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.

         Section 8.07. Officers' Certificate as Evidence. Except as otherwise
provided in Section 8.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of bad faith or willful misconduct on the part
of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee.

         Section 8.08. Conflicting Interests of Trustee. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.

         Section 8.09. Eligibility of Trustee. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 8.09, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.

         Section 8.10. Resignation or Removal of Trustee.

         (a)      The Trustee may at any time resign by giving written notice of
such resignation to the Company and to the holders of Notes. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee by
written instrument, in duplicate, executed by order of the Board of Directors,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment 60 days after the mailing of such notice
of resignation to the Noteholders, the resigning Trustee may, upon ten Business
Days' notice to the Company

                                       50
<PAGE>

and the Noteholders, appoint a successor identified in such notice or may
petition, at the expense of the Company, any court of competent jurisdiction for
the appointment of a successor trustee, or, if any Noteholder who has been a
bona fide holder of a Note or Notes for at least six months may, subject to the
provisions of Section 7.09, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.

         (b)      In case at any time any of the following shall occur:

                  (i)      the Trustee shall fail to comply with Section 8.08
         after written request therefor by the Company or by any Noteholder who
         has been a bona fide holder of a Note or Notes for at least six months;
         or

                  (ii)     the Trustee shall cease to be eligible in accordance
         with the provisions of Section 8.09 and shall fail to resign after
         written request therefor by the Company or by any such Noteholder; or

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

then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.09, any Noteholder who has been a bona fide holder of a
Note or Notes for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor trustee; provided that if no
successor Trustee shall have been appointed and have accepted appointment 60
days after either the Company or the Noteholders has removed the Trustee, or the
Trustee resigns, the Trustee so removed may petition, at the expense of the
Company, any court of competent jurisdiction for an appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor trustee.

         (c)      The holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and nominate a
successor trustee which shall be deemed appointed as successor trustee unless,
within ten days after notice to the Company of such nomination, the Company
objects thereto, in which case the Trustee so removed or any Noteholder, or if
such Trustee so removed or any Noteholder fails to act, the Company, upon the
terms and conditions and otherwise as in Section 8.10(a) provided, may petition
any court of competent jurisdiction for an appointment of a successor trustee.

         (d)      Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.11.

                                       51
<PAGE>

         Section 8.11. Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amount then due it pursuant to the provisions of Section
8.06, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property and funds held or collected by
such trustee as such, except for funds held in trust for the benefit of holders
of particular Notes, to secure any amounts then due it pursuant to the
provisions of Section 8.06.

         No successor trustee shall accept appointment as provided in this
Section 8.11 unless, at the time of such acceptance, such successor trustee
shall be qualified under the provisions of Section 8.08 and be eligible under
the provisions of Section 8.09.

         Upon acceptance of appointment by a successor trustee as provided in
this Section 8.11, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the holders of Notes at their addresses as they shall
appear on the Note Register. If the Company fails to mail such notice within ten
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Company.

         Section 8.12. Succession by Merger. Any Person into which the Trustee
may be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any Person succeeding to all or substantially all of the
corporate trust business of the Trustee (including any trust created by this
Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any Person succeeding to all or
substantially all of the corporate trust business of the Trustee, such Person
shall be qualified under the provisions of Section 8.08 and eligible under the
provisions of Section 8.09.

         In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee or any authenticating agent appointed by such successor
trustee may authenticate such Notes in the name of the successor trustee; and in
all such cases such certificates shall have the full force that is provided in
the Notes or in this Indenture; provided that the right to adopt the certificate
of authentication of any predecessor Trustee or authenticate

                                       52
<PAGE>

Notes in the name of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.

         Section 8.13. Preferential Collection of Claims. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Notes), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).

                                       53
<PAGE>

                                    ARTICLE 9
                                 THE NOTEHOLDERS

         Section 9.01. Action by Noteholders. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Noteholders
in person or by agent or proxy appointed in writing, or (b) by the record of the
holders of Notes voting in favor thereof at any meeting of Noteholders duly
called and held in accordance with the provisions of Article 10, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders. Whenever the Company or the Trustee solicits the taking
of any action by the holders of the Notes, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall he not more than 15 days
prior to the date of commencement of the solicitation of such action.

         Section 9.02. Proof of Execution by Noteholders. Subject to the
provisions of Section 8.01, 8.02 and 10.05, proof of the execution of any
instrument by a Noteholder or its agent or proxy shall be sufficient if made in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Notes shall be proved by the registry of such Notes or by a
certificate of the Note Registrar.

         The record of any Noteholders' meeting shall be proved in the manner
provided in Section 10.06.

         Section 9.03. Who Are Deemed Absolute Owners. The Company, the Trustee,
any Paying Agent, any Conversion Agent and any Note Registrar may deem the
Person in whose name such Note shall be registered upon the Note Register to be,
and may treat it as, the absolute owner of such Note (whether or not such Note
shall be overdue and notwithstanding any notation of ownership or other writing
thereon made by any Person other than the Company or any Note Registrar) for the
purpose of receiving payment of or on account of the principal of and Interest
on such Note, for conversion of such Note and for all other purposes; and
neither the Company nor the Trustee nor any Paying Agent nor any Conversion
Agent nor any Note Registrar shall be affected by any notice to the contrary.
All such payments so made to any holder for the time being, or upon his order,
shall be valid, and, to the extent of the sum or sums so paid, effectual to
satisfy and discharge the liability for monies payable upon any such Note.

         Section 9.04. Company-owned Notes Disregarded. In determining whether
the holders of the requisite aggregate principal amount of Notes have concurred
in any direction, consent, waiver or other action under this Indenture, Notes
which are owned by the Company or any other obligor on the Notes or any
Affiliate of the Company or any other obligor on the Notes shall be disregarded
and deemed not to be outstanding for the purpose of any such determination;
provided that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, consent, waiver or other action,
only Notes which a Responsible Officer knows are so owned shall be so
disregarded. Notes so owned which have been pledged in good

                                       54
<PAGE>

faith may be regarded as outstanding for the purposes of this Section 9.04 if
the pledgee shall establish to the satisfaction of the Trustee the pledgee's
right to vote such Notes and that the pledgee is not the Company, any other
obligor on the Notes or any Affiliate of the Company or any such other obligor.
In the case of a dispute as to such right, any decision by the Trustee taken
upon the advice of counsel shall be full protection to the Trustee. Upon request
of the Trustee, the Company shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Notes, if any, known by the Company to
be owned or held by or for the account of any of the above described Persons,
and, subject to Section 8.01, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Notes listed therein are outstanding for the purpose of any
such determination.

         Section 9.05. Revocation of Consents, Future Holders Bound. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
9.01, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Notes specified in this Indenture in connection with
such action, any holder of a Note which is shown by the evidence to be included
in the Notes the holders of which have consented to such action may, by filing
written notice with the Trustee at its Corporate Trust Office and upon proof of
holding as provided in Section 9.02, revoke such action so far as concerns such
Note. Except as aforesaid, any such action taken by the holder of any Note shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Note and of any Notes issued in exchange or substitution
therefor, irrespective of whether any notation in regard thereto is made upon
such Note or any Note issued in exchange or substitution therefor.

                                   ARTICLE 10
                             MEETINGS OF NOTEHOLDERS

         Section 10.01. Purpose of Meetings. A meeting of Noteholders may be
called at any time and from time to time pursuant to the provisions of this
Article 10 for any of the following purposes:

                  (1)      to give any notice to the Company or to the Trustee
         or to give any directions to the Trustee permitted under this
         Indenture, or to consent to the waiving of any default or Event of
         Default hereunder and its consequences, or to take any other action
         authorized to be taken by Noteholders pursuant to any of the provisions
         of Article 7;

                  (2)      to remove the Trustee and nominate a successor
         trustee pursuant to the provisions of Article 8;

                  (3)      to consent to the execution of an indenture or
         indentures supplemental hereto pursuant to the provisions of Section
         11.02; or

                  (4)      to take any other action authorized to be taken by or
         on behalf of the holders of any specified aggregate principal amount of
         the Notes under any other provision of this Indenture or under
         applicable law.

         Section 10.02. Call of Meetings by Trustee. The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 10.01, to
be held at such time and at such

                                       55
<PAGE>

place as the Trustee shall determine. Notice of every meeting of the
Noteholders, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting and the establishment of
any record date pursuant to Section 9.01, shall be mailed to holders of Notes at
their addresses as they shall appear on the Note Register. Such notice shall
also be mailed to the Company. Such notices shall be mailed not less than 20 nor
more than 90 days prior to the date fixed for the meeting.

         Any meeting of Noteholders shall be valid without notice if the holders
of all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.

         Section 10.03. Call of Meetings by Company or Noteholders. In case at
any time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least 10% in aggregate principal amount of the Notes then
outstanding, shall have requested the Trustee to call a meeting of Noteholders,
by written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the notice of such
meeting within 20 days after receipt of such request, then the Company or such
Noteholders may determine the time and the place for such meeting and may call
such meeting to take any action authorized in Section 10.01, by mailing notice
thereof as provided in Section 10.02.

         Section 10.04. Qualifications for Voting. To be entitled to vote at any
meeting of Noteholders a person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes on the record
date pertaining to such meeting. The only persons who shall be entitled to be
present or to speak at any meeting of Noteholders shall be the persons entitled
to vote at such meeting and their counsel and any representatives of the Trustee
and its counsel and any representatives of the Company and its counsel.

         Section 10.05. Regulations. Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.

         The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.03, in which case the
Company or the Noteholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote pf the holders of a majority
in principal amount of the Notes represented at the meeting and entitled to vote
at the meeting.

         Subject to the provisions of Section 9.04, at any meeting each
Noteholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Notes held or represented by him; provided that no vote
shall be cast or counted at any meeting in respect of any Note challenged as not
outstanding and ruled by the chairman of the meeting to be not outstanding.

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<PAGE>

The chairman of the meeting shall have no right to vote other than by virtue of
Notes held by him or instruments in writing as aforesaid duly designating him as
the proxy to vote on behalf of other Noteholders. Any meeting of Noteholders
duly called pursuant to the provisions of Section 10.02 or 10.03 may be
adjourned from time to time by the holders of a majority of the aggregate
principal amount of Notes represented at the meeting, whether or not
constituting a quorum, and the meeting may be held as so adjourned without
further notice.

         Section 10.06. Voting. The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the outstanding principal amount of the Notes held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Noteholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 10.02. The record shall show the principal amount of the
Notes voting in favor of or against any resolution. The record shall be signed
and verified by the affidavits of the permanent chairman and secretary of the
meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.

         Any record so signed and verified shall be conclusive evidence of the
matters therein stated.

         Section 10.07. No Delay of Rights by Meeting. Nothing contained in this
Article 10 shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Noteholders or any rights expressly or impliedly conferred
hereunder to make such call, any hindrance or delay in the exercise of any right
or rights conferred upon or reserved to the Trustee or to the Noteholders under
any of the provisions of this Indenture or of the Notes.

                                   ARTICLE 11
                             SUPPLEMENTAL INDENTURES

         Section 11.01. Supplemental Indentures Without Consent of Noteholders.
The Company, when authorized by the resolutions of the Board of Directors, and
the Trustee may, from time to time, and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:

         (a)      make provision with respect to the conversion rights of the
holders of Notes pursuant to the requirements of Section 15.06 or the repurchase
obligations of the Company pursuant to the requirements of Section 3.08(h).

