Document:

<PAGE>
                                                                    EXHIBIT 4.11

         THIS SECURITY IS SUBJECT TO REGULATIONS GOVERNING CONTINGENT PAYMENT
DEBT INSTRUMENTS. UNDER SUCH REGULATIONS, THE COMPARABLE YIELD OF THIS SECURITY
IS 8.25%, COMPOUNDED SEMI-ANNUALLY AND THE PROJECTED PAYMENT SCHEDULE IS
ATTACHED AS EXHIBIT G TO THE INDENTURE. A HOLDER OF SECURITIES MAY ALSO OBTAIN
THE PROJECTED PAYMENT SCHEDULE BY SUBMITTING A WRITTEN REQUEST TO THE ISSUER AT
THE FOLLOWING ADDRESS: STARWOOD HOTELS & RESORTS WORLDWIDE, INC., 1111
WESTCHESTER AVENUE, WHITE PLAINS, NEW YORK 10604, ATTENTION: GENERAL COUNSEL.

         THE ISSUER AGREES, AND BY ACCEPTANCE OF A BENEFICIAL INTEREST IN THE
SECURITY, EACH BENEFICIAL OWNER OF ALL OR ANY PORTION OF THE SECURITY EVIDENCED
HEREBY WILL BE DEEMED TO HAVE AGREED, FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES (1) TO TREAT THE SECURITY AS INDEBTEDNESS THAT IS SUBJECT TO TREAS.
REG. SEC. 1.1275-4 (THE "CONTINGENT DEBT REGULATIONS") AND, FOR PURPOSES OF THE
CONTINGENT DEBT REGULATIONS, TO TREAT, WITHOUT LIMITATION, THE AMOUNT OF CASH
AND THE FAIR MARKET VALUE OF ANY SHARES BENEFICIALLY RECEIVED UPON A CONVERSION
OF THE SECURITY AS A CONTINGENT PAYMENT AND (2) TO BE BOUND BY THE ISSUER'S
DETERMINATION OF THE "COMPARABLE YIELD" AND "PROJECTED PAYMENT SCHEDULE", WITHIN
THE MEANING OF THE CONTINGENT DEBT REGULATIONS, WITH RESPECT TO THE SECURITY.

         THIS NOTE AND THE SHARES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT, AS AMENDED (THE "SECURITIES ACT"), AND THIS
NOTE AND THE SHARES ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF
ANY, REQUIRED UNDER THE INDENTURE PURSUANT TO WHICH THIS NOTE IS ISSUED) AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER
OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (B) IN A TRANSACTION MEETING THE

<PAGE>

REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES
TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER
THE SECURITIES ACT OR (D) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE ISSUER SO REQUESTS), AS LONG AS THE REGISTRAR RECEIVES A
CERTIFICATION OF THE TRANSFEROR THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT (2) TO THE ISSUER OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL AND EACH SUBSEQUENT HOLDER IS REQUIRED TO NOTIFY ANY PURCHASER
FROM IT OF THE SECURITIES EVIDENCED HEREBY OF THE RESALE RESTRICTION SET FORTH
IN (A) ABOVE.

         THE HOLDER OF THIS SECURITY IS SUBJECT TO, AND ENTITLED TO THE BENEFITS
OF, A REGISTRATION RIGHTS AGREEMENT, DATED AS OF MAY 16, 2003, ENTERED INTO BY
THE ISSUER FOR THE BENEFIT OF CERTAIN HOLDERS FROM TIME TO TIME OF SECURITIES.

         THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY ("DTC"), A NEW YORK CORPORATION, TO THE ISSUER 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 IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                    STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

                     3.50% CONVERTIBLE SENIOR NOTE DUE 2023

CUSIP No. 85590A AH7                           Principal Amount: $300,000,000.00

<PAGE>

Issue Date: May 16, 2003                     Issue Price:  100% of the Principal
                                             Amount

         Starwood Hotels & Resorts Worldwide, Inc., a Maryland corporation
(herein called the "Issuer" or the "Issuer", which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay $300,000,000 aggregate Principal Amount (which amount may from
time to time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depositary, in accordance with the rules and
procedures of the Depositary) on May 16, 2023, 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, semi-annually on May
16 and November 16 of each year, commencing on November 16, 2003, on said
principal sum, in like coin or currency, at the rate of 3.50% per annum, from
May 16, 2003 or the most recent Interest Payment Date to which interest has been
paid or provided for, until the principal hereof has been paid or duly made
available for payment. The interest so payable on any May 16 or November 16
will, except as otherwise provided in the Indenture referred to on the reverse
hereof, be paid to the Person in whose name this Security is registered at the
close of business on the May 1 preceding such May 16 or the November 1 preceding
such November 16, whether or not such May 1 or November 1 is a Business Day.

         Each installment of interest on this Security shall be paid in same-day
funds by transfer to an account maintained by the payee located inside the
United States, provided that with respect to any Holder, such Holder shall have
furnished to the Paying Agent all required wire payment instructions no later
than the related Regular Record Date, or if no such instructions have been
furnished, by check payable to such Holder. In the case of a Global Security,
interest payable on any Interest Payment Date will be paid to the Depositary,
with respect to that portion of such Global Security held for its account by
Cede & Co. for the purpose of permitting such party to credit the interest
received by it in respect of such Global Security to the accounts of the
beneficial owners thereof.

         Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, including, without limitation, provisions giving
the Holder the right to convert this Security on the terms and subject to the
limitations referred to on the reverse hereof and as more fully specified in the
Indenture. Such further provisions shall for all purposes have the same effect
as though fully set forth at this place.

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

<PAGE>

         IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed.

                                          STARWOOD HOTELS & RESORTS
                                            WORLDWIDE, INC.

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

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

U.S. Bank National Association, as Trustee, certifies that this is one of the
Securities referred to in the Indenture.

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

Date of authentication:    May 16, 2003

<PAGE>

                           [REVERSE SIDE OF SECURITY]

         This Security is one of a duly authorized issue of Securities of the
Issuer designated as its 3.50% Convertible Senior Notes due 2023, limited in
aggregate Principal Amount to $300,000,000 (herein called the "Securities"),
issued and to be issued under an Indenture, dated as of May 16, 2003 (herein
called the "Indenture"), between the Issuer, Sheraton Holding Corporation,
Starwood Hotels & Resorts (the "Trust") and U.S. Bank National Association, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Issuer, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered.

         Initially, U.S. Bank National Association, at its corporate trust
facility in the Borough of Manhattan, The City of New York, will act as Paying
Agent, Conversion Agent, Securities Custodian and Registrar. The Issuer may
appoint and change any Paying Agent, Conversion Agent, Securities Custodian,
Registrar or co-registrar without notice.

         Method of Payment - Holders must surrender Securities to the Paying
Agent to collect all payments in respect of the Securities, except for
liquidated damages payable pursuant to the Registration Rights Agreement,
interest thereon and Contingent Interest. The Issuer will pay cash amounts in
money of the United States that at the time of payment is legal tender for
payment of public and private debts.

         Contingent Interest - Subject to the accrual and record date provisions
specified in this paragraph, the Issuer shall pay contingent interest
("Contingent Interest") to the Holders during any six-month period (a
"Contingent Interest Period") from May 16 to but not including November 16 and
from November 16 to but not including May 16, commencing after May 16, 2006, if
the average Security Market Price for the five trading days ending on the second
trading day immediately preceding the relevant six-month period with respect to
such Contingent Interest Period equals 120% or more of the Issue Price of the
Security.

         The amount of Contingent Interest payable per Security in respect of
any Contingent Interest Period shall equal the greater of (x) a rate per annum
of 0.4125%, multiplied by the Issue Price of the Security and (ii) a per annum
rate of .25% multiplied by the average Security Market Price for the five
trading days ending on the second trading day immediately preceding the relevant
Contingent Interest Period. Contingent Interest shall be computed on the basis
of a 360-day year comprised of twelve 30-day months.

"Security Market Price" means, as of any date of determination, the average of
the secondary market bid quotations per Security obtained by the Bid
Solicitation Agent for $10 million Principal Amount at approximately 4:00 p.m.
(New York City time) on such determination date from two recognized securities
dealers in The City of New York (none of which shall be an Affiliate of the
Issuer) selected by the Issuer; provided, however, if (a) at least two such bids
are not obtained by the Bid Solicitation Agent or (b) in the Issuer's reasonable
judgment, the bid quotations are not indicative of the secondary market value of
the Securities as of such determination date, then the Market Price of the
Securities for such determination date

<PAGE>

shall equal (i) the Conversion Rate in effect as of such determination date
multiplied by (ii) the average Sale Price 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 11.06, 11.07, 11.08 or 11.21 (subject to the
conditions set forth in Sections 11.09 and 11.10) of the Indenture.

