Document:

EXHIBIT (4)-6

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                            HEALTHSOUTH CORPORATION,
                                   as Issuer,

                                       and

                        THE BANK OF NEW YORK, as Trustee

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

                                    INDENTURE

                          Dated as of February 1, 2001

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

                     8 1/2% Senior Notes due 2008, Series A

                     8 1/2% Senior Notes due 2008, Series B

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<PAGE>

                              CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>

  TIA                                                                                  Indenture
Section                                                                                 Section
-------                                                                                --------
<S>   <C>                                                                              <C>
310(a)(1).......................................................................       7.10
   (a)(2).......................................................................       7.10
   (a)(3).......................................................................       N.A.
   (a)(4).......................................................................       N.A
   (a)(5).......................................................................       7.10
   (b)..........................................................................       7.08; 7.10; 11.02
   (c)..........................................................................       N.A.
311(a)..........................................................................       7.11
   (b)..........................................................................       7.11
   (c)..........................................................................       N.A.
312(a)..........................................................................       2.05
   (b)..........................................................................       11.03
   (c)..........................................................................       11.03
313(a)..........................................................................       7.06
   (b)(1).......................................................................       7.06
   (b)(2).......................................................................       7.06
   (c)..........................................................................       7.06; 11.02
   (d)..........................................................................       7.06
314(a)..........................................................................       4.02; 4.08; 11.02
   (b)..........................................................................       N.A.
   (c)(1).......................................................................       11.04; 11.05
   (c)(2).......................................................................       11.04; 11.05
   (c)(3).......................................................................       N.A.
   (d)..........................................................................       N.A.
   (e)..........................................................................       11.05
   (f)..........................................................................       N.A.
315(a)..........................................................................       7.01; 7.02
   (b)..........................................................................       7.05; 11.02
   (c)..........................................................................       7.01
   (d)..........................................................................       6.05; 7.01; 7.02
   (e)..........................................................................       6.11
316(a) (last sentence)..........................................................       2.09
   (a)(1)(A)....................................................................       6.05
   (a)(1)(B)....................................................................       6.04
   (a)(2).......................................................................       8.02
   (b)..........................................................................       6.07
   (c)..........................................................................       8.04
317(a)(1).......................................................................       6.08
   (a)(2).......................................................................       6.09
   (b)..........................................................................       2.04
318(a)..........................................................................       11.01

</TABLE>

                            N.A. means Not Applicable

--------------------
NOTE: This  Cross-Reference  Table shall not, for any purpose, be deemed to be a
part of this Indenture.

<PAGE>

                                TABLE OF CONTENTS

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                                    ARTICLE 1

                                   DEFINITIONS

<S>               <C>                                                                          <C>
Section 1.01.     Definitions....................................................................1
Section 1.02.     Other Definitions.............................................................15
Section 1.03.     Incorporation by Reference of Trust Indenture Act.............................16
Section 1.04.     Rules of Construction.........................................................16

                                    ARTICLE 2

                                    THE NOTES

Section 2.01.     Dating; Incorporation of Form in Indenture; Form of Notes.....................16
Section 2.02.     Execution and Authentication; Appointment of Authenticating Agent.............17
Section 2.03.     Registrar and Paying Agent....................................................18
Section 2.04.     Paying Agent To Hold Money in Trust...........................................18
Section 2.05.     Holder Lists..................................................................19
Section 2.06.     [Intentionally Omitted].......................................................19
Section 2.07.     Replacement Notes.............................................................19
Section 2.08.     Outstanding Notes.............................................................19
Section 2.09.     Treasury Notes................................................................20
Section 2.10.     Temporary Notes...............................................................20
Section 2.11.     Cancellation..................................................................20
Section 2.12.     Defaulted Interest............................................................20
Section 2.13.     Deposit of Moneys; Payments...................................................21
Section 2.14.     "CUSIP" Number................................................................21
Section 2.15.     Depositary....................................................................21
Section 2.16.     Registration of Transfers and Exchanges.......................................22
Section 2.17.     Restrictive Legends...........................................................29

                                    ARTICLE 3

                                   REDEMPTION

Section 3.01.     Notices to Trustee............................................................30
Section 3.02.     Selection of Notes To Be Redeemed.............................................30
Section 3.03.     Notice of Redemption..........................................................31
Section 3.04.     Effect of Notice of Redemption................................................32
Section 3.05.     Deposit of Redemption Price...................................................32
Section 3.06.     Notes Redeemed in Part........................................................33

</TABLE>
                                       i
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                                    ARTICLE 4

                                    COVENANTS

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<CAPTION>

                                                                                              Page
                                                                                              ----

<S>               <C>                                                                          <C>
Section 4.01.     Payment of Notes..............................................................33
Section 4.02.     Reports.......................................................................33
Section 4.03.     Waiver of Stay, Extension or Usury Laws.......................................33
Section 4.04.     Compliance Certificate; Notice of Default; Tax Information....................34
Section 4.05.     Payment of Taxes and Other Claims.............................................34
Section 4.06.     Corporate Existence...........................................................35
Section 4.07.     Maintenance of Office or Agency...............................................35
Section 4.08.     Compliance with Laws..........................................................35
Section 4.09.     Maintenance of Properties and Insurance.......................................36
Section 4.10.     Limitation on Restricted Payments.............................................36
Section 4.11.     Limitation on Additional Indebtedness and Subsidiary Preferred Stock..........37
Section 4.12.     Limitation on Asset Sales.....................................................38
Section 4.13.     Limitation on Transactions with Affiliates....................................41
Section 4.14.     Limitation on Liens...........................................................41
Section 4.15.     Purchase of Notes upon a Change of Control....................................42
Section 4.16.     Limitation on Restrictions on Distributions from Subsidiaries.................43
Section 4.17.     Limitations on Layering Indebtedness..........................................44

                                    ARTICLE 5

                                SURVIVING ENTITY

Section 5.01.     Limitations on Mergers and Consolidations.....................................44
Section 5.02.     Successor Substituted.........................................................44

                                    ARTICLE 6

                              DEFAULTS AND REMEDIES

Section 6.01.     Events of Default.............................................................45
Section 6.02.     Acceleration..................................................................46
Section 6.03.     Other Remedies................................................................47
Section 6.04.     Waiver of Existing Defaults and Events of Default.............................47
Section 6.05.     Control by Majority...........................................................48
Section 6.06.     Limitation on Suits...........................................................48
Section 6.07.     Rights of Holders To Receive Payment..........................................49
Section 6.08.     Collection Suit by Trustee....................................................49
Section 6.09.     Trustee May File Proofs of Claim..............................................49
Section 6.10.     Priorities....................................................................49
Section 6.11.     Undertaking for Costs.........................................................50

</TABLE>
                                       ii
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<CAPTION>

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                                    ARTICLE 7

                                     TRUSTEE

<S>               <C>                                                                          <C>
Section 7.01.     Duties of Trustee.............................................................50
Section 7.02.     Rights of Trustee.............................................................51
Section 7.03.     Individual Rights of Trustee..................................................52
Section 7.04.     Trustee's Disclaimer..........................................................53
Section 7.05.     Notice of Defaults............................................................53
Section 7.06.     Reports by Trustee to Holders.................................................53
Section 7.07.     Compensation and Indemnity....................................................53
Section 7.08.     Replacement of Trustee........................................................54
Section 7.09.     Successor Trustee by Consolidation, Merger or Conversion......................55
Section 7.10.     Eligibility; Disqualification.................................................55
Section 7.11.     Preferential Collection of Claims Against Company.............................56

                                    ARTICLE 8

               MODIFICATIONS, AMENDMENTS, SUPPLEMENTS AND WAIVERS

Section 8.01.     Without Consent of Holders....................................................56
Section 8.02.     With Consent of Holders.......................................................57
Section 8.03.     Compliance with TIA...........................................................58
Section 8.04.     Revocation and Effect of Consents.............................................58
Section 8.05.     Notation on or Exchange of Notes..............................................58
Section 8.06.     Trustee To Sign Amendments, etc...............................................59

                                    ARTICLE 9

                       DISCHARGE OF INDENTURE; DEFEASANCE

Section 9.01.     Satisfaction and Discharge of Indenture.......................................59
Section 9.02.     Legal Defeasance..............................................................60
Section 9.03.     Covenant Defeasance...........................................................60
Section 9.04.     Conditions to Legal Defeasance or Covenant Defeasance.........................61
Section 9.05.     Application of Trust Money....................................................62
Section 9.06.     Repayment to the Company......................................................62
Section 9.07.     Reinstatement.................................................................63
</TABLE>

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                                                                                             Page
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                                   ARTICLE 10

                             [INTENTIONALLY OMITTED]

                                   ARTICLE 11

                                  MISCELLANEOUS

<S>               <C>                                                                          <C>
Section 11.01.    TIA Controls..................................................................63
Section 11.02.    Notices.......................................................................63
Section 11.03.    Communications by Holders with Other Holders..................................64
Section 11.04.    Certificate and Opinion as to Conditions Precedent............................64
Section 11.05.    Statements Required in Certificate and Opinion................................65
Section 11.06.    Rules by Trustee and Agents...................................................65
Section 11.07.    Business Days; Legal Holidays.................................................65
Section 11.08.    Governing Law.................................................................65
Section 11.09.    Waiver of Trial by Jury.......................................................65
Section 11.10.    Submission to Jurisdiction....................................................66
Section 11.11.    No Adverse Interpretation of Other Agreements.................................66
Section 11.12.    No Recourse Against Others....................................................66
Section 11.13.    Successors....................................................................66
Section 11.14.    Multiple Counterparts.........................................................66
Section 11.15.    Table of Contents, Headings, etc..............................................66
Section 11.16.    Separability..................................................................66
Section 11.17.    Translation...................................................................67

SIGNATURES.....................................................................................S-1

EXHIBITS

Exhibit A         Form of Initial Notes
Exhibit B         Form of Exchange Notes
Exhibit C         Form of Rule 144A Transfer Certificate
Exhibit D         Form of Regulation S Transfer Certificate
Exhibit E         Form of Rule 144 Transfer Certificate
Exhibit F         Form of Accredited Investor Transfer Certificate

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</TABLE>

<PAGE>

                  INDENTURE,  dated as of February 1, 2001, between  HEALTHSOUTH
CORPORATION,  a corporation incorporated in Delaware (the "Company"), as Issuer,
and The Bank of New  York,  a New York  banking  corporation,  as  Trustee  (the
"Trustee").

                  The Company has duly  authorized  the  creation of an issue of
Series A 8 1/2% Senior  Notes due 2008 and Series B 8 1/2% Senior Notes due 2008
and, to provide  therefor,  the Company has duly  authorized  the  execution and
delivery of this Indenture.  All things  necessary to make the Notes,  when duly
issued and executed by the Company,  and authenticated and delivered  hereunder,
the valid  obligations  of the Company,  and to make this  Indenture a valid and
binding agreement of the Company, have been done.

                  Each  party  agrees as  follows  for the  benefit of the other
parties and for the equal and ratable benefit of the Holders:

                                    ARTICLE 1

                                   DEFINITIONS

Section 1.01.     Definitions.
                  -----------

                  "2000 Credit Agreement" means the Credit Agreement dated as of
October 31, 2000 by and among the Company, as borrower, UBS AG, Stamford Branch,
as Administrative Agent, Deutsche Bank AG New York Branch, as Syndication Agent,
the lenders party  thereto from time to time,  UBS Warburg LLC and Deutsche Bank
Securities  Inc., as Joint Lead  Arrangers,  and The  Industrial  Bank of Japan,
Limited,  as Documentation  Agent,  together with the related documents thereto,
including,  without limitation, any security documents, if any, and all exhibits
and schedules thereto and any agreement or agreements relating to any extension,
refunding,  refinancing,  successor or replacement facility, whether or not with
the same lender, and whether or not the principal amount or amount of letters of
credit  outstanding  thereunder or the interest rate payable in respect  thereof
shall be thereby  increased,  in each case as amended and in effect from time to
time.

                  "Acquired  Indebtedness"  means (i) with respect to any Person
that becomes a Subsidiary of the Company after the Issue Date,  Indebtedness  of
such Person and its  Subsidiaries  existing  at the time such  Person  becomes a
Subsidiary  of the  Company  and (ii) with  respect to the Company or any of its
Subsidiaries, any Indebtedness assumed by the Company or any of its Subsidiaries
in connection with the acquisition of an asset from another Person.

                  "Additional Interest" has the meaning provided to such term in
the Registration Rights Agreement.

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

<PAGE>

                  "Agent"  means  any  Registrar,  Paying  Agent,  co-Registrar,
authenticating agent or agent for service of notices and demands.

                  "Asset Sale" for any Person means the sale, lease,  conveyance
or other disposition (including, without limitation, by merger or consolidation,
and whether by operation of law or  otherwise)  of any of that  Person's  assets
(including,  without limitation,  the sale or other disposition of Capital Stock
of any Subsidiary of such Person, whether by such Person or by such Subsidiary),
whether owned on the Issue Date or subsequently  acquired, in one transaction or
a series of related  transactions,  in which such Person and/or its Subsidiaries
sell, lease, convey or otherwise dispose of: (i) all or substantially all of the
Capital Stock of any of such Person's Subsidiaries; (ii) assets which constitute
all or  substantially  all of any division or line of business of such Person or
any of its Subsidiaries;  or (iii) any other assets of such Person or any of its
Subsidiaries,  other than in the ordinary course of business, provided, that the
Fair Market Value thereof shall be at least 1% of Consolidated  Tangible Assets;
provided,  however,  that the following  shall not constitute  Asset Sales:  (a)
transactions  between the Company and any of its Wholly  Owned  Subsidiaries  or
among such Wholly Owned  Subsidiaries;  (b) any  transaction  not  prohibited by
Section 4.10 hereof or that constitutes a Permitted Investment; (c) any transfer
of assets  (including  Capital Stock) that is governed by and in accordance with
Article 5 hereof or the  creation  of any Lien not  prohibited  by Section  4.14
hereof; or (d) sales of damaged,  worn-out or obsolete equipment or assets that,
in the Company's reasonable judgment, are no longer either used or useful in the
business of the Company or its Subsidiaries.

                  "Attributable Indebtedness" when used with respect to any Sale
and Leaseback  Transaction  means, as at the time of determination,  the present
value  (discounted  at a rate  equivalent  to the interest  rate implicit in the
lease,  compounded on a semiannual basis) of the total obligations of the lessee
for rental payments,  after excluding all amounts required to be paid on account
of  maintenance  and repairs,  insurance,  taxes,  utilities  and other  similar
expenses  payable by the lessee  pursuant to the terms of the lease,  during the
remaining term of the lease included in any such Sale and Leaseback  Transaction
or until the earliest date on which the lessee may terminate  such lease without
penalty or upon  payment of a penalty (in which case the rental  payments  shall
include such penalty); provided, that the Attributable Indebtedness with respect
to a Sale and Leaseback  Transaction shall be no less than the fair market value
of the property subject to such Sale and Leaseback Transaction.

                  "Bank  Debt"  means all  obligations  of the  Company  and its
Subsidiaries, now or hereafter existing under (i) the Credit Agreements, whether
for principal, interest,  reimbursement of amounts drawn under letters of credit
issued  pursuant  thereto,   guarantees  in  respect  thereof,  fees,  expenses,
premiums,  indemnities or otherwise,  and (ii) any Indebtedness  incurred by the
Company  to extend,  refund or  refinance,  in whole or in part,  the Bank Debt,
including any interest and premium on any such Indebtedness.

                  "Board of Directors"  means,  with respect to any Person,  the
board  of  directors  or  similar  governing  body of such  Person  or any  duly
authorized committee thereof.

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

                                       2
<PAGE>

                  "Capital Stock" of any Person means any and all shares, rights
to  purchase,  warrants  or  options  (whether  or not  currently  exercisable),
participation  or other  equivalents of or interest in (however  designated) the
equity  (including  without   limitation  common  stock,   preferred  stock  and
partnership,  joint  venture and limited  liability  company  interests) of such
Person (excluding any debt securities that are convertible into, or exchangeable
for, such equity).

                  "Capitalized  Lease  Obligations"  of  any  Person  means  the
obligation  of such  Person to pay rent or other  amounts  under a lease that is
required to be capitalized for financial  reporting  purposes in accordance with
GAAP, and the amount of such obligation shall be the capitalized  amount thereof
determined in accordance with GAAP.

                  "Certificated  Note" means a Note issued in certificated  form
to a Person other than the Depositary.

                  "Change  of  Control"  means  the  occurrence  of  any  of the
following:  (i) all or substantially  all of the Company's assets are sold as an
entirety  to any  Person  or  related  group of  Persons;  (ii)  there  shall be
consummated any  consolidation or merger of the Company (A) in which the Company
is not the continuing or surviving  corporation  (other than a consolidation  or
merger with a Wholly Owned  Subsidiary of the Company in which all shares of the
Company's  Common  Equity  outstanding  immediately  prior to the  effectiveness
thereof  are  changed  into or  exchanged  for the  same  consideration)  or (B)
pursuant to which the  Company's  Common  Equity would be  converted  into cash,
securities or other property,  in each case other than a consolidation or merger
of the Company in which the holders of the Company's  Common Equity  immediately
prior to the  consolidation or merger have,  directly or indirectly,  at least a
majority of the total voting power of all classes of Capital  Stock  entitled to
vote  generally  in the election of  directors  of the  continuing  or surviving
corporation  immediately after such consolidation or merger in substantially the
same  proportion as their ownership of the Company's  Common Equity  immediately
before such transaction;  (iii) any Person, or any Persons acting together which
would  constitute a "group" for purposes of Section  13(d) of the Exchange  Act,
together with any affiliates thereof, shall beneficially own (as defined in Rule
13d-3  under the  Exchange  Act) at least 50% of the total  voting  power of all
classes  of Capital  Stock of the  Company  entitled  to vote  generally  in the
election of directors of the  Company;  (iv) at any time during any  consecutive
two-year period, individuals who at the beginning of such period constituted the
Board  of  Directors  of the  Company  (together  with any new  directors  whose
election by such Board of  Directors  or whose  nomination  for  election by the
stockholders  of the Company was approved by a vote of 66-2/3% of the  directors
then still in office who were either  directors at the  beginning of such period
or whose election or nomination  for election was previously so approved)  cease
for any reason to constitute a majority of the Board of Directors of the Company
then in office;  or (v) the Company is  liquidated or dissolved or adopts a plan
of liquidation or dissolution.

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

                  "Common  Equity" of any Person means all Capital Stock of such
Person that is  generally  entitled to (i) vote in the  election of directors of
such  Person or (ii) if such  Person  is not a  corporation,  vote or  otherwise
participate in the selection of the governing body, partners, managers or others
that will control the management and policies of such Person.

                                      3
<PAGE>

                  "Company" means the party named as such in the first paragraph
of this  Indenture  until a successor  replaces such party pursuant to Article 5
hereof and thereafter means such successor.

                  "Consolidated  Amortization  Expense"  of any  Person  for any
period means the  amortization  expense of such Person and its  Subsidiaries for
such  period (to the extent  included in the  computation  of  Consolidated  Net
Income of such Person),  determined on a consolidated  basis in accordance  with
GAAP.

                  "Consolidated  Depreciation  Expense" of any Person  means the
depreciation expense of such Person and its Subsidiaries for such period (to the
extent included in the  computation of Consolidated  Net Income of such Person),
determined on a consolidated basis in accordance with GAAP.

                  "Consolidated EBITDA" of any Person means, with respect to any
determination  date,  Consolidated Net Income,  plus (i) Consolidated Income Tax
Expense,  plus (ii) Consolidated  Depreciation  Expense, plus (iii) Consolidated
Amortization  Expense,  plus (iv) Consolidated  Interest  Expense,  plus (v) all
other  unusual   non-cash  items  or   non-recurring   non-cash  items  reducing
Consolidated  Net Income of such Person and its  Subsidiaries,  determined  on a
consolidated  basis  in  accordance  with  GAAP,  and less  all  non-cash  items
increasing  Consolidated  Net  Income  of  such  Person  and  its  Subsidiaries,
determined on a  consolidated  basis in accordance  with GAAP, in each case, for
such Person's prior four full fiscal quarters for which  financial  results have
been reported immediately preceding the determination date.

                  "Consolidated  Income Tax Expense"  means,  for any Person for
any period,  the  provision for taxes based on income and profits of such Person
and its  Subsidiaries to the extent such provision for income taxes was deducted
in computing Consolidated Net Income of such Person for such period,  determined
on a consolidated basis in accordance with GAAP.

                  "Consolidated  Interest  Expense" of any Person for any period
means,  without  duplication,  (i) the  Interest  Expense of such Person and its
Subsidiaries for such period,  determined on a consolidated  basis in accordance
with GAAP, plus (ii) (to the extent not otherwise included within the definition
of Interest  Expense as imputed  interest)  one-third  of the rental  expense on
Attributable  Indebtedness  of such  Person  for  such  period  determined  on a
consolidated basis, plus (iii) the dividend  requirements of such Person and its
Subsidiaries  with respect to  Disqualified  Stock and with respect to all other
Preferred  Stock of Subsidiaries of such Person (in each case whether in cash or
otherwise  (except  dividends  payable  solely in shares of Capital Stock (other
than Disqualified  Stock) of such Person or such Subsidiary))  paid,  accrued or
accumulated  during such period times a fraction  the  numerator of which is one
and the  denominator  of which is one  minus  the  then  effective  consolidated
Federal, state and local tax rate of such Person, expressed as a decimal.

                  "Consolidated  Net Income" of any Person for any period  means
the net income (or loss) of such  Person and its  Subsidiaries  for such  period
determined on a consolidated basis in accordance with GAAP;  provided that there
shall be  excluded  from  such net  income  (to the  extent  otherwise  included
therein), without duplication:

          (i)       the  net  income  (or  loss)  of any  Person  (other  than a
          Subsidiary of the referent  Person) in which any Person other than the
          referent Person has an ownership  interest,  except to the extent that
          any such income has actually been  received by the referent  Person or
          any of

                                       4
 <PAGE>
          its Wholly  Owned  Subsidiaries  in the form of  dividends  or similar
          distributions during such period;

          (ii)       except to the extent  includable  in the  consolidated  net
          income of the referent  Person  pursuant to the foregoing  clause (i),
          the net income (or loss) of any Person that accrued  prior to the date
          that (a) such Person becomes a Subsidiary of the referent Person or is
          merged into or  consolidated  with the  referent  Person or any of its
          Subsidiaries  or (b) the  assets of such  Person are  acquired  by the
          referent Person or any of its Subsidiaries;

          (iii)      the net income of any  Subsidiary  of the  referent  Person
          (other  than a  Wholly  Owned  Subsidiary)  to  the  extent  that  the
          declaration or payment of dividends or similar  distributions  by such
          Subsidiary  of that income is not  permitted by operation of the terms
          of its charter or any agreement,  instrument, judgment, decree, order,
          statute, rule or governmental regulation applicable to that Subsidiary
          during such period;

          (iv)      any gain (or loss), together with any related provisions for
          taxes on any such gain,  realized  during such period by the  referent
          Person  or any of its  Subsidiaries  upon (a) the  acquisition  of any
          securities, or the extinguishment of any Indebtedness, of the referent
          Person  or any of  its  Subsidiaries  or (b)  any  Asset  Sale  by the
          referent Person or any of its Subsidiaries;

          (v)      any extraordinary gain or extraordinary  loss,  together with
          any related provision for taxes or tax benefit resulting from any such
          extraordinary  gain or  extraordinary  loss,  realized by the referent
          Person or any of its Subsidiaries during such period; and

          (vi)      in the case of a successor to such Person by  consolidation,
          merger or transfer of its assets,  any earnings of the successor prior
          to such merger, consolidation or transfer of assets.

                  "Consolidated  Net  Worth" of any  Person as of any date means
the  stockholders'  equity  (including any preferred stock that is classified as
equity  under  GAAP,  other  than  Disqualified  Stock) of such  Person  and its
Subsidiaries  (excluding any equity adjustment for foreign currency  translation
for any period  subsequent  to the Issue Date) on a  consolidated  basis at such
date, as determined in accordance  with GAAP,  less all write-ups  subsequent to
the Issue Date in the book value of any asset owned by such Person or any of its
Subsidiaries.

                  "Consolidated  Tangible  Assets"  of any Person as of any date
means the total assets of such Person and its Subsidiaries (excluding any assets
that would be classified as  "intangible  assets" under GAAP) on a  consolidated
basis at such date, as determined  in accordance  with GAAP,  less all write-ups
subsequent to the Issue Date in the book value of any asset owned by such Person
or any of its Subsidiaries.

                  "Corporate  Trust  Office"  means the office of the Trustee at
which at any particular  time its corporate  trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at 101 Barclay  Street,  Floor 21 West,  New York,  New York  10286,  Attention:
Corporate  Trust  Administration,  or such  other  address  as the  Trustee  may
designate  from time to time by notice to the  Holders and the  Company,  or the
principal corporate trust office of any successor Trustee (or such other address
as a successor  Trustee may designate from time to time by notice to the Holders
and the Company).

                                       5
<PAGE>

                  "Credit Agreements" means (i) the Credit Agreement dated as of
June 23,  1998 by and among the  Company,  as  borrower,  Nationsbank,  National
Association,  as Administrative Agent and Arranger, J.P. Morgan Securities Inc.,
Deutsche Bank AG and Scotiabanc,  Inc., as Syndication  Agents and Co-Arrangers,
and the other lenders party thereto from time to time, together with the related
documents thereto,  including,  without limitation,  any security documents,  if
any, and all  exhibits and  schedules  thereto and any  agreement or  agreements
relating to any  extension,  refunding,  refinancing,  successor or  replacement
facility,  whether or not with the same lender, and whether or not the principal
amount or amount of letters of credit  outstanding  thereunder  or the  interest
rate  payable in respect  thereof  shall be thereby  increased,  in each case as
amended and in effect from time to time and (ii) the 2000 Credit Agreement.

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

                  "Disqualified  Stock"  means any Capital  Stock  that,  by its
terms (or by the terms of any security into which it is convertible or for which
it is  exchangeable),  or  upon  the  happening  of  any  event,  matures  or is
mandatorily  redeemable,  pursuant to a sinking fund obligation or otherwise, or
is  redeemable at the option of the holder  thereof,  in whole or in part, on or
prior to the Stated Maturity date of the Notes.

                  "DTC"  means  The  Depository   Trust  Company,   a  New  York
corporation.

                  "DTC  Letter  of  Representations"  shall  mean the  Letter of
Representations, dated the Issue Date, among the Company, DTC and the Trustee.

                  "EBITDA  Coverage  Ratio" with respect to any period means the
ratio of (i) Consolidated  EBITDA of the Company to (ii) the aggregate amount of
Consolidated Interest Expense of the Company for such period; provided, however,
that if any calculation of the Company's  EBITDA Coverage Ratio requires the use
of any quarter prior to the Issue Date, such calculation  shall be made on a pro
forma basis,  giving  effect to the issuance of the Notes and the use of the net
proceeds  therefrom  as if  the  same  had  occurred  at  the  beginning  of the
four-quarter period used to make such calculation;  and provided further that if
any such calculation  requires the use of any quarter prior to the date that any
Asset Sale was consummated,  or that any Indebtedness was incurred,  or that any
acquisition of a hospital or other  healthcare  facility or any assets purchased
outside the ordinary  course of business was effected,  by the Company or any of
its Subsidiaries,  such calculation  shall be made on a pro forma basis,  giving
effect to each such Asset Sale,  incurrence of Indebtedness  or acquisition,  as
the  case  may be,  and the use of any  proceeds  therefrom,  as if the same had
occurred  at  the  beginning  of the  four-quarter  period  used  to  make  such
calculation.

                  "Eligible Investments" of any Person means Investments of such
Person in:

          (i)      direct obligations of, or obligations the payment of which is
          guaranteed  by, the United  States of  America or an  interest  in any
          trust or fund that invests  solely in such  obligations  or repurchase
          agreements, properly secured, with respect to such obligations;

          (ii)      direct obligations of agencies or  instrumentalities  of the
          United States of America  having a rating of A or higher by Standard &
          Poor's Corporation or A2 or higher by Moody's Investors Service, Inc.;

                                       6
<PAGE>

          (iii)       a   certificate   of   deposit   issued   by,   or   other
          interest-bearing  deposits with, a bank having its principal  place of
          business in the United States of America and having equity  capital of
          not less than $250,000,000;

          (iv)      a  certificate  of  deposit  by,  or other  interest-bearing
          deposits with,  any other bank organized  under the laws of the United
          States of America or any state thereof,  provided that such deposit is
          either (a) insured by the Federal Deposit Insurance Corporation or (b)
          properly  secured by such bank by pledging  direct  obligations of the
          United  States of America  having a market  value of not less than the
          face amount of such deposits;

          (v)       prime  commercial  paper  maturing  within  270  days of the
          acquisition  thereof and, at the time of acquisition,  having a rating
          of A-1 or higher by Standard & Poor's Corporation, or P-1 or higher by
          Moody's Investors Service, Inc.; or

          (vi)      eligible  banker's  acceptances,  repurchase  agreements and
          tax-exempt municipal bonds having a maturity of less than one year, in
          each case having a rating, or that is the full recourse  obligation of
          a person  whose  senior debt is rated A or higher by Standard & Poor's
          Corporation or A2 or higher by Moody's Investors Service, Inc.

                  "Equity Offering" means a primary offering of Capital Stock of
the Company (other than  Disqualified  Stock or Preferred  Stock)  pursuant to a
registration  statement  filed  with  the  Commission  in  accordance  with  the
Securities Act and declared effective by the staff of the Commission.

                  "Exchange Act" means the  Securities  Exchange Act of 1934, as
amended.

                  "Exchange  Notes"  means  the 8 1/2%  Senior  Notes  due 2008,
Series B (the terms of which are  identical  to the Initial  Notes  except that,
unless any Exchange Notes shall be issued as Private  Exchange Notes (as defined
in the Registration  Rights  Agreement),  the Exchange Notes shall be registered
under the Securities  Act, and shall not contain the  restrictive  legend on the
face of the form of the Initial Notes), to be issued in exchange for the Initial
Notes  pursuant to the  registered  Exchange  Offer and a Private  Exchange  (as
defined in the Registration Rights Agreement).

                  "Exchange  Offer" means the  registration by the Company under
the  Securities  Act  pursuant to a  registration  statement of the offer by the
Company to each Holder of the Initial  Notes to exchange  all the Initial  Notes
held by such Holder for the  Exchange  Notes in an  aggregate  principal  amount
equal to the  aggregate  principal  amount  of the  Initial  Notes  held by such
Holder,  all in accordance  with the terms and  conditions  of the  Registration
Rights Agreement.

                  "Exempted  Debt" means the sum of the following as of any date
of determination:  (i) Indebtedness of the Company and its Subsidiaries incurred
after  the  Issue  Date and  secured  by Liens not  otherwise  permitted  by the
"Limitations  on  Liens"  covenant  and (ii)  Attributable  Indebtedness  of the
Company and its Subsidiaries in respect of every Sale and Leaseback  Transaction
entered into after the Issue Date.