         (b)      to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Notes, any property or assets or to add guarantees with
respect to the Notes;

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<PAGE>

         (c)      surrender any of the Company's rights or powers under the
Indenture (including, without limitation, its right to pay any part of the
Repurchase Price of the Notes with Common Stock as provided for in this
Indenture occurring on a date after the date of such amendment);

         (d)      to evidence the succession of another Person to the Company,
or successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Company pursuant to Article 12;

         (e)      to add to the covenants of the Company such further covenants,
restrictions or conditions for the benefit of the holders of Notes, and to make
the occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided that in respect of any
such additional covenant, restriction or condition, such supplemental indenture
may provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;

         (f)      to provide for the issuance under this Indenture of Notes in
coupon form (including Notes registrable as to principal only) and to provide
for exchangeability of such Notes with the Notes issued hereunder in fully
registered form and to make all appropriate changes for such purpose;

         (g)      to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture that may be
defective or inconsistent with any other provisions contained herein or in any
supplemental indenture, or to make such other provision in regard to matters or
questions arising under this Indenture that shall not materially adversely
affect the interests of the holders of the Notes;

         (h)      to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes;

         (i)      to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualifications of
this Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted; or

         (j)      make other changes to the Indenture or forms or terms of the
Notes, provided no such change individually or in the aggregate with all other
such changes has or will have a material adverse effect on the interests of the
Noteholders.

         Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.

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<PAGE>

         Any supplemental indenture authorized by the provisions of this Section
11.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 11.02.

         Notwithstanding any other provision of the Indenture or the Notes, the
Registration Rights Agreement and the obligation to pay Additional Amounts
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.

         Section 11.02. Supplemental Indenture with Consent of Noteholders. With
the consent (evidenced as provided in Article 9) of the holders of at least a
majority in aggregate principal amount of the Notes at the time outstanding, the
Company, when authorized by the resolutions of the Board of Directors, and the
Trustee may, from time to time and at any time, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
any supplemental indenture or of modifying in any manner the rights of the
holders of the Notes; provided that no such supplemental indenture shall (i)
reduce the principal amount of or change the Stated Maturity of any Note, (ii)
reduce the rate or extend the time of payment of Interest on any Note, (iii)
reduce any amount payable on redemption or repurchase of any Note (including
upon the occurrence of a Fundamental Change) or change the time at which the
circumstances under which the Notes may or shall be redeemed or repurchased,
(iv) impair the right of any Noteholder to institute suit for the payment on any
Note, (v) make the principal or Interest of any Note payable in any coin or
currency other than that provided in the Notes, (vi) impair the right to convert
the Notes into Common Stock subject to the terms set forth herein, (vii) reduce
the number of shares of Common Stock or other property receivable upon
conversion, (viii) modify any of the provisions of this Section 11.02 or Section
7.07, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the holder of each Note so affected, (ix) change any obligation of the Company
to maintain an office or agency in the places and for the purposes set forth in
Section 5.02, (x) reduce the quorum or voting requirements set forth in Article
10 or (xi) reduce the aforesaid percentage of Notes, the holders of which are
required to consent to any such supplemental indenture, without the consent of
the holders of all Notes then outstanding.

         Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.

         It shall not be necessary for the consent of the Noteholders under this
Section 11.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

         Section 11.03. Effect of Supplemental Indenture. Any supplemental
indenture executed pursuant to the provisions of this Article 11 shall comply
with the Trust Indenture Act, as then in effect, provided that this Section
11.03 shall not require such supplemental indenture or the

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<PAGE>

Trustee to be qualified under the Trust Indenture Act prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act or
the Indenture has been qualified under the Trust Indenture Act, nor shall it
constitute any admission or acknowledgment by any party to such supplemental
indenture that any such qualification is required prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act or
the Indenture has been qualified under the Trust Indenture Act. Upon the
execution of any supplemental indenture pursuant to the provisions of Article
11, this Indenture shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitation of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Notes shall thereafter be determined, exercised and
enforced hereunder, subject in all respects to such modifications and amendments
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.

         Section 11.04. Notation on Notes. Notes authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of
this Article 11 may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may, at the Company's expense, be
prepared and executed by the Company, authenticated by the Trustee (or an
authenticating agent duly appointed by the Trustee pursuant to Section 16.12)
and delivered in exchange for the Notes then outstanding, upon surrender of such
Notes then outstanding.

         Section 11.05. Evidence of Compliance of Supplemental Indenture to Be
Furnished to Trustee. Prior to entering into any supplemental indenture, the
Trustee shall be provided with an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed pursuant
hereto complies with the requirements of this Article 11 and is otherwise
authorized or permitted by this Indenture.

                                   ARTICLE 12
                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

         Section 12.01. Company May Consolidate on Certain Terms. Subject to the
provisions of Section 12.02, the Company shall not consolidate or merge with or
into any other Person or Persons (whether or not affiliated with the Company),
nor shall the Company or its successor or successors be a party or parties to
successive consolidations or mergers, nor shall the Company sell, convey,
transfer or lease the property and assets of the Company substantially as an
entirety, to any other Person (whether or not affiliated with the Company),
unless: (i) the Company is the surviving Person, or the resulting, surviving or
transferee Person (if other than the Company) is a corporation organized and
existing under the laws of the United States of America, any state thereof or
the District of Columbia; (ii) upon any such consolidation, merger, sale,
conveyance, transfer or lease, the due and punctual payment of the principal of
and Interest on all of the Notes, according to their tenor and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed by the Company, shall be expressly assumed, by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee by the Person (if other than the Company) formed by
such consolidation,

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<PAGE>

or into which the Company shall have been merged, or by the Person that shall
have acquired or leased such property, and such supplemental indenture shall
provide for the applicable conversion rights set forth in Section 15.06; and
(iii) immediately after giving effect to the transaction described above, no
Event of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be continuing.

         Section 12.02. Successor to Be Substituted. In case of any such
consolidation, merger, sale, conveyance, transfer or lease and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of and Interest on all of the Notes and the
due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Company, such successor Person shall succeed to
and be substituted for the Company, with the same effect as if it had been named
herein as the party of this first part. Such successor Person thereupon may
cause to be signed, and may issue either in its own name or in the name of Apria
Healthcare Group Inc. any or all of the Notes, issuable hereunder that
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor Person instead of the Company and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver, or cause to be
authenticated and delivered, any Notes that previously shall have been signed
and delivered by the officers of the Company to the Trustee for authentication,
and any Notes that such successor Person thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Notes so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Notes
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Notes had been issued at the date of the execution hereof.
In the event of any such consolidation, merger, sale, conveyance, transfer or
lease, the Person named as the "COMPANY" in the first paragraph of this
Indenture or any successor that shall thereafter have become such in the manner
prescribed in this Article 12 may be dissolved, wound up and liquidated at any
time thereafter and such Person shall be released from its liabilities as
obligor and maker of the Notes and from its obligations under this Indenture.

         In case of any such consolidation, merger, sale, conveyance, transfer
or lease, such changes in phraseology and form (but not in substance) may be
made in the Notes thereafter to be issued as may be appropriate.

         Section 12.03. Opinion of Counsel to Be Given Trustee. The Trustee
shall receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or
lease and any such assumption complies with the provisions of this Article 12.

                                   ARTICLE 13
                     SATISFACTION AND DISCHARGE OF INDENTURE

         Section 13.01. Discharge of Indenture. When (a) the Company shall
deliver to the Trustee for cancellation all Notes theretofore authenticated
(other than any Notes that have been destroyed, lost or stolen and in lieu of or
in substitution for which other Notes shall have been authenticated and
delivered) and not theretofore canceled, or (b) all the Notes not theretofore
canceled or delivered to the Trustee for cancellation shall have become due and
payable and the

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<PAGE>

Company shall deposit with the Trustee, in trust, funds sufficient to pay all
amounts due and owing on Notes (other than any Notes that shall have been
mutilated, destroyed, lost or stolen and in lieu of or in substitution for which
other Notes shall have been authenticated and delivered) not theretofore
canceled or delivered to the Trustee for cancellation, accompanied by a
verification report, as to the sufficiency of the deposited amount, from an
independent certified accountant or other financial professional satisfactory to
the Trustee, and if in either case the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company, then this Indenture shall
cease to be of further effect (except as to (i) remaining rights of registration
of transfer, substitution and exchange and conversion of Notes, (ii) rights
hereunder of Noteholders to receive payments of principal of and Interest on the
Notes and the other rights, duties and obligations of Noteholders, as
beneficiaries hereof with respect to the amounts, if any, so deposited with the
Trustee and (iii) the rights, obligations and immunities of the Trustee
hereunder), and the Trustee, on written demand of the Company accompanied by an
Officers' Certificate and an Opinion of Counsel as required by Section 16.05 and
at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture; the Company,
however, hereby agrees to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Notes.

         Section 13.02. Paying Agent to Repay Monies Held. Upon the satisfaction
and discharge of this Indenture, all monies then held by any Paying Agent of the
Notes (other than the Trustee) shall, upon written request of the Company, be
repaid to it or paid to the Trustee, and thereupon such Paying Agent shall be
released from all further liability with respect to such monies.

         Section 13.03. Return of Unclaimed Monies. Subject to the requirements
of applicable law, any monies deposited with or paid to the Trustee for payment
of the principal of or Interest on Notes and not applied but remaining unclaimed
by the holders of Notes for two years after the date upon which the principal of
or Interest on such Notes, as the case may be, shall have become due and
payable, shall be repaid to the Company by the Trustee on demand and all
liability of the Trustee shall thereupon cease with respect to such monies; and
the holder of any of the Notes shall thereafter look only to the Company for any
payment that such holder may be entitled to collect unless an applicable
abandoned property law designates another Person.

                                   ARTICLE 14
         IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

         Section 14.01. Indenture and Notes Solely Corporate Obligations. No
recourse for the payment of the principal of or Interest on any Note, or for any
claim based thereon or otherwise in respect thereof, and no recourse under or
upon any obligation, covenant or agreement of the Company in this Indenture or
in any supplemental indenture or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, employee, agent, officer, director or subsidiary, as such, past,
present or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all

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<PAGE>

such liability is hereby expressly waived and released as a condition of, and as
a consideration for, the execution of this Indenture and the issue of the Notes.

                                   ARTICLE 15
                               CONVERSION OF NOTES

         Section 15.01. Right to Convert. (a) Subject to and upon compliance
with the provisions of this Indenture, prior to the close of business on
September 1, 2033, the holder of any Note shall have the right, at such holder's
option, to convert the principal amount of the Note, or any portion of such
principal amount which is a multiple of $1,000, into fully paid and
non-assessable shares of Common Stock (as such shares shall then be constituted)
at the Conversion Rate in effect at such time, by surrender of the Note so to be
converted in whole or in part, together with any required funds, under the
circumstances described in this Section 15.01 and in the manner provided in
Section 15.02. The Notes shall be convertible only during the following periods
upon the occurrence of one of the following events:

                  (i)      during any calendar quarter after the quarter ended
         September 30, 2003 (and only during such calendar quarter) if the Last
         Reported Sale Price for the Common Stock for at least 20 Trading Days
         during the period of 30 consecutive Trading Days ending on the last
         Trading Day of the previous calendar quarter equals or exceeds 130% of
         the Conversion Price on such last Trading Day;

                  (ii)     during the five Business Day period immediately after
         any five consecutive Trading Day period in which the Trading Price per
         $1,000 principal amount of the Notes for each day of such five day
         measurement period was less than 98% of the product of the Last
         Reported Sale Price of the Common Stock on the applicable date and the
         Conversion Rate; provided, however, that the Notes shall not be
         convertible pursuant to this Section 15.01(a)(ii) after September 1,
         2028 if on any Trading Day during such measurement period the Last
         Reported Sale Price of the Common Stock was between 100% and 130% of
         the then current Conversion Price of the Notes.