         Upon determination that Holders will be entitled to receive Contingent
Interest which may become payable during a Contingent Interest Period, on or
prior to the first day of such Contingent Interest Period, the Issuer shall
issue a press release and publish such information on its web site at
www.starwoodhotels.com or such other website as the Issuer may from time to time
maintain.

         Redemption at the Option of the Issuer - No sinking fund is provided
for the Securities. The Securities are redeemable as a whole, or from time to
time in part, at any time at the option of the Issuer at a redemption price (the
"Redemption Price") equal to 100% of the Issue Price plus the accrued and unpaid
interest (including Contingent Interest, if any), to, but not including, the
Redemption Date; provided that the Securities are not redeemable prior to May
23, 2006 at the option of the Issuer.

         In addition, if there shall have occurred a Trust Assumption Event, the
Issuer or the Trust, at either the Issuer's or the Trust's option, may elect to
redeem Securities for a period of 60 days following the effective date of such
Trust Assumption Event for cash at a redemption price (the "Trust Assumption
Event Redemption Price") equal to 100% of the Issue Price plus accrued and
unpaid interest (including Contingent Interest, if any) to, but not including,
the Trust Assumption Event Redemption Date.

         In addition to the Redemption Price or Trust Assumption Event
Redemption Price payable with respect to all Securities or portions thereof to
be redeemed as of a Redemption Date or Trust Assumption Event Redemption Date,
as the case may be, the Holders of such Securities (or portions thereof) shall
be entitled to receive accrued and unpaid Defaulted Interest, if any, with
respect thereto, which Defaulted Interest shall be paid in cash on the
Redemption Date or Trust Assumption Event Redemption Date, as the case may be.

<PAGE>

         Purchase By the Issuer at the Option of the Holder - Subject to the
terms and conditions of the Indenture, the Issuer shall become obligated to
purchase, at the option of the Holder, the Securities held by such Holder on May
16 of each of 2006, 2008, 2013 and 2018 (each a "Purchase Date") at a purchase
price (the "Purchase Price") equal to 100% of the Issue Price plus accrued and
unpaid interest (including Contingent Interest, if any) to, but not including,
the Purchase Date, upon delivery of a Purchase Notice containing the information
set forth in the Indenture, at any time from the opening of business on the date
that is 20 Business Days prior to such Purchase Date until the close of business
on the third Business Day prior to such Purchase Date and upon delivery of the
Securities to the Paying Agent by the Holder as set forth in the Indenture.

         The Purchase Price may be paid, at the option of the Issuer, in cash or
by the issuance and delivery of Shares of the Issuer valued at the Market Price,
or in any combination of cash and Shares.

         At the option of the Holder and subject to the terms and conditions of
the Indenture, the Issuer shall become obligated to repurchase the Securities if
a Change in Control occurs at any time on or prior to May 16, 2006 for a change
in control purchase price ( the "Change in Control Purchase Price") equal to
100% of the Issue Price plus accrued and unpaid interest (including Contingent
Interest, if any) to, but not including, the Change in Control Purchase Date,
which Change in Control Purchase Price shall be paid in cash.

         At the option of the Holder and subject to the terms and conditions of
the Indenture, the Trust shall become obligated to repurchase the Securities if
a Trust Assumption Event occurs for a trust assumption event purchase price (the
"Trust Assumption Event Purchase Price") equal to 100% of the Issue Price plus
accrued and unpaid interest (including Contingent Interest, if any) to, but not
including, the Trust Assumption Event Purchase Date, which Trust Assumption
Event Purchase Price shall be paid in cash.

         In addition to the Purchase Price, Change in Control Purchase Price or
Trust Assumption Event Purchase Price, as the case may be, payable with respect
to all Securities or portions thereof to be purchased as of the Purchase Date,
the Change in Control Purchase Date or Trust Assumption Event Purchase Date, as
the case may be, the Holders of such Securities (or portions thereof) shall be
entitled to receive accrued and unpaid Defaulted Interest, if any, with respect
thereto, which Defaulted Interest shall be paid in cash promptly following the
later of the Purchase Date, the Change in Control Purchase Date or Trust
Assumption Event Purchase Date, as the case may be, and the time of delivery of
such Securities to the Paying Agent pursuant to the Indenture.

         Holders have the right to withdraw any Purchase Notice or Change in
Control Purchase Notice, as the case may be, by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the Indenture.

         If cash and/or securities sufficient to pay the Purchase Price or cash
sufficient to pay the Change in Control Purchase Price or cash sufficient to pay
the Trust Assumption Event Purchase Price, as the case may be, of all Securities
or portions thereof to be purchased as of the Purchase Date, the Change in
Control Purchase Date or the Trust Assumption Event Purchase Date, as the

<PAGE>

case may be, are deposited with the Paying Agent on the Business Day following
the Purchase Date, the Change in Control Purchase Date or Trust Assumption Event
Purchase Date, as the case may be, interest, (including Contingent Interest),
will cease to accrue on such Securities (or portions thereof) immediately after
such Purchase Date, Change in Control Purchase Date or Trust Assumption Event
Purchase Date, as the case may be, and the Holder thereof shall have no other
rights as such (other than the right to receive the Purchase Price, Change in
Control Purchase Price or the Trust Assumption Event Purchase Price, as the case
may be).

         If the Issuer elects to pay all or part of the Purchase Price in
Shares, the portion of interest attributable to the period from the later of (x)
the Issue Date, and (y) the date on which interest was last paid through the
Purchase Date with respect to the surrendered Security and (except as provided
below) accrued Contingent Interest and Defaulted Interest with respect to the
surrendered Security shall not be cancelled, extinguished or forfeited, but
rather shall be deemed to be paid in full to the Holder thereof through the
delivery of the Shares (together with cash payment, if any, in lieu of
fractional Shares) and cash, if any, in exchange for the Security being
purchased pursuant to the terms hereof; and such cash, if any, and the fair
market value of such Shares (together with any such cash payment in lieu of
fractional Shares) shall be treated as delivered pro rata, to the extent
thereof, first in exchange for interest accrued through the Purchase Date and
accrued Contingent Interest and Defaulted Interest, if any, and the balance, if
any, of such cash and the fair market value of such Shares (and any such cash
payment) shall be treated as delivered in exchange for the Issue Price of the
Security being purchased pursuant to the provisions hereof.

         Ranking -- The Securities shall be general senior obligations of the
Issuer.

         Guarantee -- The Securities are guaranteed by Sheraton Holding
Corporation in accordance with Article 12 of the Indenture. The guarantee may be
released upon the terms and conditions set forth in the Indenture.

         Trust Guarantee -- Pursuant to Section 12.06 of the Indenture, the
Trust has unconditionally guaranteed to each Holder of the Securities the
obligation of the Issuer to cause to be delivered to such Holder, in accordance
with Section 11.02 of the Indenture, the Class B Shares required to be delivered
upon a conversion of the Securities by such Holder in accordance with Article
11, in circumstances where the Issuer has failed to direct the Trust to issue on
the Issuer's behalf such Class B Shares in accordance with Section 11.02 of the
Indenture after a Holder has satisfied all requirements for a conversion set
forth herein and in the Indenture (the "Trust Guarantee"). If the Issuer has
failed to direct the Trust to issue on the Issuer's behalf, such Class B Shares
so required to be delivered in accordance with Section 11.02 of the Indenture
after a Holder has satisfied all requirements for a conversion set forth herein
and in the Securities, such Holder may require the Trust to issue such Class B
Shares, on behalf of the Issuer, under the Trust Guarantee and, upon the Trust
doing so, the Trust shall have the right to be paid by the Issuer (but not by
the Holder), with interest at a rate of 8% per annum from the date of issue of
such Class B Shares by the Trust until the date of payment for such Class B
Shares by the Issuer, the fair value of the Class B Shares so issued under the
Trust Guarantee.

         Conversion -- A Holder of a Security may convert it into Shares in
accordance with the terms and conditions set forth in Article 11 of the
Indenture.