                  "Existing  Indebtedness"  means all of the Indebtedness of the
Company and its Subsidiaries that is outstanding on the Issue Date.

                                       7
<PAGE>

                  "Fair  Market  Value"  of any  asset or items  means  the fair
market value of such asset or items as  determined in good faith by the Board of
Directors and evidenced by a resolution of the Board of Directors.

                  "GAAP" means  generally  accepted  accounting  principles  set
forth in the opinions and  pronouncements of the Accounting  Principles Board of
the American  Institute of  Certified  Public  Accountants  and  statements  and
pronouncements  of the  Financial  Accounting  Standards  Board or in such other
statements by such other entity as may be approved by a  significant  segment of
the accounting profession of the United States, as from time to time in effect.

                  "guarantee"  means,  as  applied  to  any  obligation,  (a)  a
guarantee (other than by endorsement or negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any manner, of any part
of all of such obligation and (b) an agreement,  direct or indirect,  contingent
or otherwise,  the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all or
any part of such  obligation,  including,  without  limiting the foregoing,  the
payment of amounts drawn down under letters of credit.

                  "Hedging  Obligations"  of any Person means the obligations of
such Person  pursuant to any  interest  rate swap  agreement,  foreign  currency
exchange agreement,  interest rate collar agreement,  option or futures contract
or other similar agreement or arrangement  relating to interest rates or foreign
exchange rates.

                  "Holder"  means a Person in whose name a Note is registered on
the Registrar's books or records.

                  "Indebtedness"  of any  Person  at  any  date  means,  without
duplication:  (i) all indebtedness of such Person for borrowed money (whether or
not the  recourse  of the lender is to the whole of the assets of such Person or
only to a portion  thereof);  (ii) all  obligations of such Person  evidenced by
bonds, debentures, notes or other similar instruments;  (iii) all obligations of
such  Person in respect of letters of credit or other  similar  instruments  (or
reimbursement  obligations with respect  thereto);  (iv) all obligations of such
Person  with  respect  to  Hedging  Obligations  (other  than those that fix the
interest  rate  on  variable  rate  indebtedness  otherwise  permitted  by  this
Indenture or that protect the Company and/or its Subsidiaries against changes in
foreign exchange rates);  (v) all obligations of such Person to pay the deferred
and unpaid  purchase  price of property or services,  except trade  payables and
accrued  expenses  incurred  in  the  ordinary  course  of  business;  (vi)  all
Capitalized Lease  Obligations of such Person;  (vii) all Indebtedness of others
secured by a Lien on any asset of such Person,  whether or not such Indebtedness
is assumed by such Person;  (viii) all Indebtedness of others guaranteed by such
Person to the extent of such guarantee; (ix) all Attributable Indebtedness;  and
(x) all  Disqualified  Stock of such Person and its  Subsidiaries  and all other
Preferred  Stock of Subsidiaries of such Person valued at the greater of (a) the
voluntary or involuntary  liquidation  preference of such Disqualified  Stock or
such Preferred  Stock, as the case may be, and (b) the aggregate  amount payable
upon purchase,  redemption,  defeasance or payment of such Disqualified Stock or
such  Preferred  Stock,  as the case may be. The amount of  Indebtedness  of any
Person  at any  date  shall  be the  outstanding  balance  at  such  date of all
unconditional obligations plus past due interest as described above, the maximum
liability of such Person for any such  contingent  obligations at such date and,
in the case of clause (vii), the amount of the Indebtedness secured.

                                      8
<PAGE>

                  "Indenture"  means this  Indenture  as  amended,  restated  or
supplemented from time to time.

                  "Initial Notes" means the 8 1/2% Senior Notes due 2008, Series
A of the Company issued on the Issue Date and  authenticated and delivered under
this  Indenture  pursuant to Section 2.02 of this  Indenture and any other notes
(other than  Exchange  Notes)  issued  after the Issue Date in  accordance  with
clause (iii) of the fourth paragraph of Section 2.02.

                  "Initial  Purchasers" refers to UBS Warburg LLC, Deutsche Banc
Alex. Brown Inc., Chase Securities Inc., First Union Securities, Inc. and Scotia
Capital (USA) Inc.

                  "Interest  Expense"  of any Person  for any  period  means the
aggregate  amount of  interest  which,  in  accordance  with GAAP,  would be set
opposite  the  caption  "interest  expense"  or any like  caption  on an  income
statement for such Person (including, without limitation or duplication, imputed
interest included in Capitalized Lease Obligations,  all commissions,  discounts
and other fees and charges  owed with  respect to letters of credit and bankers'
acceptance  financing,  the  net  costs  associated  with  Hedging  Obligations,
amortization  of  financing  fees and  expenses,  the  interest  portion  of any
deferred  payment  obligation,  amortization  of discount and all other non-cash
interest  expense  other  than  interest  amortized  to cost of sales)  plus the
aggregate amount, if any, by which such interest expense was reduced as a result
of the amortization of deferred debt restructuring credits for such period.

                  "Interest  Payment  Date"  means  the  Stated  Maturity  of an
installment  of interest on the Notes as specified in the forms of Note attached
hereto as Exhibits A and B.

                  "Investments" of any Person means: (i) all investments by such
Person  in  any  other  Person  in  the  form  of  loans,  advances  or  capital
contributions (excluding commission, travel and similar advances to officers and
employees  made in the ordinary  course of  business);  (ii) all  guarantees  of
Indebtedness or other obligations of any other Person by such Person;  (iii) all
purchases  (or  other   acquisitions  for   consideration)  by  such  Person  of
Indebtedness,  Capital Stock or other  securities of any other Person;  and (iv)
all other items that would be  classified  as  investments  (including,  without
limitation,  purchases of assets  outside the ordinary  course of business) on a
balance sheet of such Person prepared in accordance with GAAP.

                  "Issue  Date"  means  February  1, 2001,  the date the Initial
Notes are initially issued.

                  "Joint  Venture" means any Person at least a majority of whose
revenues result from healthcare related business of facilities.

                  "Lien" means,  with respect to any asset, any mortgage,  lien,
pledge,  charge,  security interest or other similar  encumbrance of any kind in
respect of such asset,  whether or not filed,  recorded or  otherwise  perfected
under  applicable law (including,  without  limitation,  any conditional sale or
other title retention agreement,  and any financing lease in the nature thereof,
any  agreement to sell,  and any filing of, or agreement to give,  any financing
statement  (other than notice filings not perfecting a security  interest) under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).

                                       9
<PAGE>

                  "Net  Proceeds"  with respect to any Asset Sale means (i) cash
(in U.S.  dollars  or freely  convertible  into U.S.  dollars)  received  by the
Company or any of its  Subsidiaries  from such Asset  Sale  (including,  without
limitation,  cash received as consideration  for the assumption or incurrence of
liabilities  incurred in connection with or in anticipation of such Asset Sale),
after (a) provision for all income or other taxes  measured by or resulting from
such  Asset  Sale or the  transfer  of the  proceeds  of such  Asset Sale to the
Company or any of its  Subsidiaries,  (b) payment of all  commissions  and other
fees and expenses related to such Asset Sale and (c) deduction of an appropriate
amount to be provided by the Company or any of its Subsidiaries as a reserve, in
accordance with GAAP, against any liabilities associated with the assets sold or
otherwise  disposed of in such Asset Sale and  retained by the Company or any of
its Subsidiaries after such Asset Sale (including,  without limitation,  pension
and  other  post-employment  benefit  liabilities  and  liabilities  related  to
environmental  matters) or against any  indemnification  obligations  associated
with the sale or other  disposition of the assets sold or otherwise  disposed of
in such Asset Sale and (ii) all non-cash  consideration  received by the Company
or any of its  Subsidiaries  from  such  Asset  Sales  upon the  liquidation  or
conversion of such consideration into cash.

                  "Notes" means the Initial  Notes,  the Exchange  Notes and any
other notes issued after the Issue Date in  accordance  with clause (iii) of the
fourth  paragraph of Section 2.02  treated as a single class of  securities,  as
amended or  supplemented  from time to time in accordance with the terms hereof,
that are issued pursuant to this Indenture.

                  "Officer" means,  with respect to any Person,  the Chairman of
the Board,  the Chief  Executive  Officer,  the Chief Financial  Officer,  Chief
Accounting  Officer,  Treasurer,   President,  any  Vice  President,  secretary,
assistant secretary, director or other authorized signatory of such Person.

                  "Officers'  Certificate"  means a  certificate  signed  by the
Chairman  of the Board,  any Vice  Chairman  of the Board,  the Chief  Executive
Officer, the President or any Vice President and by the Treasurer, any Assistant
Treasurer,  the  Secretary  or any  Assistant  Secretary of the Company in their
official  (and  not  individual)  capacities;   provided,  however,  that  every
Officers'  Certificate with respect to the compliance with a condition precedent
to the taking of any action under this  Indenture  shall include (i) a statement
that the officers  making or giving such  Officers'  Certificate  have read such
condition and any  definitions or other  provisions  contained in this Indenture
relating  thereto  and (ii) a statement  as to  whether,  in the opinion of such
officers, such condition has been complied with.

                  "Opinion  of  Counsel"  means a  written  opinion  from  legal
counsel  (such  counsel  may be an  employee of or counsel to the Company or the
Trustee) that complies with the requirements of this Indenture.

                  "Permitted  Investments"  means:  (i)  capital  contributions,
advances or loans to the Company by any  Subsidiary  or by the Company or any of
its  Subsidiaries  to a Subsidiary  of the  Company;  (ii) the  acquisition  and
holding by the Company and each of its Subsidiaries of receivables  owing to the
Company and such  Subsidiary,  if created or acquired in the ordinary  course of
business and payable or  dischargeable in accordance with customary trade terms;
(iii) the  acquisition  and holding by the Company and its  Subsidiaries of cash
and Eligible  Investments;  (iv)  Investments in any Person as a result of which
such other  Person  becomes a  Subsidiary  of the  Company or is merged  into or
consolidated  with or transfers  all or  substantially  all of its assets to the
Company or any of its  Subsidiaries;  and (v) the making of an Investment by the
Company,  directly  or  through a Wholly  Owned  Subsidiary,  in a Wholly  Owned
Subsidiary formed solely for the purpose of insuring the

                                       10
<PAGE>

healthcare  business  and  facilities  owned or  operated  by the  Company  or a
Subsidiary and any physician employed by or on the staff of any such business or
facility (the "Insurance Subsidiary"), provided that the amount invested in such
Insurance Subsidiary does not exceed $15,000,000.

                  "Permitted  Liens" means: (i) Liens for taxes,  assessments or
governmental charges or claims that either (a) are not yet delinquent or (b) are
being contested in good faith by appropriate  proceedings;  (ii) statutory Liens
of   landlords   and   carriers',   warehousemen's,    mechanics',   suppliers',
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business and with respect to amounts that either (a) are not yet  delinquent  or
(b) are being contested in good faith by appropriate proceedings and as to which
appropriate reserves or other provisions have been made in accordance with GAAP;
(iii)  Liens  (other than any Lien  imposed by the  Employee  Retirement  Income
Security  Act of 1974,  as amended)  incurred or  deposits  due in the  ordinary
course of  business  in  connection  with  workers'  compensation,  unemployment
insurance and other types of social  security;  (iv) Liens  incurred or deposits
made to secure the performance of tenders, bids, leases,  statutory obligations,
surety and appeal  bonds,  progress  payments,  government  contracts  and other
obligations of like nature (exclusive of obligations for the payment of borrowed
money),  in  each  case,  incurred  in the  ordinary  course  of  business;  (v)
attachment  or  judgment  Liens  not  giving  rise to a  Default  or an Event of
Default; (vi) easements,  rights-of-way,  restrictions and other similar charges
or encumbrances not interfering with the ordinary conduct of the business of the
Company or any of its Subsidiaries;  (vii) leases or subleases granted to others
not interfering  with the ordinary conduct of the business of the Company or any
of its  Subsidiaries;  (viii) Liens with  respect to any Acquired  Indebtedness,
provided  that such Liens only extend to assets that were  subject to such Liens
prior to the acquisition of such assets by the Company or its Subsidiaries  and,
with respect to Indebtedness other than Indebtedness ranking pari passu with the
Notes, not incurred in anticipation or contemplation of such  acquisition;  (ix)
Liens securing Bank Debt or Refinancing  Indebtedness,  provided, in the case of
Refinancing Indebtedness, that such Liens only extend to the assets securing the
Indebtedness  being  refinanced and such refinanced  Indebtedness was previously
secured by such assets;  (x) purchase  money  mortgages  (including  Capitalized
Lease Obligations); (xi) Liens existing on the Issue Date; (xii) Liens on assets
of any  Subsidiary  of the Company  securing  Indebtedness  of such  Subsidiary,
provided that such Indebtedness is permitted to be incurred by the terms of this
Indenture; (xiii) bankers' liens with respect to the right of set-off arising in
the ordinary course of business  against amounts  maintained in bank accounts or
certificates of deposit in the name of the Company or any Subsidiary;  (xiv) the
interest of any issuer of a letter of credit in any cash or Eligible  Investment
deposited  with or for the benefit of such issuer as collateral  for such letter
of credit,  provided that the Indebtedness so  collateralized is permitted to be
incurred by the terms of this Indenture;  (xv) any Lien consisting of a right of
first  refusal or option to purchase  the  Company's  ownership  interest in any
Subsidiary  or to  purchase  assets  of the  Company  or any  Subsidiary  of the
Company,  which right of first refusal or option is entered into in the ordinary
course of business;  and (xvi) the Lien  granted to the Trustee  pursuant to the
trust created pursuant to Article 9 hereof and any substantially equivalent Lien
granted  to  the  respective  trustees  under  the  indentures  for  other  debt
securities of the Company.

                  "Person" means any individual, corporation, partnership, joint
venture, incorporated or unincorporated association, joint-stock company, trust,
unincorporated   organization   or  government  or  other  agency  or  political
subdivision thereof or other entity of any kind.

                  "Preferred Stock" means with respect to any Person all Capital
Stock of such Person which has a preference in liquidation or a preference  with
respect to the payment of dividends  or  distributions  of  operating  profit or
cash.

                                       11
<PAGE>

                  "Qualified  Institutional  Buyer"  or  "QIB"  shall  have  the
meaning specified in Rule 144A.

                  "Record  Date" for interest  payable on any  Interest  Payment
Date  (except a date for  payment of default  interest)  means the January 15 or
July 15  (whether  or not a  Business  Day),  as the  case  may be,  immediately
preceding such Interest Payment Date.

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

                  "Redemption  Price"  when used with  respect to any Note to be
redeemed means the price fixed for such redemption pursuant to this Indenture.

                  "Refinancing  Indebtedness" means Indebtedness that is applied
to  refund,   refinance  or  extend  any  Existing   Indebtedness   (other  than
Indebtedness  under  the  2000  Credit   Agreement),   provided  that:  (i)  the
Refinancing  Indebtedness  is the  obligation  of  the  same  Person  (or if the
Indebtedness  being  refinanced is an obligation of one or more  Subsidiaries of
the Company, such Refinancing Indebtedness may be incurred by the Company or one
or more  Subsidiaries  of the Company) and is  subordinated  to the Notes, if at
all,  to the same  extent as the  Indebtedness  being  refunded,  refinanced  or
extended;  (ii) the  Refinancing  Indebtedness is scheduled to mature no earlier
than  the  Indebtedness  being  refunded,  refinanced  or  extended;  (iii)  the
Refinancing  Indebtedness  has a Weighted  Average  Life to Maturity at the time
such  Refinancing  Indebtedness is incurred that is equal to or greater than the
Weighted  Average  Life to  Maturity of the  portion of the  Indebtedness  being
refunded,  refinanced or extended; (iv) the Refinancing  Indebtedness is secured
only to the extent,  if at all,  and by the assets that the  Indebtedness  being
refunded,   refinanced  or  extended  is  secured;   and  (v)  such  Refinancing
Indebtedness is in an aggregate  principal  amount that is equal to or less than
the aggregate  principal  amount then outstanding  under the Indebtedness  being
refunded,  refinanced  or extended  (except for issuance  costs and increases in
Attributable   Indebtedness  due  solely  to  increases  in  the  present  value
calculations  resulting  from  renewals  or  extensions  of  the  terms  of  the
underlying leases in effect on the Issue Date).

                  "Registration  Rights Agreement" means the Registration Rights
Agreement  dated as of  February  1, 2001  among  the  Company  and the  Initial
Purchasers.

                  "Regulation  S"  means  Regulation  S  promulgated  under  the
Securities Act.

                  "Regulation S Restricted  Period"  means,  with respect to any
Note, the period of forty (40)  consecutive  days beginning on and including the
first day after the later of (i) the day on which such Note is first  offered to
Persons  other than  distributors  (as defined in  Regulation  S) in reliance on
Regulation S and (ii) the closing date of the offering of such Note.

                  "Restricted Payment" means with respect to any Person: (i) the
declaration  of any dividend or the making of any other payment or  distribution
of cash,  securities  or other  property  or assets in respect of such  Person's
Capital  Stock  (except that a dividend  payable  solely in Capital Stock (other
than  Disqualified  Stock) of such  Person  shall not  constitute  a  Restricted
Payment); (ii) any payment on account of the purchase, redemption, retirement or
other  acquisition  for value of such  Person's or such  Person's  Subsidiaries'
Capital  Stock or any other  payment or  distribution  made in respect  thereof,
either  directly or  indirectly;  (iii) any payment on account of the  purchase,
redemption,

                                       12

<PAGE>

retirement,  defeasance or other  acquisition for value,  prior to any scheduled
principal  payment,  sinking fund payment or Stated  Maturity,  of  Subordinated
Indebtedness of the Company or its Subsidiaries;  (iv) the incurrence,  creation
or assumption of any guarantee of  Indebtedness  of any Affiliate  (other than a
Subsidiary  of the Company);  or (v) the making of any  Investment in any Person
(other than Permitted Investments);  provided, however, that with respect to the
Company and its Subsidiaries,  Restricted Payments shall not include any payment
described  in clause (i),  (ii) or (iii) above made (1) to the Company or any of
its Wholly Owned Subsidiaries by any of the Company's Subsidiaries or (2) by the
Company  to  any of  its  Wholly  Owned  Subsidiaries  or (3) by any  Subsidiary
provided that the Company or another Subsidiary receives its proportionate share
thereof.

                  "Restricted  Security" means any Note (or beneficial  interest
therein) other than an Exchange Note (or  beneficial  interest  therein),  until
such  time  as:  (i)  such  Note  (or  beneficial  interest  therein)  has  been
transferred pursuant to an effective registration statement under the Securities
Act;  (ii) such Note is a 144A Global  Note and two years have passed  since the
Issue Date;  (iii) such Note is a Regulation S Global Note and the  Regulation S
Restricted Period has expired; or (iv) the Private Placement legend therefor has
otherwise been removed  pursuant to Section  2.16(e) hereof or, in the case of a
beneficial  interest  in a  Global  Note,  such  beneficial  interest  has  been
exchanged  for an  interest  in a Global  Note not  bearing a Private  Placement
Legend.

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

                  "Sale and Leaseback  Transaction"  means,  with respect to any
Person,  an  arrangement  with any bank,  insurance  company or other  lender or
investor  or to which such  lender or  investor  is a party,  providing  for the
leasing by such Person or any of its  Subsidiaries  of any  property or asset of
such  Person  or any of its  Subsidiaries  which  has been or is  being  sold or
transferred  by such Person or such  Subsidiary to such lender or investor or to
any  Person to whom  funds  have been or are to be  advanced  by such  lender or
investor on the security of such property or asset.

                  "Secretary's  Certificate"  means a certificate  signed by the
Secretary or any Assistant  Secretary of the Company in his or her official (and
not individual) capacity.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Significant  Subsidiary"  means a  Subsidiary  of the Company
which at the time of  determination  either (i) had tangible assets which, as of
the Company's most recent quarterly  consolidated balance sheet,  constituted at
least 5% of  Consolidated  Tangible Assets as of such date, or (ii) had revenues
for the  12-month  period  ending  on the  date  of the  Company's  most  recent
quarterly  consolidated statement of income which constituted at least 5% of the
Company's total consolidated revenues for such period.

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

                  "Subordinated   Indebtedness"   of  any   Person   means   any
Indebtedness  of such  Person  that is  subordinated  in right of payment to the
Notes.

                                       13
<PAGE>

                  "Subsidiary"  of any Person means (i) any corporation of which
Common Equity having  ordinary voting power to elect a majority of the directors
of such  corporation  is owned by such  Person  directly  or through one or more
other  Subsidiaries  of such Person and (ii) any entity other than a corporation
in which such Person,  directly or  indirectly,  owns at least 50% of the Common
Equity  of  such  entity  and has the  authority  to  manage  such  entity  on a
day-to-day basis.

                  "Trust  Indenture Act" or "TIA" means the Trust  Indenture Act
of 1939 (15 U.S.  Code Sections  77aaa-77bbbb)  as in effect on the date of this
Indenture (except as provided in Section 8.03 hereof).

                  "Trust  Officer"  shall  mean,  when used with  respect to the
Trustee,  any officer  within the  corporate  trust  department  of the Trustee,
including any vice  president,  assistant vice president,  assistant  treasurer,
trust  officer or any other  officer of the  Trustee  who  customarily  performs
functions  similar to those  performed  by the  Persons who at the time shall be
such officers,  respectively,  or to whom any corporate trust matter is referred
because  of such  Person's  knowledge  of and  familiarity  with the  particular
subject and who shall have direct  responsibility for the administration of this
Indenture.

                  "Trustee"  means  the  party  named as such in this  Indenture
until a successor  replaces it pursuant to this Indenture and  thereafter  means
the successor.

                  "U.S.  Government  Obligations"  means (a) securities that are
direct  obligations of the United States of America for the payment of which its
full faith and credit are pledged or (b)  obligations of a Person  controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally  guaranteed as a full faith and
credit  obligation by the United States of America,  which,  in either case, are
not callable or redeemable at the option of the issuer  thereof,  and shall also
include a depository  receipt issued by a bank (as defined in Section 3(a)(2) of
the  Securities  Act) as  custodian  with  respect  to any such U.S.  Government
Obligation  or a specific  payment of  principal of or interest on any such U.S.
Government  Obligation  held by such  custodian for the account of the holder of
such  depository  receipt;  provided  that  (except  as  required  by law)  such
custodian is not authorized to make any deduction from the amount payable to the
holder of such  depository  receipt from any amount received by the custodian in
respect of the U.S. Government  Obligation or a specific payment of principal or
interest on any such U.S.  Government  Obligation held by such custodian for the
account of the holder of such depository receipt.

                  "Weighted Average Life to Maturity" means, when applied to any
Indebtedness  or portion  thereof at any date,  the number of years  obtained by
dividing  (i) the then  outstanding  principal  amount of such  Indebtedness  or
portion  thereof (if applicable)  into (ii) the sum of the products  obtained by
multiplying  (a) the amount of each then  remaining  installment,  sinking fund,
serial  maturity or other required  payment of principal,  including  payment at
final maturity,  in respect thereof,  by (b) the number of years  (calculated to
the nearest  one-twelfth)  that will elapse  between such date and the making of
such payment.

                  "Wholly Owned Subsidiary" of any Person means (i) a Subsidiary
of which 100% of the Common Equity (except for director's  qualifying  shares or
certain  minority  interests  owned by other  Persons  solely  due to local  law
requirements that there be more than one stockholder,  but which interest is not
in excess of what is required for such purpose) is owned directly by such Person
or

                                       14
<PAGE>

through one or more other Wholly Owned  Subsidiaries of such Person and (ii) any
entity other than a corporation  in which such Person,  directly or  indirectly,
owns all of the Common Equity of such entity.

Section 1.02.     Other Definitions.

                  The  definitions  of the  following  terms may be found in the
sections indicated as follows:

                                   Term                      Defined in Section

"Accredited Investors"....................................         2.01
"Affiliate Transaction"...................................         4.13
"Agent Members"...........................................         2.15
"Applicable Procedures"...................................         2.16
"Asset Sale Offer"........................................         4.12
"Asset Sale Payment Amount"...............................         4.12
"Asset Sale Purchase Price"...............................         4.12
"Bankruptcy Law"..........................................         6.01
"Business Day"............................................        11.07
"Change of Control Offer".................................         4.15
"Change of Control Payment Date"..........................         4.15
"Change of Control Purchase Price"........................         4.15
"Clearstream".............................................         2.01
"Covenant Defeasance".....................................         9.03
"Custodian"....... .......................................         6.01
"Depositary"..............................................         2.15
"Euroclear"...............................................         2.01
"Event of Default"........................................         6.01
"Excess Proceeds".........................................         4.12
"Excess Proceeds Payment Date"............................         4.12
"Global Notes"............................................         2.01
"Legal Defeasance"........................................         9.02
"Legal Holiday"...........................................         11.07
"make whole amount".......................................   Exhibit A/Exhibit B
"Net Proceeds Deficiency".................................         4.12
"Non-payment Default".....................................        10.03
"Other Debt"..............................................         4.12
"Paying Agent"............................................         2.03
"Payment Blockage Notice".................................        10.03
"Payment Blockage Period".................................        10.03
"Payment Default".........................................        10.03
"Private Placement Legend"................................         2.17
"Registrar"...............................................         2.03
"Regulation S Global Note"................................         2.01
"Restricted Global Note"..................................         2.01
"Successor"...............................................         5.01

                                       15
<PAGE>

Section 1.03.     Incorporation by Reference of Trust Indenture Act.

                  Whenever this Indenture  refers to a provision of the TIA, the
portion of such provision  required to be incorporated  herein in order for this
Indenture to be qualified under the TIA is incorporated by reference in and made
a part  of  this  Indenture.  Unless  otherwise  specified,  terms  used in this
Indenture  that are  defined  by the TIA,  defined  in the TIA by  reference  to
another statute or defined by Commission rule have the meanings therein assigned
to them.

Section 1.04.     Rules of Construction.

                  Unless the context otherwise requires:

                  (1) a term has the  meaning  assigned  to it  herein,  whether
         defined expressly or by reference;

                  (2) an accounting  term not otherwise  defined has the meaning
         assigned to it in accordance with GAAP;

                  (3) "or" is not exclusive;

                  (4)  words in the  singular  include  the  plural,  and in the
         plural include the singular; and

                  (5) words used herein implying any gender shall apply to every
         gender.

                                    ARTICLE 2

                                    THE NOTES

Section 2.01.     Dating; Incorporation of Form in Indenture; Form of Notes.

                  (a) Generally. The Initial Notes and the Trustee's certificate
of  authentication  shall be  substantially  in the form of  Exhibit  A, and the
Exchange  Notes  and  the  Trustee's  certificate  of  authentication  shall  be
substantially  in the form of  Exhibit B, each of which is  incorporated  in and
made part of this Indenture with such appropriate insertions,  substitutions and
other  variations as are required or permitted by this Indenture.  The Notes may
have notations,  legends or endorsements required by law, stock exchange rule or
usage all in a form  approved by the Company.  Each Note shall be dated the date
of its authentication.

                  (b) Notes Sold  Pursuant to Rule 144A.  The Notes  offered and
sold in  their  initial  distribution  in  reliance  on Rule  144A to  Qualified
Institutional Buyers shall be issued in the form of a permanent global note (the
"Restricted   Global  Note")  (which  may  be   represented  by  more  than  one
certificate,  if so required by the  Depositary's  rules  regarding  the maximum
principal  amount to be represented by a single  certificate),  duly executed by
the  Company  and  authenticated  by the Trustee as  hereinafter  provided.  The
Restricted  Global Note shall be registered in the name of the Depositary or its
nominee and  deposited  with the Trustee,  at its  Corporate  Trust  Office,  as
custodian  for  the  Depositary  on  behalf  of  the  purchasers  of  the  Notes
represented thereby.

                                       16
<PAGE>

                  (c) Notes Sold Pursuant to Regulation S. The Notes offered and
sold in their initial  distribution  in reliance on Regulation S shall be issued
in the form of a permanent  global  note (the  "Regulation  S Global  Note" and,
together with the  Restricted  Global Note,  the "Global  Notes")  (which may be
represented  by more than one  certificate,  if so required by the  Depositary's
rules  regarding  the maximum  principal  amount to be  represented  by a single
certificate),  duly executed by the Company and  authenticated by the Trustee as
hereinafter  provided.  The  Regulation S Global Note shall be registered in the
name of the  Depositary  or its nominee and deposited  with the Trustee,  at its
Corporate  Trust  Office,  as  custodian  for the  Depositary  for credit to the
respective  accounts  of  The  Euroclear  System  ("Euroclear")  and  Clearsteam
Banking,  societe  anonyme  ("Clearstream").  Prior  to the  termination  of the
Regulation S Restricted Period,  beneficial interests in the Regulation S Global
Note may be held only through Euroclear and Clearstream.

                  (d) Notes  Sold to  Institutional  Accredited  Investors.  The
Notes offered and sold in their initial distribution in reliance on an exemption
from  registration  under the Securities Act (other than Rule 144A or Regulation
S) to institutional  "accredited investors" (as defined in Rule 501(a)(1),  (2),
(3) or (7) under the Securities Act ("Accredited Investors")) shall be issued in
certificated, fully registered form without coupons and only in denominations of
$250,000 and integral  multiples of $1,000 in excess  thereof,  duly executed by
the Company and authenticated by the Trustee as hereinafter provided.

Section 2.02. Execution and Authentication; Appointment of Authenticating Agent.

                  The Notes shall be executed on behalf of the Company by one or
more Officers of the Company. Such signature may be either manual or facsimile.

                  If an Officer  whose  signature  is on a Note no longer  holds
that office at the time the Trustee  authenticates  the Note,  the Note shall be
valid nevertheless.

                  A Note shall not be valid until the Trustee manually signs the
certificate of  authentication  on the Note.  Such signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.

                  The Trustee shall  authenticate (i) Initial Notes for original
issue  on the  Issue  Date  in the  aggregate  principal  amount  not to  exceed
$375,000,000,  (ii) pursuant to the Exchange Offer,  Exchange Notes from time to
time for issue only in exchange for a like principal amount of Initial Notes and
(iii)  subject to  compliance  with Section  4.11 hereof,  one or more series of
Notes for original issue after the Issue Date (such Notes to be substantially in
the form of Exhibit A or B hereto,  as the case may be) in an  unlimited  amount
(and if in the form of Exhibit A hereto the same  principal  amount of  Exchange
Notes in exchange therefor upon consummation of a registered exchange offer), in
each  case  upon  written  orders  of the  Company  in the form of an  Officers'
Certificate,  which  Officers'  Certificate  shall,  in the case of any issuance
pursuant to clause (iii) above, certify that such issuance is in compliance with
Section 4.11 hereof. In addition,  each such Officers' Certificate shall specify
the amount of Notes to be  authenticated,  the date on which the Notes are to be
authenticated,  whether  the Notes are to be Initial  Notes,  Exchange  Notes or
Notes  issued under clause  (iii) of the  preceding  sentence and the  aggregate
principal amount of Notes outstanding on the date of authentication.