                  (iii)    in the event that the Company calls the Notes for
         redemption, at any time prior to the close of business on the second
         Business Day immediately preceding the Redemption Date; provided that
         only those Notes that are called for redemption may be converted
         following such an event;

                  (iv)     as provided in Section (b) of this Section 15.01; or

                  (v)      after the date, if ever, on which either Moody's
         Investors Service, Inc. ("Moody's") or Standard & Poor's Ratings
         Services ("S&P") assigns an initial credit rating to the Notes, then
         during any period in which (1) the credit rating assigned to the Notes
         by either Moody's Investors Service or S&P is three or more rating
         subcategories below the initial credit rating assigned by Moody's or
         S&P, as the case may be or (2) either Moody's or S&P shall have
         discontinued, withdrawn or suspended their ratings of the Notes, as the
         case may be, if such ratings agency had previously rated the Notes;
         provided, however, that nothing in this Indenture shall obligate the
         Company to obtain a credit rating for the Notes.

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<PAGE>

         The Company or its designated agent shall determine on a daily basis
during the time period specified in Section 15.01(a)(i) whether the Notes shall
be convertible as a result of the occurrence of an event specified in clause (i)
above and, if the Notes shall be so convertible, the Company shall promptly
deliver to the Trustee (or other Conversion Agent appointed by the Company)
written notice thereof. Whenever the Notes shall become convertible pursuant to
this Section 15.01, the Company or, at the Company's request, the Trustee in the
name and at the expense of the Company, shall notify the holders of the event
triggering such convertibility in the manner provided in section 16.03, and the
Company shall also publicly announce such information by publication on the
Company's Web site or through such other public medium as it may use at such
time. Any notice so given shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice.

         The Trustee (or other Conversion Agent appointed by the Company) shall
have no obligation to determine the Trading Price for purposes of Section
15.01(a)(ii) unless the Company has requested in writing such a determination;
and the Company shall have no obligation to make such request unless a holder
provides it with reasonable evidence that the Trading Price per $1,000 principal
amount of Notes is less than 98% of the product of the Last Reported Sale Price
of the Common Stock and the Conversion Rate. Such evidence shall be in writing
and delivered by the holder to the Treasurer of the Company by fax or certified
or express mail to the address or fax number specified in Section 16.03 hereof.
Such request shall state that the holder has a reasonable belief that the
Trading Price per $1,000 principal amount of Notes is less than 98% of the
product of the Last Reported Sale Price of the Common Stock and the Conversion
Rate (which request shall also include the evidence with respect thereto) and
shall state that the holder is requesting that the Company request the Trustee
(or other Conversion Agent appointed by the Company) to determine whether or not
the Notes are convertible into Common Stock pursuant to Section 15.01(a)(ii) of
this Indenture. If such notice and evidence is provided, the Company shall
instruct the Trustee (or other Conversion Agent) in writing to determine the
Trading Price of the Notes beginning on the next Trading Day and on each
successive Trading Day until, and only until, the Trading Price per $1,000
principal amount of Notes is greater than or equal to 98% of the product of the
Last Reported Sale Price of the Common Stock and the Conversion Rate.

         The Trustee shall be entitled at its sole discretion to consult with
the Company and to request the assistance of the Company in connection with the
Trustee's duties and obligations pursuant to Section 15.01(a) hereof, and the
Company agrees, if requested by the Trustee, to cooperate with, and provide
assistance to, the Trustee in carrying out its duties under this Section 15.01;
provided, however, that nothing herein shall be construed to relieve the Trustee
of its duties pursuant to Section 15.01(a) hereof.

         (b)      In addition, if:

                  (i)      (A) the Company distributes to all holders of its
         Common Stock rights or warrants entitling them (for a period expiring
         within 45 days of the date of the distribution) to subscribe for or
         purchase shares of Common Stock at a price per share less than the Last
         Reported Sale Price on the Trading Day immediately preceding the
         declaration date of the distribution, or (B) the Company distributes to
         all holders of Common Stock assets (including cash), debt securities or
         rights to purchase securities of

                                       64
<PAGE>

         the Company, which distribution has a per share value as determined by
         the Company's Board of Directors and set forth in a Board Resolution
         exceeding 10% of the Last Reported Sale Price of the Common Stock on
         the Trading Day immediately preceding the declaration date for such
         distribution, then, in either case, the Notes may be surrendered for
         conversion at any time on and after the date that the Company gives
         notice to the holders of such distribution, which shall be not less
         than 20 Business Days prior to the Ex-Dividend Date for such
         distribution, until the earlier of the close of business on the
         Business Day immediately preceding, but not including, the Ex-Dividend
         Date or the date the Company publicly announces that such distribution
         will not take place; provided that no holder of a Note will have the
         ability to convert and no adjustment to the Conversion Price will be
         made if the holder will otherwise participate in such distribution
         without conversion; or

                  (ii)     the Company consolidates with or merges with or into
         another Person or is a party to a binding share exchange or conveys,
         transfers, sells, leases or otherwise disposes of all or substantially
         all of its properties and assets in each case pursuant to which the
         Common Stock is converted into cash or property other than securities,
         then the Notes may be surrendered for conversion at any time from and
         after the date 15 days prior to the anticipated effective date of the
         transaction and ending on and including the date 15 days after the
         anticipated effective date of the transaction.

         The Board of Directors shall determine the anticipated effective date
         of the transaction, and such determination shall be conclusive and
         binding on the holders and shall be publicly announced by the Company
         by publication on its Web site or through such other public medium as
         it may use at that time not later than two Business Days prior to such
         15th day.

         (c)      A Note in respect of which a holder is electing to exercise
its option to require repurchase upon a Fundamental Change pursuant to Section
3.05 or repurchase pursuant to Section 3.06 may be converted only if such holder
withdraws its election in accordance with Section 3.08(d). A holder of Notes is
not entitled to any rights of a holder of Common Stock until such holder has
converted his Notes to Common Stock, and only to the extent such Notes are
deemed to have been converted to Common Stock under this Article 15.

         Section 15.02. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or Dividends; Settlement of Cash
or Common Stock Upon Conversion. (a) In order to exercise the conversion
privilege with respect to any Note in certificated form, the Company must
receive at the office or agency of the Company maintained for that purpose or,
at the option of such holder, the Corporate Trust Office, such Note with the
original or facsimile of the form entitled "FORM OF CONVERSION NOTICE" on the
reverse thereof (the "CONVERSION NOTICE"), duly completed and manually signed,
together with such Notes duly endorsed for transfer, accompanied by the funds,
if any, required by the penultimate paragraph of this Section 15.02. Such notice
shall also state the name or names (with address or addresses) in which the
certificate or certificates for shares of Common Stock which shall be issuable
on such conversion shall be issued, and shall be accompanied by the amount of
any transfer or similar taxes which are payable in connection with such
conversion, if required pursuant to Section

                                       65
<PAGE>

15.07. The Conversion Agent shall provide copies of the Form of Conversion
Notice to holders of Notes upon request.

         In order to exercise the conversion privilege with respect to any
interest in a Global Note, the beneficial holder must complete, or cause to be
completed, the appropriate instruction form for conversion pursuant to the
Depositary's book-entry conversion program, deliver, or cause to be delivered,
by book-entry delivery an interest in such Global Note, furnish appropriate
endorsements and transfer documents if required by the Company or the Trustee or
Conversion Agent, and pay the funds, if any, required by this Section 15.02 and
any transfer taxes or similar taxes which are payable in connection with such
conversion if required pursuant to Section 15.07.

         (b)      As promptly as practicable after satisfaction of the
requirements for conversion set forth above, subject to compliance with any
restrictions on transfer if shares issuable on conversion are to be issued in a
name other than that of the Noteholder (as if such transfer were a transfer of
the Note or Notes (or portion thereof) so converted), the Company shall issue
and shall deliver to such Noteholder at the office or agency maintained by the
Company for such purpose pursuant to Section 5.02, a certificate or certificates
for the number of full shares of Common Stock issuable upon the conversion of
such Note or portion thereof as determined by the Company in accordance with the
provisions of this Article 15 and a check or cash in respect of any fractional
interest in respect of a share of Common Stock arising upon such conversion,
calculated by the Company as provided in Section 15.03. In case any Note of a
denomination greater than $1,000 shall be surrendered for partial conversion,
and subject to Section 2.03, the Company shall execute and the Trustee shall
authenticate and deliver to the holder of the Note so surrendered, without
charge to him, a new Note or Notes in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the surrendered Note.

         (c)      Each conversion shall be deemed to have been effected as to
any such Note (or portion thereof) on the date on which the requirements set
forth above in this Section 15.02 have been satisfied as to such Note (or
portion thereof) (such date, the "CONVERSION DATE"), and the Person in whose
name any certificate or certificates for shares of Common Stock shall be
issuable upon such conversion shall be deemed to have become on said date the
holder of record of the shares represented thereby; provided that any such
surrender on any date when the stock transfer books of the Company shall be
closed shall constitute the Person in whose name the certificates are to be
issued as the record holder thereof for all purposes on the next succeeding day
on which such stock transfer books are open, but such conversion shall be at the
Conversion Rate in effect on the date upon which such Note shall be surrendered.

         (d)      Any Note or portion thereof surrendered for conversion during
the period from the close of business on any Regular Record Date to the close of
business on the Business Day preceding the following Interest Payment Date that
has not been called for redemption during such period shall be accompanied by
payment, in immediately available funds or other funds acceptable to the
Company, of an amount equal to the Interest otherwise payable on such Interest
Payment Date on the principal amount being converted; provided that no such
payment need be made (1) if the Company has specified a Redemption Date or a
Fundamental Change Repurchase Date that is after a Regular Record Date and prior
to the next Interest Payment Date or (2) to the extent of any overdue Interest,
if any overdue Interest exists at the time of conversion with

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respect to such Note. Except as provided above in this Section 15.02, no payment
or other adjustment shall be made for Interest accrued on any Note converted or
for dividends on any shares issued upon the conversion of such Note as provided
in this Article 15.

         (e)      Upon the conversion of an interest in a Global Note, the
Trustee (or other Conversion Agent appointed by the Company), or the Custodian
at the direction of the Trustee (or other Conversion Agent appointed by the
Company), shall make a notation on such Global Note as to the reduction in the
principal amount represented thereby. The Company shall notify the Trustee in
writing of any conversions of Notes effected through any Conversion Agent other
than the Trustee.

         (f)      Upon the conversion of a Note, that portion of the accrued but
unpaid Interest with respect to the converted Note shall not be cancelled,
extinguished or forfeited, but rather shall be deemed to be paid in full to the
holder thereof through delivery of the Common Stock (together with the cash
payment, if any in lieu of fractional shares) in exchange for the Note being
converted pursuant to the provisions hereof; and the fair market value of such
shares of Common Stock (together with any such cash payment in lieu of
fractional shares) shall be treated as issued, to the extent thereof, first in
exchange for and in satisfaction of the Company's obligation to pay the
principal amount of the converted Note and the accrued but unpaid Interest, and
the balance, if any, of such fair market value of such Common Stock (and any
such cash payment) shall be treated as issued in exchange for and in
satisfaction of the right to convert the Note being converted pursuant to the
provisions hereof.