<PAGE>

         A Holder's right to convert Securities into Shares is subject to the
Issuer's right to elect to instead pay such Holder the amount of cash set forth
in the next succeeding sentence in lieu of delivering all or part of such
Shares; provided, however, that if such payment of cash is not permitted
pursuant to the provisions of the Indenture, the Issuer shall deliver Shares
(and cash in lieu of fractional Shares) in accordance with Article 11 of the
Indenture, whether or not the Issuer has delivered a notice pursuant to Section
11.02 of the Indenture to the effect that the Securities will be paid in cash.
The amount of cash to be paid for each $1,000 Principal Amount of a Security
shall be equal to the Sale Price of per Share for the five consecutive trading
days (a) immediately following the date of the notice of the Issuer pursuant to
Section 11.02 to pay the Conversion Price in cash if the Issuer has not given a
notice of redemption or (b) ending on the third trading day prior to the
Conversion Date, in the case of a conversion following notice by the Issuer
specifying that it intends to deliver cash upon conversion, in either case
multiplied by the Conversion Rate in effect on such Conversion Date. If the
Issuer shall elect to make such payment wholly in Shares, then such Shares shall
be delivered through the Conversion Agent to Holders surrendering Securities no
later than the fifth Business Day following the Conversion Date. If, however,
the Issuer shall elect to make any portion of such payment in cash, then the
payment, including any delivery of Shares, shall be made to Holders surrendering
Securities no later than the tenth Business Day following the Conversion Date.

         The Issuer shall not pay cash in lieu of delivering all or part of such
Shares upon the conversion of any Security pursuant to the terms of Article 11
of the Indenture (other than cash in lieu of fractional shares) if there has
occurred (prior to, on or after, as the case may be, the Conversion Date or the
date on which the Issuer delivers its notice of whether each Security shall be
converted into Shares or cash) and is continuing an Event of Default (other than
a default in such payment on such Securities).

         The initial Conversion Rate is 20.0000 Shares per $1,000 Principal
Amount, subject to adjustment in certain events described in the Indenture. The
Issuer will deliver cash or a check in lieu of any fractional Share.

         Securities surrendered for conversion during the period from the close
of business on any Regular Record Date next preceding any Interest Payment Date
to the opening of business on such Interest Payment Date (except Securities to
be redeemed on a date within such period) must be accompanied by payment in an
amount equal to the interest thereon that the registered Holder is entitled to
receive. Except where Securities surrendered for conversion must be accompanied
by payment as described above, no interest on converted Securities shall be
payable by the Issuer on any Interest Payment Date subsequent to the Conversion
Date.

         Securities surrendered for conversion during the period from the close
of business on any date on which Contingent Interest accrues to the opening of
business on the date on which such Contingent Interest is payable (except
Securities with respect to which the Issuer has mailed a notice of redemption)
must be accompanied by payment in an amount equal to the Contingent Interest and
Defaulted Interest with respect thereto that the registered Holder is to
receive. Except where Securities surrendered for conversion must be accompanied
by payment as described above, no Contingent Interest or Defaulted Interest on
converted Securities will accrue after the Conversion Date.

<PAGE>

         To convert a Security, a Holder must (1) complete and manually sign the
conversion notice below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the
Security to the Conversion Agent for cancellation as set forth below, (3)
furnish appropriate endorsements and transfer documents if required by the
Conversion Agent, the Issuer or the Trustee and (4) pay all funds required, if
any, relating to interest (including Contingent Interest) on the Security to be
converted for which the Holder is not entitled and pay any transfer or similar
tax, if required. The delivery by the Issuer to the Holder through the
Conversion Agent of certificates for the number of Shares issuable upon a
conversion of the Security under the circumstances set forth in the preceding
paragraph (together with the surrender of the associated Trust Guarantee) shall
be effected in the manner set forth in this paragraph and in the Indenture. Upon
the surrender by a Holder of the applicable Corporation Note or portion thereof
to the Issuer in accordance with Section 11.01 of the Indenture, in the
circumstances when conversion rights are exercisable and a Trust Assumption
Event has not occurred, the Issuer shall issue to the Holder the Conversion
Number of Corporation Shares and will cause the Conversion Number of Class B
Shares to be issued to the Holder from the Trust by paying to the Trust the fair
value (as such value is determined by the Issuer and the Trust) of the
Conversion Number of Class B Shares issuable upon exercise of conversion rights
and directing the Trust to issue, on behalf of the Issuer, such Class B Shares
to the Holder, subject to the surrender by the Holder of the Trust Guarantee
(insofar as it relates to the portion of the Holder's Securities being
converted), which shall be deemed to be surrendered to the Trust simultaneously
with the receipt of the Conversion Number of Class B Shares. As between the
Holder and the Trust, the Holder need only surrender the Trust Guarantee to the
Trust as provided in the preceding sentence to receive the Conversion Number of
Class B Shares from the Trust, provided that the conversion rights are then
exercisable and the Trust Assumption Event has not occurred and the Holder has
satisfied all requirements for a conversion of the Security.

         A Holder may convert a portion of a Security if the Principal Amount of
such portion is $1,000 or an integral multiple of $1,000. No payment or
adjustment will be made for dividends on, or other distributions with respect
to, any Shares except as provided in the Indenture. On conversion of a Security,
(a) that portion of accrued interest attributable to the period from the later
of (x) the Issue Date and (y) the date on which interest was last paid through
the Conversion Date with respect to the converted Security and (except as
provided below) accrued Contingent Interest and accrued Defaulted Interest with
respect to the converted Security and (b) that portion of Security Conversion
Tax Interest (as defined in Section 11.02 of the Indenture), shall not be
cancelled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the Holder thereof through the delivery of the Shares (together with the
cash payment, if any, in lieu of fractional Shares) and cash, if any, in
exchange for the Security being converted pursuant to the terms hereof; and such
cash and the fair market value of such Shares (together with any such cash
payment in lieu of fractional Shares) shall be treated as delivered pro rata, to
the extent thereof, first in exchange for interest, and accrued Contingent
Interest and Security Conversion Tax Interest accrued through the Conversion
Date and Defaulted Interest, and the balance, if any, of the fair market value
of such cash and such Shares shall be treated as delivered in exchange for the
Issue Price of the Security being converted pursuant to the provisions hereof.

         The Conversion Rate will be adjusted as provided in the Indenture.

<PAGE>

         If the Issuer is a party to a consolidation, merger or binding share
exchange or a transfer of its assets as, or substantially as, an entirety, or
upon certain distributions described in the Indenture, the right to convert a
Security into Shares may be changed into a right to convert it into securities,
cash or other assets of the Issuer or another Person.

         In the event of a Share Separation, the Securities shall not be
convertible in Shares, but shall instead be convertible solely into Corporation
Shares except upon a Trust Assumption Event. Upon the occurrence of a Share
Separation, the Conversion Rate of the Securities shall be adjusted in
accordance with the terms of the Indenture. In addition, Holders of Securities
shall not be entitled to convert their Securities into Shares for the period
beginning on the record date for such Share Separation and ending on the first
Business Day succeeding the first five consecutive trading days after the
effective date of such Share Separation.

         In the event of a deposit or withdrawal of an interest in this
Security, including an exchange, transfer, repurchase or conversion of this
Security in part only, the Trustee, as custodian of the Depositary, shall make
an adjustment on its records to reflect such deposit or withdrawal in accordance
with the rules and procedures of the Depositary.

         Subject to certain limitations in the Indenture, at any time when the
Issuer is not subject to Section 13 or 15(d) of the United States Securities
Exchange Act of 1934, as amended, upon the request of a Holder of a Restricted
Security, the Issuer shall promptly furnish or cause to be furnished Rule 144A
Information (as defined below) to such Holder of Restricted Securities, or to a
prospective purchaser of any such security designated by any such Holder, to the
extent required to permit compliance by any such Holder with Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"). "Rule 144A
Information" shall be such information as is specified pursuant to Rule
144A(d)(4) under the Securities Act (or any successor provision thereto).

         If an Event of Default shall occur and be continuing, the Issue Price
plus accrued and unpaid interest (including Contingent Interest, if any) may be
declared due and payable in the manner and with the effect provided in the
Indenture.

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

         As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the

<PAGE>

appointment of a receiver or trustee or for any other remedy thereunder, unless
such Holder shall have previously given the Trustee written notice of a
continuing Event of Default with respect to the Securities, the Holders of not
less than 25% in Principal Amount of the outstanding Securities shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee reasonable security or indemnity
satisfactory to the Trustee against any loss, liability or expense, and the
Trustee shall not have received from the Holders of a majority in Principal
Amount of outstanding Securities a direction inconsistent with such request, and
shall have failed to institute any such proceeding, for 60 days after receipt of
such notice, request and offer of indemnity. The foregoing shall not apply to
any suit instituted by the Holder of this Security for the enforcement of any
payment hereon on or after the respective due dates expressed herein.