                                       17

<PAGE>

                  Except as  provided  in section  2.01(d),  the Notes  shall be
issuable only in definitive,  fully  registered form without coupons and only in
minimum denominations of $1,000 and integral multiples thereof.

                  The Trustee,  with the approval of the Company, may appoint an
authenticating  agent  to  authenticate  Notes.  Any such  appointment  shall be
evidenced by an  instrument  signed by an authorized  officer of the Trustee,  a
copy of which shall be  furnished to the Company.  An  authenticating  agent may
authenticate  Notes  whenever  the  Trustee may do so.  Each  reference  in this
Indenture  to  authentication  by the Trustee  includes  authentication  by such
agent,  and shall comply with this Indenture.  An  authenticating  agent has the
same right as an Agent to deal with the Company or an Affiliate.

Section 2.03.     Registrar and Paying Agent.

                  The Company shall  maintain an office or agency in the Borough
of  Manhattan,  The  City of New  York  where  (a)  Notes  may be  presented  or
surrendered  for  registration  of transfer or for exchange  ("Registrar"),  (b)
Notes may be  presented  or  surrendered  for payment  ("Paying  Agent") and (c)
notices and demands in respect of Notes and this  Indenture  may be served.  The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The  Registrar  shall  provide the Company a current copy of such  register from
time to time upon  request  of the  Company.  The  Company  may have one or more
co-Registrars and one or more additional  Paying Agents.  The Company may change
any Paying Agent,  Registrar or co-Registrar  without notice to any Holder.  The
Company may not act as Paying Agent, but may act as Registrar or co-Registrar.

                  The Company shall enter into an appropriate  agency  agreement
with any  Registrar or Paying Agent not a party to this  Indenture,  which shall
incorporate  the  provisions  of the TIA.  The  agreement  shall  implement  the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee in writing of the name and address of any such Agent. If the Company
fails to maintain a Registrar or Paying  Agent,  or agent for service of notices
and demands, or fails to give the foregoing notice, the Company shall notify the
Trustee and the  Trustee  shall to the extent that it is capable act as such for
so long as such failure continues.

                  The Company  initially  appoints the Trustee as Registrar  and
Paying Agent in the Borough of Manhattan, The City of New York.

Section 2.04.     Paying Agent To Hold Money in Trust.

                  Before  10:00 A.M.  New York City time on each payment date of
the  principal of and/or  interest on any Notes,  the Company shall deposit with
the Paying Agent a sum sufficient to pay such principal and interest so becoming
due. The Company at any time may require a Paying Agent to pay all money held by
it to the Trustee  together  with a complete  accounting  of such sums,  and the
Trustee may at any time  during the  continuance  of any Event of Default  under
Section 6.01(a) or (b) hereof,  upon written request to a Paying Agent,  require
such Paying Agent to  forthwith  pay to the Trustee all sums so held in trust by
such Paying Agent together with a complete  accounting of such sums.  Upon doing
so,  the Paying  Agent  shall have no  further  liability  for the money.  Funds
deposited  with the Paying  Agent may be invested as agreed from time to time by
the Company and the Paying Agent.  All payments made hereunder  shall be in U.S.
legal tender.

                                       18
<PAGE>

Section 2.05.     Holder Lists.

                  The  Trustee  shall  preserve  in  as  current  a  form  as is
reasonably  practicable  the most recent list  available  to it of the names and
addresses of Holders.  If the Trustee is not the  Registrar,  the Company  shall
furnish to the Trustee at least five Business Days before each Interest  Payment
Date and the Stated  Maturity  Date and at such other  times as the  Trustee may
reasonably  request in  writing,  a list in such form and as of such date as the
Trustee may require of the names and addresses of Holders.

Section 2.06.     [Intentionally Omitted].

Section 2.07.     Replacement Notes.

                  If a mutilated  Note is  surrendered  to the Trustee or if the
Holder of a Note  claims  that a Note has been  lost,  destroyed  or  wrongfully
taken, the Company shall issue and the Trustee shall  authenticate a replacement
Note if the Trustee's  requirements  for  replacement are met. An indemnity bond
may be required by the Company or the Trustee that is sufficient in the judgment
of the Company and the Trustee to protect the Company,  the Trustee or any Agent
from any loss which any of them may suffer if a Note is replaced and evidence to
their  satisfaction  of apparent loss,  destruction or theft of such Note may be
required by the Company,  the Trustee or any Agent.  The Company and the Trustee
may charge for their reasonable  out-of-pocket  expenses  (including  reasonable
attorneys'  fees and  expenses  and any  applicable  taxes) in  replacing a Note
pursuant to this Section 2.07. In the event any such mutilated,  lost, destroyed
or  wrongfully  taken  Note has  become  due and  payable,  the  Company  in its
discretion  may pay such  Note  instead  of  issuing  a new Note in  replacement
thereof.  If after the delivery of such new Note,  a bona fide  purchaser of the
original  Note in lieu of which such new Note was issued  presents  for  payment
such  original  Note,  the Company and the Trustee  shall be entitled to recover
such new  Note  from  the  person  to whom it was  delivered  or any  transferee
thereof, except a bona fide purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage,  cost
or expense incurred by the Company or the Trustee in connection therewith.

                  Every  replacement  Note is an  additional  obligation  of the
Company.

Section 2.08.     Outstanding Notes.

                  Notes  outstanding at any time are all Notes  authenticated by
the  Trustee  except  for  those  canceled  by  it,  those  delivered  to it for
cancellation and those described in this Section 2.08 as not outstanding.

                  A Note replaced  pursuant to Section 2.07 hereof (other than a
mutilated Note surrendered for replacement)  ceases to be outstanding unless and
until the Trustee  receives proof  satisfactory to it that such replaced Note is
held by a protected purchaser.

                  If a Paying  Agent  holds on a  Redemption  Date or at  Stated
Maturity  U.S.  legal tender  sufficient  to pay the  principal  of,  make-whole
amount,  if any, and accrued interest on Notes (or portions  thereof) payable on
that date, then on and after that date,  such Notes (or portions  thereof) cease
to be outstanding and interest on them ceases to accrue.

                                       19

<PAGE>

Section 2.09.     Treasury Notes.

                  In determining  whether the Holders of the required  principal
amount of Notes have  concurred  in any  direction,  waiver,  consent or notice,
Notes  owned by the  Company or any of its  Affiliates  shall be  considered  as
though they are not  outstanding,  except that for the  purposes of  determining
whether the Trustee shall be protected in relying on any such direction,  waiver
or consent,  only Notes which a Trust Officer of the Trustee  actually knows are
so owned  shall be so  considered.  The Company  shall  notify the  Trustee,  in
writing,  when it or any of its  Affiliates  repurchases  or otherwise  acquires
Notes and of the  aggregate  principal  amount of such Notes so  repurchased  or
otherwise acquired.

Section 2.10.     Temporary Notes.

                  Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall  authenticate  temporary  Notes.  Temporary  Notes
shall be substantially in the form, and shall carry all rights and restrictions,
of  definitive  Notes  but  may  have  variations  that  the  Company  considers
appropriate for temporary Notes.  Without  unreasonable delay, the Company shall
prepare and the Trustee  shall  authenticate  definitive  Notes in exchange  for
temporary  Notes upon surrender of such temporary  Notes at the office or agency
maintained pursuant to Section 2.03 hereof.

Section 2.11.     Cancellation.

                  The Company at any time may  deliver  Notes to the Trustee for
cancellation.  The  Registrar  and the Paying Agent shall forward to the Trustee
any Notes  surrendered  to them for transfer,  exchange or payment.  The Trustee
shall  cancel  all  Notes  surrendered  for  transfer,   exchange,   payment  or
cancellation and, unless the Company instructs the Trustee in writing to deliver
the Notes to the Company,  shall  dispose of such Notes in  accordance  with its
normal practice.  Subject to Section 2.07 hereof,  the Company may not issue new
Notes to replace Notes in respect of which it has previously paid all principal,
make-whole  amount,  if any, and interest accrued  thereon,  or delivered to the
Trustee for  cancellation.  The Trustee shall provide the Company with a list of
all Notes that have been  canceled  from time to time as requested in writing by
the Company.  If the Company  shall acquire any of the Notes,  such  acquisition
shall  not  operate  as  a  redemption  or  satisfaction  of  the   Indebtedness
represented  by such  Notes  unless  and until the same are  surrendered  to the
Trustee for cancellation pursuant to this Section 2.07.

Section 2.12.     Defaulted Interest.

                  If the Company  defaults in a payment of principal or interest
on the  Notes,  it shall  pay  interest  on  overdue  principal  and on  overdue
installments of interest  (without regard to any applicable  grace periods) from
time to time on demand at the rate per annum  borne by the Notes,  to the extent
lawful.

                  If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted  interest,  plus (to the extent  lawful) any interest
payable  on the  defaulted  interest,  to  the  Persons  who  are  Holders  on a
subsequent  special  Record  Date,  which date shall be the  fifteenth  day next
preceding the date fixed by the Company for the payment of defaulted interest or
the next succeeding Business Day if such date is not a Business Day. At least 15
days before the  subsequent  special Record Date, the Company shall mail to each
Holder, as of a recent date selected by the

                                       20
<PAGE>
Company, with a copy to the Trustee, a notice that states the subsequent special
Record Date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.

                  Notwithstanding  the  foregoing,  any  interest  which is paid
prior to the expiration of the 30-day period set forth in Section 6.01(a) hereof
shall be paid to Holders as of the Record Date for the Interest Payment Date for
which interest has not been paid.

Section 2.13.     Deposit of Moneys; Payments.

                  Prior to 10:00  A.M.,  New York  City  time,  on the  relevant
Interest Payment Date, Stated Maturity date,  Redemption Date, Change of Control
Purchase Date and Excess Proceeds Payment Date, the Company shall have deposited
with the Paying Agent in immediately  available  funds money  sufficient to make
all cash  payments due on such  Interest  Payment Date,  Stated  Maturity  date,
Redemption  Date,  Change of Control  Purchase Date and Excess Proceeds  Payment
Date,  as the case may be (or if any such date is not a Business  Day, the first
preceding  Business  Day).  The  principal and interest on Global Notes shall be
payable  to the  Depositary  or its  nominee,  as the case  may be,  as the sole
registered  owner and the sole holder of the Global Notes  represented  thereby.
The principal and interest on  Certificated  Notes,  if any, shall be payable at
the office of the Paying  Agents.  The Paying  Agents  shall pay the Company any
excess cash  remaining on deposit after all payments have been made with respect
to a given Interest Payment Date, Stated Maturity date,  Redemption Date, Change
of Control  Purchase Date or Excess  Proceeds  Payment Date, as the case may be.
All payments made hereunder shall be in U.S. legal tender.

Section 2.14.     "CUSIP" Number.

                  The Company in issuing the Notes may use "CUSIP" number(s) and
the  Trustee  shall use the  "CUSIP"  numbers(s)  in  notices of  redemption  or
exchange as a convenience to Holders;  provided that neither the Company nor the
Trustee shall have any  responsibility for any defect in the "CUSIP" number that
appears on any Note, check, advice or payment or redemption notice, and any such
notice  may  state  that no  representation  is made  as to the  correctness  or
accuracy of the  "CUSIP"  number(s)  printed in the notice or on the Notes,  and
that reliance may be placed only on the other identification  numbers printed on
the Notes and any such  redemption  or  exchange  shall not be  affected  by any
defect in or omission of such  number(s).  The Company shall promptly notify the
Trustee of any changes in "CUSIP" numbers.

Section 2.15.     Depositary.

                  (a) The Company  hereby  appoints DTC to act as depositary (in
such capacity,  together with its successors in such capacity, the "Depositary")
with  respect to the Global  Notes.  The Trustee  shall act as  custodian of the
Global Notes for the Depositary.  So long as the Depositary or its nominee, Cede
& Co., is the registered  owner of the Global Notes,  it shall be considered the
Holder of the Notes represented thereby for all purposes hereunder and under the
Global Notes,  and neither any members of, or  participants  in, the  Depositary
("Agent  Members")  nor any other  Persons on whose behalf Agent Members may act
shall have any rights  hereunder  with  respect to the Global Notes or under the
Global Notes.  Notwithstanding  the foregoing,  nothing herein shall prevent the
Company,  the  Trustee or any agent of the  Company or the  Trustee  from giving
effect to any written certification,  proxy or other authorization  furnished by
the  Depositary  or its nominee,  as the case may be, or impair,  as between the

                                       21
<PAGE>

Depositary,  its Agent  Members  and any other  Person on whose  behalf an Agent
Member may act, the operation of customary  practices of such Persons  governing
the exercise of the rights of a Holder of any Note.

                  (b) The Company may remove or replace DTC or any  successor as
Depositary  for  any  reason  upon  thirty  (30)  days'  notice  to DTC or  such
successor. The Holders shall have no right to a depositary for the Notes.

                  (c)  Notwithstanding  any other provision of this Indenture or
the Notes, so long as DTC or its nominee is the registered owner of the Notes:

                         (i) the provisions of the DTC Letter of Representations
                    shall  control over the  provisions of this  Indenture  with
                    respect to the matters covered thereby;

                         (ii) presentation of Notes to the Trustee at redemption
                    or at maturity  shall be deemed made to the Trustee when the
                    right to exercise  ownership rights in the Notes through DTC
                    or Agent Members is transferred by DTC on its books; and

                         (iii) DTC may present  notices,  approvals,  waivers or
                    other  communications  required or  permitted  to be made by
                    Holders under this  Indenture on a  fractionalized  basis on
                    behalf of some or all of those Persons  entitled to exercise
                    ownership rights in the Notes through DTC or Agent Members.

Section 2.16.     Registration of Transfers and Exchanges.

                  (a)  Transfer  and  Exchange  Generally.  (i)  The  Notes  are
         transferable  only  upon the  surrender  thereof  for  registration  of
         transfer.  When a  Note  is  presented  to  the  Registrar  with a duly
         executed  instrument of assignment  and transfer  substantially  in the
         form of  assignment  attached  to  Exhibit A or B, as  applicable,  the
         Registrar  shall  register the  transfer as requested if such  transfer
         complies with the provisions hereof.  Prior to the due presentation for
         registration  of  transfer  of any Note,  the Person in whose name such
         Note is registered  shall be treated as the absolute owner of such Note
         for the purpose of receiving payment of principal of, make-whole amount
         (if any) and  interest  on such Note  (whether  or not such  payment is
         overdue) and for all other  purposes  whatsoever,  notwithstanding  any
         notice to the  contrary.  Registration  of  transfer of any Note by the
         Registrar shall be deemed to be an  acknowledgment  of such transfer by
         the Company.

                           (ii) When Notes are presented to the Registrar with a
         written  request to  exchange  such  Notes for Notes of any  authorized
         denominations and of a like aggregate  principal amount,  the Registrar
         shall make the exchange as requested if such exchange complies with the
         provisions of this Section 2.16(a).

                           (iii)  Following any request for transfer or exchange
         of one or more Notes made in  compliance  with clauses (i) or (ii),  as
         the case may be, of this Section  2.16(a),  the Company shall  execute,
         and the Trustee shall  authenticate and deliver,  one or more new Notes
         of a like principal amount and in such authorized  denominations as may
         be requested.  Any exchange or transfer shall be without charge, except
         that the Company may require  payment by the Holder of a sum sufficient
         to cover any tax or other  governmental  charge  that may be

                                       22
<PAGE>

          imposed in relation to a transfer or exchange  other than any exchange
          pursuant to Sections 2.10, 3.06, 4.12, 4.15 or 8.05 hereof.

               (iv)  Transfers or  exchanges of the Global Notes and  beneficial
          interests  therein  shall be  subject  to the  provisions  of  Section
          2.16(b) and the rules of the  Depositary.  Transfers  or  exchanges of
          Certificated  Notes  shall be  subject  to the  provisions  of Section
          2.16(c).

               (v) Except as  otherwise  provided  herein,  the Global Notes and
          each  Certificated Note shall bear the Private Placement Legend as set
          forth in Section  2.17.  By its  acceptance  of any Note  bearing  the
          Private Placement Legend, whether upon original issuance or subsequent
          transfer,  each Holder of such a Note acknowledges the restrictions on
          transfer of such Note set forth in this  Indenture  and in the Private
          Placement  Legend and agrees that it will  transfer  such Note only as
          provided in this  Indenture.  Upon the specific  written  request of a
          Holder to remove the Private  Placement  Legend,  the Registrar  shall
          authenticate  and deliver a Note with an equivalent  principal  amount
          not bearing the Private  Placement  Legend if there is provided to the
          Company evidence reasonably satisfactory to the Company (which may, at
          the Company's request, include an Opinion of Counsel) that neither the
          Private  Placement  Legend nor the  restrictions on transfer set forth
          therein are required to ensure  compliance  with the  Securities  Act.
          Upon a written request for the registration of transfer or exchange of
          a Note bearing the Private  Placement  Legend pursuant to an effective
          registration statement under the Securities Act and in accordance with
          any applicable  securities laws of any state of the United States, the
          Registrar  shall  authenticate  and deliver a Note with an  equivalent
          principal  amount not  bearing the Private  Placement  Legend.  If the
          Private  Placement  Legend has been removed from a Note as provided in
          this clause (v), the transfer of such Note shall not be subject to the
          restrictions  on transfer set forth in the Private  Placement  Legend,
          and no other Note issued in exchange  for all or any part of such Note
          shall  bear the  Private  Placement  Legend  unless  the  Company  has
          reasonable  cause to  believe  that such  other  Note is a  Restricted
          Security and  instructs  the Registrar in writing to cause the Private
          Placement Legend to appear thereon.

               (vi) None of the Company or the Trustee or the Registrar shall be
          liable for any delay by the Depositary in  identifying  the beneficial
          owners of the Notes,  and each such Person may  conclusively  rely on,
          and shall be protected in relying on, instructions from the Depositary
          for all  purposes  (including  with  respect to the  registration  and
          delivery,  and the respective  principal  amounts,  of any Notes to be
          issued).

               (vii) Prior to the due  presentation for registration of transfer
          of any Note, the Company, the Trustee, the Paying Agent, the Registrar
          or any co-Registrar may deem and treat the Person in whose name a Note
          is  registered  as the absolute  owner of such Note for the purpose of
          receiving  payment of principal  of,  make-whole  amount,  if any, and
          interest,  if any, on such Note and for all other purposes whatsoever,
          whether  or not such Note is  overdue,  and none of the  Company,  the
          Trustee,  the Paying Agent, the Registrar or any co-Registrar shall be
          affected by notice to the contrary.  So long as the  Depositary or its
          nominee  is the  Holder  of a  Global  Note,  the  Depositary  or such
          nominee,  as the case may be,  will be  considered  the sole  owner or
          Holder of the Notes  represented  by such Global Note for all purposes
          hereunder and under the Notes.  Any Holder of a Global Note,  and each
          Person with an interest in such Global Note,  shall,  by acceptance of
          such  Global  Note or  such  interest,  agree  that  transfers  of the
          beneficial  interests in such Global Note may be effected only through
          a book-entry  system

                                       23
<PAGE>

          maintained  by the Holder of such  Global Note (or its agent) and that
          ownership  of a  beneficial  interest  in such  Global  Note  shall be
          required to be reflected in a book entry.

               (viii) Any Note issued upon any transfer or exchange  pursuant to
          this Section 2.16 will  evidence the same debt and will be entitled to
          the  same  benefits  and,  unless  otherwise   provided  for  in  this
          Indenture,  subject to the same  restrictions  under this Indenture as
          the Note or Notes surrendered upon such transfer or exchange.

               (ix) The Registrar shall not be required to register the transfer
          of or exchange  any Note (A) selected  for  redemption  in whole or in
          part pursuant to Article 3, except the unredeemed  portion of any Note
          being redeemed in part, (B) for a period  beginning  fifteen (15) days
          before the  mailing of a notice of  redemption  of Notes and ending on
          the date of such  mailing  or (C)  between a Record  Date and the next
          succeeding Interest Payment Date.

            (b)    Transfers  and  Exchanges of the Global Notes and  Beneficial
          Interests Therein.
               (i)  Subject  to  clauses  (ii)  through  (viii) of this  Section
          2.16(b),  transfers  of the Global Notes shall be limited to transfers
          in whole, but not in part, to the Depositary,  its successors or their
          respective  nominees.  So long as the Global Notes remain  outstanding
          and  are  held  by or on  behalf  of  the  Depositary,  transfers  and
          exchanges of beneficial interests in the Global Notes shall be made in
          accordance  with  the  provisions  of  this  Section  2.16(b)  and  in
          accordance  with the rules and  procedures  of the  Depositary  to the
          extent applicable (the "Applicable Procedures").

               (ii) No restrictions  shall apply with respect to the transfer or
          registration  of  transfer  of  (x)  a  beneficial   interest  in  the
          Restricted Global Note to a transferee that takes delivery in the form
          of a  beneficial  interest  in the  Restricted  Global  Note  or (y) a
          beneficial  interest in the  Regulation  S Global Note to a transferee
          that  takes  delivery  in the  form of a  beneficial  interest  in the
          Regulation S Global Note; provided that any transfer described in this
          clause  (ii)  shall  be  made  in  accordance   with  the   Applicable
          Procedures.

               (iii) Any  transfer of a  beneficial  interest in the  Restricted
          Global Note to a transferee  that will take  delivery in the form of a
          beneficial  interest  in the  Regulation  S Global  Note  prior to the
          termination of the Regulation S Restricted Period shall be registered,
          subject to the  Applicable  Procedures,  only in accordance  with this
          clause (iii). At any time prior to the termination of the Regulation S
          Restricted   Period,   upon  (x)  receipt  by  the  Registrar  of  (A)
          instructions  given in accordance with the Applicable  Procedures from
          the  Depositary  or its nominee on behalf of an owner of a  beneficial
          interest in the  Restricted  Global Note to transfer  such  beneficial
          interest  to a  Person  that  will  take  delivery  in the  form  of a
          beneficial  interest in the  Regulation S Global  Note,  (B) a written
          order of the  Depositary or its nominee  given in accordance  with the
          Applicable  Procedures  containing  account and other information with
          respect to such  transfer and (C) a certificate  of the  transferor of
          the beneficial interest in the Restricted Global Note substantially in
          the form of  Exhibit D and (y)  satisfaction  of all other  applicable
          conditions  imposed by this Indenture and the  Applicable  Procedures,
          the  Registrar  shall  (1)  reflect  in the  register  for the Notes a
          decrease in the principal amount of the Restricted  Global Note and an
          increase in the principal amount of the Regulation S Global Note, each
          such  adjustment to be equal to the  beneficial  interest  transferred
          pursuant to this clause (iii) and (2) instruct the  Depositary to make
          the corresponding adjustment to its records

                                       24
<PAGE>

          and debit the account of the  appropriate  Agent Members in accordance
          with the Applicable Procedures.

               (iv) Any  transfer of a  beneficial  interest  in the  Restricted
          Global Note to a transferee  that will take  delivery in the form of a
          beneficial  interest in the Regulation S Global Note subsequent to the
          termination of the Regulation S Restricted Period shall be registered,
          subject to the  Applicable  Procedures,  only in accordance  with this
          clause  (iv).  At  any  time  subsequent  to  the  termination  of the
          Regulation S Restricted  Period,  upon (x) receipt by the Registrar of
          (A)  instructions  given in accordance with the Applicable  Procedures
          from  the  Depositary  or its  nominee  on  behalf  of an  owner  of a
          beneficial  interest in the  Restricted  Global Note to transfer  such
          beneficial interest to a Person that will take delivery in the form of
          a beneficial  interest in the  Regulation S Global Note, (B) a written
          order of the  Depositary or its nominee  given in accordance  with the
          Applicable  Procedures  containing  account and other information with
          respect to such  transfer and (C) a certificate  of the  transferor of
          the beneficial interest in the Restricted Global Note substantially in
          the form of Exhibit D (if  transfer is made in reliance on  Regulation
          S) or Exhibit E (if  transfer is made in reliance on Rule 144) and (y)
          satisfaction  of  all  other  conditions  imposed  by  the  Applicable
          Procedures,  the  Registrar  shall (1) reflect in the register for the
          Notes a decrease in the principal amount of the Restricted Global Note
          and an increase in the  principal  amount of the  Regulation  S Global
          Note,  each  such  adjustment  to equal  the  principal  amount of the
          beneficial interest  transferred pursuant to this clause (iv), and (2)
          instruct the  Depositary to make the  corresponding  adjustment to its
          records  and debit and credit the  accounts of the  appropriate  Agent
          Members in accordance with the Applicable Procedures.

               (v) Any  transfer of a  beneficial  interest in the  Regulation S
          Global Note to a transferee  that will take  delivery in the form of a
          beneficial  interest in the  Restricted  Global Note,  either prior or
          subsequent to the  termination of the Regulation S Restricted  Period,
          shall be  registered,  subject to the Applicable  Procedures,  only in
          accordance  with this  clause (v). At any time upon (x) receipt by the
          Registrar of (A) instructions  given in accordance with the Applicable
          Procedures from the Depositary or its nominee on behalf of an owner of
          a beneficial interest in the Regulation S Global Note to transfer such
          beneficial interest to a Person that will take delivery in the form of
          a beneficial  interest in the  Restricted  Global Note,  (B) a written
          order of the  Depositary or its nominee  given in accordance  with the
          Applicable  Procedures  containing  account and other information with
          respect to such  transfer and (C) a certificate  of the  transferor of
          the beneficial  interest in the Regulation S Global Note substantially
          in the form of Exhibit C and (y)  satisfaction of all other conditions
          imposed by and the  Applicable  Procedures,  the  Registrar  shall (1)
          reflect  in the  register  for the Notes a decrease  in the  principal
          amount  of  the  Regulation  S  Global  Note  and an  increase  in the
          principal  amount of the Restricted  Global Note, each such adjustment
          to equal the principal amount of the beneficial  interest  transferred
          pursuant to this clause (v), and (2) instruct the  Depositary  to make
          the  corresponding  adjustment to its records and debit and credit the
          accounts  of the  appropriate  Agent  Members in  accordance  with the
          Applicable Procedures.

               (vi) Any  transfer of a  beneficial  interest  in the  Restricted
          Global Note to a transferee that will take delivery in the form of one
          or  more  Certificated  Notes  shall  be  registered,  subject  to the
          Applicable  Procedures,  only in accordance  with this clause (vi). At
          any time upon (x) receipt by the Registrar of (A)  instructions  given
          in accordance  with the Applicable  Procedures  from the Depositary or
          its  nominee  on behalf of an owner of a

                                       25

<PAGE>

          beneficial  interest in  the Restricted  Global Note  to transfer such
          beneficial interest to a Person that will take delivery in the form of
          one or more Certificated  Notes, (B) a written order of the Depositary
          or its nominee  given in  accordance  with the  Applicable  Procedures
          containing   account  and  other  information  with  respect  to  such
          transfer,  (C) a certificate of such Person  substantially in the form
          of Exhibit F and (D) unless the Restricted Global Note does not bear a
          Private  Placement  Legend,  an Opinion of Counsel to the effect  that
          such  transfer  is in  compliance  with the  Securities  Act,  and (y)
          satisfaction  of all  other  applicable  conditions  imposed  by  this
          Indenture and the Applicable  Procedures,  (1) the Registrar shall (A)
          reflect  in the  register  for the Notes a decrease  in the  principal
          amount  of the  Restricted  Global  Note  in an  amount  equal  to the
          beneficial interest  transferred  pursuant to this clause (vi) and (B)
          instruct the  Depositary to make the  corresponding  adjustment to its
          records  and debit the  account  of the  appropriate  Agent  Member in
          accordance with the Applicable  Procedures,  and (2) the Company shall
          execute and the Trustee shall authenticate and deliver to or on behalf
          of such Person one or more Certificated Notes of like tenor and amount
          and,  unless  the  Restricted  Global  Note  does not  bear a  Private
          Placement Legend, bearing the Private Placement Legend.

               (vii) Any transfer of a beneficial  interest in the  Regulation S
          Global Note to a transferee that will take delivery in the form of one
          or more Certificated  Notes prior to the termination of the Regulation
          S Restricted  Period shall be  registered,  subject to the  Applicable
          Procedures,  only in accordance  with this clause  (vii).  At any time
          prior to the termination of the Regulation S Restricted  Period,  upon
          (x) receipt by the Registrar of (A)  instructions  given in accordance
          with the Applicable  Procedures  from the Depositary or its nominee on
          behalf of an owner of a beneficial interest in the Regulation S Global
          Note to transfer such  beneficial  interest to a Person that will take
          delivery in the form of one or more Certificated  Notes, (B) a written
          order of the  Depositary or its nominee  given in accordance  with the
          Applicable  Procedures  containing  account and other information with
          respect  to  such   transfer,   (C)  a  certificate   of  such  Person
          substantially  in the form of  Exhibit F and (D) an Opinion of Counsel
          to the effect that such transfer is in compliance  with the Securities
          Act  and (y)  satisfaction  of all  other  conditions  imposed  by the
          Applicable  Procedures,  (1) the  Registrar  shall (A)  reflect in the
          register  for the  Notes a  decrease  in the  principal  amount of the
          Regulation S Global Note in an amount equal to the beneficial interest
          transferred  pursuant  to  this  clause  (vii)  and (B)  instruct  the
          Depositary  to make the  corresponding  adjustment  to its records and
          debit the account of the  appropriate  Agent Member in accordance with
          the Applicable  Procedures,  and (2) the Company shall execute and the
          Trustee shall  authenticate and deliver to or on behalf of such Person
          one or more  Certificated  Notes of like tenor and amount  bearing the
          Private Placement Legend.

               (viii)  Notwithstanding  any contrary provision contained herein,
          Certificated  Notes  shall be issued in  exchange  for the  beneficial
          interests in a Global Note if at any time: (x) the Company advises the
          Trustee in  writing  that the  Depositary  is  unwilling  or unable to
          continue as depositary  for such Global Note or is no longer  eligible
          to act as  such  and  in  each  case  a  successor  depositary  is not
          appointed  by the  Company  within  ninety (90) days of receipt by the
          Company of notice of such inability;  (y) the Company,  at its option,
          elects to terminate the book-entry  system through the Depositary with
          respect to such Global Note;  or (z) after the  occurrence of an Event
          of  Default,   beneficial  owners  holding  interests  representing  a
          majority of the aggregate  principal  amount of Notes  represented  by
          such Global Note advise the Trustee in writing  through the Depositary
          that the continuation of a book-entry system through the Depositary is
          no  longer  in  such  beneficial  owners'  best  interests.  Upon  the
          occurrence  of any

                                       26
<PAGE>

          of the events set forth in clauses (x), (y) and (z) immediately above,
          the Trustee,  upon receipt of written notice thereof and a list of all
          Persons  that hold a beneficial  interest in such Global  Note,  shall
          notify,  through the  appropriate  Agent Members at the expense of the
          Company,  all Persons that hold a  beneficial  interest in such Global
          Note of the  issuance of  Certificated  Notes.  Upon  surrender by the
          Trustee,  as  custodian  for the  Depositary,  of such Global Note and
          receipt from the Depositary of instructions for  re-registration,  the
          Company shall execute and the Trustee,  upon the written  instructions
          of the Company,  shall authenticate and deliver  Certificated Notes of
          like tenor and amount  and,  unless  such  Global Note does not bear a
          Private  Placement  Legend,  bearing  the  Private  Placement  Legend.
          Certificated Notes issued in exchange for beneficial interests in such
          Global Note pursuant to this clause (viii) shall be registered in such
          names and in such authorized denominations as the Depositary, pursuant
          to  instructions  from Agent Members or otherwise,  shall instruct the
          Trustee.