         (g)      In the event that the Company receives a Conversion Notice on
or prior to (1) the date on which the Company gives a Redemption Notice or (2)
the date that is 20 days prior to the Stated Maturity of the Notes (the "FINAL
NOTICE DATE"), the following procedures shall apply:

                  (i)      If the Company elects to satisfy all or any portion
         of its obligation to convert the Notes (the "CONVERSION OBLIGATION") in
         cash, the Company shall notify holders through the Trustee of the
         dollar amount to be satisfied in cash (which must be expressed either
         as 100% of the Conversion Obligation or as a fixed dollar amount) at
         any time on or before the date that is two Business Days following the
         Conversion Date (the "CASH SETTLEMENT NOTICE PERIOD"). If the Company
         timely elects to pay cash for any portion of the Common Stock otherwise
         issuable to holders upon conversion, holders may retract the Conversion
         Notice at any time during the two Business Days following the final day
         of the Cash Settlement Notice Period (the "CONVERSION RETRACTION
         PERIOD"). No such retraction can be made (and a Conversion Notice shall
         be irrevocable) if the Company does not elect to deliver cash in lieu
         of Common Stock (other than cash in lieu of fractional shares). Upon
         the expiration of a Conversion Retraction Period, a Conversion Notice
         shall be irrevocable. If the Company elects to satisfy all or any
         portion of the Conversion Obligation in cash, and the applicable
         Conversion Notice has not been retracted, then settlement (in cash or
         in cash and Common Stock) will occur on the Business Day following the
         final day of the 20-Trading Day period beginning on the day after the
         final day of the Conversion Retraction Period (the "CASH SETTLEMENT
         AVERAGING PERIOD").

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<PAGE>

                  (ii)     If the Company does not elect to satisfy any part of
         the Conversion Obligation in cash (other than cash in lieu of any
         fractional shares), delivery of the Common Stock into which the Notes
         are converted (and cash in lieu of any fractional shares) shall occur
         through the Conversion Agent as described above as soon as practicable
         on or after the Conversion Date.

         (h)      Settlement amounts will be computed as follows:

                  (i)      If the Company elects to satisfy the entire
         Conversion Obligation in Common Stock, it shall deliver to holders that
         have delivered the Conversion Notice giving rise to the Conversion
         Obligation a number of shares of Common Stock equal to (i) the
         aggregate principal amount of Notes to be converted divided by 1,000,
         multiplied by (ii) the Conversion Rate. In addition, the Company shall
         pay cash for any fractional shares of Common Stock based on the Last
         Reported Sale Price of the Common Stock on the Trading Day immediately
         preceding the Conversion Date.

                  (ii)     If the Company elects to satisfy the entire
         Conversion Obligation in cash, it shall deliver to holders that have
         delivered the Conversion Notice giving rise to the Conversion
         Obligation cash in an amount equal to the product of:

                           (A)      a number equal to (i) the aggregate
                  principal amount of Notes to be converted divided by 1,000,
                  multiplied by (ii) the Conversion Rate; and

                           (B)      the average Last Reported Sale Price of the
                  Common Stock during the Cash Settlement Averaging Period.

                  (iii)    If the Company elects to satisfy a fixed portion
         (other than 100%) of the Conversion Obligation in cash, it will deliver
         to holders the specified cash amount (the "CASH AMOUNT") and a number
         of Common Stock equal to the greater of (i) zero and (ii) the excess,
         if any, of the number of Common Stock calculated as if the Company
         elected to satisfy the entire Conversion Obligation in shares over the
         number of shares equal to the sum, for each day of the Cash Settlement
         Averaging Period, of (x) 5% of the Cash Amount, divided by (y) the Last
         Reported Sale Price of the Common Stock. In addition, the Company shall
         pay cash for all fractional Common Stock based on the average Last
         Reported Sale Price of the Common Stock during the Cash Settlement
         Averaging Period.

         (i)      The Company must determine whether or not it will satisfy all
or a portion of the conversion obligation in cash at the time it issues a
Redemption Notice or a Final Maturity Notice and such notices will state the
amount of the Conversion Obligation to be settled in cash. In the event that the
Company receives a Conversion Notice after the date a Redemption Notice or the
Final Maturity Notice has been issued, settlement amounts will be computed and
settlement dates will be determined in the same manner as set forth in clauses
(g) and (h) of this Section 15.02 except that the Cash Settlement Averaging
Period shall be the 20 Trading Day

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<PAGE>

period beginning on the Trading Day after the Conversion Date. If a Conversion
Notice is received from holders of Notes after the date that a Redemption Notice
or the Final Maturity Notice has been issued, such holders may not retract their
Conversion Notice. Settlement (in cash and/or Common Stock) will occur on the
Business Day following the final day of such Cash Settlement Averaging Period.

         Section 15.03. Cash Payments in Lieu of Fractional Shares. No
fractional shares of Common Stock or scrip certificates representing fractional
shares shall be issued upon conversion of Notes. If more than one Note shall be
surrendered for conversion at one time by the same holder, the number of full
shares that shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Notes (or specified portions thereof to
the extent permitted hereby) so surrendered. If any fractional share of stock
would be issuable upon the conversion of any Note or Notes, the Company shall
make an adjustment and payment therefor in cash to the holder of Notes at the
Last Reported Sale Price on the last Trading Day immediately preceding the day
on which the Notes (or specified portions thereof) are deemed to have been
converted.

         Section 15.04. Conversion Rate. Each $1,000 principal amount of the
Notes shall be convertible into the number of shares of Common Stock specified
in the form of Note (herein called the "CONVERSION RATE") attached as Exhibit A
hereto (initially 28.6852 shares), subject to adjustment as provided in this
Article 15.

         Section 15.05. Adjustment of Conversion Rate. The Conversion Rate shall
be adjusted from time to time by the Company as follows:

         (a)      In case the Company shall pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Rate, as in effect at the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution, shall be increased by dividing such
Conversion Rate by a fraction,

                  (i)      the numerator of which shall be the number of shares
         of Common Stock outstanding at the close of business on the date fixed
         for such determination, and

                  (ii)     the denominator of which shall be the sum of such
         number of shares and the total number of shares constituting such
         dividend or other distribution,

such increase to become effective immediately after the opening of business on
the Business Day following the date fixed for such determination. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in treasury by the Company. If any dividend or distribution of the type
described in this Section 15.05(a) is declared but not so paid or made, the
Conversion Rate shall again be adjusted to the Conversion Rate that would then
be in effect if such dividend or distribution had not been declared.

         (b)      In case the Company shall (other than pursuant to a dividend
reinvestment plan or share purchase plan) issue rights, options or warrants to
all holders of its Common Stock entitling them, for a period expiring within 60
days after the date of issuance of such rights, options or warrants, to
subscribe for or purchase shares of Common Stock at a price per share

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<PAGE>

less than the Current Market Price per share of the Common Stock on the date of
issuance of such rights, options or warrants, the Conversion Rate in effect at
the opening of business on the day following the date fixed for such
determination shall be increased by dividing such Conversion Rate by a fraction,

                  (i)      the numerator of which shall be the number of shares
         of Common Stock outstanding at the close of business on the date fixed
         for such determination plus the number of shares of Common Stock which
         the aggregate offering price of the total number of shares of Common
         Stock so offered for subscription or purchase would purchase at such
         Current Market Price, and

                  (ii)     the denominator of which shall be the number of
         shares of Common Stock outstanding at the close of business on the date
         fixed for such determination plus the number of shares of Common Stock
         so offered for subscription or purchase at such below Current Market
         Price.

Such adjustment shall be successively made whenever any such rights, options or
warrants are issued and shall become effective immediately after the opening of
business on the Business Day following the date fixed for such determination.
The Company shall not issue any such rights, options or warrants in respect of
shares of Common Stock held in treasury by the Company. To the extent that
shares of Common Stock are not delivered after the expiration of such rights or
warrants, the Conversion Rate shall be readjusted to the Conversion Rate that
would then be in effect had the adjustments made upon the issuance of such
rights, options or warrants been made on the basis of delivery of only the
number of shares of Common Stock actually delivered. If such rights, options or
warrants are not so issued, the Conversion Rate shall again be adjusted to be
the Conversion Rate that would then be in effect if such date fixed for the
determination of stockholders entitled to receive such rights, options or
warrants had not been fixed.

In determining whether any rights, options or warrants entitle the holders to
subscribe for or purchase shares of Common Stock at less than such Current
Market Price, and in determining the aggregate offering price of such shares of
Common Stock, there shall be taken into account any consideration received by
the Company for such rights, options or warrants and any amount payable on
exercise or conversion thereof, the value of such consideration, if other than
cash, to be determined by the Board of Directors.

         (c)      In case outstanding shares of Common Stock shall be subdivided
or split into a greater number of shares of Common Stock, the Conversion Rate in
effect at the opening of business on the day following the day upon which such
subdivision or split becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately reduced, such increase or reduction,
as the case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision, split or
combination becomes effective.

         (d)      In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness,
shares of capital stock, securities, cash or other

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<PAGE>

property (but excluding any rights, options or warrants referred to in Section
15.05(b) and any dividend or distribution referred to in Section 15.05(a)), the
Conversion Rate shall be adjusted by dividing the Conversion Rate in effect
immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution by a
fraction,

                  (i)      the numerator of which shall be the Current Market
         Price per share of the Common Stock on the date fixed for such
         determination, and

                  (ii)     the denominator of which shall be such Current Market
         Price per share of the Common Stock plus (i) with respect to cash
         distributions, the amount per share of such distribution, (ii) with
         respect to all other distributions, the then fair market value per
         share (as determined by the Board of Directors, whose determination
         shall be conclusive and described in a Board Resolution) on such date
         of the portion of the evidences of indebtedness, shares of capital
         stock, securities, or other property so distributed, or (iii) with
         respect to distributions of which cash is a portion (but not all) of
         such distribution, the amount per share of the distribution payable in
         cash plus the then fair market value per share (as determined by the
         Board of Directors, whose determination shall be conclusive and
         described in a Board Resolution) of the remaining portion of such
         distribution that is payable other than in cash.

such adjustment to become effective immediately prior to the opening of business
on the Business Day following the date fixed for the determination of
stockholders entitled to receive such distribution; provided, however, that in
the event that the Company makes a distribution to all holders of its Common
Stock consisting of capital stock of, or similar equity interest in, a
subsidiary or other business unit of the Company, the Conversion Rate shall be
adjusted by dividing the Conversion Rate in effect immediately prior to the
close of business on the date fixed for the determination of stockholders
entitled to receive such distribution by a fraction of which the numerator shall
be the Spin-off Market Price per share of the Common Stock on the date fixed for
such determination less the Spin-off Market Price per share or similar equity
interest of the subsidiary or other business unit of the Company on such date
and the denominator shall be the Spin-off Market Price per share of the Common
Stock, such adjustment to become effective 10 Trading Days after the effective
date of such distribution of capital stock of, or similar equity interest in, a
subsidiary or other business unit of the Company. In any case in which this
Section 15.05(d) is applicable, Section 15.05(a) and (b) shall not be
applicable. If such dividend or distribution is not so paid or made, the
Conversion Rate shall again be adjusted to be the Conversion Rate that would
then be in effect if such dividend or distribution had not been declared.

         (e)      In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders of consideration per share of
Common Stock having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a resolution
of the Board of Directors) that as of the last time (the "EXPIRATION TIME")
tenders or exchanges may be made pursuant to such tender or exchange offer (as
it may be amended) exceeds the Last Reported Sale Price of a share of Common
Stock on the Trading Day next succeeding the Expiration Time, the Conversion
Rate shall be increased so that the same shall equal the rate

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<PAGE>

determined by multiplying the Conversion Rate in effect immediately prior to the
Expiration Time by a fraction:

                  (i)      the numerator of which shall be the sum of (x) the
         fair market value (determined as aforesaid) of the aggregate
         consideration payable to stockholders based on the acceptance (up to
         any maximum specified in the terms of the tender or exchange offer) of
         all shares validly tendered or exchanged and not withdrawn as of the
         Expiration Time (the shares deemed so accepted up to any such maximum,
         being referred to as the "PURCHASED SHARES") and (y) the product of the
         number of shares of Common Stock outstanding (less any Purchased
         Shares) at the Expiration Time and the Last Reported Sale Price of a
         share of Common Stock on the Trading Day next succeeding the Expiration
         Time, and

                  (ii)     the denominator of which shall be the number of
         shares of Common Stock outstanding (including any tendered or exchanged
         shares) at the Expiration Time multiplied by the Last Reported Sale
         Price of a share of Common Stock on the Trading Day next succeeding the
         Expiration Time,

such adjustment to become effective immediately prior to the opening of business
on the day following the expiration time. If the Company is obligated to
purchase shares pursuant to any such tender or exchange offer, but the Company
is permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Rate shall again be adjusted to
be the Conversion Rate that would then be in effect if such tender or exchange
offer had not been made.