         No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the Principal Amount, Purchase Price or
Change in Control Purchase Price of, interest (including Contingent Interest),
if any, on, and liquidated damages on this Security at the times, place and
rate, and in the coin or currency, prescribed in the Indenture.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the security
register, upon surrender of this Security for registration of transfer at the
office or agency of the Issuer established pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Registrar duly executed by, the Holder hereof
or his attorney duly authorized in writing, and thereupon one or more new
Securities, of authorized denominations and for the same aggregate Principal
Amount will be issued to the designated transferee or transferees.

         The Securities are issuable only in registered form without coupons in
denominations of $1,000 Principal Amount and any integral multiple of $1,000
above that amount. As provided in the Indenture and subject to certain
limitations therein set forth, Securities are exchangeable for a like aggregate
Principal Amount of Securities of a different authorized denomination, as
requested by the Holder surrendering the same.

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

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

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

<PAGE>

                   [FORM OF TRANSFER CERTIFICATE FOR TRANSFER
                   FROM GLOBAL SECURITY OR DEFINITIVE SECURITY
                             TO DEFINITIVE SECURITY]

        (Transfers pursuant to Section 2.13(a)(1) or Section 2.13(a)(2)
                                of the Indenture)

                                                           ________________, ___

U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attention:  Corporate Trust Department

Re:      Transfer of  $________ Principal Amount of
         3.50% Convertible Senior Notes due 2023
         (the "Securities") of Starwood Resorts & Hotels Worldwide, Inc. (the
         "Issuer")

         Reference is hereby made to the Indenture dated as of May 16, 2003 (the
"Indenture") among the Issuer, Sheraton Holding Corporation, Starwood Hotels &
Resorts and U.S. Bank National Association, as Trustee. Capitalized terms used
but not defined herein shall have the meanings given them in the Indenture.

         This letter relates to U.S. $              aggregate principal amount
of Securities which are held [in the form of a [Definitive] [Global Security
(CUSIP No.                 )]* in the name of [name of transferor] (the
"Transferor") to effect the transfer of Securities.

         In connection with such request, and in respect of such Securities, the
Transferor does hereby certify that such Securities are being transferred in
accordance with (i) the transfer restrictions set forth in the Securities and
the Indenture and (ii) to a transferee that the Transferor reasonably believes
is an institutional "accredited investor" (as defined in Rule 501(a)(1), (2),
(3) or (7) of Regulation D under the U.S. Securities Act of 1933, as amended)
(an "Institutional Accredited Investor") which is acquiring such Securities for
its own account or for one or more accounts, each of which is an Institutional
Accredited Investor, over which it exercises sole investment discretion and
(iii) in accordance with applicable securities laws of any state of the United
States.

---------------------------
*  Insert, if appropriate.

<PAGE>

                                               [Name of Transferor],

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

<PAGE>

               [FORM OF NON-DISTRIBUTION LETTER FOR INSTITUTIONAL
                             ACCREDITED INVESTORS]

         (Transfers pursuant to Section 2.13(a)(1) or Section 2.13(a)(2)
                               of the Indenture)

                                                           ----------------, ---

U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attention:  Corporate Trust Department

Starwood Resorts & Hotels Worldwide, Inc.
1111 Westchester Avenue
White Plains, New York 10604

Re:      Purchase of  $________ Principal Amount of
         3.50% Convertible Senior Notes due 2023
         (together with the Shares issuable upon
         conversion thereof, the "Securities") of
         Starwood Resorts & Hotels Worldwide, Inc. (the "Issuer")(1)

Ladies and Gentlemen:

                  In connection with our purchase of the Securities we confirm
that:

                  1. We understand that the Securities are not being and will
not be registered under the Securities Act of 1933, as amended (the "Securities
Act"), and are being sold to us in a transaction that is exempt from the
registration requirements of the Securities Act.

                  2. We acknowledge that (a) neither the Issuer, nor the Initial
Purchasers (as defined in the Offering Memorandum dated May 9, 2003 relating to
the Securities (the "Offering Memorandum")) nor any person acting on behalf of
the Issuer or the Initial Purchasers has made any representation to us with
respect to the Issuer or the offer or sale of any Securities; and (b) any
information we desire concerning the Issuer and the Securities or any other
matter relevant to our decision to purchase the Securities (including a copy of
the Offering Memorandum) is or has been made available to us.

                  3. We have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Securities, and we are (or any account for which we are
purchasing under paragraph 4 below is) an institutional "accredited

-----------------------
(1)     Each U.S. purchaser, or account for which each U.S. purchaser is acting,
should purchase at least $250,000 Principal Amount of Securities.

<PAGE>

investor" (within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act) able to bear the economic risk of investment in the
Securities.

                  4. We are acquiring the Securities for our own account (or for
accounts as to which we exercise sole investment discretion and have authority
to make, and do make, the statements contained in this letter) and not with a
view to any distribution of the Securities, subject, nevertheless, to the
understanding that the disposition of our property will at all times be and
remain within our control.

                  5. We understand that (a) the Securities will be in registered
form only and that any certificates delivered to us in respect of the Securities
will bear a legend substantially to the following effect:

         "THIS NOTE AND THE SHARES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT, AS AMENDED (THE "SECURITIES ACT"), AND THIS
NOTE AND THE SHARES ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR IN ACCORDANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF SUCH EVIDENCE, IF
ANY, REQUIRED UNDER THE INDENTURE PURSUANT TO WHICH THIS NOTE IS ISSUED) AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER JURISDICTION. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER
OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(A) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (D)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS),
AS LONG AS THE REGISTRAR RECEIVES A CERTIFICATION OF THE TRANSFEROR THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT (2) TO THE ISSUER OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL AND EACH SUBSEQUENT HOLDER
IS REQUIRED

<PAGE>

TO NOTIFY ANY PURCHASER FROM IT OF THE SECURITIES EVIDENCED
HEREBY OF THE RESALE RESTRICTION SET FORTH IN (A) ABOVE."

                  and (b) the Issuer has agreed to reissue such certificates
without the foregoing legend only in the event of a disposition of the
Securities in accordance with the provisions of paragraph 6 below (provided, in
the case of a disposition of the Securities in accordance with paragraph 6(f)
below, that the legal opinion referred to in such paragraph so permits), or at
our request at such time as we would be permitted to dispose of them in
accordance with paragraph 6(a) below.

                  6. We agree that in the event that at some future time we wish
to dispose of any of the Securities, we will not do so unless such disposition
is made in accordance with any applicable securities laws of any state of the
United States and:

                  (a) the Securities are sold in compliance with Rule 144(k)
         under the Securities Act; or

                  (b) the Securities are sold in compliance with Rule 144A under
         the Securities Act; or

                  (c) the Securities are sold in compliance with Rule 904 of
         Regulation S under the Securities Act; or

                  (d) the Securities are sold pursuant to an effective
         registration statement under the Securities Act; or

                  (e) the Securities are sold to the Issuer or an affiliate (as
         defined in Rule 501(b) of Regulation D) of the Issuer; or

                  (f) the Securities are disposed of in any other transaction
         that does not require registration under the Securities Act, and we
         theretofore have furnished to the Issuer or its designee an opinion of
         counsel experienced in securities law matters to such effect or such
         other documentation as the Issuer or its designee may reasonably
         request.

                                Very truly yours,

                                By ______________________
                                   (Authorized Officer)

<PAGE>

                            [FORM OF PURCHASE NOTICE]

                                                           ________________, ___

U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attention:  Corporate Trust Department

Starwood Resorts & Hotels Worldwide, Inc.
1111 Westchester Avenue
White Plains, New York 10604

Re:      Purchase of  $________ Principal Amount of
         3.50% Convertible Senior Notes due 2023
         (the "Securities") of Starwood Resorts & Hotels Worldwide, Inc. (the
         "Issuer")

         Certificate No(s). of Securities:   _____________________________

         This is a Purchase Notice as defined in Section [3.08(a)][3.15(b)] of
the Indenture dated as of May 16, 2003 (the "Indenture") among the Issuer,
Sheraton Holding Corporation, Starwood Hotels & Resorts and U.S. Bank National
Association, as Trustee. Terms used but not defined herein shall have the
meanings ascribed to them in the Indenture.

         I intend to deliver the following aggregate Principal Amount of
Securities for purchase by the Issuer pursuant to Section [3.08(a)][3.15(b)] of
the Indenture (in multiples of $1,000):
$_____________________________

         I hereby agree that the Securities will be purchased as of the Purchase
Date pursuant to the terms and conditions thereof and of the Indenture.