                  (c)  Transfers and Exchanges of  Certificated  Notes.  (i) Any
         transfer of a Certificated Note bearing the Private Placement Legend to
         a  transferee   that  takes  delivery  in  the  form  of  one  or  more
         Certificated  Notes shall be registered  only in  accordance  with this
         clause (i).  Upon (x)  surrender of any  Certificated  Note bearing the
         Private Placement Legend at the office of the Registrar,  together with
         (A) an executed  instrument  of assignment  of such  Certificated  Note
         substantially in the form of assignment  attached to such  Certificated
         Note,  (B) a certificate of the  transferee of such  Certificated  Note
         substantially in the form of Exhibit F and (C) an Opinion of Counsel to
         the effect that such transfer is in compliance  with the Securities Act
         and (y) satisfaction of all other applicable conditions imposed by this
         Indenture,  (1) the Trustee  shall  register  such transfer and (2) the
         Company shall execute and the Trustee shall authenticate and deliver in
         the  name of the  transferee  one or  more  Certificated  Notes  of any
         authorized  denomination in the same aggregate  principal amount and of
         the same maturity as the transferred  Certificated  Note, each such new
         Certificated  Note  bearing the  Private  Placement  Legend;  provided,
         however,  that Certificated Notes so delivered shall not be required to
         bear the Private  Placement  Legend if there is provided to the Company
         evidence  reasonably  satisfactory  to the  Company  (which may, at the
         Company's  request,  include an Opinion of  Counsel)  that  neither the
         Private  Placement  Legend nor the  restrictions  on transfer set forth
         therein are required to ensure compliance with the Securities Act.

                           (ii) Any transfer of a Certificated  Note not bearing
         the Private Placement Legend to a transferee that takes delivery in the
         form of one or more  Certificated  Notes  shall be  registered  only in
         accordance   with  this  clause  (ii).   Upon  (x)   surrender  of  any
         Certificated  Note not  bearing  the  Private  Placement  Legend at the
         office  of the  Registrar,  together  with an  executed  instrument  of
         assignment  of such  Certificated  Note  substantially  in the  form of
         assignment  attached to such Certificated Note, and (y) satisfaction of
         all other  applicable  conditions  imposed by this  Indenture,  (A) the
         Trustee shall  register such transfer and (B) the Company shall execute
         and the  Trustee  shall  authenticate  and  deliver  in the name of the
         transferee   one  or  more   Certificated   Notes  of  any   authorized
         denomination  in the same  aggregate  principal  amount and of the same
         maturity  as  the   transferred   Certificated   Note.  Each  such  new
         Certificated  Note may at the request of the transferee,  but shall not
         be required to, bear the Private Placement Legend.

                           (iii) Any transfer of a Certificated Note bearing the
         Private  Placement  Legend to a transferee  that takes  delivery in the
         form of a beneficial interest in a Global Note shall be registered only
         in  accordance  with  this  clause  (iii).  Upon (x)  surrender  of any

                                       27
<PAGE>

         Certificated Note bearing the Private Placement Legend at the office of
         the Registrar,  together with (A) an executed  instrument of assignment
         of such  Certificated  Note  substantially  in the  form of  assignment
         attached to such Certificated  Note, (B) written  instructions from the
         transferor that such  Certificated Note shall be registered in the name
         of  the  Depositary  or  its  nominee  and  (C) a  certificate  of  the
         transferor  of such  Certificated  Note  substantially  in the  form of
         Exhibit  D (if the  transferee  will  take  delivery  in the  form of a
         beneficial  interest in the  Regulation S Global Note) or Exhibit C (if
         the transferee will take delivery in the form of a beneficial  interest
         in the  Restricted  Global  Note),  and (y)  satisfaction  of all other
         applicable  conditions  imposed by this  Indenture  and the  Applicable
         Procedures,  the Registrar  shall (1) register such transfer and cancel
         such  Certificated  Note,  (2) reflect in the register for the Notes an
         increase  in the  appropriate  Global  Note in an  amount  equal to the
         Certificated  Note  transferred  pursuant to this clause  (iii) and (3)
         instruct the  Depositary  to make the  corresponding  adjustment to its
         records  and credit  the  account of the  appropriate  Agent  Member in
         accordance with the Applicable Procedures.

                           (iv) Any transfer of a Certificated  Note not bearing
         the Private Placement Legend to a transferee that takes delivery in the
         form of a beneficial interest in a Global Note shall be registered only
         in  accordance   with  this  clause  (iv).  Upon  (x)  surrender  of  a
         Certificated  Note not  bearing  the  Private  Placement  Legend at the
         office of the  Registrar,  together with (A) an executed  instrument of
         assignment  of such  Certificated  Note  substantially  in the  form of
         assignment   attached  to  such   Certificated  Note  and  (B)  written
         instructions  from the transferor that such  Certificated Note shall be
         registered  in the  name  of the  Depositary  or its  nominee,  and (y)
         satisfaction  of  all  other  applicable  conditions  imposed  by  this
         Indenture  and the  Applicable  Procedures,  the  Registrar  shall  (1)
         register such transfer and cancel such  Certificated  Note, (2) reflect
         in the  register  for the Notes an  increase  in the Global  Note in an
         amount  equal to the  Certificated  Note  transferred  pursuant to this
         clause (iv) and (3) instruct the  Depositary to make the  corresponding
         adjustment  to it's  records and credit the account of the  appropriate
         Agent Member in accordance with the Applicable Procedures.

                           (v) Any  exchange of a  Certificated  Note for one or
         more Certificated Notes in different authorized  denominations shall be
         registered  only in accordance with this clause (v). Upon (x) surrender
         of a Certificated Note at the office of the Registrar,  together with a
         written  request to  exchange  such  Certificated  Note for one or more
         Certificated  Notes  in  different  authorized  denominations,  and (y)
         satisfaction  of  all  other  applicable  conditions  imposed  by  this
         Indenture,  (A) the Registrar  shall register such exchange and (B) the
         Company shall execute and the Trustee shall authenticate and deliver in
         the name of the registered owner one or more Certificated  Notes in any
         authorized  denomination  with the same aggregate  principal amount and
         maturity date.

                           (vi)  Any  exchange  of a  Certificated  Note  for  a
         beneficial  interest  in a  Global  Note  shall be  registered  only in
         accordance  with this clause (vi). Upon (x) surrender of a Certificated
         Note at the  office  of the  Registrar,  together  with  (A) a  written
         request to exchange such Certificated Note for a beneficial interest in
         a Global Note, (B) written  instructions from the registered owner that
         such  Certificated  Note  shall  be  registered  in  the  name  of  the
         Depositary or its nominee and (C) a certificate of the registered owner
         of such  Certificated  Note  substantially in the form of Exhibit D (if
         the Certificated  Note is being exchanged for a beneficial  interest in
         the Regulation S Global Note) or Exhibit C (if the Certificated Note is
         being  exchanged  for a beneficial  interest in the  Restricted  Global
         Note)

                                       28

<PAGE>

          and (y)  satisfaction of all other  applicable  conditions  imposed by
          this Indenture and the Applicable Procedures,  the Registrar shall (1)
          register such exchange and cancel such Certificated  Note, (2) reflect
          in the  register  for the Notes an increase in the  Restricted  Global
          Note in an amount equal to the Certificated Note exchanged pursuant to
          this  clause  (vi)  and  (3)  instruct  the  Depositary  to  make  the
          corresponding  adjustment to its records and credit the account of the
          appropriate Agent Member in accordance with the Applicable Procedures.

Section 2.17.     Restrictive Legends.

                  Each Note that  constitutes a Restricted  Security  shall bear
the following legend (the "Private  Placement Legend") on the face thereof until
February  1, 2003,  unless  otherwise  agreed to by the  Company  and the Holder
thereof:

                   THE  NOTE  (OR  ITS   PREDECESSORS)   EVIDENCED   HEREBY  WAS
         ORIGINALLY  ISSUED IN A  TRANSACTION  EXEMPT  FROM,  OR NOT SUBJECT TO,
         REGISTRATION  UNDER  SECTION 5 OF THE UNITED STATES  SECURITIES  ACT OF
         1933, AS AMENDED (THE "SECURITIES  ACT"), AND THE NOTE EVIDENCED HEREBY
         MAY NOT BE OFFERED,  SOLD OR  OTHERWISE  TRANSFERRED  IN THE ABSENCE OF
         SUCH  REGISTRATION  OR  AN  APPLICABLE  EXEMPTION  THEREFROM  OR  IN  A
         TRANSACTION NOT SUBJECT  THERETO.  EACH PURCHASER OF THE NOTE 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 NOTE EVIDENCED  HEREBY AGREES FOR THE
         BENEFIT OF THE  COMPANY  THAT (A) SUCH NOTE MAY BE  RESOLD,  PLEDGED OR
         OTHERWISE  TRANSFERRED  ONLY  (i)(a) TO A PERSON THE SELLER  REASONABLY
         BELIEVES  IS A QUALIFIED  INSTITUTIONAL  BUYER (AS DEFINED IN RULE 144A
         UNDER THE SECURITIES ACT) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
         ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
         THE RESALE,  PLEDGE OR TRANSFER IS BEING MADE IN A TRANSACTION  MEETING
         THE  REQUIREMENTS  OF RULE 144A  UNDER  THE  SECURITIES  ACT,  (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 OF  REGULATION  S  UNDER  THE
         SECURITIES  ACT OR (d) IN ACCORDANCE  WITH ANOTHER  EXEMPTION  FROM THE
         REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT,  PROVIDED THAT IN THE
         CASE OF A  TRANSFER,  PLEDGE OR SALE  PURSUANT  TO THIS CLAUSE (d) SUCH
         TRANSFER IS SUBJECT TO THE RECEIPT BY THE  REGISTRAR  (AND THE COMPANY,
         IF IT SO REQUESTS) OF A CERTIFICATION  OF THE TRANSFEROR AND AN OPINION
         OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN  COMPLIANCE  WITH THE
         SECURITIES ACT, (ii) TO THE COMPANY OR ITS AFFILIATES OR (iii) PURSUANT
         TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT

                                       29

<PAGE>

          AND, IN EACH CASE, IN ACCORDANCE  WITH ANY APPLICABLE  SECURITIES LAWS
          OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION
          AND THE  INDENTURE  GOVERNING  THE NOTES AND (B) THE HOLDER WILL,  AND
          EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF
          THE NOTE EVIDENCED HEREBY OF THE RESALE  RESTRICTIONS SET FORTH IN (A)
          ABOVE.

                  Each Global Note shall also bear the following legend:

                  THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
         HEREINAFTER  REFERRED TO AND IS  REGISTERED IN THE NAME OF A DEPOSITARY
         OR A NOMINEE OF A DEPOSITARY  OR A SUCCESSOR  DEPOSITARY.  THIS NOTE IS
         NOT  EXCHANGEABLE  FOR NOTES  REGISTERED  IN THE NAME OF A PERSON OTHER
         THAN THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED  CIRCUMSTANCES
         DESCRIBED IN THE INDENTURE,  AND NO TRANSFER OF THIS NOTE (OTHER THAN A
         TRANSFER OF THIS NOTE AS A WHOLE BY THE  DEPOSITARY TO A NOMINEE OF THE
         DEPOSITARY  OR BY A NOMINEE  OF THE  DEPOSITARY  TO THE  DEPOSITARY  OR
         ANOTHER  NOMINEE OF THE  DEPOSITARY)  MAY BE  REGISTERED  EXCEPT IN THE
         LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

                  TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
         WHOLE,  BUT NOT IN PART, AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE
         SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE  RESTRICTIONS
         SET FORTH IN SECTION 2.16 OF THE INDENTURE.

                                    ARTICLE 3

                                   REDEMPTION

Section 3.01.     Notices to Trustee.

                  If the Company  elects to redeem Notes pursuant to paragraph 6
of the Notes, at least 60 days prior to the Redemption Date or during such other
period as the  Trustee  may agree to, the  Company  shall  notify the Trustee in
writing of the Redemption Date, the principal amount of Notes to be redeemed and
the  Redemption  Price,  and  deliver to the  Trustee an  Officers'  Certificate
stating that such  redemption will comply with the conditions  contained  herein
and in the Notes, as appropriate.

Section 3.02.     Selection of Notes To Be Redeemed.

                  (a)      In  the event  that less than all of the Notes are to
be redeemed at any time,  selection of the Notes to be redeemed shall be made by
the Trustee on a pro rata basis,  by lot or by such method as the Trustee  shall
deem fair and equitable;  provided, however, that no Notes of a principal amount
of  $1,000 or less  shall be  redeemed  in part;  provided,  further,  that if a
partial  redemption is made with the proceeds of any Equity Offering,  selection
of the Notes or  portions  thereof

                                       30
<PAGE>

for  redemption  shall be made by the Trustee  only on a pro rata basis or on as
nearly a pro rata basis as is  practicable  (subject  to the  procedures  of the
Depositary),  unless such method is otherwise prohibited. The Trustee shall make
the selection from the outstanding  Notes not previously  called for redemption.
The Trustee shall  promptly  notify the Company in writing of the Notes selected
for redemption  and, in the case of any Notes  selected for partial  redemption,
the  principal  amount  of the Notes to be  redeemed.  In the event of a partial
redemption by lot, the Trustee shall select the particular  Notes to be redeemed
not less than 30 nor more than 60 days  prior to the  relevant  Redemption  Date
from the Outstanding Notes not previously called for redemption. The Company may
redeem Notes in  denominations  of $1,000 only in whole.  The Trustee may select
for redemption  portions (equal to $1,000 or any integral multiple of $1,000) of
the principal of Notes that have denominations larger than $1,000. A new Note in
a principal amount equal to the unredeemed portion thereof will be issued in the
name of the Holder  thereof  upon  delivery of the  original  Note to the Paying
Agent and  cancellation of the original Note. On and after the Redemption  Date,
interest will cease to accrue on Notes or portions thereof called for redemption
as long as the Company has made a deposit  with the Paying  Agent in U.S.  legal
tender in  satisfaction  of the  applicable  Redemption  Price  pursuant to this
Indenture.

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

Section 3.03.     Notice of Redemption.

                  Notice of  redemption  shall be mailed by first  class mail at
least 30 but not more than 60 calendar days before the  Redemption  Date to each
Holder of Notes to be redeemed at the registered  address of such Holder. If any
Note is to be redeemed in part only,  the notice of  redemption  that relates to
such  Note  shall  state the  portion  of the  principal  amount  thereof  to be
redeemed.  If the Company  elects to have the Trustee give notice of redemption,
the Trustee  shall give  notice in the name of the Company and at the  Company's
expense;  provided,  however,  that the  Company  shall  furnish the Trustee all
information required to be contained in the notice.

                    The notice shall identify the Notes to be redeemed and shall
               state:

                    (1) the Redemption Date;

                    (2) the Redemption Price and the amount of accrued interest,
               if any, to be paid;

                    (3) whether or not the Company is redeeming all  outstanding
               Notes and if any Note is being  redeemed in part,  the portion of
               the principal  amount (equal to $1,000 in principal amount or any
               integral  multiple thereof) of such Note to be redeemed and that,
               on and after the Redemption  Date, upon surrender of such Note, a
               new Note or Notes in  principal  amount  equal to the  unredeemed
               portion thereof will be issued;

                    (4) the name,  address  and  telephone  number of the Paying
               Agent;

                    (5) that Notes called for redemption  must be surrendered to
               the  Paying  Agent at the  address  specified  in such  notice to
               collect the Redemption Price plus accrued interest, if any;

                                       31
<PAGE>

                    (6)  that,   unless  the  Company  defaults  in  making  the
               redemption  payment,  interest  on Notes  called  for  redemption
               ceases to accrue  on and after the  Redemption  Date and the only
               remaining  right of the  Holders  is to  receive  payment  of the
               Redemption  Price plus accrued  interest to the  Redemption  Date
               upon surrender of the Notes to the Paying Agent;

                    (7) the  subparagraph  of the  Notes  pursuant  to which the
               Notes called for redemption are being redeemed;

                    (8) if fewer  than all the  Notes  are to be  redeemed,  the
               identification of the particular Notes (or portion thereof) to be
               redeemed,  as well as the aggregate  principal amount of Notes to
               be redeemed  and the  aggregate  principal  amount of Notes to be
               outstanding after such partial redemption; and

                    (9) the CUSIP or ISIN number,  if any,  listed in the notice
               or printed on the Notes, and that no representation is made as to
               the accuracy or correctness of such CUSIP or ISIN number.

Section 3.04.     Effect of Notice of Redemption.

                  Once the notice of redemption described in Section 3.03 hereof
is mailed,  Notes called for redemption become due and payable on the Redemption
Date and at the Redemption Price,  including any make-whole amount, plus accrued
interest to the  Redemption  Date, if any.  Upon  surrender to the Paying Agent,
such Notes  shall be paid at the  Redemption  Price,  including  any  make-whole
amount,  plus accrued interest to the Redemption Date, if any;  provided that if
the  Redemption  Date is  after a Record  Date  and on or prior to the  Interest
Payment  Date,  the  accrued  interest  shall be  payable  to the  Holder of the
redeemed Notes registered on the relevant Record Date.

Section 3.05.     Deposit of Redemption Price.

                  On or prior to 10:00 a.m., New York City time, on the relevant
Redemption  Date,  the Company  shall have  deposited  with the Paying  Agent in
immediately  available funds U.S. legal tender  sufficient to pay the Redemption
Price of and accrued interest, if any, on all Notes to be redeemed on that date.
The Paying Agent shall return to the Company any money deposited with the Paying
Agent by the  Company in excess of the amount  necessary  to pay the  Redemption
Price of and accrued interest, if any, on all Notes to be redeemed.

                  On and  after  any  Redemption  Date,  if  U.S.  legal  tender
sufficient to pay the Redemption Price of and accrued interest, if any, on Notes
called for  redemption  shall have been made  available in  accordance  with the
preceding  paragraph,  the Notes  called  for  redemption  will  cease to accrue
interest  and the only  right of the  Holders  of such  Notes will be to receive
payment of the Redemption  Price of and,  subject to the proviso in Section 3.04
hereof,  accrued and unpaid  interest on such Notes to the  Redemption  Date, if
any.  If any Note  called for  redemption  shall not be so paid,  interest  will
continue to accrue and be paid,  from the Redemption  Date until such redemption
payment is made,  on the unpaid  principal of the Note and any interest not paid
on such unpaid  principal,  in each case, at the rate and in the manner provided
for in Section 2.12 hereof.

                                       32
<PAGE>

Section 3.06.     Notes Redeemed in Part.

                  Upon surrender of a Note that is redeemed in part, the Company
shall execute and the Trustee shall authenticate, at the expense of the Company,
for a Holder a new Note equal in principal  amount to the unredeemed  portion of
the Note surrendered;  provided that each new Note will be in a principal amount
of $1,000 or an integral multiple of $1,000.

                                    ARTICLE 4

                                    COVENANTS

Section 4.01.     Payment of Notes.

                  The Company shall pay the principal of and interest (including
all Additional Interest as provided in the Registration Rights Agreement) on the
Notes on the dates and in the manner  provided in the Notes and this  Indenture.
An installment of principal or interest shall be considered  paid on the date it
is due if the Trustee or Paying Agent holds, for the benefit of the Holders,  on
that date money  designated for and  sufficient to pay such  installment in full
and is not  prohibited  from paying  such money to the  Holders  pursuant to the
terms of this Indenture.

                  The  Company  shall pay  interest  on  overdue  principal  and
interest on overdue  interest,  to the extent  lawful as provided for in Section
2.12 hereof.

Section 4.02.     Reports.

                  Whether or not  required by the rules and  regulations  of the
Commission,  so long as any Notes are  outstanding,  the Company shall file with
the Commission,  to the extent such filings are accepted by the Commission,  and
shall  furnish  (within  15 days after such  filing) to the  Trustee  and to the
Holders all quarterly and annual  reports and other  information,  documents and
reports  that would be  required  to be filed with the  Commission  pursuant  to
Section 13 of the Exchange  Act if the Company were  required to file under such
section.  In  addition,  the Company  shall make such  information  available to
prospective purchasers of the Notes,  securities analysts and broker-dealers who
request it in writing.  Delivery of such reports,  information  and documents to
the Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable  from  information  contained  therein,   including  the  Company's
compliance  with any of its  covenants  hereunder  (as to which the  Trustee  is
entitled to rely exclusively on Officers' Certificates).

Section 4.03.     Waiver of Stay, Extension or Usury Laws.

                  The Company  covenants  (to the extent that it may lawfully do
so)  that it will  not at any time  insist  upon,  or  plead  (as a  defense  or
otherwise)  or in any manner  whatsoever  claim or take the benefit or advantage
of, any stay or extension law or any usury law or other law which would prohibit
or forgive the  Company  from  paying all or any  portion of the  principal  of,
make-whole amount, if any, and/or interest on the Notes as contemplated  herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and the Company

                                       33
<PAGE>

hereby  expressly waives all benefit or advantage of any such law, and covenants
that it will not  hinder,  delay or impede  the  execution  of any power  herein
granted to the Trustee,  but will suffer and permit the  execution of every such
power as though no such law had been enacted.

Section 4.04.     Compliance Certificate; Notice of Default; Tax Information.

                  (a)      The  Company shall deliver to the Trustee,  within 90
days after the end of the Company's  fiscal year commencing with the fiscal year
ending December 31, 2000, an Officers'  Certificate (one of the signers of which
shall  be the  principal  executive  officer,  principal  financial  officer  or
principal  accounting officer of the Company) stating that to the best of his or
her  knowledge  no  Default  or Event  of  Default  has  occurred,  listing  all
Restricted  Payments for such year,  and if a Default or Event of Default  shall
have occurred,  describing all of such Defaults or Events of Default of which he
or she may have  knowledge  and what action the Company is taking or proposes to
take with  respect  thereto.  The  Officers'  Certificate  shall also notify the
Trustee  should  the  Company  elect to change  the manner in which it fixes its
fiscal year end.

                  (b)      The annual financial statements delivered pursuant to
Section 4.02 shall be accompanied  by a written report  addressed to the Trustee
of the Company's  independent  accountants  (who shall be a firm of  established
national reputation) that in conducting their audit of such financial statements
nothing  has come to their  attention  that would  lead them to  believe  that a
Default or Event of Default has occurred  under this  Indenture  insofar as they
relate to accounting matters or, if any such violation has occurred,  specifying
the  nature and  period of  existence  thereof,  it being  understood  that such
accountants  shall not be liable  directly or  indirectly  to any Person for any
failure to obtain knowledge of any such violation.

                  (c)      If  (i) any Default or Event of Default has  occurred
and is continuing or (ii) any Holder seeks to exercise any remedy hereunder with
respect to a claimed  default  under this  Indenture  or the Notes,  the Company
shall deliver to the Trustee,  at its address set forth in Section 11.02 hereof,
by  registered  or  certified  mail or by  telegram  or  facsimile  transmission
followed by hard copy by registered or certified  mail an Officers'  Certificate
specifying such Default or Event of Default,  notice or other action, the status
thereof  and what  action  the  Company  is taking or  proposes  to take,  which
Officers' Certificate shall be so delivered within five (5) Business Days of its
becoming aware of such occurrence.

Section 4.05.     Payment of Taxes and Other Claims.

                  The  Company  shall  pay or  discharge  or cause to be paid or
discharged,  before the same shall become  delinquent,  (i) all material  taxes,
assessments  and  governmental  charges  (including  withholding  taxes  and any
penalties,  interest and additions to taxes) levied or imposed upon it or any of
its  Subsidiaries  or properties of it or any of its  Subsidiaries  and (ii) all
lawful claims for labor,  materials and supplies  that, if unpaid,  might by law
become a Lien  upon the  property  of it or any of its  Subsidiaries;  provided,
however,  that the Company shall not be required to pay or discharge or cause to
be paid or discharged  any such tax,  assessment,  charge or claim whose amount,
applicability  or  validity  is being  contested  in good  faith by  appropriate
proceedings  properly  instituted  and  diligently  conducted for which adequate
reserves, to the extent required under GAAP, have been taken.

                                       34
<PAGE>

Section 4.06.     Corporate Existence.

                  Subject to Article 5 hereof,  the Company shall do or cause to
be done all things  necessary  to preserve and keep in full force and effect (i)
its corporate  existence,  and the corporate,  partnership or limited  liability
company or other existence of each Subsidiary, in accordance with the respective
organizational  documents (as the same may be amended from time to time) of each
Subsidiary  and the  material  rights  (charter  and  statutory),  licenses  and
franchises  of the  Company  and its  Subsidiaries  except  where the failure to
preserve  and keep in full  force  and  effect  any such  rights,  licenses  and
franchises shall not have a material adverse effect on the financial  condition,
business, operations or prospects of the Company and its Subsidiaries taken as a
whole;  and provided that the Company shall not be required to preserve any such
right,  license or  franchise,  or the  corporate,  limited  liability  company,
partnership  or other  existence  of any of the  Subsidiaries,  if the  Board of
Directors of the Company shall  determine  that the  preservation  thereof is no
longer  desirable  in  the  conduct  of the  business  of the  Company  and  its
Subsidiaries, taken as a whole.

Section 4.07.     Maintenance of Office or Agency.

                  The Company shall  maintain an office or agency in the Borough
of  Manhattan,  The  City  of New  York,  where  Notes  may be  surrendered  for
registration of transfer or exchange or for  presentation  for payment and where
notices  and  demands  to or upon the  Company  in respect of the Notes and this
Indenture  may be served.  The Company shall give prompt  written  notice to the
Trustee of the  location,  and any  change in the  location,  of such  office or
agency.  If at any time the  Company  shall fail to maintain  any such  required
office or agency or shall fail to furnish the Trustee with the address  thereof,
such presentations, surrenders, notices and demands may be made or served at the
address of the Trustee as set forth in Section 11.02 hereof.

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

                  The Company hereby  initially  designates the Corporate  Trust
Office of the  Trustee set forth in Section  11.02  hereof as such office of the
Company in the Borough of Manhattan, The City of New York.

Section 4.08.     Compliance with Laws.

                  The  Company  shall  comply,  and  shall  cause  each  of  its
Subsidiaries to comply, with all applicable statutes, rules, regulations, orders
and  restrictions  of the  United  States of  America  and all  other  sovereign
nations,  all  states  and  municipalities  thereof,  and  of  any  governmental
department,   commission,   board,  regulatory  authority,  bureau,  agency  and
instrumentality of the foregoing,  in respect of the conduct of their respective
businesses  and the ownership of their  respective  properties,  except for such
noncompliances  as would not in the aggregate have a material  adverse effect on
the  financial  condition  or  results  of  operations  of the  Company  and its
Subsidiaries taken as a whole.

                                       35
<PAGE>

Section 4.09.     Maintenance of Properties and Insurance.

                  (a)      The Company shall cause all material properties owned
by or leased by it or any of its  Subsidiaries  used or useful to the conduct of
the  Company's  business  or the  business  of any  of  its  Subsidiaries  to be
maintained and kept in normal  condition,  repair and working order and supplied
with all necessary  equipment and shall cause to be made all necessary  repairs,
renewals,  replacements,  betterments and  improvements  thereof,  all as in its
judgment  may be  necessary,  so that  the  business  carried  on in  connection
therewith may be properly and advantageously  conducted at all times;  provided,
however,  that nothing in this Section 4.09 shall  prevent the Company or any of
its Subsidiaries from  discontinuing the use, operation or maintenance of any of
such properties, or disposing of any of them, if such discontinuance or disposal
is, in the  judgment of the Board of Directors of the Company or of the Board of
Directors of the Subsidiary of the Company  concerned,  desirable in the conduct
of the business of the Company or any Subsidiary of the Company.

                  (b)      The  Company  shall  maintain,  and  shall  cause the
Subsidiaries to maintain, insurance with responsible carriers against such risks
and in such amounts, and with such deductibles, retentions, self-insured amounts
and co-insurance provisions,  as, in the reasonable judgment of the Company, may
be necessary.

Section 4.10.     Limitation on Restricted Payments.

                  The  Company  shall  not,  and  shall  not  permit  any of its
Subsidiaries,  directly or indirectly,  to make any Restricted Payment if at the
time of such  Restricted  Payment:  (i) a Default or Event of Default shall have
occurred and be continuing or shall occur as a consequence  thereof;  (ii) after
giving effect to the proposed Restricted Payment,  the amount of such Restricted
Payment,  when added to the  aggregate  amount of all  Restricted  Payments made
after  September  25,  2000,  exceeds  the  sum  of:  (a)  50% of the  Company's
Consolidated  Net Income  accrued  during the period (taken as a single  period)
commencing on July 1, 1997 to and including the fiscal quarter ended immediately
prior to the date of such Restricted Payment (or, if such aggregate Consolidated
Net Income shall be a deficit,  minus 100% of such aggregate  deficit);  (b) the
net cash  proceeds  from the issuance and sale of the  Company's  Capital  Stock
(other than to a  Subsidiary  of the  Company)  that is not  Disqualified  Stock
during the period (taken as a single period) commencing with the Issue Date; and
(c)  $50,000,000;  or (iii) the Company would not be able to incur an additional
$1.00 of Indebtedness pursuant to Section 4.11 hereof.

                  Notwithstanding  the  foregoing,  the Company may: (w) pay any
dividend  within 60 days after the date of  declaration  thereof if the  payment
thereof  would have complied  with the  limitations  of this Section 4.10 on the
date of  declaration;  (x) retire shares of the  Company's  Capital Stock or the
Company's or a Subsidiary of the Company's Indebtedness out of the proceeds of a
substantially  concurrent  sale (other than to a  Subsidiary  of the Company) of
shares of the Company's Capital Stock (other than Disqualified  Stock); (y) make
Investments in Joint  Ventures,  when added to the aggregate  amount of all such
other Investments made pursuant to this clause (y) (or such other Investments as
would have been made pursuant to this clause (y) had such clause been in effect)
after September 25, 2000, not exceeding at any time 5% of Consolidated  Tangible
Assets (with each such  Investment  being valued as of the date made and without
regard to subsequent changes in value); and (z) make Investments,  when added to
the aggregate amount of all such other  Investments made pursuant to this clause
(z) (or such other  Investments  as would have been made pursuant to this clause
(z) had such clause been in effect) after  September 25, 2000,  not exceeding at
any time 2.5% of

                                       36
<PAGE>

Consolidated  Tangible Assets (with each such Investment  being valued as of the
date made and without regard to subsequent changes in value); provided, however,
that each  Restricted  Payment  described  in clauses (w) and (x) above shall be
taken into  account  for  purposes  of  computing  the  aggregate  amount of all
Restricted  Payments  pursuant  to  clause  (ii)  of the  immediately  preceding
paragraph.