         (f)      The reclassification of Common Stock into securities other
than Common Stock (other than any reclassification upon an event to which
Section 15.06 applies) shall be deemed to involve (a) a distribution of such
securities other than Common Stock to all holders of Common Stock (and the
effective date of such reclassification shall be deemed to be "the date fixed
for the determination of stockholders entitled to receive such distribution" and
the "date fixed for such determination" within the meaning of Section 15.05(d)),
and (b) a subdivision, split or combination, as the case may be, of the number
of shares of Common Stock outstanding immediately prior to such reclassification
into the number of shares of Common Stock outstanding immediately thereafter
(and the effective date of such reclassification shall be deemed to be "the day
upon which such subdivision or split becomes effective" or "the day upon which
such combination becomes effective," as the case may be, and "the day upon which
such subdivision, split or combination becomes effective" within the meaning of
Section 15.05(c)).

         (g)      Notwithstanding the foregoing provisions of Section 15.05, no
adjustment shall be made thereunder, nor shall an adjustment be made to the
ability of a Holder of a Note to convert, for any distribution described therein
if the Holder will otherwise participate in the distribution without conversion
of such Holder's Notes.

         (h)      The Company may make such increases in the Conversion Rate, in
addition to those required by clauses (a) through (g) of this Section 15.05 as
the Board of Directors considers to be advisable to avoid or diminish any income
tax to holders of Common Stock or rights to purchase

                                       72
<PAGE>

Common Stock resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such for income tax purposes.

         To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount for any period of time if
the period is at least 20 days, the increase is irrevocable during the period
and the Board of Directors shall have made a determination that such increase
would be in the best interests of the Company, which determination shall be
conclusive. Whenever the Conversion Rate is increased pursuant to the preceding
sentence, the Company shall mail to holders of record of the Notes a notice of
the increase at least 15 days prior to the date the increased Conversion Rate
takes effect, and such notice shall state the increased Conversion Rate and the
period during which it will be in effect.

         (i)      No adjustment to the Conversion Rate need be made:

                  (i)      upon the issuance of any shares of Common Stock
         pursuant to any present or future plan providing for the reinvestment
         of dividends or interest payable on securities of the Company and the
         investment of additional optional amounts in shares of Common Stock
         under any plan;

                  (ii)     upon the issuance of any shares of Common Stock or
         options or rights to purchase those shares pursuant to any present or
         future employee, director or consultant benefit plan or program of or
         assumed by the Company or any of its Subsidiaries;

                  (iii)    upon the issuance of any shares of Common Stock
         pursuant to any option, warrant, right, or exercisable, exchangeable or
         convertible security not described in (ii) above and outstanding as of
         the date the Notes were first issued;

                  (iv)     for a change in the par value of the Common Stock;

                  (v)      for accrued and unpaid interest, including Contingent
         Interest, if any; or

                  (vi)     upon a reclassification of Common Stock or any
         consolidation, merger, binding share exchange or transfer of all or
         substantially all of the assets of the Company and its Subsidiaries,
         taken as a whole, in each case pursuant to which the Common Stock is
         converted into cash, securities or other property.

To the extent the Notes become convertible into cash, assets or property (other
than capital stock of the Company or securities to which Section 15.06 applies),
no adjustment shall be made thereafter as to the cash, assets or property.
Interest shall not accrue on such cash, assets or property.

         (j)      No adjustment in the Conversion Rate shall be required unless
such adjustment would require an increase or decrease of at least 1% in such
rate; provided that any adjustments that by reason of this Section 15.05(j) are
not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Article 15 shall be made by
the Company and shall be made to the nearest cent or to the nearest one-ten
thousandth (1/10,000) of a share, as the case may be.

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<PAGE>

         (k)      Whenever the Conversion Rate is adjusted as herein provided,
the Company shall promptly file with the Trustee and any Conversion Agent other
than the Trustee an Officers' Certificate setting forth the Conversion Rate
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment. Unless and until a Responsible Officer of the Trustee shall
have received such Officers' Certificate, the Trustee shall not be deemed to
have knowledge of any adjustment of the Conversion Rate and may assume that the
last Conversion Rate of which it has knowledge is still in effect. Promptly
after delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the date on which each adjustment becomes effective and shall mail such notice
of such adjustment of the Conversion Rate to the holder of each Note at his last
address appearing on the Note Register provided for in Section 2.05 of this
Indenture, within 20 days after execution thereof. Failure to deliver such
notice shall not affect the legality or validity of any such adjustment.

         (l)      In any case in which this Section 15.05 provides that an
adjustment shall become effective immediately after (1) a record date or Stock
Record Date for an event, (2) the date fixed for the determination of
stockholders entitled to receive a dividend or distribution pursuant to Section
15.05(a), (3) a date fixed for the determination of stockholders entitled to
receive rights or warrants pursuant to Section 15.05(b) or (4) the Expiration
Time for any tender or exchange offer pursuant to Section 15.05(e), (each a
"DETERMINATION DATE"), the Company may elect to defer until the occurrence of
the applicable Adjustment Event (as hereinafter defined) (x) issuing to the
holder of any Note converted after such Determination Date and before the
occurrence of such Adjustment Event, the additional shares of Common Stock or
other securities issuable upon such conversion by reason of the adjustment
required by such Adjustment Event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment and (y) paying to such
holder any amount in cash in lieu of any fraction pursuant to Section 15.03. For
purposes of this Section 15.05(l), the term "ADJUSTMENT EVENT" shall mean:

                  (i)      in any case referred to in clause (1) hereof, the
         occurrence of such event,

                  (ii)     in any case referred to in clause (2) hereof, the
         date any such dividend or distribution is paid or made,

                  (iii)    in any case referred to in clause (3) hereof, the
         date of expiration of such rights or warrants, and

                  (iv)     in any case referred to in clause (4) hereof, the
         date a sale or exchange of Common Stock pursuant to such tender or
         exchange offer is consummated and becomes irrevocable.

         (m)      For purposes of this Section 15.05, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.

                                       74
<PAGE>

         Section 15.06. Effect of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 15.05(c) applies), (ii) any consolidation, merger
or combination of the Company with another Person as a result of which holders
of Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, or (iii) any sale or conveyance of all or substantially all of the
properties and assets of the Company to any other Person as a result of which
holders of Common Stock shall be entitled to receive stock, other securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock, then the Company or the successor or purchasing Person, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture) providing that each Note shall be convertible
into the kind and amount of shares of stock, other securities or other property
or assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance by a holder of a number
of shares of Common Stock issuable upon conversion of such Notes (assuming, for
such purposes, a sufficient number of authorized shares of Common Stock are
available to convert all such Notes) immediately prior to such reclassification,
change, consolidation, merger, combination, sale or conveyance assuming such
holder of Common Stock did not exercise his rights of election, if any, as to
the kind or amount of stock, other securities or other property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance (provided that, if the kind or amount of
stock, other securities or other property or assets (including cash) receivable
upon such reclassification, change, consolidation, merger, combination, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised ("NON-ELECTING SHARE"),
then for the purposes of this Section 15.06 the kind and amount of stock, other
securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
for each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). Such
supplemental indenture shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
15.

         The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at its address appearing on the
Note Register provided for in Section 2.05 of this Indenture, within 20 days
after execution thereof. Failure to deliver such notice shall not affect the
legality or validity of such supplemental indenture.

         The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.

         If this Section 15.06 applies to any event or occurrence, Section 15.05
shall not apply.

         Section 15.07. Taxes on Shares Issued. The issue of stock certificates
on conversions of Notes shall be made without charge to the converting
Noteholder for any documentary, stamp or similar issue or transfer tax in
respect of the issue thereof. The Company shall not, however, be required to pay
any such tax which may be payable in respect of any transfer involved in the
issue and delivery of stock in any name other than that of the holder of any
Note converted, and

                                       75
<PAGE>

the Company shall not be required to issue or deliver any such stock certificate
unless and until the Person or Persons requesting the issue thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.

         Section 15.08. Reservation of Shares, Shares to Be Fully Paid;
Compliance with Governmental Requirements; Listing of Common Stock. The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares or shares held in treasury, sufficient shares of Common Stock to provide
for the conversion of the Notes from time to time as such Notes are presented
for conversion.

         Before taking any action which would cause an adjustment increasing the
Conversion Rate to an amount that would cause the Conversion Price to be reduced
below the then par value, if any, of the shares of Common Stock issuable upon
conversion of the Notes, the Company will take all corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue shares of such Common Stock at such adjusted
Conversion Rate.

         The Company covenants that all shares of Common Stock that may be
issued upon conversion of Notes will upon issue be fully paid and nonassessable
by the Company and free from all taxes, liens and charges with respect to the
issue thereof.

         The Company covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Notes hereunder require registration
with or approval of any governmental authority under any federal or state law
before such shares may be validly issued upon conversion, the Company will in
good faith and as expeditiously as possible, to the extent then permitted by the
rules and interpretations of the Commission (or any successor thereto), endeavor
to secure such registration or approval, as the case may be.

         The Company further covenants that, if at any time the Common Stock
shall be listed on the New York Stock Exchange or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Note;
provided that if the rules of such exchange or automated quotation system permit
the Company to defer the listing of such Common Stock until the first conversion
of the Notes into Common Stock in accordance with the provisions of this
Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Notes in accordance with the requirements of such exchange or
automated quotation system at such time.

         Section 15.09. Responsibility of Trustee. The Trustee and any other
Conversion Agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine the Conversion Rate or whether any facts exist
which may require any adjustment of the Conversion Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
Conversion Agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered

                                       76
<PAGE>

upon the conversion of any Note; and the Trustee and any other Conversion Agent
make no representations with respect thereto. Neither the Trustee nor any
Conversion Agent shall be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any Note for the purpose of
conversion or to comply with any of the duties, responsibilities or covenants of
the Company contained in this Article 15. Without limiting the generality of the
foregoing, neither the Trustee nor any Conversion Agent shall be under any
responsibility to determine the correctness of any provisions contained in any
supplemental indenture entered into pursuant to Section 15.06 relating either to
the kind or amount of shares of stock or securities or property (including cash)
receivable by Noteholders upon the conversion of their Notes after any event
referred to in such Section 15.06 or to any adjustment to be made with respect
thereto, but, subject to the provisions of Section 8.01, may accept as
conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, the Officers' Certificate (which the Company shall be
obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.

         Section 15.10. Notice to Holders Prior to Certain Actions. In case:

         (a)      the Company shall declare a dividend (or any other
distribution) on its Common Stock that would require an adjustment in the
Conversion Rate pursuant to Section 15.05; or

         (b)      the Company shall authorize the granting to the holders of all
or substantially all of its Common Stock of rights, options or warrants to
subscribe for or purchase any share of any class or any other rights, options or
warrants; or

         (c)      of any reclassification or reorganization of the Common Stock
of the Company (other than a subdivision or combination of its outstanding
Common Stock, or a change in par value, or from par value to no par value, or
from no par value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company; or

         (d)      of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;

the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note Register provided for in
Section 2.05 of this Indenture, as promptly as possible but in any event at
least ten days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such

                                       77
<PAGE>

dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.