         [In the event that the Issuer elects, pursuant to Section 3.08(b) of
the Indenture, to pay the Purchase Price, in whole or in part, in Shares but
such portion of the Purchase Price is ultimately payable entirely in cash
because any of the conditions to payment of the Purchase Price in Shares is not
satisfied prior to the close of business on the Purchase Date, I elect (check
one):

         [ ] (1) to withdraw this Purchase Notice as to all of the Securities to
         which it relates;

         [ ] (2) to withdraw this Purchase Notice as to $___________________
         Principal Amount of Securities (Certificate No(s).
         ____________________); or

         [ ] (3) to receive cash in respect of the entire Purchase Price for all
         Securities or portions thereof to which this Purchase Notice relates.]

<PAGE>

                                              Signed:  ________________________

<PAGE>

                   [FORM OF CHANGE IN CONTROL PURCHASE NOTICE]

                                                           ________________, ___

U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attention:  Corporate Trust Department

Starwood Resorts & Hotels Worldwide, Inc.
1111 Westchester Avenue
White Plains, New York 10604

Re:      Purchase of  $________ Principal Amount of
         3.50% Convertible Senior Notes due 2023
         (the "Securities") of Starwood Resorts & Hotels Worldwide, Inc. (the
         "Issuer")

         Certificate No(s). of Securities:   _____________________________

         This is a Change in Control Purchase Notice as defined in Section 3.09
of the Indenture dated as of May 16, 2003 (the "Indenture") among the Issuer,
Sheraton Holding Corporation, Starwood Hotels & Resorts and U.S. Bank National
Association, as Trustee. Terms used but not defined herein shall have the
meanings ascribed to them in the Indenture.

         I intend to deliver the following aggregate Principal Amount of
Securities for purchase by the Issuer pursuant to Section 3.09 of the Indenture
(in multiples of $1,000):
$________________________________

         I hereby agree that the Securities will be purchased as of the Change
in Control Purchase Date pursuant to the terms and conditions thereof and of the
Indenture.

                        Signed: ________________________

<PAGE>

                   [FORM OF TRANSFER CERTIFICATE FOR TRANSFER
                              OF RESTRICTED SHARES]

            (Transfers pursuant to Section 11.20(c) of the Indenture)

[NAME AND ADDRESS OF TRANSFER AGENT OF SHARES]

U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attention:  Corporate Trust Department

Re:      Shares of Starwood Resorts & Hotels Worldwide, Inc. (the "Issuer")

         Reference is hereby made to the Indenture dated as of May 16, 2003 (the
"Indenture") between the Issuer and U.S. Bank National Association, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given them
in the Indenture.

         This letter relates to ____________ Shares represented by the
accompanying certificate(s) that were issued upon conversion of Securities and
which are held in the name of [name of transferor] (the "Transferor") to effect
the transfer of such Shares.

         In connection with the transfer of such Shares, the undersigned
confirms that such Shares are being transferred:

         CHECK ONE BOX BELOW

         (1) / /  to the Issuer; or

         (2) / /  pursuant to and in compliance with Regulation S under the
                  Securities Act of 1933; or

         (3) / /  to an institutional "accredited investor" (as defined in Rule
                  501(a)(1), (2), (3) or (7) under the Securities Act of 1933)
                  that has furnished to the transfer agent a signed letter
                  containing certain representations and agreements (the form of
                  which letter can be obtained from the Issuer or transfer
                  agent); or

         (4) / /  pursuant to an exemption from registration under the
                  Securities Act of 1933 provided by Rule 144 thereunder.

         Unless one of the boxes is checked, the transfer agent will refuse to
register any of the Shares evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however, that if box
(2), (3) or (4) is checked, the transfer agent may require,

<PAGE>

prior to registering any such transfer of the Shares such certifications and
other information, and if box (4) is checked such legal opinions, as the Issuer
reasonably requests in writing, by delivery to the transfer agent of a standing
letter of instruction, to confirm that such transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933.

                                         [Name of Transferor],

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

Dated:

<PAGE>

                            FORM OF CONVERSION NOTICE

         If you want to convert this Security into Shares of the Issuer, check
the box: / /

         To convert only part of this Security, state the Principal Amount to be
converted (which must be $1,000 or an integral multiple of $1,000):

         $__________________________________

         If you want the stock certificate made out in another person's name,
fill in the form below:

________________________________________________________________________________
              (Insert other person's social security or tax ID no.)
________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
           (Print or type other person's name, address and zip code)

         Date: _____________________________         Signed: ___________________

         (Sign exactly as your name appears on the other side of this Security)

         Signature Guarantee:________________________________<PAGE>

                                                                    EXHIBIT 10.1

THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR FOREIGN JURISDICTION.
NEITHER THIS WARRANT, SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT AND APPLICABLE STATE AND FOREIGN SECURITIES LAWS OR PURSUANT TO AN
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH
LAWS.

2003-001

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

                                PROXYMED, INC.
                          COMMON STOCK PURCHASE WARRANT

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

                  This certifies that, for good and valuable consideration,
ProxyMed, Inc., a Florida corporation (the "Company"), grants to First Data
Corporation, a Delaware corporation (the "Warrantholder"), the right to
subscribe for and purchase from the Company, during the applicable Exercise
Period (as hereinafter defined), up to 600,000 validly issued, fully paid and
nonassessable shares, par value $0.001, of Common Stock of the Company (the
"Warrant Shares"), in three (3) annual allotments of 200,000 shares (each an
"Annual Allotment") at the exercise price per share of $16.50, subject to
adjustment pursuant to Section 5 hereof (the "Exercise Price"), all subject to
the terms, conditions and adjustments herein set forth. Capitalized terms used
herein shall have the meanings ascribed to such terms in Section 9 below.

                  1. ISSUANCE OF WARRANT; VESTING; DETERMINATION OF INCLUDED
REVENUE.

                           1.1 ISSUANCE OF WARRANT. This Warrant is issued
concurrently with and in consideration of the execution by First Data Resources
Inc., a Delaware corporation and a wholly-owned subsidiary of the Warrantholder
("FDR"), of the Commercial Agreement.

                           1.2 VESTING. The Warrantholder's right to exercise
each Annual Allotment shall become vested and exercisable if, and only if, the
following amounts of Included Revenue (as determined in accordance with Section
1.3) are achieved during the applicable Measurement Period:

          MEASUREMENT PERIOD      INCLUDED REVENUE     ANNUAL ALLOTMENT

       First Measurement Period      $10,000,000        200,000 shares

       Second Measurement Period     $20,000,000        200,000 shares

       Third Measurement Period      $30,000,000        200,000 shares
<PAGE>

Any right of exercise that has vested pursuant to this Section 1.2, but which
has not been exercised on or before the expiration of the applicable Exercise
Period (as defined in Section 2.1) shall become null and void and of no further
force or effect immediately at such expiration with no further action required
from either party.

                           1.3 DETERMINATION OF INCLUDED REVENUE. As promptly as
practicable, and in any event not later than the fifteenth day after each
Measurement Period, the Company's Chief Financial Officer ("CFO") shall deliver
to the Warrantholder a certificate (the "Annual Certification") setting forth in
reasonable detail the calculation of the amount of Included Revenue for the
applicable Measurement Period and a certification by the CFO that such
calculations are true and correct. The Annual Certification shall be conclusive
evidence of such Included Revenue, unless Warrantholder in good faith objects in
writing to the calculation of Included Revenue set forth in the Annual
Certification no later than five (5) Business Days after its receipt. The
foregoing written objection shall state with specificity any and all of the
grounds on which the Warrantholder objects. The Company and the Warrantholder
shall use their respective reasonable best efforts to resolve any such
objections within five (5) Business Days after the receipt by the Company of
Warrantholders objection. If the Company and the Warrantholder shall fail to
agree on the amount of Included Revenue for a particular Measurement Period
within such five (5) day period, the amount of Included Revenue for such
Measurement Period shall be determined by a certified public accountant ("CPA")
independent of the Company and the Warrantholder, chosen by the Board of
Directors and reasonably acceptable to the Warrantholder. The amount of Included
Revenue determined by the CPA shall be final and binding on each of the Company
and the Warrantholder. The cost of the CPA's certification shall be borne by the
Warrantholder unless the Included Revenue certified by the Company's CFO is
understated by more than five (5) percent, as compared to the Included Revenue
certified by the CPA, in which case the Company shall bear or reimburse the
Warrantholder for the cost of the CPA's certification of Included Revenue. The
Company and the Warrantholder shall cooperate to promptly provide the CPA with
such information as the CPA may reasonably request, and shall use their best
efforts to cause the CPA to complete its certification of Included Revenue
within twenty (20) days after engagement of the CPA.