Section  4.11.  Limitation  on Additional Indebtedness and Subsidiary  Preferred
                Stock.

                  (a)      After  the Issue Date, (i) the Company shall not, and
shall not permit any of its  Subsidiaries  to,  directly or indirectly,  create,
incur,  issue,  assume,  guarantee,  extend the Stated Maturity of, or otherwise
become  liable  with  respect  to  (collectively,   "incur"),  any  Indebtedness
(including,  without  limitation,  Acquired  Indebtedness)  and (ii) the Company
shall not permit any of its  Subsidiaries to issue (except to the Company or any
of its Wholly Owned  Subsidiaries)  or create any Preferred  Stock or permit any
Person (other than the Company or a Wholly Owned  Subsidiary) to own or hold any
interest in any Preferred Stock of any such Subsidiary;  provided, however, that
the Company may incur  Indebtedness  and the Company may permit its Subsidiaries
to issue or  create  Preferred  Stock  if,  after  giving  effect  thereto,  the
Company's  EBITDA Coverage Ratio on the date thereof would be at least 2.5 to 1,
determined  on a pro  forma  basis  as if  the  incurrence  of  such  additional
Indebtedness  or the  issuance  of such  Preferred  Stock  (declared  to have an
aggregate  principal  amount equal to the  aggregate  liquidation  value of such
Preferred  Stock),  as the case may be, and the  application of the net proceeds
therefrom,  had  occurred at the  beginning of the  four-quarter  period used to
calculate the Company's EBITDA Coverage Ratio.

                  (b)      Notwithstanding  the foregoing,  and  irrespective of
the EBITDA Coverage Ratio, in addition to Existing Indebtedness: (i) the Company
may incur  Indebtedness  pursuant to the Notes  issued on the Issue Date and the
Exchange  Notes  issued in exchange  for such Notes;  (ii) the Company may incur
Indebtedness under the 2000 Credit Agreement in an aggregate principal amount at
any time not to exceed $400,000,000;  (iii) the Company and its Subsidiaries may
incur Refinancing  Indebtedness;  (iv) the Company may incur any Indebtedness to
any Subsidiary or any Subsidiary may incur any Indebtedness to the Company or to
any Subsidiary;  (v) the Company and its Subsidiaries may incur any Indebtedness
evidenced by letters of credit which are used in the ordinary course of business
of the Company and its  Subsidiaries to secure workers'  compensation  and other
insurance coverages; (vi) the Company and its Subsidiaries may incur Capitalized
Lease Obligations and Attributable Indebtedness, in each case excluding Existing
Indebtedness,  in an aggregate  principal amount at any one time outstanding not
to exceed 10% of Consolidated Tangible Assets; and (vii) the Subsidiaries of the
Company may incur Indebtedness, excluding Existing Indebtedness, in an aggregate
principal amount at any time outstanding not to exceed $250,000,000, in addition
to  Indebtedness  permitted  to be  incurred  by  Subsidiaries  pursuant  to the
foregoing clauses (iii) - (vi).

                  (c       Notwithstanding the foregoing, the Company may permit
any  Subsidiary  which is a  partnership  formed to operate a single  healthcare
facility to issue or create Preferred Stock,  provided that the aggregate amount
of all such Preferred Stock  outstanding after giving effect to such issuance or
creation shall not exceed 1% of  Consolidated  Tangible Assets as of the date of
such issuance or creation.

                                       37
<PAGE>

Section 4.12.     Limitation on Asset Sales.

                  (a)      The  Company  shall not,  and shall not permit any of
its  Subsidiaries  to,  consummate any Asset Sale unless (i) the Company or such
Subsidiary receives  consideration at the time of such Asset Sale at least equal
to the Fair  Market  Value of the  assets  included  in such  Asset  Sale,  (ii)
immediately  before and  immediately  after giving effect to such Asset Sale, no
Default or Event of Default shall have  occurred and be continuing  and (iii) at
least  75% of the  consideration  received  by the  Company  or such  Subsidiary
therefor is in the form of cash paid at the closing thereof, provided,  however,
that this clause  (iii) shall not apply if,  after  giving  effect to such Asset
Sale, the aggregate  principal  amount of all notes or similar debt  obligations
and Fair Market Value of all equity securities  received by the Company from all
Asset Sales  since  September  25,  2000 (other than such notes or similar  debt
obligations and such equity securities  converted into or otherwise  disposed of
for cash and applied in accordance  with the second  succeeding  sentence) would
not  exceed  2.5%  of  Consolidated   Tangible   Assets.   The  amount  (without
duplication) of any (x) Indebtedness  (other than Subordinated  Indebtedness) of
the Company or such  Subsidiary  that is expressly  assumed by the transferee in
such Asset Sale and with respect to which the Company or such Subsidiary, as the
case may be, is unconditionally  released by the holder of such Indebtedness and
(y) any notes,  securities or similar  obligations or items of property received
from such transferee that are  immediately  converted,  sold or exchanged by the
Company  or such  Subsidiary  for cash (to the  extent of the cash  actually  so
received),  shall be deemed to be cash for purposes of this Section  4.12. If at
any time any non-cash  consideration received by the Company or such Subsidiary,
as the case may be, in connection  with any Asset Sale is converted into or sold
or otherwise  disposed of for cash (other than interest received with respect to
any  such  non-cash  consideration),   then  the  date  of  such  conversion  or
disposition  shall be deemed to constitute  the date of an Asset Sale  hereunder
and the Net Proceeds  thereof shall be applied in  accordance  with this Section
4.12. A transfer of assets by the Company to a Wholly Owned  Subsidiary  or by a
Wholly Owned  Subsidiary  to the Company or to another  Wholly Owned  Subsidiary
will  not  be  deemed  to be an  Asset  Sale,  and a  transfer  of  assets  that
constitutes a Restricted Payment and that is permitted under Section 4.10 hereof
will not be deemed to be an Asset Sale.

                  (b)      If the Company or any Subsidiary  engages in an Asset
Sale, the Company or such  Subsidiary  shall,  no later than 360 days after such
Asset  Sale,  (i)  apply  all or any of the  Net  Proceeds  therefrom  to  repay
Indebtedness  that  ranks pari passu with the Notes and is secured by the assets
disposed  of in the  Asset  Sale or to repay  Bank Debt in  accordance  with the
applicable  provisions thereof,  (ii) invest all or any part of the Net Proceeds
therefrom  in the lines of business  of the  Company or any of its  Subsidiaries
immediately prior to such investment or (iii) any combination of clauses (i) and
(ii) above.  The amount of such Net Proceeds not applied or invested as provided
in this paragraph (b) will constitute "Excess Proceeds."

                  (c)      When  the aggregate  amount of Excess Proceeds equals
or  exceeds  $5,000,000,  the  Company  shall  be  required  to make an offer to
purchase (an "Asset Sale Offer") from all Holders, an aggregate principal amount
of Notes equal to the amount of such Excess Proceeds as follows:

                  (i) The Company  shall make an Asset Sale Offer to all Holders
         in  accordance  with the  procedures  set forth in this Section 4.12 to
         purchase  the  maximum  principal  amount  (expressed  as a multiple of
         $1,000) of Notes that may be  purchased  out of the amount  (the "Asset
         Sale Payment Amount") of such Excess Proceeds.

                                       38
<PAGE>

                  (ii) The offer price for the Notes shall be payable in cash in
         an amount equal to 100% of the principal  amount of the Notes  tendered
         pursuant to such Asset Sale Offer, plus accrued and unpaid interest and
         Additional  Interest,  if any,  to the date such  Asset  Sale  Offer is
         consummated (the "Asset Sale Purchase  Price"),  in accordance with the
         procedures  set forth in this  Section  4.12.  To the  extent  that the
         aggregate  Asset Sale Purchase Price of Notes  tendered  pursuant to an
         Asset Sale Offer is less than the Asset Sale  Payment  Amount  relating
         thereto (such shortfall constituting a "Net Proceeds Deficiency"),  the
         Company may use such Net Proceeds Deficiency, or a portion thereof, for
         general corporate purposes.

                  (iii) If the  aggregate  Asset  Sale  Purchase  Price of Notes
         validly tendered and not withdrawn by holders thereof exceeds the Asset
         Sale Payment  Amount,  Notes to be purchased shall be selected on a pro
         rata basis.

                  (iv) Upon  completion  of such Asset Sale Offer in  accordance
         with the  foregoing  provisions,  the  amount of Excess  Proceeds  with
         respect  to which  such Asset Sale Offer was made shall be deemed to be
         zero.

                  In the event that any other  Indebtedness of the Company which
ranks pari passu with the Notes ("Other Debt")  requires an offer to purchase to
be made to repurchase  such Other Debt upon the  consummation  of an Asset Sale,
the Company may apply the Excess  Proceeds to both  purchase such Other Debt and
to make an Asset Sale Offer,  provided,  that the  purchase  price of such Other
Debt does not exceed 100% of the aggregate  principal  amount or accreted  value
thereof plus interest thereon. With respect to any Excess Proceeds,  the Company
shall  make the Asset  Sale  Offer in  respect  thereof  at the same time as the
analogous  offer to purchase is made pursuant to any Other Debt and the purchase
date in  respect  thereof  shall be the  same as the  purchase  date in  respect
thereof pursuant to any Other Debt.

                  With respect to any Asset Sale Offer effected pursuant to this
Section 4.12, to the extent the  aggregate  principal  amount of Notes and Other
Debt,  if any,  tendered  pursuant  to such Asset Sale Offer and the  concurrent
offer to purchase  with respect to such Other Debt exceeds the Excess  Proceeds,
such Notes and Other  Debt,  if any,  shall be  purchased  pro rata based on the
aggregate  principal  amount of such Notes and such Other Debt  tendered by each
holder thereof.

                  (d) If the  Company is  required  to make an Asset Sale Offer,
the Company  shall,  within 30 days  following the date  specified in clause (c)
above,  notify the Trustee  thereof and give  written  notice of such Asset Sale
Offer to each Holder by first-class  mail,  postage  prepaid,  at the address of
such Holder appearing in the register maintained by the Registrar, stating:

                  (1)    that an Asset Sale Offer is being made pursuant to this
         Section 4.12;

                  (2) that such Holders have the right to require the Company to
         apply the Excess  Proceeds to repurchase  the Notes at a purchase price
         in cash equal to 100% of the principal  amount thereof plus accrued and
         unpaid interest, if any, to the purchase date which shall be no earlier
         than 30 days and not later  than 60 days  from the date such  notice is
         mailed (the "Excess Proceeds Payment Date");

                  (3)    that any Note not tendered or accepted for payment will
         continue to accrue interest;

                                       39
<PAGE>

                  (4) that any Notes accepted for payment  pursuant to the Asset
         Sale Offer shall  cease to accrue  interest  after the Excess  Proceeds
         Payment Date;

                  (5) that  Holders  accepting  the  offer to have  their  Notes
         purchased  pursuant  to the  Asset  Sale  Offer  will  be  required  to
         surrender the Notes,  with the form entitled "Option of Holder to Elect
         Purchase" on the reverse of the Note completed,  to the Paying Agent at
         the address  specified  in the notice prior to the close of business on
         the Business Day preceding the Excess Proceeds Payment Date;

                  (6) that Holders will be entitled to withdraw their acceptance
         of the Asset Sale Offer if the Paying  Agent  receives,  not later than
         the close of business on the third  Business Day  preceding  the Excess
         Proceeds  Payment Date, a telegram,  facsimile  transmission  or letter
         setting forth the name of the Holder, the principal amount of the Notes
         delivered for purchase and a statement  that such Holder is withdrawing
         his or her election to have such Notes purchased;

                  (7)  that  if  the   aggregate   principal   amount  of  Notes
         surrendered by Holders exceeds the amount of Excess  Proceeds,  Company
         shall  select the Notes to be purchased on a pro rata basis so that the
         aggregate  amount of Notes so  purchased  equals  the  amount of Excess
         Proceeds  (with such  adjustments  as may be deemed  appropriate by the
         Company  so that only  Notes in  denominations  of  $1,000 or  integral
         multiples thereof shall be purchased);

                  (8) that Holders whose Notes are being  purchased only in part
         will be issued new Notes equal in principal  amount to the  unpurchased
         portion of the Notes surrendered; provided that each Note purchased and
         each such new Note issued shall be in an original  principal  amount in
         denominations of $1,000 or integral multiples thereof;

                  (9)  the calculations used in determining the amount of Excess
         Proceeds to be applied to the purchase of such Notes;

                  (10) any other  procedures that a Holder must follow to accept
         an Asset Sale Offer or effect withdrawal of such acceptance; and

                  (11)   the name and address of the Paying Agent.

                  On the Excess Proceeds Payment Date, the Company shall, to the
extent  lawful,  (1)  accept  for  payment,  on a pro rata  basis to the  extent
necessary,  Notes or portions thereof tendered pursuant to the Asset Sale Offer,
(2) deposit with the Paying Agent US legal tender sufficient to pay the purchase
price plus accrued and unpaid interest,  if any, on the Notes to be purchased or
portions  thereof,  (3) deliver or cause to be delivered to the Trustee Notes so
accepted  together  with an  Officers'  Certificate  stating  that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 4.12.  The Paying Agent shall promptly mail to each Holder
so accepted payment in an amount equal to the purchase price for such Notes, and
the Company shall execute and issue, and the Trustee shall promptly authenticate
and make  available  for delivery to such Holder,  a new Note equal in principal
amount to any unpurchased  portion of the Notes surrendered;  provided that each
Note  purchased and each such new Note issued shall be in an original  principal
amount in denominations of $1,000 or integral multiples thereof.

                                       40
<PAGE>

                  (e) The Company  shall  comply with the  requirements  of Rule
14e-1  under  the  Exchange  Act  and  other  securities  laws  and  regulations
thereunder to the extent such laws and  regulations are applicable in connection
with the repurchase of Notes pursuant to an Asset Sale Offer. To the extent that
the provisions of any securities laws or regulations  conflict with this Section
4.12,  the  Company  shall  comply  with  the  applicable  securities  laws  and
regulations and shall not be deemed to have breached its obligations  under this
Section 4.12 by virtue thereof.

Section 4.13.     Limitation on Transactions with Affiliates.

                  Neither  the  Company  nor  any  of  its  Subsidiaries  shall,
directly or indirectly, in one transaction or a series of transactions, make any
loan, advance,  guarantee or capital  contribution to, or for the benefit of, or
sell,  lease,  transfer or otherwise  dispose of any of its properties or assets
to, or for the benefit of, or purchase or lease any property or assets from,  or
enter into or amend any contract,  agreement or  understanding  with, or for the
benefit  of, any  Affiliate  of the  Company or any of its  Subsidiaries  or any
Person  (or any  Affiliate  of such  Person)  holding  10% or more of the Common
Equity of the Company or any of its Subsidiaries, other than transactions in the
ordinary course between the Company and its  Subsidiaries or among  Subsidiaries
of the  Company  (an  "Affiliate  Transaction"),  unless:  (i) the terms of such
Affiliate   Transactions  are  fair  and  reasonable  to  the  Company  or  such
Subsidiary, as the case may be, and are at least as favorable as the terms which
could be obtained by the  Company or such  Subsidiary,  as the case may be, in a
comparable  transaction  made  on an  arm's-length  basis  between  unaffiliated
parties; (ii) with respect to any such Affiliate Transaction involving aggregate
payments in excess of $5,000,000,  the Company delivers an Officers' Certificate
to the Trustee certifying that such Affiliate  Transaction  complies with clause
(i) above and a Secretary's  Certificate  which sets forth and  authenticates  a
resolution  that has been  adopted by a vote of a majority of the  disinterested
members of the Board of Directors  approving  such  Affiliate  Transaction;  and
(iii)  with  respect  to any  such  Affiliate  Transaction  involving  aggregate
payments  in excess of  $25,000,000,  the  Company  delivers  to the Trustee the
certificates  specified  in clause  (ii) above and an opinion of an  independent
investment banking firm of national standing in the United States,  stating that
such Affiliate Transaction is fair from a financial point of view to the Company
or such Subsidiary,  as the case may be; provided,  however,  that the foregoing
clauses  (ii) and (iii) shall not apply to  transactions  between the Company or
any of its Subsidiaries and MedCenterDirect.com, Inc. or any entity to which the
Company  transfers  all or  substantially  all of the rights to its  HEALTHSOUTH
Clinical Automation Program.

Section 4.14.     Limitation on Liens.

                  The Company will not create or suffer to exist any Lien (other
than Permitted Liens) on any of its assets, unless contemporaneously therewith:

                  (i) in the case of any Lien securing an obligation  that ranks
         pari passu with the Notes,  effective  provision  is made to secure the
         Notes at least  equally  and ratably  with or prior to such  obligation
         with a Lien on the same collateral; and

                  (ii) in the case of any Lien  securing an  obligation  that is
         subordinated in right of payment to the Notes,  effective  provision is
         made to secure  the Notes  with a Lien on the same  collateral  that is
         prior to the Lien securing such subordinated obligation.

                                       41
<PAGE>

                  Notwithstanding  the above,  the Company may, without securing
the Notes,  create or assume any  Indebtedness  which is secured by a Lien which
would  otherwise be subject to the foregoing  restrictions,  provided that after
giving effect thereto, the Exempted Debt then outstanding does not exceed 10% of
the total  Consolidated  Tangible Assets of the Company and its  Subsidiaries at
such time.

Section 4.15.     Purchase of Notes upon a Change of Control.

                  (a) Upon the  occurrence  of a Change of Control,  the Company
shall be obligated to make an offer to purchase (the "Change of Control  Offer")
the outstanding  Notes of each Holder in whole or in part in integral  multiples
of $1,000,  at a purchase price (the "Change of Control Purchase Price") in cash
in an  amount  equal  to 101% of the  principal  amount  thereof,  plus  accrued
interest,  if any,  to the date of  purchase  (the  "Change of Control  Purchase
Date"), pursuant to the procedures set forth below.

                  (b)  Within  30 days  following  any  Change of  Control,  the
Company shall notify the Trustee  thereof and give written notice of such Change
of Control to each Holder by first-class mail,  postage prepaid,  at the address
of such Holder appearing in the register  maintained by the Registrar,  stating,
among other things:

                    (1) that the Change of Control  Offer is being made pursuant
               to this Section 4.15;

                    (2) that such  Holders have the right to require the Company
               to repurchase such Notes at the Change of Control  Purchase Price
               on the Change of Control  Purchase Date which shall be no earlier
               than 30 days and not later than 60 days from the date such notice
               is mailed;

                    (3) that any Note not  tendered or accepted for payment will
               continue to accrue interest;

                    (4) that,  unless the Company defaults in its payment of the
               Change of Control  Purchase Price,  any Note accepted for payment
               pursuant  to the Change of Control  Offer  shall  cease to accrue
               interest after the Change of Control Purchase Date;

                    (5) that  Holders  accepting  the offer to have their  Notes
               purchased  pursuant to a Change of Control Offer will be required
               to surrender the Notes,  with the form entitled "Option of Holder
               to Elect Purchase" on the reverse of the Note  completed,  to the
               Paying Agent at the address  specified in the notice prior to the
               close of business on the  Business  Day  preceding  the Change of
               Control Purchase Date;

                    (6)  that  Holders  will  be  entitled  to  withdraw   their
               acceptance  of the  Change of Control  Offer if the Paying  Agent
               receives,  not  later  than the  close of  business  on the third
               Business Day  preceding  the Change of Control  Purchase  Date, a
               telegram, facsimile transmission or letter setting forth the name
               of the Holder,  the principal  amount of the Notes  delivered for
               purchase and a statement that such Holder is  withdrawing  his or
               her election to have such Notes purchased;

                    (7) any other procedures that a Holder must follow to accept
               an  Change  of  Control  Offer  or  effect   withdrawal  of  such
               acceptance; and

                                       42
<PAGE>

                    (8) the name and address of the Paying Agent.

                  On the Change of Control  Payment Date, the Company shall,  to
the extent  lawful,  (1) accept for payment Notes or portions  thereof  tendered
pursuant to the Change of Control Offer,  (2) deposit with the Paying Agent U.S.
legal  tender  sufficient  to pay the  purchase  price of all Notes or  portions
thereof so  tendered  and (3)  deliver or cause to be  delivered  to the Trustee
Notes so accepted together with an Officers' Certificate stating that such Notes
or portions  thereof were  accepted for payment by the Company  pursuant to this
Section  4.15.  The Paying Agent shall  promptly mail to each Holder so accepted
payment in an amount equal to the purchase price for such Notes, and the Company
shall execute and issue, and the Trustee shall promptly authenticate and mail to
such Holder, a new Note equal in principal amount to any unpurchased  portion of
the Notes  surrendered;  provided  that each such new Note shall be issued in an
original amount in denominations of $1,000 and integral multiples thereof.

                  (c) The Company  shall  comply with the  requirements  of Rule
14e-1  under  the  Exchange  Act  and  other  securities  laws  and  regulations
thereunder to the extent such laws and  regulations are applicable in connection
with the  repurchase  of Notes  pursuant  to a Change of Control  Offer.  To the
extent that the provisions of any securities  laws or regulations  conflict with
this Section 4.15, the Company shall comply with the applicable  securities laws
and regulations  and shall not be deemed to have breached its obligations  under
this Section 4.15 by virtue thereof.

Section 4.16.     Limitation on Restrictions on Distributions from Subsidiaries.

                  The  Company  shall  not,  and  shall  not  permit  any of its
Subsidiaries  to,  create  or  otherwise  cause or  suffer  to  exist or  become
effective any consensual  encumbrance or restriction (other than encumbrances or
restrictions imposed by law or by judicial or regulatory action or by provisions
in leases or other  agreements that restrict the  assignability  thereof) on the
ability of any  Subsidiary of the Company to (i) pay dividends or make any other
distributions on its Capital Stock or any other interest or participation in, or
measured by, its profits, owned by the Company or any of its other Subsidiaries,
or pay interest on or principal of any  Indebtedness  owed to the Company or any
of its other Subsidiaries,  (ii) make loans or advances to the Company or any of
its other  Subsidiaries or (iii) transfer any of its properties or assets to the
Company or any of its other  Subsidiaries,  in each case except for encumbrances
or  restrictions  existing  under or by reason of (a)  applicable  law,  (b) the
Credit  Agreements,  (c) Existing  Indebtedness,  (d) any restrictions under any
agreement evidencing any Acquired Indebtedness that was permitted to be incurred
pursuant  to this  Indenture  and  which was not  incurred  in  anticipation  or
contemplation of the related  acquisition,  provided that such  restrictions and
encumbrances  only apply to assets that were  subject to such  restrictions  and
encumbrances  prior to the  acquisition  of such  assets by the  Company  or its
Subsidiaries,  (e)  restrictions  or  encumbrances  replacing those permitted by
clause (b), (c) or (d) above which,  taken as a whole,  are not materially  more
restrictive,  (f) this Indenture,  (g) any restrictions and encumbrances arising
in  connection  with  Refinancing  Indebtedness;  provided,  however,  that  any
restrictions or encumbrances of the type described in this clause (g) that arise
under such Refinancing  Indebtedness are not, taken as a whole,  materially more
restrictive   than  those  under  the  agreement   creating  or  evidencing  the
Indebtedness being refunded or refinanced,  (h) any restrictions with respect to
a  Subsidiary  of the Company  imposed  pursuant to an  agreement  that has been
entered into for the sale or other  disposition of all or  substantially  all of
the Capital Stock or assets of such  Subsidiary,  (i) any agreement  restricting
the  sale  or  other  disposition  of  property  securing  Indebtedness  if such
agreement does not expressly restrict the

                                     43
<PAGE>

ability  of a  Subsidiary  of the  Company  to pay  dividends  or make  loans or
advances  and (j)  customary  restrictions  in  purchase  money  debt or  leases
relating to the property covered thereby.

Section 4.17.     Limitations on Layering Indebtedness.

                  The  Company  will  not,  and  will  not  permit  any  of  its
Subsidiaries to, directly or indirectly, incur any Indebtedness that purports to
be by its terms  subordinated  to any other  Indebtedness of the Company or such
Subsidiary,  as the case may be,  unless  such  Indebtedness  is also  expressly
subordinated  to the  Notes to the same  extent  and in the same  manner as such
Indebtedness is subordinated to such other Indebtedness.

                                    ARTICLE 5

                                SURVIVING ENTITY

Section 5.01.     Limitations on Mergers and Consolidations.

                  The Company  shall not  consolidate  or merge with or into, or
sell,  lease,  convey or otherwise  dispose of all or  substantially  all of its
assets, or assign any of its obligations  under the Notes or this Indenture,  to
any Person unless:  (i) the Person formed by or surviving such  consolidation or
merger (if other than the Company), or to which such sale, lease,  conveyance or
other disposition or assignment shall be made  (collectively,  the "Successor"),
is a corporation  organized and existing  under the laws of the United States or
any State  thereof or the District of  Columbia,  and the  Successor  assumes by
supplemental  indenture  in a  form  satisfactory  to  the  Trustee  all  of the
obligations of the Company under the Notes and this Indenture;  (ii) immediately
after giving effect to such consolidation,  merger,  sale, lease,  conveyance or
other  disposition or assignment and the use of any net proceeds  therefrom on a
pro forma  basis,  no  Default or Event of Default  shall have  occurred  and be
continuing; (iii) immediately after giving effect to such consolidation, merger,
sale,  lease,  conveyance or other  disposition or assignment and the use of any
net proceeds  therefrom on a pro forma basis,  the Consolidated Net Worth of the
Company or the  Successor,  as the case may be,  would be at least  equal to the
Consolidated  Net Worth of the Company  immediately  prior to such  transaction;
(iv) immediately after giving effect to such consolidation, merger, sale, lease,
conveyance or other  disposition  or assignment  and the use of any net proceeds
therefrom on a pro forma basis,  the EBITDA Coverage Ratio of the Company or the
Successor,  as the case may be, would be such that the Company or the Successor,
as the case may be,  would be  entitled  to incur at least  $1.00 of  additional
Indebtedness  under the EBITDA  Coverage Ratio test in Section 4.11 hereof;  and
(v) the Company shall have delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel,  each  stating  that such  consolidation,  merger,  sale,
lease,   conveyance  or  other  disposition  or  assignment  complies  with  the
provisions of this Indenture.

Section 5.02.     Successor Substituted.

                  Upon any consolidation,  merger, conveyance or any transfer of
all or substantially all of the assets of the Company in accordance with Section
5.01 hereof, the surviving entity formed by such consolidation or into which the
Company or any such Subsidiary is merged or to which such transfer is made shall
succeed to, and be  substituted  for, and may exercise every right and power of,
the
                                       44
<PAGE>

Company or such  Subsidiary,  as the case may be, under this  Indenture with the
same  effect as if such  surviving  entity had been named as the Company or such
Subsidiary,  as the case may be herein,  and thereafter the  predecessor  entity
shall be relieved of all  obligations and covenants under this Indenture and the
Notes.

                                    ARTICLE 6

                              DEFAULTS AND REMEDIES

Section 6.01.     Events of Default.

                  An "Event of Default"  means each one of the following  events
which shall have occurred and be continuing  (whatever the reason for such Event
of Default and whether it shall be  voluntary or  involuntary  or be effected by
operation  of law or pursuant to any  judgment,  decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

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

                  (b)  default  in  the  payment  of  all  or  any  part  of the
         principal,  or  make-whole  amount,  if any, on any of the Notes as and
         when the  same  shall  become  due and  payable  either  at its  Stated
         Maturity, upon any redemption, by declaration or otherwise;

                  (c)      failure by the Company to comply with its obligations
         or covenants  described under Section 4.12,  Section 4.15 or  Article 5
         hereof;

                  (d)  failure  on the part of the  Company  duly to  observe or
         perform any other of the  covenants  or  agreements  on the part of the
         Company  in the  Notes or this  Indenture  (other  than  the  covenants
         referred to in clauses  (a), (b) and (c) above) for a period of 60 days
         after the date on which written notice specifying such failure, stating
         that such  notice is a "Notice of  Default"  under this  Indenture  and
         demanding  that the Company  remedy the same,  shall have been given by
         registered or certified mail, return receipt requested,  to the Company
         by the Trustee,  or to the Company and the Trustee by the holders of at
         least 25% in aggregate principal amount of the outstanding Notes;

                  (e) default under any bond, debenture,  note or other evidence
         of indebtedness  for money borrowed by the Company or any Subsidiary of
         the Company or under any mortgage,  indenture or instrument under which
         there may be issued or by which there may be secured or  evidenced  any
         indebtedness for money borrowed by the Company or any Subsidiary of the
         Company,  whether such  indebtedness  now exists or shall  hereafter be
         created,  if (i) such default results in such indebtedness  becoming or
         being  declared  due and  payable  prior  to the date on which it would
         otherwise  become due and payable,  (ii) the  principal  amount of such
         indebtedness,  together  with the  principal  amount of any other  such
         indebtedness which has been so accelerated,  aggregates  $25,000,000 or
         more at any one time  outstanding  and (iii) such  indebtedness  is not
         discharged, or such acceleration is not rescinded or annulled, within a

                                       45
<PAGE>

         period of 10 days after  there  shall have been given to the Company by
         the  Trustee or to the  Company  and the  Trustee by the  holders of at
         least 25% in  aggregate  principal  amount of the  outstanding  Notes a
         written  notice  specifying  such default and  requiring the Company to
         cause such  Indebtedness to be discharged or cause such acceleration to
         be rescinded or annulled;

                  (f) a court having  jurisdiction in the premises shall enter a
         decree or order for relief in respect of the Company or any Significant
         Subsidiary  in an  involuntary  case under any  applicable  bankruptcy,
         insolvency  or  other  similar  law  now or  hereafter  in  effect,  or
         appointing  a  receiver,  liquidator,   assignee,  custodian,  trustee,
         sequestrator  or similar  official  of the  Company or any  Significant
         Subsidiary  for  any  substantial  part  of its or  their  property  or
         ordering the winding up or  liquidation  of its or their  affairs,  and
         such decree or order shall  remain  unstayed and in effect for a period
         of 60 consecutive days; or

                  (g) the Company or any Significant Subsidiary shall commence a
         voluntary  case under any  applicable  bankruptcy,  insolvency or other
         similar law now or hereafter  in effect,  or consent to the entry of an
         order for relief in an involuntary  case under any such law, or consent
         to the  appointment  or taking  possession  by a receiver,  liquidator,
         assignee, custodian, trustee, sequestrator (or similar official) of the
         Company or any Significant Subsidiary or for any substantial part of it
         or their  property,  or make any general  assignment for the benefit of
         creditors.

Section 6.02.     Acceleration.