         Section 15.11. Stockholder Rights Plans. If the rights provided for in
any future rights plan adopted by the Company have separated from the shares of
Common Stock in accordance with the provisions of the applicable stockholder
rights agreement so that the holders of the Notes would not be entitled to
receive any rights in respect of Common Stock issuable upon conversion of the
Notes, the conversion rate will be adjusted as if the Company distributed to all
holders of Common Stock shares of the Company's capital stock, evidences of
indebtedness or assets (including securities but excluding rights or warrants to
purchase Common Stock issued to all holders of Common Stock, Common Stock issued
as a dividend or distribution on Common Stock and cash distributions), subject
to readjustment in the event of the expiration, termination or redemption of the
rights. In lieu of any such adjustment, the Company may amend such applicable
stockholder rights agreement to provide that upon conversion of the notes the
holders will receive, in addition to the Common Stock issuable upon such
conversion, the rights which would have attached to such Common Stock if the
rights had not become separated from the Common Stock under such applicable
stockholder rights agreement.

                                   ARTICLE 16
                            MISCELLANEOUS PROVISIONS

         Section 16.01. Provisions Binding On Company's Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.

         Section 16.02. Official Acts By Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of the
Company.

         Section 16.03. Addresses For Notices, Etc. Any notice or demand which
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Notes on the Company shall be deemed
to have been sufficiently given or made, for all purposes, if given or served by
being deposited postage prepaid by registered or certified mail in a post office
letter box or sent by telecopier transmission addressed as follows: to Apria
Healthcare Group Inc., 26220 Enterprise Court, Lake Forest, California 92630,
Telecopier No.: (949) 587-1850, Attention: Chief Financial Officer. Any notice,
direction, request or demand hereunder to or upon the Trustee shall be deemed to
have been sufficiently given or made, for all purposes, if given or served by
being deposited, postage prepaid, by registered or certified mail in a post
office letter box or sent by telecopier transmission addressed as follows: U.S.
Bank National Association, 60 Livingston Avenue, St. Paul, Minnesota, 55107,
attn: Corporate Trust Department.

         The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.

                                       78
<PAGE>

         Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail, postage prepaid, at his address as it appears on the
Note Register and shall be sufficiently given to him if so mailed within the
time prescribed.

         Failure to mail a notice or communication to a Noteholder or any defect
in it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.

         Section 16.04. Governing Law. This Indenture and each Note shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of the State of New
York (including Section 5-1401 of the New York General Obligations Law or any
successor to such statute).

         Section 16.05. Evidence of Compliance with Conditions Precedent,
Certificates to Trustee. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.

         Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include: (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.

         Section 16.06. Legal Holidays. In any case in which the date of
maturity of Interest on or principal of the Notes or the Redemption Date of any
Note or any Repurchase Date with respect to any Note will not be a Business Day,
then payment of such Interest on or principal of the Notes need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the date of maturity or the Redemption Date or
the Repurchase Date, as the case may be, and no interest shall accrue for the
period from and after such date.

         Section 16.07. Company Responsible for Making Calculations. Except as
specified in Section 4.01, the Company will be responsible for making all
calculations called for under the Notes. These calculations include, but are not
limited to, determination of the Current Market Price, Last Reported Sale Price,
Market Price and Spin-off Market Price, the amount of accrued Interest
(including any Contingent Interest) payable on the Notes and the Conversion Rate
of the Notes. The Company will make these calculations in good faith and, absent
manifest error, these calculations will be final and binding on the Noteholders.
Promptly after the calculation thereof, the Company will provide to each of the
Trustee and the Conversion Agent an Officers' Certificate setting forth a
schedule of its calculations, and each of the Trustee and the Conversion

                                       79
<PAGE>

Agent is entitled to conclusively rely upon the accuracy of such calculations
without independent verification. The Trustee will forward the Company's
calculations to any Holder upon the request of such Holder.

         Section 16.08. Trust Indenture Act. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided that unless otherwise required by law, notwithstanding
the foregoing, this Indenture and the Notes issued hereunder shall not be
subject to the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section
314 of the Trust Indenture Act as now in effect or as hereafter amended or
modified; provided further that this Section 16.08 shall not require this
Indenture or the Trustee to be qualified under the Trust Indenture Act prior to
the time such qualification is in fact required under the terms of the Trust
Indenture Act, nor shall it constitute any admission or acknowledgment by any
party to the Indenture that any such qualification is required prior to the time
such qualification is in fact required under the terms of the Trust Indenture
Act. If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in an indenture qualified
under the Trust Indenture Act, such required provision shall control.

         Section 16.09. No Security Interest Created. Except as provided in
Section 8.06, nothing in this Indenture or in the Notes, expressed or implied,
shall be construed to constitute a security interest under the Uniform
Commercial Code or similar legislation, as now or hereafter enacted and in
effect, in any jurisdiction in which property of the Company or its subsidiaries
is located.

         Section 16.10. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto, any Paying Agent, any authenticating agent, any Note Registrar and their
successors hereunder and the holders of Notes any benefit or any legal or
equitable right, remedy or claim under this Indenture.

         Section 16.11. Table of Contents, Headings, Etc. The table of contents
and the titles and headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.

         Section 16.12. Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.04, 2.05, 2.06, 2.07, 3.02 and 3.08, as fully to all
intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Notes. For all purposes of this Indenture, the authentication and delivery of
Notes by the authenticating agent shall be deemed to be authentication and
delivery of such Notes "by the Trustee" and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent shall be deemed to
satisfy any requirement hereunder or in the Notes for the Trustee's certificate
of authentication. Such authenticating agent shall at all times be a Person
eligible to serve as trustee hereunder pursuant to Section 8.09.

                                       80
<PAGE>

         Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 16.12, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.

         Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former authenticating agent under this
Indenture and, upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Notes as the names and
addresses of such holders appear on the Note Register.

         The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in writing
between the Company and the authenticating agent.

         The provisions of Sections 8.02, 8.03, 8.04 and 9.03 and this Section
16.12 shall be applicable to any authenticating agent.

         Section 16.13. Execution in Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.

         Section 16.14. Severability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, then (to the extent
permitted by law) the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

         U.S. Bank National Association hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions herein above set
forth.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                       81
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.

                                        APRIA HEALTHCARE GROUP INC.

                                        By:   /s/ James E. Baker
                                            -----------------------------------
                                              Name: James E. Baker
                                              Title: Chief Financial Officer

                                        U.S. BANK NATIONAL
                                          ASSOCIATION, as Trustee

                                        By:   /s/ Frank P. Leslie, III
                                            -----------------------------------
                                              Name: Frank P. Leslie, III
                                              Title: Vice President

                                       82
<PAGE>

                                                                       EXHIBIT A

[Include only for Global Notes:]

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITORY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND
ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

[Include only for Notes that are Restricted Securities]

[THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY,
BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")); (2)
AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS
PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY, PRIOR TO THE EXPIRATION
OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS SECURITY UNDER RULE 144(k)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), ONLY (A) TO APRIA
HEALTHCARE GROUP INC. (THE "ISSUER"), (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES
TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER), (C) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, IN COMPLIANCE WITH RULE 144A TO A
PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR
(D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY
OF AN

<PAGE>

OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS SECURITY
PURSUANT TO CLAUSE 2(B) ABOVE OR UPON ANY TRANSFER OF THIS SECURITY UNDER RULE
144 UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).]

THIS NOTE IS SUBJECT TO UNITED STATES FEDERAL INCOME TAX REGULATIONS GOVERNING
CONTINGENT PAYMENT DEBT INSTRUMENTS. FOR PURPOSES OF SECTIONS 1272, 1273 AND
1275 OF THE INTERNAL REVENUE CODE, THE COMPARABLE YIELD OF THIS NOTE IS 8.625%,
COMPOUNDED SEMI-ANNUALLY (WHICH WILL BE TREATED AS THE YIELD TO MATURITY FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES).

THE ISSUER AGREES, AND BY ACCEPTING A BENEFICIAL OWNERSHIP INTEREST IN THIS NOTE
EACH HOLDER AND ANY BENEFICIAL OWNER OF THIS NOTE WILL BE DEEMED TO HAVE AGREED,
FOR UNITED STATES FEDERAL INCOME TAX PURPOSES (1) TO TREAT THIS NOTE AS A DEBT
INSTRUMENT THAT IS SUBJECT TO TREAS. REG. SEC. 1.1275-4 (THE "CONTINGENT PAYMENT
REGULATIONS"), (2) TO TREAT THE FAIR MARKET VALUE OF ANY COMMON STOCK RECEIVED
UPON ANY CONVERSION OF THIS NOTE OR UPON A PURCHASE OF THIS NOTE AT THE HOLDER'S
OPTION AS A CONTINGENT PAYMENT FOR PURPOSES OF THE CONTINGENT PAYMENT
REGULATIONS, AND (3) TO ACCRUE INTEREST WITH RESPECT TO THE NOTE AS ORIGINAL
ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES ACCORDING TO THE
"NONCONTINGENT BOND METHOD," SET FORTH IN THE CONTINGENT PAYMENT REGULATIONS,
AND TO BE BOUND BY THE ISSUER'S DETERMINATION OF THE "COMPARABLE YIELD" AND
"PROJECTED PAYMENT SCHEDULE," WITHIN THE MEANING OF THE CONTINGENT PAYMENT
REGULATIONS, WITH RESPECT TO THIS NOTE. THE ISSUER AGREES TO PROVIDE PROMPTLY TO
THE HOLDER OF THIS NOTE, UPON WRITTEN REQUEST, THE ISSUE PRICE, ISSUE DATE,
YIELD TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE. ANY SUCH
WRITTEN REQUEST SHOULD BE SENT TO THE ISSUER AT THE FOLLOWING ADDRESS: APRIA
HEALTHCARE GROUP INC., 26220 Enterprise Court, Lake Forest, California 92630,
ATTN: CHIEF FINANCIAL OFFICER.

THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS
AGREEMENT DATED August 20, 2003 AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE
BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS
AGREEMENT.

                                      A-2
<PAGE>

                           APRIA HEALTHCARE GROUP INC.

                     3 3/8% CONVERTIBLE SENIOR NOTE DUE 2033

                                                           CUSIP:

No. 1                                                             $_____________

         Apria Healthcare Group Inc., a corporation duly organized and validly
existing under the laws of the State of Delaware (herein called the "COMPANY",
which term includes any successor corporation under the Indenture referred to on
the reverse hereof), for value received hereby promises to pay to CEDE & CO. or
its registered assigns, [the principal sum of ___________ DOLLARS] [the
principal sum set forth on Schedule I hereto]1 on September 1, 2033 at the
office or agency of the Company maintained for that purpose in accordance with
the terms of the Indenture, in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest, semiannually on September 1 and
March 1 of each year, commencing March 1, 2004, on said principal sum at said
office or agency, in like coin or currency, at the rate per annum of 3.375%,
from the September 1 or March 1, as the case may be, next preceding the date of
this Note to which interest has been paid or duly provided for, unless the date
hereof is a date to which interest has been paid or duly provided for, in which
case from the date of this Note, or unless no interest has been paid or duly
provided for on the Notes, in which case from August 20, 2003 until payment of
said principal sum has been made or duly provided for. Notwithstanding the
foregoing, if the date hereof is after any August 15 or February 15, as the case
may be, and before the following September 1 or March 1, this Note shall bear
interest from such August 15 or February 15; provided that if the Company shall
default in the payment of interest due on such September 1 or March 1, then this
Note shall bear interest from the next preceding August 15 or February 15 to
which interest has been paid or duly provided for; and provided further that if
no interest has been paid or duly provided for on this Note, then this Note
shall bear interest from August 20, 2003. Contingent Interest, if any, will
accrue for any applicable Interest Period and be payable to holders of this Note
on the applicable Interest Payment Date to the person in whose name this Note is
registered on the corresponding record date. Except as otherwise provided in the
Indenture, the interest payable on the Note pursuant to the Indenture on any
September 1 or March 1 will be paid to the Person entitled thereto as it appears
in the Note Register at the close of business on the Regular Record Date, which
shall be the August 15 or February 15 (whether or not a Business Day) next
preceding such September 1 or March 1, as provided in the Indenture; provided
that any such interest not punctually paid or duly provided for shall be payable
as provided in the Indenture. The Company shall pay interest (i) on any Notes in
certificated form by check mailed to the address of the Person entitled thereto
as it appears in the Note Register (or, upon written notice from the registered
holder hereof, by wire transfer in immediately available funds, if such Person
is entitled to interest on Notes with an aggregate

------------------------
(1)  For Global Notes only.