                           1.4 TERM OF WARRANT. The term of this Warrant shall
commence on the date on which it is executed by the parties and shall expire on
the day after the last day of the Exercise Period following the Third
Measurement Period. The term of this Warrant shall not renew under any
circumstances.

                  2. EXERCISE OF WARRANT; PAYMENT OF TAXES.

                           2.1 EXERCISE OF WARRANT. Subject to the terms and
conditions set forth herein, provided Warrantholder's right to exercise has
vested pursuant to Section 1.2 of this Warrant, each Annual Allotment may be
exercised by the Warrantholder during the period commencing upon receipt of each
Annual Certification and ending on the later of (X) the sixtieth day following
the end of the preceding Measurement Period or (Y) if the CPA is engaged
pursuant to Section 1.3, the tenth day following the certification of the
Included Revenue by the CPA (the "Exercise Period"), provided that FDR is not
then in material breach of the Commercial Agreement, and further provided that

                                       2
<PAGE>

such exercise would not constitute a Prohibited Exercise, in which case the
Exercise Period shall be extended until the fifth Business Day following the
first date upon which such exercise would not constitute a Prohibited Exercise,
by:

                                    (a) the delivery to the Company of a duly
executed Exercise Form, and

                                    (b) the delivery of payment to the Company,
for the account of the Company, by wire transfer or any other means approved by
the Company, of the aggregate Exercise Price for exercise in lawful money of the
United States of America.

The Company agrees that the Warrant Shares shall be deemed to be issued to the
Warrantholder as the record holder of such Warrant Shares as of the close of
business on the date on which payment is made for the Warrant Shares as
aforesaid. For the avoidance of doubt, cashless exercises of the Warrant shall
not be permitted. Warrantholder shall also surrender this Warrant to the Company
upon the earlier of Warrantholder's permitted exercise in full of the third
Annual Allotment or the termination of this Warrant as per Section 1.4.

                           2.2 WARRANT SHARE CERTIFICATES. A stock certificate
or certificates for the Warrant Shares specified in each Exercise Form shall be
delivered to the Warrantholder within five (5) Business Days after receipt of
both the Exercise Form by the Company and the payment by the Warrantholder of
the aggregate Exercise Price.

                           2.3 PAYMENT OF TAXES. The Company will pay all
documentary stamp or other issuance taxes, if any, attributable to the issuance
of Warrant Shares upon the exercise of this Warrant; PROVIDED, HOWEVER, that the
Company shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issue or delivery of any Warrants or
Warrant certificates or Warrant Shares in a name other than that of the then
Warrantholder as reflected upon the books of the Company.

                  3. RESTRICTIVE LEGEND. Except as otherwise permitted by this
Section 3, each Warrant (and each Warrant issued in substitution for any Warrant
pursuant to Section 6) shall be stamped or otherwise imprinted with a legend in
substantially the form as set forth on the cover of this Warrant.
Notwithstanding the foregoing, the Warrantholder may require the Company to
issue a Warrant or a certificate for Warrant Shares, in each case without a
legend, if either (i) such Warrant or such Warrant Shares, as the case may be,
have been registered for resale under the Securities Act, (ii) the Warrantholder
has delivered to the Company an opinion of legal counsel (from a firm reasonably
satisfactory to the Company) which opinion shall be addressed to the Company and
be reasonably satisfactory in form and substance to the Company's counsel, to
the effect that such registration is not required with respect to such Warrant
or such Warrant Shares, as the case may be or (iii) such Warrant or Warrant
Shares may be sold in accordance with Rule 144 of the Securities Act (or any
successor provision then in effect) under the Securities Act.

                                       3
<PAGE>

                  4. RESERVATION AND REGISTRATION OF SHARES. The Company
covenants and agrees as follows:

                                    (a) All Warrant Shares that are issued upon
the exercise of this Warrant shall, upon issuance, be validly issued, fully-paid
and nonassessable, and not subject to any preemptive rights, and be free from
all taxes, liens, security interests, charges, and other encumbrances with
respect to the issuance thereof, other than taxes in respect of any transfer
occurring contemporaneously with such issue.

                                    (b) The Company shall at all times have
authorized and reserved, and shall keep available and free from preemptive
rights, a sufficient number of shares of Common Stock to provide for the
exercise of the rights represented by this Warrant.

                                    (c) The Company shall not, by amendment of
its Articles of Incorporation or through any reorganization, transfer of assets,
spin-off, consolidation, merger, dissolution, issue or sale of securities or any
other action or inaction, seek to avoid the observance or performance of any of
the terms of this Warrant, and shall at all times in good faith assist in
performing and giving effect to the terms hereof.

                  5. ANTI-DILUTION ADJUSTMENTS. The Exercise Price and the
number of Warrant Shares to be received upon exercise of this Warrant shall be
subject to adjustment as follows:

                           5.1 DIVIDEND, SUBDIVISION, COMBINATION OR
RECLASSIFICATION OF COMMON STOCK. In the event that the Company shall at any
time or from time to time, after the issuance of this Warrant but prior to the
full exercise of all Annual Allotments, (w) make a dividend or distribution on
the outstanding shares of Common Stock payable in Capital Stock, (x) subdivide
the outstanding shares of Common Stock into a larger number of shares, (y)
combine the outstanding shares of Common Stock into a smaller number of shares
or (z) issue any shares of its Capital Stock in a reclassification of the Common
Stock (other than any such event for which an adjustment is made pursuant to
another clause of this Section 5), then, and in each such case, (A) the
aggregate number of Warrant Shares for which this Warrant is exercisable (the
"Warrant Share Number") immediately prior to such event shall be adjusted (and
any other appropriate actions shall be taken by the Company) so that the
Warrantholder shall be entitled to receive upon exercise of this Warrant the
number of shares of Common Stock or other securities of the Company that it
would have owned or would have been entitled to receive upon or by reason of any
of the events described above, had this Warrant been exercised immediately prior
to the occurrence of such event and (B) the Exercise Price payable upon the
exercise of this Warrant shall be adjusted by multiplying such Exercise Price
immediately prior to such adjustment by a fraction, the numerator of which shall
be the number of Warrant Shares issuable upon the exercise of this Warrant
immediately prior to such adjustment, and the denominator of which shall be the
number of Warrant Shares issuable immediately thereafter. An adjustment made
pursuant to this Section 5.1 shall become effective retroactively (x) in the
case of any such dividend or distribution, to a date immediately following the
close of business on the record date for the determination of holders of shares
of Common Stock entitled to receive such dividend or distribution or (y) in the
case of any such subdivision, combination or reclassification, to the close of
business on the day upon which such corporate action becomes effective.

                           5.2 CERTAIN DISTRIBUTIONS. In case the Company shall
at any time or from time to time, after the issuance of this Warrant but prior
to the full exercise of all Annual

                                       4
<PAGE>

Allotments, distribute to all holders of shares of Common Stock (including any
such distribution made in connection with a merger or consolidation in which the
Company is the resulting or surviving Person and shares of Common Stock are not
changed or exchanged) cash, evidences of indebtedness of the Company or another
issuer, securities of the Company or another issuer or other assets (excluding
dividends or distributions payable in shares of Common Stock for which
adjustment is made under Section 5.1) or rights or warrants to subscribe for or
purchase any of the foregoing, THEN, and in each such case, (A) the Exercise
Price then in effect shall be adjusted (and any other appropriate actions shall
be taken by the Company) by multiplying the Exercise Price in effect prior to
the date of distribution by a fraction (i) the numerator of which shall be such
Current Market Price of Common Stock immediately prior to the date of
distribution less the then fair market value (as determined by the Board of
Directors in the exercise of their fiduciary duties) of the portion of the cash,
evidences of indebtedness, securities or other assets so distributed or of such
rights or warrants applicable to one share of Common Stock and (ii) the
denominator of which shall be the Current Market Price of the Common Stock
immediately prior to the date of distribution (but such fraction shall not be
greater than one) and (B) the Warrant Share Number shall be increased by being
multiplied by a fraction (i) the numerator of which shall be the Current Market
Price of one share of Common Stock immediately prior to the record date for the
distribution of such cash, evidences of indebtedness, securities, other assets
or rights or warrants and (ii) the denominator of which shall be the Current
Market Price of one share of Common Stock immediately prior to such record date
less the fair market value (as determined by the Board of Directors in the
exercise of their fiduciary duties) of the portion of such cash, evidences of
indebtedness, securities, other assets or rights or warrants so distributed.
Such adjustment shall be made whenever any such distribution is made and shall
become effective retroactively to a date immediately following the close of
business on the record date for the determination of stockholders entitled to
receive such distribution.