                  If an  Event  of  Default  (other  than an  Event  of  Default
specified in Section  6.01(f) or 6.01(g)  hereof  relating to the Company) shall
have occurred and be continuing  under this Indenture,  the Trustee,  by written
notice to the  Company,  or the Holders of at least 25% in  aggregate  principal
amount of the Notes then  outstanding  by written  notice to the Company and the
Trustee,  may declare all amounts  owing under the Notes to be due and  payable.
Upon effectiveness of such acceleration,  the aggregate principal of, make-whole
amount, if any, and interest on the outstanding  Notes shall immediately  become
due and payable.  At any time after such  acceleration  but before a judgment or
decree based on such acceleration is obtained by the Trustee, or any Holder, the
Holders of a majority in aggregate  principal  amount of outstanding  Notes,  by
written  notice to the  Company  and the  Trustee,  may  rescind  and annul such
acceleration if:

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

                    (1) all overdue interest on the Notes;

                    (2) all unpaid principal of and make-whole  amount,  if any,
               on any of the  outstanding  Notes that has  become due  otherwise
               than by such  declaration of acceleration and interest thereon at
               the rate borne by the Notes;

                    (3) to the extent that  payment of such  interest is lawful,
               interest upon overdue interest and overdue  principal at the rate
               borne by the Notes;

                    (4) all sums paid or  advanced  by the  Trustee  under  this
               Indenture   and   the    reasonable    compensation,    expenses,
               disbursements  and  advances  of  the  Trustee,  its  agents  and
               counsel;

                                       46
<PAGE>

               (b) all Events of Default,  other than the non-payment of amounts
          of principal of,  make-whole  amount, if any, or interest on the Notes
          that has become due solely by such declaration of  acceleration,  have
          been cured or waived; and

               (c) in the  event of the cure or  waiver  of an Event of  Default
          with respect to the Company of the type  described in Section  6.01(f)
          or 6.01(g)  hereof,  the  Trustee  shall have  received  an  Officers'
          Certificate  and an Opinion of Counsel  that such Event of Default has
          been cured or waived.

                  No such  rescission  shall  affect any  subsequent  Default or
impair any right consequent thereto.

                  In case an Event of Default with respect to the Company of the
type described in Section  6.01(f) or 6.01(g) hereof shall occur,  the aggregate
principal of,  make-whole  amount, if any, and interest on the outstanding Notes
shall immediately become due and payable without any declaration or other act on
the part of the Trustee or the Holders.

Section 6.03.     Other Remedies.

                  If an Event of Default occurs and is  continuing,  the Trustee
may pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of, or make-whole amount, if any, and interest on the Notes
or to enforce the  performance  of any provision of the Notes or this  Indenture
and may  take  any  necessary  action  requested  of it as  Trustee  to  settle,
compromise, adjust or otherwise conclude any proceedings to which it is a party.

                  The  Trustee  may  maintain a  proceeding  even if it does not
possess any of the Notes or does not produce  any of them in the  proceeding.  A
delay or omission by the Trustee or any Holder in exercising any right or remedy
accruing  upon an Event of  Default  shall  not  impair  the  right or remedy or
constitute  a waiver of or  acquiescence  in the Event of Default.  No remedy is
exclusive of any other  remedy.  All  available  remedies are  cumulative to the
extent permitted by law.

Section 6.04.     Waiver of Existing Defaults and Events of Default.

                  Subject to Sections  2.09,  6.02,  6.07 and 8.02  hereof,  the
Holders of a majority in principal amount of the Notes then outstanding have the
right to waive existing  Defaults  under or in compliance  with any provision of
this  Indenture or the Notes  except a continuing  Default in the payment of the
principal of, or interest or make-whole amount, if any, on any Note as specified
in clauses  (a) and (b) of Section  6.01 hereof or in respect of a covenant or a
provision which cannot be modified or amended without the consent of all Holders
as provided for in Section 8.02 hereof. The Company shall deliver to the Trustee
an Officers'  Certificate stating that the requisite  percentage of Holders have
consented to such waiver and attach copies of such consents. In case of any such
waiver,  the  Company,  the Trustee  and the Holders  shall be restored to their
former  positions and rights hereunder and under the Notes,  respectively.  This
paragraph of this Section 6.04 shall be in lieu of ss.  316(a)(1)(B)  of the TIA
and such ss.  316(a)(1)(B)  of the TIA is hereby  expressly  excluded  from this
Indenture and the Notes, as permitted by the TIA.

                  Upon any such waiver, such Default shall cease to exist and be
deemed to have been  cured and not to have  occurred,  and any Event of  Default
arising  therefrom  shall be deemed to have

                                       47
<PAGE>

been cured and not to have occurred for every purpose of this Indenture,  but no
such waiver shall extend to any  subsequent or other Default or Event of Default
or impair any right consequent thereto.

Section 6.05.     Control by Majority.

                  Subject to Section 2.09  hereof,  the Holders of a majority in
principal  amount of the then  outstanding  Notes shall have the right to direct
the time,  method and place of conducting  any  proceeding  for  exercising  any
remedy  available to the Trustee or exercising  any trust or power  conferred on
the Trustee by this Indenture.  The Trustee,  however,  may refuse to follow any
direction  that  conflicts  with  law or  this  Indenture  or that  the  Trustee
determines in its reasonable judgment may be unduly prejudicial to the rights of
another Holder not taking part in such direction, and the Trustee shall have the
right to decline to follow any such  direction if the Trustee,  being advised by
counsel,  determines that the action so directed may not lawfully be taken or if
the  Trustee  in good  faith  shall,  by a Trust  Officer,  determine  that  the
proceedings so directed may involve it in personal liability;  provided that the
Trustee may take any other  action  deemed  proper by the  Trustee  which is not
inconsistent  with such direction.  In the event the Trustee takes any action or
follows any direction pursuant to this Indenture,  the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against any loss or
expense caused by taking such action or following such  direction.  This Section
6.05  shall be in lieu of  Section  316(a)(1)(A)  of the TIA,  and such  Section
316(a)(1)(A) of the TIA is hereby expressly excluded from this Indenture and the
Notes, as permitted by the TIA.

Section 6.06.     Limitation on Suits.

                  Subject to  Section  6.07  hereof,  no Holder has any right to
institute any proceeding with respect to this Indenture or any remedy  hereunder
unless:

                    (1)  the  Holder  gives  the  Trustee  written  notice  of a
               continuing Event of Default;

                    (2) the  Holders  of at  least  25% in  aggregate  principal
               amount of the  outstanding  Notes  make a written  request to the
               Trustee to pursue the remedy;

                    (3) such Holder or Holders  offer to the  Trustee  indemnity
               reasonably   satisfactory   to  the  Trustee  against  any  loss,
               liability  or expense  which may be incurred in  compliance  with
               such request;

                    (4) the Trustee fails to institute such proceeding within 60
               calendar  days  after  receipt  of such  notice  and the offer of
               indemnity; and

                    (5) the Trustee  has not  received  directions  inconsistent
               with  such  written  request  during  such  60-day  period by the
               Holders  of a  majority  in  aggregate  principal  amount of then
               outstanding Notes.

                  A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.

                                       48

<PAGE>

Section 6.07.     Rights of Holders To Receive Payment.

                  Notwithstanding  any other  provision of this  Indenture,  the
right of any Holder to receive payment of principal of, or make-whole amount, if
any,  or  accrued  interest  on any Note  held by such  Holder  on or after  the
respective  due  dates  expressed  in  such  Note,  or to  bring  suit  for  the
enforcement of any such payment on or after such  respective  dates, is absolute
and  unconditional  (subject  to the terms of this  Indenture)  and shall not be
impaired or affected without the consent of such Holder.

Section 6.08.     Collection Suit by Trustee.

                  If an Event of Default occurs and is  continuing,  the Trustee
may recover  judgment in its own name and as trustee of an express trust against
the Company for the whole amount of unpaid principal, make-whole amount, if any,
and accrued interest remaining unpaid, together with, to the extent that payment
of such  interest  is lawful,  interest  on overdue  principal  and  interest on
overdue installments of interest,  in each case at the rate set forth in Section
4.01 hereof,  and such further amounts as shall be sufficient to cover the costs
and expenses of  collection,  including the reasonable  compensation,  expenses,
disbursements and advances of the Trustee, its agents and counsel.

Section 6.09.     Trustee May File Proofs of Claim.

                  The Trustee may file such proofs of claim and other  papers or
documents  as may be  necessary  or advisable in order to have the claims of the
Trustee  (including  any  claim  for  the  reasonable  compensation,   expenses,
disbursements  and  advances of the  Trustee,  its agents and  counsel)  and the
Holders  allowed in any  judicial  proceedings  relative  to the Company (or any
other  obligor  upon the Notes),  its  creditors  or its  property  and shall be
entitled  and  empowered  to collect and  receive  any monies or other  property
payable  or  deliverable  on any such  claims and to  distribute  the same after
deduction  of its charges and  expenses to the extent that any such  charges and
expenses  are  not  paid  out of the  estate  in any  such  proceedings  and any
custodian in any such judicial proceeding is hereby authorized by each Holder to
make such  payments  to the  Trustee,  and in the event that the  Trustee  shall
consent to the making of such  payments  directly to the Holders,  to pay to the
Trustee  any  amount  due  to it  for  the  reasonable  compensation,  expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof.

                  Nothing  herein  contained  shall be deemed to  authorize  the
Trustee  to  authorize  or consent to or accept or adopt on behalf of any Holder
any plan or reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder  thereof,  or to authorize the Trustee to vote
in respect of the claim of any Holder in any such proceedings.

Section 6.10.     Priorities.

                  If the Trustee  collects any money pursuant to this Article 6,
it shall pay out the money in the following order:

                  FIRST:  to the  Trustee for  amounts  due under  Section  7.07
hereof;

                  SECOND:  if the  Holders  are  forced to proceed  against  the
Company directly without the Trustee, to Holders for their collection costs; and

                                       49
<PAGE>

                  THIRD:  to Holders for amounts due and unpaid on the Notes for
principal,  make-whole amount, if any, and interest as to each, ratably, without
preference or priority of any kind,  according to the amounts due and payable on
the Notes.

                  The Trustee, upon prior written notice to the Company, may fix
a Record  Date and  payment  date for any  payment to Holders  pursuant  to this
Section 6.10.

Section 6.11.     Undertaking for Costs.

                  In any suit for the  enforcement  of any right or remedy under
this  Indenture  or in any suit  against  the  Trustee  for any action  taken or
omitted by it as Trustee,  a court in its  discretion  may require the filing by
any party  litigant in the suit of an  undertaking to pay the costs of the suit,
and  the  court  in  its  discretion  may  assess  reasonable  costs,  including
reasonable  attorneys' fees,  against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses  made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder  pursuant to Section 6.07 hereof or a suit by Holders of more than 10% in
principal amount of the Notes then outstanding.

                                    ARTICLE 7

                                     TRUSTEE

Section 7.01.     Duties of Trustee.

                  (a) If an Event of Default  actually  known to a Trust Officer
of the Trustee has occurred and is  continuing,  the Trustee shall exercise such
rights and powers vested in it by this Indenture and use the same degree of care
and  skill in their  exercise  as a  prudent  Person  would  exercise  under the
circumstances in the conduct of such Person's own affairs.

                  (b) Except during the  continuance of a Default or an Event of
Default:

                  (1) The Trustee need perform only those duties and obligations
that are specifically set forth in this Indenture.

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

                  (c) Notwithstanding anything to the contrary herein contained,
the Trustee may not be relieved from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:

                                       50
<PAGE>

                          (A)  This  paragraph  does not  limit  the  effect  of
          paragraph (b) of this Section 7.01.

                          (B) The  Trustee  shall not be liable for any error of
          judgment made in good faith by a Trust Officer of the Trustee,  unless
          it is proved  that the  Trustee  was  negligent  in  ascertaining  the
          pertinent facts.

                          (C) The Trustee  shall not be liable  with  respect to
          any action it takes or omits to take in good faith in accordance  with
          a direction  received by it pursuant to Sections  6.02,  6.04 and 6.05
          hereof.

                  (d) No provision of this  Indenture  shall require the Trustee
to expend or risk its own funds or otherwise  incur any  financial  liability in
the  performance  of any of its duties  hereunder or to take or omit to take any
action  under this  Indenture  or take any action at the request or direction of
Holders if it shall have reasonable grounds for believing that repayment of such
funds is not assured to it or it does not receive from such Holders an indemnity
reasonably satisfactory to it against such risk, liability, loss, fee or expense
which might be incurred by it in compliance with such request or direction.

                  (e) Whether or not  expressly so provided,  the  provisions of
the TIA and  paragraphs  (a), (b), (c) and (d) of this Section 7.01 shall govern
every provision of this Indenture that in any way relates to the Trustee.

                  (f) The Trustee  shall not be liable for interest on any money
received  by it except as the  Trustee  may agree in writing  with the  Company.
Money held in trust by the  Trustee  need not be  segregated  from  other  funds
except to the extent required by the law or as otherwise agreed to in writing by
the Trustee and the Company.

                  (g) Unless otherwise  specifically provided in this Indenture,
any demand,  request direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.

Section 7.02.     Rights of Trustee.

                  Subject to Section 7.01 hereof:

                  (1) The Trustee may conclusively rely on any document believed
by it in good faith to be genuine  and to have been signed or  presented  by the
proper Person. The Trustee need not investigate any fact or matter stated in the
document.

                  (2) Before the  Trustee  acts or  refrains  from  acting  with
respect  to any  matters  contemplated  by this  Indenture  or the  Notes it may
require an Officers'  Certificate or an Opinion of Counsel, or both, which shall
conform to the  provisions of Section  11.05 hereof.  The Trustee shall be fully
protected  and shall not be liable  for any  action it takes or omits to take in
good faith in reliance on such Officers' Certificate or Opinion of Counsel.

                  (3) The Trustee may act through agents, attorneys,  custodians
or nominees and shall not be responsible for the misconduct or negligence of any
agent, attorney, custodian or nominee appointed with due care by it hereunder.

                                       51
<PAGE>

                  (4) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it  reasonably  believes to be  authorized  or
within its rights or powers under this Indenture.

                  (5) Before the  Trustee  acts or  refrains  from  acting  with
respect to any matters  contemplated by this Indenture or the Notes, the Trustee
may consult  with  counsel of its  selection,  and the advice or opinion of such
counsel,  accountant,  appraiser or other  expert  adviser  whether  retained or
employed by the Company or the Trustee shall be full and complete  authorization
and  protection  from  liability  in  respect of any  action  taken,  omitted or
suffered by it hereunder in good faith and in reliance thereon.

                  (6) The Trustee  shall not be bound to make any  investigation
into the facts or  matters  stated in any  resolution,  certificate,  statement,
instrument,  opinion, report, notice, request, direction,  consent, order, bond,
debenture or other paper or document,  but the Trustee,  in its discretion,  may
make such further inquiry or investigation  into such facts or matters as it may
see fit, and if the Trustee  shall  determine in good faith to make such further
inquiry or investigation, it shall be entitled to examine the books, records and
premises of the Company,  personally or by agent or attorney at the sole cost of
the Company and shall incur no liability or additional  liability of any kind by
reason of such inquiry or investigation.

                  (7) In no event shall the Trustee be liable for the  selection
of investments or for investment losses incurred thereon. The Trustee shall have
no liability in respect of losses incurred as a result of the liquidation of any
such  investment  prior to its  Stated  Maturity  or the  failure  of the  party
directing such investment to provide timely written  investment  direction.  The
Trustee  shall  have no  obligation  to  invest or  reinvest  any  amounts  held
hereunder in the absence of specific written investment direction.

                  (8)  The  rights,   privileges,   immunities  and  protections
afforded  to  the  Trustee  pursuant  to  this  Indenture  (including,   without
limitation,  the right to be indemnified)  shall also be afforded to the Trustee
in  each  of  its  capacities  hereunder  and  each  Paying  Agent,   Registrar,
Co-Registrar,  Custodian, transfer agent or tender agent and each agent or other
Person employed to act hereunder.

                  (9) The  Trustee  shall not be  deemed  to have  notice of any
Default or Event of Default  unless a Trust  Officer of the  Trustee  has actual
knowledge  thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Notes and this Indenture.

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

Section 7.03.     Individual Rights of Trustee.

                  The Trustee in its individual or any other capacity may become
the owner or  pledgee  of Notes and may make  loans to,  accept  deposits  from,
perform  services for or  otherwise  deal with the  Company,  or any  Affiliates
thereof,  with the same rights it would have if it were not  Trustee.  Any

                                       52

<PAGE>

Agent may do the same with like rights. The Trustee,  however,  shall be subject
to Sections 7.10 and 7.11 hereof.

Section 7.04.     Trustee's Disclaimer.

                  The  Trustee  shall  not  be  responsible  for  and  makes  no
representation  as to the validity or adequacy of this Indenture or the Notes or
any recitals  therein,  it shall not be accountable for the Company's use of the
proceeds from the sale of Notes or any money paid to the Company pursuant to the
terms of this Indenture and it shall not be responsible for any statement in the
Notes other than its certificate of authentication.

Section 7.05.     Notice of Defaults.

                  If a Default or an Event of Default  occurs and is  continuing
and is known to a Trust  Officer of the Trustee,  the Trustee shall mail to each
Holder  notice of the  uncured  Default or Event of Default  within 5 days after
obtaining  knowledge  thereof.  Except in the case of a  Default  or an Event of
Default in payment of principal of,  make-whole  amount, if any, or interest on,
any Note,  including an  accelerated  payment and the failure to make payment on
the Change of Control  Payment Date  pursuant to a Change of Control Offer or on
the Excess Proceeds  Payment Date pursuant to an Asset Sale Offer, and except in
the case of a failure to comply with  Article 5 hereof the Trustee may  withhold
the notice if and so long as a  committee  of its Trust  Officers  in good faith
determines  that  withholding the notice is in the best interest of the Holders.
This Section 7.05 shall be in lieu of the proviso to Section  315(b) of the TIA,
and such proviso of Section 315(b) of the TIA is hereby expressly  excluded from
this Indenture and the Notes, as permitted by the TIA.

Section 7.06.     Reports by Trustee to Holders.

                  If required by TIA Section 313(a), within 60 days after May 15
of any year,  commencing on May 15, 2001,  the Trustee shall transmit by mail to
each  Holder  a brief  report  dated as of such  May 15 that  complies  with TIA
Section 313(a). The Trustee also shall comply with the reporting requirements of
TIA Sections 313(b), (c) and (d).

                  A copy of each  such  report  at the time of such  mailing  to
Holders  shall be mailed to the Company  and, if the Notes are listed on a stock
exchange,  filed with the  Commission and each stock exchange on which the Notes
are listed as provided by TIA Section 313(d).  The Company shall promptly notify
the Trustee when the Notes are listed on any stock  exchange  and any  delisting
thereof.

Section 7.07.     Compensation and Indemnity.

                  The Company  shall pay to the  Trustee  from time to time such
compensation  as may from time to time be agreed in writing  between the Company
and the Trustee for its  services  hereunder  (which  compensation  shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust). Except as otherwise provided herein, the Company shall reimburse
the Trustee upon request for all reasonable disbursements, expenses and advances
incurred  or made by it in  connection  with its duties  under  this  Indenture,
including  the  reasonable  compensation,  disbursements  and  expenses  of  the
Trustee's  agents,  counsel,  custodians  and  nominees,  except  for  any  such
disbursement or expense as may be attributable to the Trustee's negligence,  bad
faith or willful misconduct.

                                       53
<PAGE>

                  The  Company  shall  indemnify  each  of the  Trustee  and its
officers,  directors,  employees and agents and any predecessor  Trustee and its
officers,  directors,  employees  and agents for,  and hold it or them  harmless
against,  any and all loss,  damage,  claim,  liability or  reasonable  expense,
including taxes (other than franchise taxes and taxes based on the income of the
Trustee) incurred by it or them in connection with the acceptance or performance
of its duties under this Indenture and any other  documents and  transactions in
connection  therewith  including the reasonable  costs and expenses of defending
itself against any claim (whether asserted by the Company,  or any Holder or any
other Person) or liability in connection with the exercise or performance of any
of its or their  powers  or duties  hereunder  (including,  without  limitation,
settlement costs,  provided any settlement with respect to which indemnification
is sought shall have been consented to by the Company). The Trustee shall notify
the Company in writing  promptly of any claim  asserted  against the Trustee for
which it may seek  indemnity.  However,  the failure by the Trustee to so notify
the Company shall not relieve the Company of its obligations hereunder except to
the extent the Company is  prejudiced  thereby.  This Section 7.07 shall survive
the termination of this Indenture and the earlier  resignation or removal of the
Trustee.

                  Notwithstanding the foregoing,  the Company need not reimburse
the Trustee for any expense or indemnify it against any loss,  damage,  claim or
liability  incurred by the Trustee through its negligence,  bad faith or willful
misconduct.  To secure the payment  obligations  of the Company in this  Section
7.07,  the Trustee shall have a lien prior to the Notes on all money or property
held or collected by the Trustee  except such money or property held in trust to
pay principal of and interest on particular Notes.

                  When the Trustee incurs expenses or renders  services after an
Event of Default  specified in Section  6.01(f) or 6.01(g)  hereof  occurs,  the
expenses  (including the reasonable charges and expenses of its counsel) and the
compensation   for  the  services  are  intended  to   constitute   expenses  of
administration under any Federal or state bankruptcy, insolvency or similar law.

                  The  obligation  of the Company  under this Section 7.07 shall
survive  the  resignation  or removal of the Trustee  and the  satisfaction  and
discharge of this Indenture.

Section 7.08.     Replacement of Trustee.

                  The Trustee may resign by so notifying the Company in writing.
The Holders of a majority in principal amount of the then outstanding  Notes may
remove the Trustee by notifying  the removed  Trustee and the Company in writing
and may appoint a successor  Trustee with the  Company's  written  consent.  The
Company may remove the Trustee at its election if:

                    (1) the Trustee fails to comply with Section 7.10 hereof;

                    (2) the Trustee is adjudged a bankrupt or an insolvent or an
               order for relief is entered with respect to the Trustee under any
               Bankruptcy Law;

                    (3) a  receiver  or other  public  officer  takes  charge or
               control of the Trustee or its property or affairs; or

                    (4) the Trustee otherwise becomes incapable of acting.

                                       54
<PAGE>

                  If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee  for any  reason,  the Company  shall  promptly  appoint a
successor Trustee.

                  No   resignation  or  removal  of  the  Trustee  shall  become
effective  until the acceptance of appointment  by the successor  Trustee.  If a
successor Trustee does not take office within 30 days after the retiring Trustee
resigns or is removed,  the  retiring  Trustee,  the Company or the Holders of a
majority in principal amount of the outstanding  Notes may petition any court of
competent  jurisdiction  at the expense of the Company for the  appointment of a
successor Trustee.

                  If the Trustee  fails to comply with Section 7.10 hereof,  any
Holder may petition any court of competent  jurisdiction  for the removal of the
Trustee and the  appointment  of a successor  Trustee if the Trustee fails after
written request thereof by such Holder to comply with such Section 7.10.

                  A successor Trustee shall deliver a written  acceptance of its
appointment to the retiring  Trustee and to the Company.  Immediately  following
such delivery,  the resignation or removal of the retiring  Trustee shall become
effective and the retiring  Trustee  shall,  subject to its rights under Section
7.07  hereof,  transfer  all  property  held by it as Trustee  to the  successor
Trustee, and the successor Trustee, after any and all amounts then due and owing
the Trustee hereunder have been paid in full, shall have all the rights,  powers
and duties of the Trustee under this Indenture.  A successor  Trustee shall mail
notice of its  succession  to each Holder.  Notwithstanding  replacement  of the
Trustee pursuant to this Section 7.08, the Company's  obligations  under Section
7.07 hereof shall continue for the benefit of the retiring Trustee.

Section 7.09.     Successor Trustee by Consolidation, Merger or Conversion.

                  If the Trustee  consolidates with, merges or converts into, or
transfers all or  substantially  all of its corporate  trust assets to,  another
corporation,  subject to Section 7.10 hereof, the successor  corporation without
any  further  act  shall be the  successor  Trustee.  In case at the  time  such
successor or successors by merger,  conversion or  consolidation  to the Trustee
shall  succeed to the trusts  created by this  Indenture  any of the Notes shall
have been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor  trustee, and deliver
such Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any such successor to the Trustee may authenticate such
Notes  either  in the name of any  predecessor  hereunder  or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Notes or in this Indenture  provided that
the certificate of the Trustee shall have.

Section 7.10.     Eligibility; Disqualification.

                  This  Indenture  shall  always  have a Trustee  which shall be
eligible to act as Trustee  under TIA  Sections  310(a)(1)  and  310(a)(2).  The
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent  published  annual report of condition.  If the Trustee
has or shall  acquire  any  "conflicting  interest"  within  the  meaning of TIA
Section 310(b),  the Trustee and the Company shall comply with the provisions of
TIA Section  310(b);  provided,  however,  that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or  participation  in other securities of
the Company are outstanding if the  requirements for such exclusion set forth in
TIA Section  310(b)(1)  are met.  If at any

                                       55
<PAGE>

time the Trustee shall cease to be eligible in accordance with the provisions of
this Section 7.10,  the Trustee shall resign  immediately in the manner and with
the effect hereinbefore specified in this Article 7.

Section 7.11.     Preferential Collection of Claims Against Company.

                  The Trustee  shall comply with TIA Section  311(a),  excluding
any  creditor  relationship  listed in TIA  Section  311(b).  A Trustee  who has
resigned or been  removed  shall be subject to TIA Section  311(a) to the extent
indicated therein.

                                    ARTICLE 8

               MODIFICATIONS, AMENDMENTS, SUPPLEMENTS AND WAIVERS

Section 8.01.     Without Consent of Holders.

                  The Company,  when  authorized  by a Board  Resolution  of the
Company,  and the Trustee may modify,  amend or supplement this Indenture or the
Notes without notice to or consent of any Holder:

                    (1) to cure any  ambiguity,  or to correct or supplement any
               provision  in this  Indenture  or the  Notes  or make  any  other
               provisions  with  respect to matters or questions  arising  under
               this Indenture or the Notes;  provided  that, in each case,  such
               provisions  shall  not  adversely  affect  the  interest  of  the
               Holders;

                    (2) to provide for uncertificated Notes in addition to or in
               place of certificated Notes;

                    (3) to provide for the assumption by a successor corporation
               of the Company's obligations under this Indenture;

                    (4) to add guarantees with respect to the Notes;

                    (5) to secure the Notes;

                    (6) to add to the  covenants of the Company or the Events of
               Default for the benefit of Holders;

                    (7)  to  surrender  any  right  or  power  conferred  on the
               Company; or

                    (8) to make any other change that does not adversely  affect
               the rights of any Holder or to comply with any requirement of the
               Commission in connection with the qualification of this Indenture
               under the Trust Indenture Act.

                                       56
<PAGE>

Section 8.02.     With Consent of Holders.

                  Subject to Section  6.07  hereof,  the Company and the Trustee
may modify,  amend or  supplement  this  Indenture or the Notes with the written
consent of the Holders of a majority in principal amount of the then outstanding
Notes (including consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes). Subject to Sections 6.04 and 6.07 hereof,
the Holders of a majority in principal amount of the then outstanding  Notes may
waive  compliance  by the Company with any  provision  of this  Indenture or the
Notes. However,  without the consent of each Holder affected (including consents
obtained in  connection  with a tender offer or exchange  offer for, or purchase
of, the Notes),  a modification,  amendment,  supplement or waiver,  including a
waiver pursuant to Section 6.04 hereof, may not:

                  (1) change the Stated Maturity of the principal of, or
          any  installment  of  interest  on,  such Note or alter  the  optional
          redemption provisions thereof;

                  (2) reduce the principal amount of, or make-whole  amount,  if
          any,  or interest  on, such Note or extend the time of payments  under
          the Notes;

                  (3) modify the ranking of the Notes in a manner adverse to the
          Holder;

                  (4) change the place or currency of payment of  principal  of,
          or make-whole amount, if any, or interest on, such Note;

                  (5) alter the provisions with respect to the obligation of the
          Company to make a Change of Control Offer in  accordance  with Section
          4.15 hereof or to make an Asset Sale Offer in accordance  with Section
          4.12 hereof;

                  (6) impair the right to institute suit for the  enforcement of
          any payment on or with respect to such Note; or

                  (7) reduce the  percentage in principal  amount of outstanding
          Notes,  the consent of whose Holders is required for  modification  or
          amendment of this  Indenture or for waiver of compliance  with certain
          provisions  of this  Indenture  or for waiver of certain  Defaults  or
          Events of Default.

                  After an  amendment,  supplement  or waiver under this Section
8.02 becomes  effective,  the Company shall mail to the Holders a notice briefly
describing  the amendment,  supplement or waiver.  Any failure of the Company to
mail such notice, or any defect therein,  shall not, however,  in any way impair
or affect the validity of any such supplemental indenture.

                  Upon  the  request  of the  Company,  accompanied  by a  Board
Resolution  authorizing the execution of any such  supplemental  indenture,  and
upon the  receipt by the  Trustee of  evidence  reasonably  satisfactory  to the
Trustee of the  consent  of the  Holders as  aforesaid  and upon  receipt by the
Trustee of the  documents  described in Section 8.06 hereof,  the Trustee  shall
join with the Company in the  execution of such  supplemental  indenture  unless
such  supplemental  indenture  affects  the  Trustee's  own  rights,  duties  or
immunities  under  this  Indenture,  in which  case the  Trustee  may in its own
discretion,  but  shall  not be  obligated  to,  enter  into  such  supplemental
indenture.

                                       57
<PAGE>

                  It shall not be necessary for the consent of the Holders under
this Section  8.02 to approve the  particular  form of any  proposed  amendment,
supplement or waiver,  but it shall be  sufficient if such consent  approves the
substance thereof.

Section 8.03.     Compliance with TIA.

                  Every  amendment  to or  supplement  of this  Indenture or the
Notes shall comply with the TIA as then in effect.

Section 8.04.     Revocation and Effect of Consents.

                  Until an amendment,  waiver or supplement becomes effective, a
consent  to it by a Holder  is a  continuing  consent  by the  Holder  and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following  paragraph,  any such Holder or subsequent Holder
may  revoke  the  consent  as to such  Holder's  Note or portion of such Note by
notice to the  Trustee  or the  Company  received  before  the date on which the
Trustee  receives an Officers'  Certificate  certifying  that the Holders of the
requisite  principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver.

                  The Company may,  but shall not be obligated  to, fix a Record
Date for the  purpose of  determining  the  Holders  entitled  to consent to any
amendment, supplement or waiver. If a Record Date is fixed, then notwithstanding
the last sentence of the immediately preceding paragraph, those Persons who were
Holders at such Record Date (or their duly designated  proxies),  and only those
Persons,  shall be entitled to revoke any consent  previously given,  whether or
not such Persons  shall  continue to be Holders  after such Record Date. No such
consent  shall be valid or  effective  for more than 90 days after  such  Record
Date.