                                      A-3
<PAGE>

principal amount in excess of $2,000,000) or (ii) on any Global Note by wire
transfer of immediately available funds to the account of the Depositary or its
nominee.

         The Company promises to pay interest on overdue principal and (to the
extent that payment of such interest is enforceable under applicable law)
Interest at the rate of 3.375%, per annum, compounded semi-annually.

         Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions giving the holder
of this Note the right to convert this Note into Common Stock of the Company on
the terms and subject to the limitations referred to on the reverse hereof and
as more fully specified in the Indenture. Under the circumstances described in
the Indenture, the Company may fulfill all or part of its conversion obligation
by delivering cash in lieu of Common Stock. Such further provisions of the
Indenture shall for all purposes have the same effect as though fully set forth
at this place.

         This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of the State of New York (including Section 5-1401 of
the New York General Obligations Law or any successor to such statute).

         This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.

                                      A-4
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed.

                                              APRIA HEALTHCARE GROUP INC.

                                              By:________________________

[Date of authentication]

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Notes described in the within-named Indenture.

U.S. BANK NATIONAL ASSOCIATION,
      as Trustee

By: ______________________________
    Authorized Signatory

                               , or

By: ______________________________
    As Authenticating Agent
    (if different from Trustee)

                By: ______________________________
                    Authorized Signatory

                                      A-5
<PAGE>

                             FORM OF REVERSE OF NOTE

                           APRIA HEALTHCARE GROUP INC.

                     3 3/8% CONVERTIBLE SENIOR NOTE DUE 2033

         This Note is one of a duly authorized issue of Notes of the Company,
designated as its 3-3/8% Convertible Senior Notes due 2033 (herein called the
"NOTES"), limited in aggregate principal amount to $250,000,000, issued and to
be issued under and pursuant to an Indenture dated as of August 20, 2003 (herein
called the "INDENTURE"), between the Company and U.S. Bank National Association,
as trustee (herein called the "TRUSTEE"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Notes.

         In case an Event of Default shall have occurred and be continuing, the
principal of and accrued Interest on all Notes may be declared by either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
Notes then outstanding, and upon said declaration shall become, due and payable,
in the manner, with the effect and subject to the conditions provided in the
Indenture.

         The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of at least a majority in aggregate
principal amount of the Notes at the time outstanding, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of any supplemental indenture or modifying
in any manner the rights of the holders of the Notes; provided that no such
supplemental indenture shall (i) reduce the principal amount of or change the
Stated Maturity of any Note, (ii) reduce the rate or extend the time of payment
of Interest on this Note, (iii) reduce any amount payable on redemption or
repurchase of this Note (including upon the occurrence of a Fundamental Change)
or change the time at which the circumstances under which this Note may or shall
be redeemed or repurchased, (iv) impair the right of any Noteholder to institute
suit for the payment on this Note, (v) make the principal or Interest of this
Note payable in any coin or currency other than that provided in this Note, (vi)
impair the right to convert this Note into Common Stock subject to the terms set
forth in the Indenture, (vii) reduce the number of shares of Common Stock or
other property receivable upon conversion, (viii) modify any of the provisions
of Section 11.02 or Section 7.07 of the Indenture, except to increase any such
percentage or to provide that certain other provisions of the Indenture cannot
be modified or waived without the consent of the holder of each Note so
affected, (ix) change any obligation of the Company to maintain an office or
agency in the places and for the purposes set forth in Section 5.02 of the
Indenture, (x) reduce the quorum or voting requirements set forth in Article 10
of the Indenture or (xi) reduce the aforesaid percentage of Notes, the holders
of which are required to consent to any such supplemental indenture, without the
consent of the holders of all Notes then outstanding. Subject to the provisions
of the Indenture, the holders of a majority in aggregate principal amount of the
Notes at the time outstanding may on behalf of the holders of all of the Notes
waive any past default or Event of Default under the Indenture and its
consequences except (A) a default in the payment of Interest on or the principal
of any of the Notes, (B) a failure by the Company to convert any Notes into
Common Stock of the Company,

                                      A-6
<PAGE>

(C) a default in the payment of the Redemption Price pursuant to Article 3 of
the Indenture, (D) a default in the payment of the Company Repurchase Price or
Fundamental Change Repurchase Price pursuant to Article 3 of the Indenture, or
(E) a default in respect of a covenant or provisions of the Indenture which
under Article 11 of the Indenture cannot be modified or amended without the
consent of the holders of each or all Notes then outstanding or affected
thereby. Any such consent or waiver by the holder of this Note (unless revoked
as provided in the Indenture) shall be conclusive and binding upon such holder
and upon all future holders and owners of this Note and any Notes which may be
issued in exchange or substitution hereof, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes.

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

         Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months.

         The Notes are issuable in fully registered form, without coupons, in
denominations of $1,000 principal amount and any multiple of $1,000. At the
office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in connection with
any registration or exchange of Notes, Notes may be exchanged for a like
aggregate principal amount of Notes of any other authorized denominations.

         At any time on or after September 8, 2010 and prior to maturity, the
Notes may be redeemed at the option of the Company, in whole or in part, in cash
upon mailing a notice of such redemption not less than 30 days but not more than
60 days before the Redemption Date to the holders of Notes at their last
registered addresses, all as provided in the Indenture, at a Redemption Price
equal to 100% of the principal amount of notes being redeemed plus accrued and
unpaid Interest to, but excluding, the Redemption Date; provided that if the
Redemption Date is a September 1 or March 1, then the Interest payable on such
date shall be paid to the holder of record on the preceding August 15 or
February 15, respectively.

         In no event will any Security be redeemable at the option of the
Company before September 8, 2010.

         The Company may not give notice of any redemption of the Notes if a
default in the payment of Interest on the Notes has occurred and is continuing.

         The Notes are not subject to redemption through the operation of any
sinking fund.

         If a Fundamental Change occurs at any time prior to maturity of the
Notes, this Note will be redeemable on a Fundamental Change Repurchase Date,
specified by the Company, which shall be no later than 30 days after notice
thereof, at the option of the holder of this Note at a Fundamental Change
Repurchase Price equal to 100% of the principal amount thereof, together with
accrued Interest to (but excluding) the Fundamental Change Repurchase Date;
provided that

                                      A-7
<PAGE>

if such Fundamental Change Repurchase Date falls after a record date and on or
prior to the corresponding Interest Payment Date, the Interest payable on such
Interest Payment Date shall be paid to the holder of record of this Note on the
preceding August 15 or February 15, respectively. The Notes will be redeemable
in multiples of $1,000 principal amount. The Company shall mail to all holders
of record of the Notes a notice of the occurrence of a Fundamental Change and of
the repurchase right arising as a result thereof on or before the 15th day after
the occurrence of such Fundamental Change. For a Note to be so repurchased at
the option of the holder, the Company must receive at the office or agency of
the Company maintained for that purpose in accordance with the terms of the
Indenture, such Note with the form entitled "FORM OF FUNDAMENTAL CHANGE
REPURCHASE ELECTION" on the reverse thereof duly completed, together with such
Note, duly endorsed for transfer, before the close of business on the Business
Day immediately preceding the Fundamental Change Repurchase Date.

         Subject to the terms and conditions of the Indenture, the Company shall
become obligated to repurchase, at the option of the holder, all or any portion
of the Notes held by such holder on September 1, 2008, September 1, 2010,
September 1, 2013, September 1, 2018, September 1, 2023 and September 1, 2028 in
integral multiples of $1,000 at a Company Repurchase Price of 100% of the
principal amount, plus any accrued and unpaid Interest on such Note to but
excluding the Company Repurchase Date. To exercise such right, a holder shall
deliver to the Company such Note with the form entitled "FORM OF COMPANY
REPURCHASE ELECTION" on the reverse thereof duly completed, together with the
Note, duly endorsed for transfer, at any time from the opening of business on
the date that is 20 Business Days prior to such Company Repurchase Date until
the close of business on the Business Day immediately preceding the Company
Repurchase Date, and shall deliver the Notes to the Trustee (or other Paying
Agent appointed by the Company) as set forth in the Indenture.

         The Company Repurchase Price to be paid on September 1, 2008 shall be
paid in cash. The Company Repurchase Price to be paid on any of September 1,
2010, September 1, 2013 or September 1, 2018, September 1, 2023 and September 1,
2028 may be paid, at the option of the Company, in cash or by the issuance and
delivery of shares of Common Stock, or in any combination thereof, subject to
the terms and conditions of the Indenture.

         Holders have the right to withdraw any Repurchase Election by
delivering to the Trustee (or other Paying Agent appointed by the Company) a
written notice of withdrawal up to the close of business on the Business Day
immediately preceding the Repurchase Date, all as provided in the Indenture.

         If cash or securities sufficient to pay the Repurchase Price with
respect to all Notes or portions thereof to be repurchased as of any Repurchase
Date is deposited with the Trustee (or other Paying Agent appointed by the
Company), then on and after such Repurchase Date, Interest will cease to accrue
on such Notes (or portions thereof), and the holder thereof shall have no other
rights as such other than the right to receive the Repurchase Price upon
surrender of such Note.

         Subject to the occurrence of certain events and in compliance with the
provisions of the Indenture, prior to the Stated Maturity of the Notes, the
holder hereof has the right, at its option, to convert each $1,000 principal
amount of the Notes into 28.6852 shares of the Company's

                                      A-8
<PAGE>

Common Stock (a Conversion Price of approximately $34.86 per share), as such
shares shall be constituted at the date of conversion and subject to adjustment
from time to time as provided in the Indenture, upon surrender of this Note with
the form entitled "FORM OF CONVERSION NOTICE" on the reverse hereof duly
completed, to the Company at the office or agency of the Company maintained for
that purpose in accordance with the terms of the Indenture, or at the option of
such holder, the Corporate Trust Office, and, unless the shares issuable on
conversion are to be issued in the same name as this Note, duly endorsed by, or
accompanied by instruments of transfer in form satisfactory to the Company duly
executed by, the holder or by his duly authorized attorney. The Company will
notify the holder thereof of any event triggering the right to convert the Notes
as specified above in accordance with the Indenture.

         If the Company (i) is a party to a consolidation, merger, statutory
share exchange or combination, (ii) reclassifies the Common Stock, or (iii)
sells or conveys its properties and assets substantially as an entirety to any
Person, the right to convert a Security into shares of Common Stock may be
changed into a right to convert it into securities, cash or other assets of the
Company or such other Person, in each case in accordance with the Indenture.

         No adjustment in respect of Interest on any Note converted or dividends
on any shares issued upon conversion of such Note will be made upon any
conversion except as set forth in the next sentence. If this Note (or portion
hereof) is surrendered for conversion during the period from the close of
business on any record date for the payment of Interest to the close of business
on the Business Day preceding the following Interest Payment Date and has not
been called for redemption by the Company on a Redemption Date that occurs
during such period, this Note (or portion hereof being converted) must be
accompanied by payment, in immediately available funds or other funds acceptable
to the Company, of an amount equal to the Interest otherwise payable on such
Interest Payment Date on the principal amount being converted; provided that no
such payment shall be required (1) if the Company has specified a Redemption
Date or a Fundamental Change Repurchase Date that is after a record date and
prior to the next Interest Payment Date or (2) to the extent of any overdue
Interest, if any overdue Interest exists at the time of conversion with respect
to such Note.