                           5.3 OTHER CHANGES. In case the Company at any time or
from time to time, after the issuance of this Warrant but prior to the full
exercise of all Annual Allotments, shall take any action affecting its Common
Stock similar to or having an effect similar to any of the actions described in
any of Sections 5.1, 5.2 or 5.7 (but not including any action described in any
such Section) and the Board of Directors in good faith determines that it would
be equitable in the circumstances to adjust the Exercise Price and Warrant Share
Number as a result of such action, then, and in each such case, the Exercise
Price and Warrant Share Number shall be adjusted in such manner and at such time
as the Board of Directors in good faith determines would be equitable in the
circumstances (such determination to be evidenced in a resolution, a certified
copy of which shall be mailed to the Warrantholder).

                           5.4 NO ADJUSTMENT; PAR VALUE MINIMUM. Notwithstanding
anything herein to the contrary, no adjustment under this Section 5 need be made
to the Exercise Price or Warrant Share Number if the company receives written
notice from the Warrantholder that no such adjustment is required.
Notwithstanding any other provision of this Warrant, the Exercise Price shall
not be adjusted below the par value of a share of Common Stock.

                           5.5 ABANDONMENT. If the Company shall take a record
of the holders of shares of its Common Stock for the purpose of entitling them
to receive a dividend or other distribution, and shall thereafter and before the
distribution to stockholders thereof legally abandon its plan to pay or deliver

                                       5
<PAGE>

such dividend or distribution, then no adjustment in the Exercise Price or
Warrant Share Number shall be required by reason of the taking of such record.

                           5.6 CERTIFICATE AS TO ADJUSTMENTS. Upon any
adjustment in the Exercise Price or Warrant Share Number, the Company shall
within a reasonable period (not to exceed ten (10) days) following any of the
foregoing transactions deliver to the Warrantholder a certificate, signed by (i)
the Chief Executive Officer of the Company and (ii) the Chief Financial Officer
of the Company, setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated and specifying
the adjusted Exercise Price and Warrant Share Number then in effect following
such adjustment.

                           5.7 SPIN-OFF; REORGANIZATION, RECLASSIFICATION,
MERGER OR SALE TRANSACTION.

                                    (a) In case of any spin-off by the Company
of another Person (the "Spin-off Entity") at any time after the issuance of this
Warrant but prior to the exercise hereof, the Company shall issue to the
Warrantholder a new warrant, in form and substance satisfactory to the Company
and the Warrantholder, entitling the Warrantholder to purchase, at the exercise
price equal to the excess of the Exercise Price in effect immediately prior to
such spin-off over the adjusted Exercise Price pursuant to Section 5.2, the
number of shares of common stock or other proprietary interest in the Spin-off
Entity that the Warrantholder would have owned had the Warrantholder,
immediately prior to such spin-off, fully exercised any unexpired Annual
Allotment under this Warrant.

                                    (b) In case of any capital reorganization,
reclassification, Sale Transaction, merger or consolidation (other than a Sale
Transaction or a merger or consolidation of the Company in which the Company is
the surviving corporation) of the Company or other change of outstanding shares
of Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value) (each, a "Transaction") at any time
after the issuance of this Warrant but prior to the exercise hereof, the Company
shall execute and deliver to the Warrantholder at least twenty (20) Business
Days prior to effecting such Transaction a certificate stating that,
notwithstanding the vesting requirements of Section 1.3, each unexpired Annual
Allotment shall be deemed to be vested and exercisable and the Warrantholder
shall have the right thereafter to exercise this Warrant for the kind and amount
of shares of stock or other securities, property or cash receivable upon such
Transaction by a holder of the number of shares of Common Stock into which this
Warrant could have been exercised immediately prior to such Transaction, and
provision shall be made therefor in the agreement, if any, relating to such
Transaction. Notwithstanding the immediately preceding sentence, if FDR elects
pursuant to the terms of the Commercial Agreement to terminate the Commercial
Agreement as a result of any Transaction, this Warrant and all rights to acquire
the unvested Annual Allotments shall terminate effective upon consummation of
such Transaction. Such certificate shall provide for adjustments which shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Section 5. The provisions of this Section 5.7 and any equivalent thereof in
any such certificate similarly shall apply to successive transactions.

                                       6
<PAGE>

                           5.8 NOTICES. In case at any time or from time to
time:

                                    (a) the Company shall declare a dividend (or
any other distribution) on its shares of Common Stock;

                                    (b) the Company shall authorize the granting
to the holders of shares of its Common Stock rights or warrants to subscribe for
or purchase any shares of Capital Stock or any other rights or warrants;

                                    (c) there shall occur a spin-off or
Transaction; or

                                    (d) the Company shall take any other action
that would require a vote of the Company's stockholders;

then the Company shall mail to the Warrantholder, as promptly as possible but in
any event at least ten (10) days prior to the applicable date hereinafter
specified, a notice stating (A) the date on which a record is to be taken for
the purpose of such dividend, distribution or granting of 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 granting of rights or
warrants are to be determined, or (B) the date on which such spin-off or
Transaction is expected to become effective 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 shares of stock or other securities or property or cash
deliverable upon such spin-off or Transaction. Notwithstanding the foregoing, in
the case of any event to which Section 5.7 is applicable, the Company shall also
deliver the certificate described in such Section 5.7 to the Warrantholder at
least twenty (20) Business Days prior to effecting such reorganization or
reclassification as aforesaid.

                  6. LOSS OR DESTRUCTION OF WARRANT. Subject to the terms and
conditions hereof, upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
and, in the case of loss, theft or destruction, of such bond or indemnification
as the Company may reasonably require, and, in the case of such mutilation, upon
surrender and cancellation of this Warrant, the Company will execute and deliver
a new Warrant of like tenor.

                  7. OWNERSHIP OF WARRANT. The Company may deem and treat the
person in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of
transfer.

                  8. AMENDMENTS. Any provision of this Warrant may be amended
and the observance thereof waived only with the written consent of the Company
and the Warrantholder.

                  9. DEFINITIONS. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:

                  "AFFILIATE" shall mean any Person who is an "affiliate" as
defined in Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act. of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission thereunder.

                                       7
<PAGE>

                  "BOARD OF DIRECTORS" means the Board of Directors of the
Company.

                  "BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.

                  "CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, participations, rights in, or other equivalents (however
designated and whether voting or non-voting) of such Person's capital stock and
any and all rights, warrants or options exchangeable for or convertible into
such capital stock (but excluding any debt security whether or not it is
exchangeable for or convertible into such capital stock).

                  "COMMERCIAL AGREEMENT" means Master Joint Marketing Agreement
dated of even date herewith between the Company and First Data Resources Inc.,
as such agreement may be amended, modified or supplemented from time to time.

                  "COMMON STOCK" means the Common Stock, par value $0.001 per
share, of the Company.

                  "COMMON STOCK EQUIVALENT" means any security or obligation
which is by its terms convertible into or exercisable into shares of Common
Stock, including, without limitation, any option, warrant or other subscription
or purchase right with respect to Common Stock.

                  "COMPANY" has the meaning set forth in the first paragraph of
this Warrant.

                  "CURRENT MARKET PRICE" means, as of the date of determination,
(a) the average of the daily Market Price under clause (a), (b) or (c) of the
definition thereof of the Common Stock during the immediately preceding five (5)
trading days ending on such date, and (b) if the Common Stock is not then listed
or admitted to trading on any national securities exchange or quoted in the
over-the-counter market, then the Market Price under clause (d) of the
definition thereof on such date.

                   "EXERCISE FORM" means an Exercise Form in the form annexed
hereto as EXHIBIT A.

                  "EXERCISE PERIOD" has the meaning set forth in Section 2.1 of
this Warrant.

                  "EXERCISE PRICE" has the meaning set forth in the first
paragraph of this Warrant.

                  "GOVERNMENTAL AUTHORITY" means the government of any nation,
state, city, locality or other political subdivision thereof, any entity,
including, without limitation, the Nasdaq Stock Market, Inc. and its regulatory
arm, the National Association of Securities Dealers, Inc., exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.

                  "INCLUDED REVENUE" means the combined gross revenue (excluding
revenue related to postage or any other similar costs that are pass-throughs) of

                                       8
<PAGE>

the Company and its subsidiaries (as determined under generally accepted
accounting principles consistently applied) derived from services provided by
the Company to its customers as a result of the Commercial Agreement during the
applicable Measurement Period, without any reduction in such gross revenue for
rebates or other revenue sharing payments paid or payable to the Warrantholder
or any of its Affiliates or to any third party. For the avoidance of doubt,
Included Revenue in a given Measurement Period shall be calculated on a
non-cumulative basis and shall not include any revenue recognized in any other
Measurement Period.