                  After an amendment, supplement or waiver becomes effective, it
shall bind every  Holder,  unless it makes a change  described in any of clauses
(1) through (7) of Section 8.02 hereof, in which case, the amendment, supplement
or waiver  shall  bind only each  Holder of a Note who has  consented  to it and
every  subsequent  Holder of a Note or portion of a Note that evidences the same
debt as the consenting  Holder's  Note;  provided that any such waiver shall not
impair or affect the right of any Holder to receive  payment of principal of and
interest on a Note, on or after the respective due dates expressed in such Note,
or to  bring  suit for the  enforcement  of any such  payment  on or after  such
respective dates without the consent of such Holder.

Section 8.05.     Notation on or Exchange of Notes.

                  If an amendment,  supplement, or waiver changes the terms of a
Note,  the Trustee may request the Holder to deliver it to the Trustee.  In such
case,  the  Trustee  shall place an  appropriate  notation on the Note about the
changed terms and return it to the Holder. Alternatively,  if the Company or the
Trustee so  determine,  in exchange for the Note the Company shall issue and the
Trustee shall  authenticate a new Note that reflects the changed terms.  Failure
to make the  appropriate  notation  or issue a new Note  shall  not  affect  the
validity and effect of such amendment, supplement or waiver.

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<PAGE>

Section 8.06.     Trustee To Sign Amendments, etc.

                  The Trustee  shall be entitled to receive,  and shall be fully
protected in relying  upon, an Officers'  Certificate  and an Opinion of Counsel
stating that the execution of any  amendment,  supplement  or waiver  authorized
pursuant to this Article 8 is authorized or permitted by this Indenture and that
such amendment,  supplement or waiver  constitutes the legal,  valid and binding
obligation of the Company,  enforceable in accordance with its terms (subject to
customary  exceptions).  The Trustee may, but shall not be obligated to, execute
any such amendment, supplement or waiver which affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.

                                    ARTICLE 9

                       DISCHARGE OF INDENTURE; DEFEASANCE

Section 9.01.     Satisfaction and Discharge of Indenture.

                  This  Indenture  shall be discharged  and shall cease to be of
further  effect  (except  those  obligations  referred  to  in  the  penultimate
paragraph of this Section 9.01) and the Trustee, on written demand of and at the
expense  of  the  Company,   shall  execute  proper  instruments   acknowledging
satisfaction and discharge of this Indenture, when either:

                  (a) all Notes  theretofore  authenticated and delivered (other
         than (i) Notes which have been destroyed, lost or stolen and which have
         been replaced or paid as provided in Section 2.07 hereof and (ii) Notes
         for whose  payment  money has  theretofore  been  deposited in trust or
         segregated  and held in trust by the Company and  thereafter  repaid to
         the Company or discharged  from such trust) have been  delivered to the
         Trustee for cancellation; or

                  (b) (i) either (A)  pursuant to Article 3 hereof,  the Company
         shall  have  given  notice  to the  Trustee  and  mailed  a  notice  of
         redemption  to each Holder of the  redemption of all of the Notes under
         arrangements  satisfactory to the Trustee for the giving of such notice
         or  (B)  all  Notes  not  theretofore  delivered  to  the  Trustee  for
         cancellation  have  become  due  and  payable;  (ii)  the  Company  has
         irrevocably  deposited  or caused to be  deposited  with the Trustee in
         trust for the purpose an amount in U.S. legal tender  sufficient to pay
         and discharge  the entire  Indebtedness  on such Notes not  theretofore
         delivered  to the  Trustee  for  cancellation,  for the  principal  of,
         make-whole  amount,  if any, and interest to the date of such  deposit;
         (iii) no Default or Event of Default with respect to this  Indenture or
         the Notes shall have  occurred  and be  continuing  on the date of such
         deposit or shall  occur as a result of such  deposit  and such  deposit
         will not result in a breach or  violation  of, or  constitute a default
         under, any other material instrument to which the Company is a party or
         by  which it is  bound  (other  than a  Default  or  Event  of  Default
         resulting  from the  incurrence  of  Indebtedness,  all or a portion of
         which  will  be  used to  defease  the  Notes  concurrently  with  such
         incurrence);  (iv) the  Company has paid or caused to be paid all other
         sums  payable  hereunder  by the  Company;  and  (v)  the  Company  has
         delivered  to the Trustee  (A)  irrevocable  instructions  to apply the
         deposited  money  toward  payment of the Notes at the  Stated  Maturity
         thereof,  and (B) an  Officers'  Certificate  and an Opinion of Counsel
         each stating that all conditions precedent herein provided for relating
         to the  satisfaction and discharge of this Indenture have been complied

                                       59
<PAGE>

         with and that such  satisfaction  and  discharge  does not  result in a
         default under any material  agreement or instrument  then known to such
         counsel which binds or affects the Company.

                  Notwithstanding   the  foregoing   paragraph,   the  Company's
obligations  in Article 2 and Sections  4.01,  4.07,  7.07 and 8.06 hereof shall
survive until the Notes are no longer outstanding pursuant to the last paragraph
of Section 2.08 hereof.  After the Notes are no longer  outstanding  pursuant to
Section 2.08 hereof, the Company's obligations under Section 7.07 and 8.06 shall
survive.

                  After such delivery or irrevocable  deposit,  the Trustee upon
request shall acknowledge in writing the discharge of the Company's  obligations
under the Notes  and this  Indenture  except  for  those  surviving  obligations
specified above.

Section 9.02.     Legal Defeasance.

                  (a) The Company  may, at its option by a Board  Resolution  of
the Board of Directors of the Company,  at any time,  elect to have this Section
9.02 be applied to all outstanding Notes upon compliance with the conditions set
forth in Section 9.04 hereof.

                  (b) Upon the Company's  exercise under paragraph (a) hereof of
the option  applicable to this paragraph (b), the Company shall,  subject to the
satisfaction  of the conditions  set forth in Section 9.04 hereof,  be deemed to
have been discharged from its obligations with respect to all outstanding  Notes
on the date the  conditions set forth below are satisfied  (hereinafter,  "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and  discharged the entire  Indebtedness  represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the  purposes of Section  9.05 hereof and the other  Sections of this  Indenture
referred to in clauses (i) and (ii) below,  and to have  satisfied all its other
obligations  under such Notes and this Indenture (and the Trustee,  on demand of
and  at  the  expense  of  the  Company,   shall  execute   proper   instruments
acknowledging  the  same),  except for the  following  provisions,  which  shall
survive until otherwise  terminated or discharged  hereunder:  (i) the rights of
Holders of outstanding Notes to receive, solely from the trust fund described in
Section  9.05  hereof and as more fully set forth in such  Section,  payments in
respect of the principal  of,  make-whole  amount,  if any, and interest on such
Notes  when such  payments  are due on the Stated  Maturity  thereof  (or,  upon
redemption, if applicable),  (ii) the Company's obligations with respect to such
Notes under Article 2 and Section 4.07 hereof, (iii) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Company's  obligations in
connection  therewith and (iv) this Article 9. Subject to  compliance  with this
Article  9, the  Company  may  exercise  its  option  under  this  Section  9.02
notwithstanding  the prior  exercise of its option under Section 9.03 below with
respect to the Notes.

Section 9.03.     Covenant Defeasance.

                  (a) The Company  may, at its option by a Board  Resolution  of
the Board of Directors of the Company,  at any time,  elect to have this Section
9.03 be applied to all outstanding Notes upon compliance with the conditions set
forth in Section 9.04 hereof.

                  (b) Upon the Company's  exercise under paragraph (a) hereof of
the option  applicable to this paragraph (b), the Company shall,  subject to the
satisfaction  of the  conditions  set forth in Section 9.04 hereof,  be released
from its  obligations  under the covenants  contained in Sections 4.05, 4.08 and
4.09  through  4.17,  inclusive,  and  Article  5  hereof  with  respect  to the
outstanding  Notes

                                       60

<PAGE>

on and after the date the conditions set forth below are satisfied (hereinafter,
"Covenant   Defeasance"),   and  the  Notes  shall   thereafter  be  deemed  not
"outstanding" for the purposes of any direction,  waiver, consent or declaration
or act of Holders (and the  consequences of any thereof) in connection with such
covenants,  but shall continue to be deemed "outstanding" for all other purposes
hereunder.  For this purpose,  such Covenant Defeasance means that, with respect
to the outstanding  Notes, the Company may omit to comply with and shall have no
liability in respect of any term,  condition or limitation set forth in any such
covenant,  whether directly or indirectly,  by reason of any reference elsewhere
herein to any such  covenant or by reason of any  reference in any such covenant
to any other  provision  herein or in any other  document  and such  omission to
comply  shall not  constitute  a Default  or an Event or Default  under  Section
6.01(c) or 6.01(d) hereof, but, except as specified above, the remainder of this
Indenture,  and such Notes shall be unaffected  thereby.  In addition,  upon the
Company's  exercise under paragraph (a) hereof of the option  applicable to this
paragraph  (b),  subject  to the  satisfaction  of the  conditions  set forth in
Section 9.04 hereof, Sections 6.01(c),  6.01(d) and 6.01(e) shall not constitute
Events of Default.

Section 9.04.     Conditions to Legal Defeasance or Covenant Defeasance.

                  The following  shall be the  conditions to the  application of
either Section 9.02 or 9.03 hereof to the outstanding Notes:

                  In order to  exercise  either  Legal  Defeasance  or  Covenant
Defeasance:

                  (a) the  Company  must  irrevocably  deposit  or  cause  to be
         deposited  with the  Trustee,  as trust  funds in  trust,  specifically
         pledged as security  for, and  dedicated  solely to, the benefit of the
         Holders,  cash in U.S. dollars, or U.S. Government  Obligations,  or in
         the case of Covenant Defeasance,  corporate  obligations rated at least
         "A" by  Standard  & Poor's  Ratings  Group or at least  "A" by  Moody's
         Investors Service,  Inc. or a combination  thereof,  in such amounts as
         will be sufficient,  in the opinion of a nationally  recognized firm of
         independent public accountants,  to pay and discharge the principal of,
         make-whole amount, if any, and interest on the outstanding Notes on the
         Stated  Maturity  thereof (or upon  redemption,  if applicable) of such
         principal, make-whole amount, if any, or installment of interest;

                  (b) no Default or Event of Default  with  respect to the Notes
         shall have  occurred and be  continuing on the date of such deposit or,
         insofar as an event of  bankruptcy  under clauses (f) or (g) of Section
         6.01 hereof is  concerned,  at any time during the period ending on the
         91st day after the date of such deposit;

                  (c) such Legal  Defeasance  or Covenant  Defeasance  shall not
         result in a breach or violation of, or constitute a default under, this
         Indenture or any material  agreement or instrument to which the Company
         is a party or by which it is bound;

                  (d) in the case of Legal  Defeasance,  the Company  shall have
         delivered to the Trustee an Opinion of Counsel stating that the Company
         has received from, or there has been published by, the Internal Revenue
         Service a ruling,  or since the Issue Date,  there has been a change in
         applicable  federal  income tax law, in either case to the effect that,
         and based thereon such opinion  shall confirm that,  the Holders of the
         outstanding  Notes of such series will not  recognize  income,  gain or
         loss for federal income tax purposes as a result of such defeasance and
         will be subject to federal income tax on the same amounts,  in the same
         manner  and at the  same  times  as  would  have  been the case if such
         defeasance had not occurred; and

                                       61

<PAGE>

                  (e) in the case of Covenant Defeasance, the Company shall have
         delivered  to the  Trustee an Opinion of Counsel to the effect that the
         Holders of outstanding  Notes of such series will not recognize income,
         gain or loss for  federal  income  tax  purposes  as a  result  of such
         defeasance  and  will be  subject  to  federal  income  tax on the same
         amounts,  in the same  manner  and at the same times as would have been
         the case if such defeasance had not occurred; and

                  (f)  the  Company  shall  have  delivered  to the  Trustee  an
         Officers'  Certificate and an Opinion of Counsel, each stating that all
         conditions   precedent  provided  for  relating  to  either  the  Legal
         Defeasance  or the Covenant  Defeasance,  as the case may be, have been
         complied with.

Section 9.05.     Application of Trust Money.

                  All money and U.S. Government  Obligations  deposited with the
Trustee  pursuant to Section  9.01 or 9.04 hereof in respect of the  outstanding
Notes shall be held in trust and applied by the Trustee,  in accordance with the
provisions of such Notes and this Indenture,  to the payment, either directly or
through any Paying  Agent as the Trustee may  determine,  to the Holders of such
Notes,  of all sums due and to become  due  thereon  in  respect  of  principal,
make-whole  amount,  if any,  and accrued  interest,  but such money need not be
segregated from other funds except to the extent required by law.

                  Anything in this  Article 9 to the  contrary  notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon a written
request of the Company in the form of an Officers' Certificate any money or U.S.
Government  Obligations  held by it as provided  in Section  9.01 or 9.04 hereof
which,  in the opinion of a  nationally-recognized  firm of  independent  public
accountants  expressed  in a  written  certification  thereof  delivered  to the
Trustee,  are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

Section 9.06.     Repayment to the Company.

                  Subject to Sections 9.01,  9.,02,  9.03,  9.04, 9.05 and 9.07,
the Trustee and the Paying Agent shall  promptly pay to the Company upon request
any excess U.S. legal tender or U.S. Government  Obligations held by them at any
time and thereupon  shall be relieved  from all  liability  with respect to such
money.  The Trustee and the Paying  Agent shall pay to the Company  upon request
any money held by them for the payment of principal,  make-whole amount, if any,
or interest that remains  unclaimed for two years;  provided that the Trustee or
such Paying Agent, before being required to make any payment, may at the expense
of the Company cause to be published once in a newspaper of general  circulation
in the City of New York or mail to each  Holder  entitled  to such money  notice
that such money remains unclaimed, and that after a date specified therein which
shall be at least 30 days  from the date of such  publication  or  mailing,  any
unclaimed  balance of such money then  remaining  will be repaid to the Company.
After  payment to the Company,  Holders  entitled to such money must look to the
Company for payment as general  creditors  unless an applicable  law  designates
another Person.

                                       62
<PAGE>

Section 9.07.     Reinstatement.

                  If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Section 9.01, 9.02 or 9.03 hereof
by reason of any legal  proceeding  or by reason of any order or judgment of any
court or governmental authority enjoining,  restraining or otherwise prohibiting
such application,  the Company's  obligations under this Indenture and the Notes
shall be revived and  reinstated  as though no deposit had occurred  pursuant to
this  Article 9 until such time as the Trustee or Paying  Agent is  permitted to
apply all such money and U.S. Government  Obligations in accordance with Section
9.01  hereof;  provided,  however,  that if the  Company has made any payment of
principal  of,  make-whole  amount,  if any,  or accrued  interest  on any Notes
because  of the  reinstatement  of  their  obligations,  the  Company  shall  be
subrogated  to the rights of the Holders of such Notes to receive  such  payment
from the money and U.S.  Government  Obligations  held by the  Trustee or Paying
Agent.

                                   ARTICLE 10

                             [INTENTIONALLY OMITTED]

                                   ARTICLE 11

                                  MISCELLANEOUS

Section 11.01.    TIA Controls.

                  If any  provision  of  this  Indenture  limits,  qualifies  or
conflicts  with  another  provision  which is  required  to be  included in this
Indenture by the TIA, the required provision shall control.

Section 11.02.    Notices.

                  Any  notices or other  communications  required  or  permitted
hereunder shall be in writing,  and shall be sufficiently  given if made by hand
delivery, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:

                  If to the Company:

                           HEALTHSOUTH Corporation
                           One HealthSouth Parkway
                           Birmingham, Alabama  35243
                           Telephone No.:  (205) 969-4977
                           Facsimile No.:  (205) 969-4730
                           Attention:  William W. Horton

                                       63
<PAGE>

                  If to the Trustee:

                           The Bank of New York
                           101 Barclay Street, Floor 21 West
                           New York, New York  10286
                           Telephone No.:  (212) 815-5287
                           Facsimile No.:  (212) 815-5915
                           Attention:  Corporate Trust Trustee Administration

                  The Company or the Trustee by written notice to the others may
designate   additional  or  different   addresses  for  subsequent   notices  or
communications. Any notice or communication to the Company or the Trustee, shall
be deemed to have been given or made when actually received.

                  Any notice or communication mailed to a Holder shall be mailed
by first-class mail, postage prepaid,  at the address shown on the register kept
by the Registrar.

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

                  In case by reason of the  suspension  of regular mail service,
or by reason of any other cause,  it shall be  impossible  to mail any notice as
required by this  Indenture,  then such method of  notification as shall be made
with the approval of the Trustee shall  constitute a sufficient  mailing of such
notice.

Section 11.03.    Communications by Holders with Other Holders.

                  Holders may  communicate  pursuant to TIA Section  312(b) with
other  Holders with  respect to their rights under this  Indenture or the Notes.
The  Company,  the  Trustee,  the  Registrar  and  anyone  else  shall  have the
protection of TIA Section 312(c).

Section 11.04.    Certificate and Opinion as to Conditions Precedent.

                  Upon any request or  application by the Company to the Trustee
to take any action  under  this  Indenture,  the  Company  shall  furnish to the
Trustee:

                  (1)  an  Officers'   Certificate   (which  shall  include  the
          statements  set forth in Section  11.05  hereof)  stating that, in the
          opinion of the signers, all conditions precedent, if any, provided for
          in this Indenture  relating to the proposed  action have been complied
          with; and

                  (2) an Opinion of Counsel  (which shall include the statements
          set forth in Section  11.05  hereof)  stating  that, in the opinion of
          such counsel, all such conditions  precedent,  if any, provided for in
          this  Indenture  relating to the  proposed  action have been  complied
          with.
                                       64

<PAGE>

Section 11.05.    Statements Required in Certificate and Opinion.

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

                  (1) a statement  that the person  making such  certificate  or
          opinion  has read  such  covenant  or  condition  and the  definitions
          relating thereto;

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

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

                  (4) a  statement  as to whether or not, in the opinion of such
          person,  such covenant or condition has been complied with;  provided,
          however,  that with respect to matters of fact,  an Opinion of Counsel
          may  rely  on an  Officers'  Certificate  or  certificates  of  public
          officials.

Section 11.06.    Rules by Trustee and Agents.

                  The  Trustee  may make  reasonable  rules for  action by or at
meetings of Holders.  The Registrar and Paying Agent may make  reasonable  rules
for their functions.

Section 11.07.    Business Days; Legal Holidays.

                  A  "Business  Day" is a day  that is not a  Legal  Holiday.  A
"Legal Holiday" is a Saturday, a Sunday, a federally-recognized holiday or a day
on which  banking  institutions  are not required to be open in the State of New
York. If a payment date is a Legal Holiday at a place of payment, payment may be
made at that place on the next  succeeding day that is not a Legal Holiday,  and
no interest shall accrue for the intervening period.

Section 11.08.    Governing Law.

                  THIS  INDENTURE  AND  THE  NOTES  SHALL  BE  GOVERNED  BY  AND
CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK,  AS APPLIED TO
CONTRACTS  MADE AND PERFORMED  WITHIN THE STATE OF NEW YORK,  WITHOUT  REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.  EACH OF THE PARTIES  HERETO AGREES TO SUBMIT TO
THE  JURISDICTION  OF THE  COURTS  OF THE  STATE  OF NEW YORK IN ANY  ACTION  OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES.

Section 11.09.    Waiver of Trial by Jury.

                  The Company  hereby  irrevocably  waives any and all rights to
trial  by  jury in any  legal  proceeding  arising  out of or  relating  to this
Indenture.

                                       65
<PAGE>

Section 11.10.    Submission to Jurisdiction.

                  The Company hereby consents to the non-exclusive  jurisdiction
of a state or federal  court  situated in New York City,  New York in connection
with any  dispute  arising  hereunder  or under the Notes.  The  Company  hereby
irrevocably  waives,  to the fullest  extent  permitted by  applicable  law, any
objection  which it may now or hereafter have to the laying of venue of any such
proceeding brought in such a court and any claim that such proceeding brought in
such a court has been brought in an inconvenient forum.

Section 11.11.    No Adverse Interpretation of Other Agreements.

                  This Indenture may not be used to interpret another indenture,
loan,  security or debt agreement of the Company or any Subsidiary  thereof.  No
such indenture,  loan,  security or debt agreement may be used to interpret this
Indenture.

Section 11.12.    No Recourse Against Others.

                  No incorporator,  director, officer, employee,  stockholder or
controlling  person,  as such,  of the Company  shall have any liability for any
obligations  of the Company  under the Notes or this  Indenture or for any claim
based on, in respect of or by reason of such  obligations or their creation.  By
accepting a Note,  each Holder shall waive and release all such  liability.  The
waiver  and  release  shall be part of the  consideration  for the  issue of the
Notes.

Section 11.13.    Successors.

                  All  agreements  of each of the Company in this  Indenture and
the Notes shall bind their respective successors. All agreements of the Trustee,
any additional  trustee and any Paying Agents in this  Indenture  shall bind its
successor.

Section 11.14.    Multiple Counterparts.

                  The parties may sign multiple  counterparts of this Indenture.
Each signed  counterpart  shall be deemed an original,  but all of them together
represent one and the same agreement.

Section 11.15.    Table of Contents, Headings, etc.

                  The table of contents,  cross-reference  sheet and headings of
the Articles and Sections of this Indenture  have been inserted for  convenience
of reference  only, are not to be considered a part hereof,  and shall in no way
modify or restrict any of the terms or provisions hereof.

Section 11.16.    Separability.

                  Each provision of this Indenture shall be considered separable
and if for any reason any provision shall be invalid,  illegal or unenforceable,
the validity,  legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby to the extent allowed by law.

                                       66

<PAGE>

Section 11.17.    Translation.

                  The original and controlling version of this Indenture and any
related  agreements shall be the English language  version.  All translations of
this Indenture or any agreements  related hereto into other  languages  shall be
for the  convenience  of the parties only,  and shall not control the meaning or
application of this Indenture.  All notices and other communications required or
permitted by this  Indenture  or any other  transactional  agreement  must be in
English or accompanied by an English  translation,  and the  interpretation  and
application of such notices and other  communications shall be based solely upon
the English language version thereof.

                                       67
<PAGE>

                  IN WITNESS WHEREOF,  the parties have caused this Indenture to
be duly executed all as of the date and year first written above.

                                                     Company:

                             HEALTHSOUTH CORPORATION

                                     By:    /s/ William T. Owens
                                            ---------------------------------

                                             Name:  William T. Owens
                                             Title: Executive Vice President and
                                                    Chief Financial Officer

<PAGE>

                                        Trustee:

                                        THE BANK OF NEW YORK,
                                            as Trustee

                                        By: /s/ Robert A. Massimillo
                                           -------------------------------------
                                            Name:  Robert A. Massimillo
                                            Title: Assistant Vice President

<PAGE>

                                                                       EXHIBIT A

                             [FORM OF SERIES A NOTE]

                                                            CUSIP No.:
                             HEALTHSOUTH CORPORATION

                           8 1/2% SENIOR NOTE DUE 2008

No.                                                                          $

                  HEALTHSOUTH   CORPORATION,   a  corporation   incorporated  in
Delaware (the "Company,"  which term includes any successor  entity),  for value
received  promises to pay to or  registered  assigns,  the principal sum of $ on
February 1, 2008.

                  Interest  Payment Dates:  February 1 and August 1,  commencing
          August 1, 2001.

                  Record Dates:  January 15 and July 15.

                  Reference  is  made to the  further  provisions  of this  Note
contained  herein and the Indenture  (as  defined),  which will for all purposes
have the same effect as if set forth at this place.

<PAGE>

                  IN WITNESS  WHEREOF,  the  Company  has caused this Note to be
signed  manually or by facsimile by its duly authorized  directors,  officers or
other authorized signatories.

                             HEALTHSOUTH CORPORATION

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

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

CERTIFICATE OF AUTHENTICATION

Date: February 1, 2001

                  This is one of the 8 1/2% Senior Notes due 2008 referred to in
the within-mentioned Indenture.

                                       THE BANK OF NEW YORK,
                                           as Trustee

                                       By:
                                         ---------------------------------------
                                          Authorized Signatory
                                      A-2

<PAGE>

                              (REVERSE OF SECURITY)

                           8 1/2% SENIOR NOTE DUE 2008

                  1.   Interest.    HEALTHSOUTH   CORPORATION,   a   corporation
incorporated  in  Delaware  (the  "Company"),  promises  to pay  interest on the
principal amount of this Note at the rate per annum shown above. Interest on the
Notes will accrue from the most recent date on which  interest  has been paid or
duly  provided  for,  or if no  interest  has  been  paid,  from the date of the
original  issuance of the Notes. The Company will pay interest  semi-annually in
arrears on each Interest Payment Date,  commencing August 1, 2001. Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months.

                  The Company  shall pay  interest on overdue  principal  and on
overdue  installments  of  interest  (without  regard  to any  applicable  grace
periods)  to the extent  lawful from time to time on demand at the rate borne by
the Notes.

                  2. Method of Payment.  The Company  shall pay  interest on the
Notes (except defaulted  interest) to the Persons who are the registered Holders
at the close of  business  on January 15 or July 15  immediately  preceding  the
Interest  Payment Date  (whether or not such day is a Business  Day) even if the
Notes are canceled on registration of transfer or registration of exchange after
such Record  Date.  Holders  must  surrender  Notes to a Paying Agent to collect
principal payments. Payments of principal and make-whole amount, if any, will be
made (on  presentation  of such  Notes if in  certificated  form) in U.S.  legal
tender;  provided,  however,  that the  Company  may pay  principal,  make-whole
amount, if any, and interest by check payable in U.S. legal tender.  The Company
may  deliver  any such  interest  payment by check  mailed to the address of the
Person entitled thereto as such address will appear on the security register.

                  3. Paying  Agents and  Registrar.  Initially,  The Bank of New
York,  a  banking  organization  organized  under  the  laws  of New  York  (the
"Trustee"),  will act as Paying Agent and the Trustee will act as Registrar. The
Company may change any Paying Agents,  Registrar or co-Registrar  without notice
to the Holders.  Neither the Company nor any of its  Subsidiaries  or Affiliates
may act as Paying Agent but may act as Registrar or co-Registrar.

                  4. Indenture. The Company issued this Note under an Indenture,
dated as of February 1, 2001 (the "Indenture"), by and among the Company and the
Trustee.  This Note is one of a duly  authorized  issue of Initial  Notes of the
Company designated as its 8 1/2% Senior Notes due 2008 (the "Notes").  The Notes
include  the  Initial  Notes  and the  Exchange  Notes  issued  pursuant  to the
Indenture.  The  Initial  Notes and the  Exchange  Notes are treated as a single
class of securities  under the Indenture.  Capitalized  terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the Notes
include  those stated in the  Indenture  and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.  77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture. Notwithstanding anything
to the contrary herein,  the Notes are subject to all such terms, and Holders of
Notes are referred to the  Indenture  and the TIA for a statement  of them.  The
Notes are general unsecured obligations of the Company.

                                      A-3
<PAGE>

                  5.       [Intentionally Omitted.]

                  6.       Redemption.

                  The  Notes  will be  redeemable,  in whole or in part,  at the
option of the Company at any time at a redemption  price equal to the greater of
(i) 100% of the principal amount of the Notes,  plus accrued interest thereon to
the date of redemption  and (ii) as determined by a Quotation  Agent (as defined
below),  the sum of the present  values of the remaining  scheduled  payments of
principal  and  interest  thereon  discounted,  to  the  redemption  date  on  a
semi-annual  basis  (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate, plus accrued interest on the Notes to the date of
redemption.  If a  redemption  date does not fall on an interest  payment  date,
then, with respect to the interest payment immediately succeeding the redemption
date, only the unaccrued  portion of such interest  payment as of the redemption
date shall be included  in any  calculation  pursuant to clause (ii) above.  Any
amount  payable in excess of 100% of the  principal  amount of the Notes  (other
than accrued  interest  thereon) shall be referred to herein as the  "make-whole
amount."

                  "Adjusted Treasury Rate" means, with respect to any redemption
date, the rate per annum equal to the semi-annual  equivalent  yield to maturity
of the Comparable  Treasury Issue,  assuming a price for the Comparable Treasury
Issue  (expressed  as a  percentage  of  the  principal  amount)  equal  to  the
Comparable Treasury Price for such redemption date, plus 0.50%.

                  "Comparable  Treasury  Issue" means the United States Treasury
security  selected by a Quotation  Agent as having a maturity  comparable to the
remaining  term of the Notes to be redeemed that would be utilized,  at the time
of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such Notes.

                  "Comparable   Treasury  Price"  means,  with  respect  to  any
redemption date, (i) the average of the Reference Treasury Dealer Quotations for
such redemption  date,  after excluding the highest and lowest of such Reference
Treasury Dealer  Quotations,  or (ii) if the Trustee obtains three or fewer such
Reference Treasury Dealer Quotations, the average of all such quotations.

                  "Quotation Agent" means one of the Reference  Treasury Dealers
appointed by the Trustee after consultation with the Company.

                  "Reference Treasury Dealer" means (i) each of UBS Warburg LLC,
Deutsche Banc Alex.  Brown Inc. and Chase  Securities Inc. and their  respective
successors;  provided, however, that if any of the foregoing shall cease to be a
primary  U.S.  Government  securities  dealer in New York,  New York (a "Primary
Treasury  Dealer"),  the  Company  shall  substitute  therefor  another  Primary
Treasury  Dealer;  and (ii) any other Primary  Treasury  Dealer  selected by the
Trustee after consultation with the Company.

                  "Reference  Treasury Dealer  Quotation" means, with respect to
each  Reference  Treasury  Dealer  and any  redemption  date,  the  average,  as
determined  by the  Trustee,  of the bid and  asked  prices  for the  Comparable
Treasury Issue (expressed in each case as a percentage of its principal  amount)
quoted in writing to the Trustee by such Reference  Treasury Dealer at 5:00 p.m.
on the third business day preceding such redemption date.

                                      A-4
<PAGE>

                  If less than all of the Notes are to be  redeemed at any time,
selection of the Notes to be redeemed will be made by the Trustee from among the
outstanding  Notes on a pro rata basis, by lot or by any other method  permitted
in the  Indenture.  On and after the  redemption  date,  interest  will cease to
accrue on the Notes or portions thereof called for redemption.

                  The Notes will not be entitled to any sinking fund.

                  7. Notice of Redemption.  Notice of redemption under paragraph
6 of this Note will be mailed at least 30 days but not more than 60 days  before
the  Redemption  Date to each Holder of Notes to be  redeemed  at such  Holder's
registered address.

                  Except  as set  forth  in the  Indenture,  if  monies  for the
redemption of the Notes called for redemption shall have been deposited with the
Paying Agent for redemption on such  Redemption  Date, then the Notes called for
redemption  will cease to bear interest from and after such  Redemption Date and
the only right of the  Holders  of such Notes will be to receive  payment of the
Redemption Price plus interest accrued through the Redemption Date, if any.

                  8. Offers to Purchase.  The  Indenture  provides  that,  after
certain Asset Sales (as defined in the  Indenture)  and upon the occurrence of a
Change of  Control  (as  defined  in the  Indenture),  and  subject  to  further
limitations  contained  therein,  the  Company  will  make an offer to  purchase
certain  amounts of the Notes in accordance with the procedures set forth in the
Indenture.