         No fractional shares will be issued upon any conversion, but an
adjustment and payment in cash will be made, as provided in the Indenture, in
respect of any fraction of a share which would otherwise be issuable upon the
surrender of any Note or Notes for conversion.

         A Note in respect of which a holder is exercising its right to require
repurchase upon a Fundamental Change or repurchase on a Repurchase Date may be
converted only if such holder withdraws its election to exercise such right in
accordance with the terms of the Indenture.

         Any Notes called for redemption, unless surrendered for conversion by
the holders thereof on or before the close of business on the second Business
Day preceding the Redemption Date, may be deemed to be redeemed from the holders
of such Notes for an amount equal to the applicable Redemption Price, together
with accrued but unpaid Interest to, but excluding, the Redemption Date, by one
or more investment banks or other purchasers who may agree with the Company (i)
to purchase such Notes from the holders thereof and convert them into shares of
the Company's Common Stock and (ii) to make payment for such Notes as aforesaid
to the Trustee in trust for the holders.

                                      A-9
<PAGE>

         Upon due presentment for registration of transfer of this Note at the
office or agency of the Company maintained for that purpose in accordance with
the terms of the Indenture, a new Note or Notes of authorized denominations for
an equal aggregate principal amount will be issued to the transferee in exchange
thereof, subject to the limitations provided in the Indenture, without charge
except for any tax, assessment or other governmental charge imposed in
connection therewith.

         The Company, the Trustee, any authenticating agent, any Paying Agent,
any Conversion Agent and any Note Registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note shall
be overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Note Registrar) for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any other
authenticating agent nor any Paying Agent nor other Conversion Agent nor any
Note Registrar shall be affected by any notice to the contrary. All payments
made to or upon the order of such registered holder shall, to the extent of the
sum or sums paid, satisfy and discharge liability for monies payable on this
Note.

         No recourse for the payment of the principal of or Interest on this
Note, or for any claim based hereon or otherwise in respect hereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
the Indenture or any supplemental indenture or in any Note, or because of the
creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer or director or subsidiary,
as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.

         The Company agrees, and by acceptance of a Note, each beneficial holder
of a Note will be deemed to have agreed to treat the Notes as indebtedness of
the Company for U.S. federal income tax purposes that are subject to the
regulations governing contingent payment debt instruments and to be bound (in
the absence of an administrative determination or judicial ruling to the
contrary) by the Company's determination of the comparable yield and projected
payment schedule within the meaning of the regulations governing contingent
payment debt instruments. A holder of Notes may obtain the issue price, issue
date, yield to maturity, comparable yield and projected payment schedule for the
Notes, determined by the Company pursuant to Treas. Reg. Sec. 1.1275-4, by
submitting a written request for it to the Company at the following address:
Apria Healthcare Group Inc., 26220 Enterprise Court, Lake Forest, California
92630, Attention: Chief Financial Officer.

         Terms used in this Note and defined in the Indenture are used herein as
therein defined.

                                      A-10
<PAGE>

                                  ABBREVIATIONS

         The following abbreviations, when used in the inscription of the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations.

<TABLE>
<S>            <C>                                                <C>
TEN COM -      as tenants in common                               UNIF GIFT MIN ACT -___ Custodian ___
TEN ENT -      as tenant by the entireties                        (Cust)       (Minor)
JT TEN -       as joint tenants with right of survivorship        under Uniform Gifts to Minors Act
               and not as tenants in common                       ____________________________________
                                                                                      (State)
</TABLE>

         Additional abbreviations may also be used though not in the above list.

                                      A-11
<PAGE>

                                     FORM OF

                                CONVERSION NOTICE

TO:      APRIA HEALTHCARE GROUP INC.
         U.S. BANK NATIONAL ASSOCIATION

         The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion thereof (which is
$1,000 or a multiple thereof) below designated, into shares of Common Stock of
Apria Healthcare Group Inc. in accordance with the terms of the Indenture
referred to in this Note, and directs that the shares issuable and deliverable
upon such conversion, together with any check in payment for fractional shares
and any Notes representing any unconverted principal amount hereof, be issued
and delivered to the registered holder hereof unless a different name has been
indicated below. Capitalized terms used herein but not defined shall have the
meanings ascribed to such terms in the Indenture. If shares or any portion of
this Note not converted are to be issued in the name of a person other than the
undersigned, the undersigned will provide the appropriate information below and
pay all transfer taxes payable with respect thereto. Any amount required to be
paid by the undersigned on account of Interest, including Contingent Interest
and Additional Amounts, if any, accompanies this Note.

Dated:_____________________

                                        ______________________________

                                        ______________________________
                                        Signature(s)

                                      A-12
<PAGE>

                                          Signature(s) must be guaranteed by an
                                          "ELIGIBLE GUARANTOR INSTITUTION"
                                          meeting the requirements of the Note
                                          Registrar, which requirements include
                                          membership or participation in the
                                          Security Transfer Agent Medallion
                                          Program ("STAMP") or such other
                                          "SIGNATURE GUARANTEE PROGRAM" as may
                                          be determined by the Note Registrar in
                                          addition to, or in substitution for,
                                          STAMP, all in accordance with the
                                          Securities Exchange Act of 1934, as
                                          amended.

                                          ___________________________________
                                          Signature Guarantee

         Fill in the registration of shares of Common Stock if to be issued, and
Notes if to be delivered, other than to and in the name of the registered
holder:

______________________________
(Name)

______________________________
(Street Address)

______________________________
(City, State and Zip Code)

______________________________
Please print name and address

Principal amount to be converted
(if less than all):

$______________________________

Social Security or Other Taxpayer
Identification Number:

______________________________

                                      A-13
<PAGE>

                                     FORM OF
                     FUNDAMENTAL CHANGE REPURCHASE ELECTION

TO:      APRIA HEALTHCARE GROUP INC.

U.S. BANK NATIONAL ASSOCIATION

         The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from Apria Healthcare Group Inc. (the
"COMPANY") as to the occurrence of a Fundamental Change with respect to the
Company and requests and instructs the Company to repurchase the entire
principal amount of this Note, or the portion thereof (which is $1,000 or a
multiple thereof) below designated, in accordance with the terms of the
Indenture referred to in this Note at the price of 100% of such entire principal
amount or portion thereof, together with accrued Interest to, but excluding, the
Fundamental Change Repurchase Date, to the registered holder hereof. Capitalized
terms used herein but not defined shall have the meanings ascribed to such terms
in the Indenture.

Dated: _______________________

                                                _______________________

                                                _______________________
                                                Signature(s)

                                      A-14
<PAGE>

NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Note in every particular without alteration
or enlargement or any change whatever.

Note Certificate Number (if applicable):

Principal amount to be repurchased (if less than all):

Social Security or Other Taxpayer Identification Number:

                                      A-15
<PAGE>

                                     FORM OF
                           COMPANY REPURCHASE ELECTION

TO:      APRIA HEALTHCARE GROUP INC.

U.S. BANK NATIONAL ASSOCIATION

         The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from Apria Healthcare Group Inc. (the
"COMPANY") regarding the right of holders to elect to require the Company to
repurchase the Notes and requests and instructs the Company to repay the entire
principal amount of this Note, or the portion thereof (which is $1,000 or an
integral multiple thereof) below designated, in accordance with the terms of the
Indenture at the price of 100% of such entire principal amount or portion
thereof, together with accrued Interest to, but excluding, the Company
Repurchase Date, to the registered holder hereof. Capitalized terms used herein
but not defined shall have the meanings ascribed to such terms in the Indenture.
The Notes shall be repurchased by the Company as of the Company Repurchase Date
pursuant to the terms and conditions specified in the Indenture. If the Company
elects to pay the Company Repurchase Price, in whole or in part, in shares of
Common Stock but such portion of the Company Repurchase Price shall ultimately
be paid to such holder entirely in cash because any of the conditions to payment
of the Company Repurchase Price in shares of Common Stock is not satisfied prior
to the close of business on the Business Day immediately preceding the Company
Repurchase Date, the undersigned registered owner elects:

         to withdraw this Company Repurchase Election as to $__________
         principal amount of the Notes to which this Company Repurchase Election
         relates (Certificate Numbers:
         ______________________________________________), or

         to receive cash in respect of $_______________ principal amount of the
         Notes to which this Company Repurchase Election relates.

Dated: _______________________

                                                _______________________

                                                _______________________
                                                Signature(s)

                                      A-16
<PAGE>

NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Note in every particular without alteration
or enlargement or any change whatever.

Note Certificate Number (if applicable):

Principal amount to be repurchased (if less than all):

Social Security or Other Taxpayer Identification Number:

                                      A-17
<PAGE>

                                   ASSIGNMENT

         For value received _____________________ hereby sell(s) assign(s) and
transfer(s) unto ______________________ (Please insert social security or other
Taxpayer Identification Number of assignee) the within Note, and hereby
irrevocably constitutes and appoints attorney to transfer said Note on the books
of the Company, with full power of substitution in the premises.

         In connection with any transfer of the Note prior to the expiration of
the holding period applicable to sales thereof under Rule 144(k) under the
Securities Act (or any successor provision) (other than any transfer pursuant to
a registration statement that has been declared effective under the Securities
Act), the undersigned confirms that such Note is being transferred:

         To Apria Healthcare Group Inc. or a subsidiary thereof; or

         To a "QUALIFIED INSTITUTIONAL BUYER" in compliance with Rule 144A under
         the Securities Act of 1933, as amended; or

         Pursuant to and in compliance with Rule 144 under the Securities Act of
         1933, as amended; or

         Pursuant to a Registration Statement which has been declared effective
         under the Securities Act of 1933, as amended, and which continues to be
         effective at the time of transfer;

and unless the Note has been transferred to Apria Healthcare Group Inc. or a
subsidiary thereof, the undersigned confirms that such Note is not being
transferred to an "affiliate" of the Company as defined in Rule 144 under the
Securities Act of 1933, as amended.

         Unless one of the boxes is checked, the Trustee will refuse to register
any of the Notes evidenced by this certificate in the name of any person other
than the registered holder thereof.

Dated: _______________________

                                                _______________________

                                                _______________________
                                                Signature(s)

                                      A-18
<PAGE>

                                          Signature(s) must be guaranteed by an
                                          "ELIGIBLE GUARANTOR INSTITUTION"
                                          meeting the requirements of the Note
                                          Registrar, which requirements include
                                          membership or participation in the
                                          Security Transfer Agent Medallion
                                          Program ("STAMP") or such other
                                          "SIGNATURE GUARANTEE PROGRAM" as may
                                          be determined by the Note Registrar in
                                          addition to, or in substitution for,
                                          STAMP, all in accordance with the
                                          Securities Exchange Act of 1934, as
                                          amended.

                                          __________________________________
                                          Signature Guarantee

NOTICE: The signature on the Conversion Notice, the Fundamental Change
Repurchase Election, the Company Repurchase Election or the Assignment must
correspond with the name as written upon the face of the Note in every
particular without alteration or enlargement or any change whatever.

                                      A-19
<PAGE>

                                                                      Schedule I

                   [Include Schedule I only for a Global Note]

                           APRIA HEALTHCARE GROUP INC.
                     3-3/8% Convertible Senior Note due 2033

No. _____________

<TABLE>
<CAPTION>
                                                                                   Authorized
                                     Notation Explaining Principal Amount      Signature of trustee
Date     Principal Amount                       Recorded                           or Custodian
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<S>      <C>                         <C>                                       <C>
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</TABLE>

                                      A-20