                  "MARKET PRICE" means, as of the date of determination, (a) if
the Common Stock is listed on a national securities exchange, the closing price
per share of Common Stock on such date published in THE WALL STREET JOURNAL
(NATIONAL EDITION) or, if no such closing price on such date is published in THE
WALL STREET JOURNAL (NATIONAL EDITION), the average of the closing bid and asked
prices on such date, as officially reported on the principal national securities
exchange on which the Common Stock is then listed or admitted to trading; or (b)
if the Common Stock is not then listed or admitted to trading on any national
securities exchange but is designated as a national market system security by
the National Association of Securities Dealers, Inc., the last trading price of
the Common Stock on such date; or (c) if there shall have been no trading on
such date or if the Common Stock is not designated as a national market system
security by the National Association or Securities Dealers, Inc., the average of
the reported closing bid and asked prices of the Common Stock on such date as
shown by the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotations System and reported by any member firm of the
New York Stock Exchange selected by the Company; or (d) if none of (a), (b) or
(c) is applicable, a market price per share determined mutually by the Board of
Directors and the Warrantholder or, if the Board of Directors and the
Warrantholder shall fail to agree, at the Company's expense by an appraiser
chosen by the Board of Directors and reasonably acceptable to the Warrantholder.
Any determination of the Market Price by an appraiser shall be based on a
valuation of the Company as an entirety without regard to any discount for
minority interests or disparate voting rights among classes of capital stock.

                  "MEASUREMENT PERIOD" means the following measurement periods
for measuring Included Revenue: the "First Measurement Period" shall be the
period commencing July 7, 2003 and ending December 31, 2004, inclusive; the
"Second Measurement Period" shall be the period commencing January 1, 2005 and
ending December 31, 2005, inclusive; and the "Third Measurement Period" shall be
the period commencing January 1, 2006 and ending December 31, 2006, inclusive.
For the avoidance of doubt, each Measurement Period is intended to establish the
beginning and ending date for the measurement of Included Revenue, and no excess
Included Revenue from one Measurement Period shall be included in the
calculation of Included Revenue for any other Measurement Period.

                  "PERSON" means any individual, firm, corporation, partnership,
limited liability company, trust, incorporated or unincorporated association,
joint venture, joint stock company, governmental body or other entity of any
kind.

                  "PROHIBITED EXERCISE" means any exercise of this Warrant which
would result in the Warrantholder violating any Requirement of Law, any rule or

                                       9
<PAGE>

regulation of any Governmental Authority, or the Company's Insider Trading
Policy, as modified in good faith by the Company and communicated to the
Warrantholder from time to time.

                  "REQUIREMENT OF LAW" means, as to any Person, any law,
environmental law, statute, treaty, rule, regulation, right, privilege,
qualification, license or franchise or determination of an arbitrator or a court
or other Governmental Authority or stock exchange, in each case applicable or
binding upon such Person or any of its property or to which such Person or any
of its property is subject or pertaining to any or all of the transactions
contemplated or referred to herein.

                   "SALE TRANSACTION" shall mean (a) (i) the merger or
consolidation of the Company into or with one or more Persons, (ii) the merger
or consolidation of one or more Persons into or with the Company or (iii) a
tender offer or other business combination if, in the case of (i), (ii) or
(iii), the stockholders of the Company prior to such merger or consolidation do
not retain at least a majority of the voting power of the surviving Person or
(b) the voluntary sale, conveyance, exchange or transfer to another Person of
(i) the voting Capital Stock of the Company if, after such sale, conveyance,
exchange or transfer, the stockholders of the Company prior to such sale,
conveyance, exchange or transfer do not retain at least a majority of the voting
power of the Company or (ii) all or substantially all of the assets of the
Company.

                  "SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations of the Securities and Exchange Commission
thereunder.

                  "SPIN-OFF ENTITY" has the meaning set forth in Section 5.7 of
this Warrant.

                  "TRANSACTION" has the meaning set forth in Section 5.7 of this
Warrant.

                  "WARRANT SHARE NUMBER" has the meaning set forth in Section
5.1 of this Warrant.

                  "WARRANT SHARES" has the meaning set forth in the first
paragraph of this Warrant.

                  "WARRANTHOLDER" has the meaning set forth in the first
paragraph of this Warrant.

                  10. MISCELLANEOUS.

                           10.1 ENTIRE AGREEMENT. This Warrant constitutes the
entire agreement between the Company and the Warrantholder with respect to the
Warrant and supersedes all prior agreements and understanding with respects to
the subject matter of this Warrant.

                           10.2 BINDING EFFECT; BENEFITS. This Warrant shall
inure to the benefit of and shall be binding upon the Company and the
Warrantholder and their respective permitted successors and assigns. Nothing in
this Warrant, expressed or implied, is intended to or shall confer on any person
other than the Company and the Warrantholder, or their respective permitted
successors or assigns, any rights, remedies, obligations or liabilities under or
by reason of this Warrant.

                           10.3 HEADINGS. The headings in this Warrant are for
convenience of reference only and shall not limit or otherwise affect the
meaning of this Warrant.

                                       10
<PAGE>

                           10.4 NOTICES. All notices, demands and other
communications provided for or permitted hereunder shall be made in writing and
shall be by registered or certified first-class mail, return receipt requested,
telecopier, courier service or personal delivery:

                           (a)      if to the Company:
                                    ProxyMed, Inc.
                                    2555 Davie Rd., Suite 110
                                    Fort Lauderdale, FL  33317
                                    Telecopy:  (954) 473-2341
                                    Attention:  Michael K. Hoover, Chief
                                                Executive Officer
                                                Rafael G. Rodriguez,
                                                Senior Corporate Counsel

                                    with a copy to:

                                    Holland & Knight LLP
                                    701 Brickell Avenue, Suite 3000
                                    Miami, FL  33131
                                    Telecopy:  (305) 789-7799
                                    Attention:  Steven Sonberg, Esq.

                           (b)      if to the Warrantholder:

                                    First Data Corporation
                                    6200 South Quebec Street, Suite 330
                                    Greenwood Village, CO  80111
                                    Telecopy:  (303) 967-6621
                                    Attention:  Beverly Kennedy

                                    with a copy to:

                                    First Data Corporation
                                    10825 Old Mill Road, Suite M-10
                                    Omaha, NE 68154
                                    Telecopy:  (402) 222-5256
                                    Attention:  General Counsel

All such notices, demands and other communications shall be deemed to have been
duly given when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial courier service; five (5) Business Days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is mechanically acknowledged, if telecopied. Any party may by notice given in
accordance with this Section 10.4 designate another address or Person for
receipt of notices hereunder.

                                       11
<PAGE>

                           10.5 SEVERABILITY. Any term or provision of this
Warrant which is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the terms and
provisions of this Warrant or affecting the validity or enforceability of any of
the terms or provisions of this Warrant in any other jurisdiction.

                           10.6 GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD
TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.

                           10.7 NO RIGHTS OR LIABILITIES AS STOCKHOLDERS.
Nothing contained in this Warrant shall be determined as conferring upon the
Warrantholder any rights as a stockholder of the Company or as imposing any
liabilities on the Warrantholder to purchase any securities whether such
liabilities are asserted by the Company or by creditors or stockholders of the
Company or otherwise.

                [Remainder of this page intentionally left blank]

                                       12
<PAGE>

                  IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer.

                                      PROXYMED, INC.

                                      By:  /s/ Michael K. Hoover
                                          --------------------------------------
                                          Name: Michael K. Hoover
                                          Title: Chairman & Chief Executive
                                                 Officer

Dated:  July 3, 2003

                                       13
<PAGE>

                                    EXHIBIT A

                                  EXERCISE FORM

                 (To be executed upon exercise of this Warrant)

                  The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant, to purchase [________] shares of Common
Stock and herewith tenders payment for such shares to the order of the Company
in the amount of $[______] in accordance with the terms of this Warrant. The
undersigned requests that a certificate for such Warrant Shares be registered in
the name of the undersigned and that such certificates be delivered to the
undersigned's address below.

                  The undersigned represents that it is acquiring such shares
for its own account for investment and not with a view to or for sale in
connection with any distribution thereof (subject, however, to any requirement
of law that the disposition thereof shall at all times be within its control).

Dated:

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

                                                  -----------------------------
                                                  (Print Name)

                                                  -----------------------------
                                                  (Street Address)

                                                  -----------------------------
                                                  (City)   (State)   (Zip Code)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00053-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00053-of-00352.parquet"}]]