                  9. Registration  Rights.  Pursuant to the Registration  Rights
Agreement  by and between the  Company and the Initial  Purchasers,  the Company
will be obligated to consummate an exchange  offer  pursuant to which the Holder
of this Note shall have the right to exchange this Note for the Company's Series
B 8 1/2%  Senior  Notes due 2008  (the  "Exchange  Notes"),  at such time as the
Exchange  Notes shall have been  registered  under the  Securities  Act, in like
principal  amount and having terms  identical  in all  material  respects to the
Initial  Notes.  The Holders of the  Initial  Notes shall be entitled to receive
certain  Additional  Interest  payments in the event such exchange  offer is not
consummated and upon certain other conditions, all pursuant to and in accordance
with the terms of the Registration Rights Agreement.

                  10.  Denominations;  Transfer;  Exchange.  The  Notes  are  in
definitive,  fully registered form, without coupons, in minimum denominations of
[$1,000]  [$250,000] and in integral  multiples [of $1,000 in excess] thereof. A
Holder shall  register the transfer or exchange of Notes in accordance  with the
Indenture.  The Registrar may require a Holder,  among other things,  to furnish
appropriate  endorsements  and transfer  documents  and to pay certain  transfer
taxes or  similar  governmental  charges  payable  in  connection  therewith  as
permitted by the  Indenture.  The Registrar need not register the transfer of or
exchange of any Notes or portions thereof selected for redemption.

                  11.  Persons Deemed  Owners.  The registered  Holder of a Note
shall be treated as the owner of such Note for all

purposes.

                  12.  Unclaimed Money. If money for the payment of principal or
interest remains  unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company.  After that,  Holders  entitled to money must
look to the  Company  for  payment as  general  creditors  unless an  "abandoned
property" law designates another person.

                                      A-5
<PAGE>

                  13. Legal Defeasance and Covenant  Defeasance.  If the Company
at any time deposits with the Trustee U.S. legal tender or other  obligations of
the types set forth in the  Indenture  sufficient  to pay the  principal  of and
interest  on the Notes to Stated  Maturity or  redemption,  if  applicable,  and
complies with the other provisions of the Indenture relating to Legal Defeasance
or Covenant  Defeasance,  the Company will be discharged from certain provisions
of the Indenture and the Notes (including certain  covenants,  but excluding its
obligation to pay the principal of and interest on the Notes).

                  14. Amendments,  Supplements,  and Waivers. Subject to certain
exceptions,  the Indenture or the Notes may be amended or supplemented  with the
written  consent of the Holders of at least a majority in aggregate  outstanding
principal  amounts of the Notes, and any existing Default or Event of Default or
noncompliance  with any provision may be waived with the written  consent of the
Holders  of  a  majority  in  aggregate  principal  amount  of  the  Notes  then
outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture or the Notes to, among other things,  cure any
ambiguity,  defect  or  inconsistency  or make any  other  change  that does not
adversely affect in any material respect the rights of any Holder of a Note.

                  15.  Restrictive  Covenants.  The  Indenture  imposes  certain
limitations on the ability of the Company and its  Subsidiaries  to, among other
things,  make  payments  in  respect  of its  Capital  Stock,  incur  additional
Indebtedness,  make certain  investments,  sell assets,  enter into transactions
with  Affiliates,  create  Liens,  merge or  consolidate  with or into any other
Person or sell,  lease,  convey or otherwise dispose of all or substantially all
of its  assets  or  create  dividend  or other  payment  restrictions  affecting
Subsidiaries  of the  Company.  Such  limitations  are  subject  to a number  of
important  qualifications  and exceptions.  The Company must report on an annual
basis to the Trustee on compliance with such limitations.

                  16. Successor.  When a Successor  assumes,  in accordance with
the Indenture,  all the obligations of its  predecessor  under the Notes and the
Indenture,  and immediately  before and thereafter no Default exists and certain
other  conditions are satisfied,  the  predecessor  entity will be released from
those obligations.

                  17. Defaults and Remedies.  Events of Default are set forth in
the  Indenture.  If an Event of Default  (other  than an Event of  Default  with
respect to the Company  pursuant to Section 6.01(f) or 6.01(g) of the Indenture)
shall have occurred and be continuing, then the Trustee by written notice to the
Company or the Holders of not less than 25% in aggregate principal amount of the
Notes then  outstanding may declare to be immediately due and payable the entire
principal  amount of all the Notes then outstanding plus accrued interest to the
date of acceleration; provided, however, that after such acceleration but before
a judgment or decree based on such acceleration is obtained by the Trustee,  the
Holders of a majority in aggregate  principal amount of the outstanding Notes by
written  notice to the  Company  and the  Trustee  may  rescind  and annul  such
acceleration and its consequences if all existing Events of Default,  other than
the  nonpayment of principal,  make-whole  amount,  if any, or interest that has
become due solely  because of the  acceleration,  have been cured or waived.  No
such  rescission  shall  affect  any  subsequent  Default  or  impair  any right
consequent  thereto.  In case an Event of Default  with  respect to the  Company
specified in Section 6.01(f) or 6.01(g) of the Indenture occurs,  such principal
amount,  together with make-whole  amount,  if any, and interest with respect to
all of the Notes, shall be due and payable  immediately  without any declaration
or other act on the part of the Trustee or the Holders of the Notes.

                                      A-6
<PAGE>

                  18.  Trustee  Dealings  with  Company.  The Trustee  under the
Indenture,  in its individual or any other  capacity,  may make loans to, accept
deposits from, and perform services for the Company, and may otherwise deal with
the Company,  its Subsidiaries or their respective  Affiliates as if it were not
the Trustee.

                  19. No Recourse  Against Others.  No  incorporator,  director,
officer,  employee,  stockholder or controlling  person, as such, of the Company
shall have any liability for any  obligations  of the Company under the Notes or
the  Indenture  or for any claim  based on, in  respect  of or by reason of such
obligations or their creation.  By accepting a Note, each Holder shall waive and
release  all  such  liability.  The  waiver  and  release  shall  be part of the
consideration for the issue of the Notes.

                  20.  Authentication.  This Note  shall not be valid  until the
Trustee or Authenticating Agent manually signs the certificate of authentication
on this Note.

                  21.  Multiple  Counterparts.  The  parties  may sign  multiple
counterparts of this Note. Each signed  counterpart  shall be deemed an original
but all of them together represent one and the same Note.

                  22.  Governing  Law.  THIS  NOTE  SHALL  BE  GOVERNED  BY  AND
CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK,  AS APPLIED TO
CONTRACTS  MADE AND PERFORMED  WITHIN THE STATE OF NEW YORK,  WITHOUT  REGARD TO
PRINCIPLES  OF CONFLICTS OF LAW. EACH OF THE PARTIES TO THE INDENTURE HAS AGREED
TO  SUBMIT  TO THE  JURISDICTION  OF THE  COURTS OF THE STATE OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.

                  23. Abbreviations and Defined Terms.  Customary  abbreviations
may be used in the name of a Holder of a Note or an  assignee,  such as: TEN COM
(= tenants in common),  TEN ENT (= tenants by the  entireties),  JT TEN (= joint
tenants  with  right of  survivorship  and not as tenants  in  common),  CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

                  24. CUSIP Numbers.  The Company has caused CUSIP numbers to be
printed on the Notes as a convenience to the Holders.  No representation is made
as to the  accuracy of such  numbers as printed on the Notes and reliance may be
placed only on the other identification numbers printed hereon.

                  25. Indenture.  Each Holder, by accepting a Note, agrees to be
bound by all of the terms and  provisions of the  Indenture,  as the same may be
amended from time to time.

                  The Company  will furnish to any Holder of a Note upon written
request and without  charge a copy of the  Indenture  which has the text of this
Note in larger  type.  Requests  may be made to:  HEALTHSOUTH  Corporation,  One
HealthSouth Parkway,  Birmingham,  Alabama 35243,  Telephone No. (205) 969-4977,
Facsimile No. (205) 969-4730, Attention: William W. Horton.

                                      A-7
<PAGE>

                                 ASSIGNMENT FORM

                  If you the Holder want to assign  this Note,  fill in the form
below and have your signature guaranteed:

I or we assign and transfer this Note to:

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

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

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

                  (Print or type name, address and zip code and
                  social security or tax ID number of assignee)

and irrevocably appoint _______________________________________________________,
agent  to  transfer  this  Note on the  books  of the  Company.  The  agent  may
substitute another to act for him.

Date:                                       Signed:
       -----------------------------               -----------------------------
                                                  (Sign exactly as your name
                                                  appears on the other
                                                  side of this Note)

Medallion Guarantee:
                      -----------------------------

                                      A-8

<PAGE>

                      [OPTION OF HOLDER TO ELECT PURCHASE]

                  If you  want to  elect  to have  this  Note  purchased  by the
Company  pursuant to Section  4.12 or Section 4.15 of the  Indenture,  check the
appropriate box:

                                            Section 4.12 |_|
                                            Section 4.15 |_|

                  If you want to elect to have only part of this Note  purchased
by the Company pursuant to Section 4.12 or Section 4.15 of the Indenture,  state
the amount you elect to have purchased:

$  ------------------------

Date:
-----------------------------             --------------------------------------
                                           NOTICE:  The  signature  on
                                           this     assignment    must
                                           correspond with the name as
                                           it appears upon the face of
                                           the  within  Note in  every
                                           particular          without
                                           alteration  or  enlargement
                                           or  any  change  whatsoever
                                           and  be  guaranteed  by the
                                           endorser's bank or broker.

Medallion Guarantee:
                     -----------------------------

                                      A-9

<PAGE>
                                                                       EXHIBIT B

                             [FORM OF SERIES B NOTE]

                                                           CUSIP No.:

                             HEALTHSOUTH CORPORATION

                           8 1/2% SENIOR NOTE DUE 2008

No.                                                                     $

                  HEALTHSOUTH   CORPORATION,   a  corporation   incorporated  in
Delaware (the "Company,"  which term includes any successor  entity),  for value
received  promises to pay to or  registered  assigns,  the principal sum of $ on
February 1, 2008.

                  Interest  Payment Dates:  February 1 and August 1,  commencing
August 1, 2001.

                  Record Dates:  January 15 and July 15.

                  Reference  is  made to the  further  provisions  of this  Note
contained  herein and the Indenture  (as  defined),  which will for all purposes
have the same effect as if set forth at this place.

<PAGE>

                  IN WITNESS  WHEREOF,  the  Company  has caused this Note to be
signed  manually or by facsimile by its duly authorized  directors,  officers or
other authorized signatories.

                                               HEALTHSOUTH CORPORATION

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

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

CERTIFICATE OF AUTHENTICATION

Date:

                  This is one of the 8 1/2% Senior Notes due 2008 referred to in
the within-mentioned Indenture.

                                                     THE BANK OF NEW YORK,
                                                          as Trustee

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

                                      B-2
<PAGE>

                              (REVERSE OF SECURITY)

                           8 1/2% SENIOR NOTE DUE 2008

                  1   Interest.    HEALTHSOUTH   CORPORATION,    a   corporation
incorporated  in  Delaware  (the  "Company"),  promises  to pay  interest on the
principal amount of this Note at the rate per annum shown above. Interest on the
Notes will accrue from the most recent date on which  interest  has been paid or
duly  provided  for,  or if no  interest  has  been  paid,  from the date of the
original  issuance of the Notes. The Company will pay interest  semi-annually in
arrears on each Interest Payment Date,  commencing August 1, 2001. Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months.

                  The Company  shall pay  interest on overdue  principal  and on
overdue  installments  of  interest  (without  regard  to any  applicable  grace
periods)  to the extent  lawful from time to time on demand at the rate borne by
the Notes.

                  2. Method of Payment.  The Company  shall pay  interest on the
Notes (except defaulted  interest) to the Persons who are the registered Holders
at the close of  business  on January 15 or July 15  immediately  preceding  the
Interest  Payment Date  (whether or not such day is a Business  Day) even if the
Notes are canceled on registration of transfer or registration of exchange after
such Record  Date.  Holders  must  surrender  Notes to a Paying Agent to collect
principal payments. Payments of principal and make-whole amount, if any, will be
made (on  presentation  of such  Notes if in  certificated  form) in U.S.  legal
tender;  provided,  however,  that the  Company  may pay  principal,  make-whole
amount, if any, and interest by check payable in U.S. legal tender.  The Company
may  deliver  any such  interest  payment by check  mailed to the address of the
Person entitled thereto as such address will appear on the security register.

                  3. Paying  Agents and  Registrar.  Initially,  The Bank of New
York,  a  banking  organization  organized  under  the  laws  of New  York  (the
"Trustee"),  will act as Paying Agent and the Trustee will act as Registrar. The
Company may change any Paying Agents,  Registrar or co-Registrar  without notice
to the Holders.  Neither the Company nor any of its  Subsidiaries  or Affiliates
may act as Paying Agent but may act as Registrar or co-Registrar.

                  4. Indenture. The Company issued this Note under an Indenture,
dated as of February 1, 2001 (the "Indenture"), by and among the Company and the
Trustee.  This Note is one of a duly  authorized  issue of Exchange Notes of the
Company designated as its 8 1/2% Senior Notes due 2008 (the "Notes").  The Notes
include  the  Initial  Notes  and the  Exchange  Notes  issued  pursuant  to the
Indenture.  The  Initial  Notes and the  Exchange  Notes are treated as a single
class of securities  under the Indenture.  Capitalized  terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the Notes
include  those stated in the  Indenture  and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.  77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture. Notwithstanding anything
to the contrary herein,  the Notes are subject to all such terms, and Holders of
Notes are referred to the  Indenture  and the TIA for a statement  of them.  The
Notes are general unsecured obligations of the Company.

                  5.       [Intentionally Omitted.]

                                      B-3
<PAGE>

                  6.       Redemption.

                  The  Notes  will be  redeemable,  in whole or in part,  at the
option of the Company at any time at a redemption  price equal to the greater of
(i) 100% of the principal amount of the Notes,  plus accrued interest thereon to
the date of redemption  and (ii) as determined by a Quotation  Agent (as defined
below),  the sum of the present  values of the remaining  scheduled  payments of
principal  and  interest  thereon   discounted  to  the  redemption  date  on  a
semi-annual  basis  (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate, plus accrued interest on the Notes to the date of
redemption.  If a  redemption  date does not fall on an interest  payment  date,
then, with respect to the interest payment immediately succeeding the redemption
date, only the unaccrued  portion of such interest  payment as of the redemption
date shall be included  in any  calculation  pursuant to clause (ii) above.  Any
amount  payable in excess of 100% of the  principal  amount of the Notes  (other
than accrued  interest  thereon) shall be referred to herein as the  "make-whole
amount."

                  "Adjusted Treasury Rate" means, with respect to any redemption
date, the rate per annum equal to the semi-annual  equivalent  yield to maturity
of the Comparable  Treasury Issue,  assuming a price for the Comparable Treasury
Issue  (expressed  as a  percentage  of  the  principal  amount)  equal  to  the
Comparable Treasury Price for such redemption date, plus 0.50%.

                  "Comparable  Treasury  Issue" means the United States Treasury
security  selected by a Quotation  Agent as having a maturity  comparable to the
remaining  term of the Notes to be redeemed that would be utilized,  at the time
of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such Notes.

                  "Comparable   Treasury  Price"  means,  with  respect  to  any
redemption date, (i) the average of the Reference Treasury Dealer Quotations for
such redemption  date,  after excluding the highest and lowest of such Reference
Treasury Dealer  Quotations,  or (ii) if the Trustee obtains three or fewer such
Reference Treasury Dealer Quotations, the average of all such quotations.

                  "Quotation Agent" means one of the Reference  Treasury Dealers
appointed by the Trustee after consultation with the Company.

                  "Reference Treasury Dealer" means (i) each of UBS Warburg LLC,
Deutsche Banc Alex.  Brown Inc. and Chase  Securities Inc. and their  respective
successors;  provided, however, that if any of the foregoing shall cease to be a
primary  U.S.  Government  securities  dealer in New York,  New York (a "Primary
Treasury  Dealer"),  the  Company  shall  substitute  therefor  another  Primary
Treasury  Dealer;  and (ii) any other Primary  Treasury  Dealer  selected by the
Trustee after consultation with the Company.

                  "Reference  Treasury Dealer  Quotation" means, with respect to
each  Reference  Treasury  Dealer  and any  redemption  date,  the  average,  as
determined  by the  Trustee,  of the bid and  asked  prices  for the  Comparable
Treasury Issue (expressed in each case as a percentage of its principal  amount)
quoted in writing to the Trustee by such Reference  Treasury Dealer at 5:00 p.m.
on the third business day preceding such redemption date.

                  If less than all of the Notes are to be  redeemed at any time,
selection of the Notes to be redeemed will be made by the Trustee from among the
outstanding  Notes on a pro rata basis, by lot or

                                      B-4
<PAGE>
by any other method  permitted  in the  Indenture.  On and after the  redemption
date,  interest will cease to accrue on the Notes or portions thereof called for
redemption.

                  The Notes will not be entitled to any sinking fund.

                  7. Notice of Redemption.  Notice of redemption under paragraph
6 of this Note will be mailed at least 30 days but not more than 60 days  before
the  Redemption  Date to each Holder of Notes to be  redeemed  at such  Holder's
registered address.

                  Except  as set  forth  in the  Indenture,  if  monies  for the
redemption of the Notes called for redemption shall have been deposited with the
Paying Agent for redemption on such  Redemption  Date, then the Notes called for
redemption  will cease to bear interest from and after such  Redemption Date and
the only right of the  Holders  of such Notes will be to receive  payment of the
Redemption Price plus interest accrued through the Redemption Date, if any.

                  8. Offers to Purchase.  The  Indenture  provides  that,  after
certain Asset Sales (as defined in the  Indenture)  and upon the occurrence of a
Change of  Control  (as  defined  in the  Indenture),  and  subject  to  further
limitations  contained  therein,  the  Company  will  make an offer to  purchase
certain  amounts of the Notes in accordance with the procedures set forth in the
Indenture.

                  9.  Denominations;   Transfer;  Exchange.  The  Notes  are  in
definitive,  fully registered form, without coupons, in minimum denominations of
[$1,000]  [$250,000] and in integral  multiples [of $1,000 in excess] thereof. A
Holder shall  register the transfer or exchange of Notes in accordance  with the
Indenture.  The Registrar may require a Holder,  among other things,  to furnish
appropriate  endorsements  and transfer  documents  and to pay certain  transfer
taxes or  similar  governmental  charges  payable  in  connection  therewith  as
permitted by the  Indenture.  The Registrar need not register the transfer of or
exchange of any Notes or portions thereof selected for redemption.

                  10.  Persons Deemed  Owners.  The registered  Holder of a Note
shall be treated as the owner of such Note for all purposes.

                  11.  Unclaimed Money. If money for the payment of principal or
interest remains  unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company.  After that,  Holders  entitled to money must
look to the  Company  for  payment as  general  creditors  unless an  "abandoned
property" law designates another person.

                  12. Legal Defeasance and Covenant  Defeasance.  If the Company
at any time deposits with the Trustee U.S. legal tender or other  obligations of
the types set forth in the  Indenture  sufficient  to pay the  principal  of and
interest  on the Notes to Stated  Maturity or  redemption,  if  applicable,  and
complies with the other provisions of the Indenture relating to Legal Defeasance
or Covenant  Defeasance,  the Company will be discharged from certain provisions
of the Indenture and the Notes (including certain  covenants,  but excluding its
obligation to pay the principal of and interest on the Notes).

                  13. Amendments,  Supplements,  and Waivers. Subject to certain
exceptions,  the Indenture or the Notes may be amended or supplemented  with the
written  consent of the

                                      B-5
<PAGE>

Holders of at least a majority in aggregate outstanding principal amounts of the
Notes, and any existing  Default or Event of Default or  noncompliance  with any
provision may be waived with the written consent of the Holders of a majority in
aggregate  principal amount of the Notes then outstanding.  Without notice to or
consent of any Holder, the parties thereto may amend or supplement the Indenture
or the Notes to, among other things, cure any ambiguity, defect or inconsistency
or make any other change that does not adversely  affect in any material respect
the rights of any Holder of a Note.

                  14.  Restrictive  Covenants.  The  Indenture  imposes  certain
limitations on the ability of the Company and its  Subsidiaries  to, among other
things,  make  payments  in  respect  of its  Capital  Stock,  incur  additional
Indebtedness,  make certain  investments,  sell assets,  enter into transactions
with  Affiliates,  create  Liens,  merge or  consolidate  with or into any other
Person or sell,  lease,  convey or otherwise dispose of all or substantially all
of its  assets  or  create  dividend  or other  payment  restrictions  affecting
Subsidiaries  of the  Company.  Such  limitations  are  subject  to a number  of
important  qualifications  and exceptions.  The Company must report on an annual
basis to the Trustee on compliance with such limitations.

                  15. Successor.  When a Successor  assumes,  in accordance with
the Indenture,  all the obligations of its  predecessor  under the Notes and the
Indenture,  and immediately  before and thereafter no Default exists and certain
other  conditions are satisfied,  the  predecessor  entity will be released from
those obligations.

                  16. Defaults and Remedies.  Events of Default are set forth in
the  Indenture.  If an Event of Default  (other  than an Event of  Default  with
respect to the Company  pursuant to Section 6.01(f) or 6.01(g) of the Indenture)
shall have occurred and be continuing, then the Trustee by written notice to the
Company or the Holders of not less than 25% in aggregate principal amount of the
Notes then  outstanding may declare to be immediately due and payable the entire
principal  amount of all the Notes then outstanding plus accrued interest to the
date of acceleration; provided, however, that after such acceleration but before
a judgment or decree based on such acceleration is obtained by the Trustee,  the
Holders of a majority in aggregate  principal amount of the outstanding Notes by
written  notice to the  Company  and the  Trustee  may by written  notice to the
Company and the Trustee rescind and annul such acceleration and its consequences
if all  existing  Events of Default,  other than the  nonpayment  of  principal,
make-whole amount, if any, or interest that has become due solely because of the
acceleration,  have been cured or waived.  No such  rescission  shall affect any
subsequent Default or impair any right consequent  thereto.  In case an Event of
Default with respect to the Company  specified in Section  6.01(f) or 6.01(g) of
the Indenture occurs, such principal amount, together with make-whole amount, if
any,  and interest  with  respect to all of the Notes,  shall be due and payable
immediately  without any  declaration or other act on the part of the Trustee or
the Holders of the Notes.

                  17.  Trustee  Dealings  with  Company.  The Trustee  under the
Indenture,  in its individual or any other  capacity,  may make loans to, accept
deposits from, and perform services for the Company, and may otherwise deal with
the Company,  its Subsidiaries or their respective  Affiliates as if it were not
the Trustee.

                  18. No Recourse  Against Others.  No  incorporator,  director,
officer,  employee,  stockholder or controlling  person, as such, of the Company
shall have any liability for any  obligations  of the Company under the Notes or
the  Indenture  or for any claim  based on, in  respect  of or by reason of such
obligations or their creation.  By accepting a Note, each Holder shall waive and
release  all  such  liability.  The  waiver  and  release  shall  be part of the
consideration for the issue of the Notes.

                                      B-6

<PAGE>

                  19.  Authentication.  This Note  shall not be valid  until the
Trustee or Authenticating Agent manually signs the certificate of authentication
on this Note.

                  20.  Multiple  Counterparts.  The  parties  may sign  multiple
counterparts of this Note. Each signed  counterpart  shall be deemed an original
but all of them together represent one and the same Note.

                  21.  Governing  Law.  THIS  NOTE  SHALL  BE  GOVERNED  BY  AND
CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK,  AS APPLIED TO
CONTRACTS  MADE AND PERFORMED  WITHIN THE STATE OF NEW YORK,  WITHOUT  REGARD TO
PRINCIPLES  OF CONFLICTS OF LAW. EACH OF THE PARTIES TO THE INDENTURE HAS AGREED
TO  SUBMIT  TO THE  JURISDICTION  OF THE  COURTS OF THE STATE OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.

                  22. Abbreviations and Defined Terms.  Customary  abbreviations
may be used in the name of a Holder of a Note or an  assignee,  such as: TEN COM
(= tenants in common),  TEN ENT (= tenants by the  entireties),  JT TEN (= joint
tenants  with  right of  survivorship  and not as tenants  in  common),  CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

                  23. CUSIP Numbers.  The Company has caused CUSIP numbers to be
printed on the Notes as a convenience to the Holders.  No representation is made
as to the  accuracy of such  numbers as printed on the Notes and reliance may be
placed only on the other identification numbers printed hereon.

                  24. Indenture.  Each Holder, by accepting a Note, agrees to be
bound by all of the terms and  provisions of the  Indenture,  as the same may be
amended from time to time.

                  The Company  will furnish to any Holder of a Note upon written
request and without  charge a copy of the  Indenture  which has the text of this
Note in larger  type.  Requests  may be made to:  HEALTHSOUTH  Corporation,  One
HealthSouth Parkway,  Birmingham,  Alabama 35243,  Telephone No. (205) 969-4977,
Facsimile No. (205) 969-4730, Attention: William W. Horton.

                                      B-7
<PAGE>

                                 ASSIGNMENT FORM

                  If you the Holder want to assign  this Note,  fill in the form
below and have your signature guaranteed:

I or we assign and transfer this Note to:

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

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

--------------------------------------------------------------------------------
                 (Print or type name, address and zip code and
                  social security or tax ID number of assignee)

and irrevocably appoint________________________________________________________,
agent  to  transfer  this  Note on the  books  of the  Company.  The  agent  may
substitute another to act for him.

Date:                                       Signed:
       -----------------------------                ----------------------------
                                                    (Sign exactly as your name
                                                    appears on the other
                                                    side of this Note)

Medallion Guarantee:
                    ----------------------------

                                      B-8
<PAGE>

                      [OPTION OF HOLDER TO ELECT PURCHASE]

                  If you  want to  elect  to have  this  Note  purchased  by the
Company  pursuant to Section  4.12 or Section 4.15 of the  Indenture,  check the
appropriate box:

                                Section 4.12 |_|
                                Section 4.15 |_|

                  If you want to elect to have only part of this Note  purchased
by the Company pursuant to Section 4.12 or Section 4.15 of the Indenture,  state
the amount you elect to have purchased:

$
   ----------------------

Date:
        -------------------------                    ---------------------------
                                                      NOTICE:  The  signature on
                                                      this    assignment    must
                                                      correspond  with  the name
                                                      as  it  appears  upon  the
                                                      face of the within Note in
                                                      every  particular  without
                                                      alteration or  enlargement
                                                      or any  change  whatsoever
                                                      and be  guaranteed  by the
                                                      endorser's bank or broker.

Medallion Guarantee:
                    ------------------------

                                      B-9
<PAGE>
                                                                       EXHIBIT C

                    [FORM OF RULE 144A TRANSFER CERTIFICATE]
                                     [Date]

[Name of Registrar]
[Address of Registrar]

Ladies and Gentlemen:

                  Reference  is  hereby  made  to  the  Indenture,  dated  as of
February 1, 2001, between  HEALTHSOUTH  Corporation,  as Issuer (the "Company"),
and The Bank of New York,  as  Trustee.  Capitalized  terms used but not defined
herein shall have the  respective  meanings given to such terms in the Indenture
or Rule 144A, as the case may be.

[Insert  the  following  paragraph  for any  transfer  made  pursuant to Section
2.16(b)(vi):

                  This certificate relates to US$___________ principal amount of
Notes  which are held in the form of a  beneficial  interest  in the  Restricted
Global  Note  (CUSIP No.  ______________  ) with the  Depositary  in the name of
[insert name of transferor] (the  "Transferor").  The Transferor has requested a
transfer of such beneficial  interest for one or more  Certificated  Notes to be
registered in the name of [insert name of transferee] (the "Transferee").]

[Insert  the  following  paragraph  for any  transfer  made  pursuant to Section
2.16(b)(v):

                  This certificate relates to US$___________ principal amount of
Notes which are held in the form of a  beneficial  interest in the  Regulation S
Global  Note  (CUSIP No.  ______________  ) with the  Depositary  in the name of
[insert name of transferor] (the  "Transferor").  The Transferor has requested a
transfer of such beneficial interest for a beneficial interest in the Restricted
Global Note to be  registered  in the name of [insert name of  transferee]  (the
"Transferee").]

[Insert  the  following  paragraph  for any  transfer  made  pursuant to Section
2.16(c)(iii):

                  This certificate relates to US$__________  principal amount of
Notes which are held in the form of one or more Certificated Notes registered in
the name of [insert name of transferor  (the  "Transferor").  The Transferor has
requested a transfer of such Certificated Notes for a beneficial interest in the
Restricted  Global  Note  (CUSIP  No.  _____________  ) to  be  held  [with  the
Depositary in the name of [insert name of Transferee] (the "Transferee").]

                  In connection with such request for transfer and in respect of
such Notes,  the  Transferor  does hereby  certify  that such  transfer is being
effected in accordance with the transfer restrictions set forth in the Indenture
and the Notes and pursuant to and in accordance  with Rule 144A, and accordingly
the Transferor does hereby certify:

                           (1) the  Transferee  is a person that the  Transferor
         and any person acting on behalf of the Transferor reasonably believe is
         purchasing such Notes for its own account,  or for one or more accounts
         with  respect  to  which  the  Transferee   exercises  sole  investment

                                      C-1
<PAGE>

         discretion,  and the  Transferee  and each such account is a "qualified
         institutional buyer" within the meaning of Rule 144A;

                           (2) the  Transferor  and  any  person  acting  on its
         behalf has taken  reasonable  steps to ensure  that the  Transferee  is
         aware that the  Transferor  may be  relying on Rule 144A in  connection
         with the transaction; and

                           (3) the transaction  satisfies all other requirements
         of Rule  144A  and of any  applicable  Notes  laws of any  state of the
         United States or any other jurisdiction.

                  You and the Company are entitled to rely upon this certificate
and are irrevocably  authorized to produce this  certificate or a copy hereof to
any  interested  party in any  administrative  or legal  proceedings or official
inquiry with respect to the matters covered hereby.

                                                     [Name of Transferor]

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

                                      C-2
<PAGE>

                                                                       EXHIBIT D

                   [FORM OF REGULATION S TRANSFER CERTIFICATE]

                                     [date]

[Name of Registrar]
[Address of Registrar]

Ladies and Gentlemen:

                  Reference  is  hereby  made  to  the  Indenture,  dated  as of
February 1, 2001, between  HEALTHSOUTH  Corporation,  as Issuer (the "Company"),
and The Bank of New York,  as  Trustee.  Capitalized  terms used but not defined
herein shall have the  respective  meanings given to such terms in the Indenture
or Regulation S, as the case may be.

[Insert  the  following  paragraph  for any  transfer  made  pursuant to Section
2.16(b)(iii) or 2.16(b)(iv):

                  This certificate relates to US$__________  principal amount of
Notes  which are held in the form of a  beneficial  interest  in the  Restricted
Global Note (CUSIP  No.__________)  with the  Depositary  in the name of [insert
name of transferor] (the "Transferor").  The Transferor has requested a transfer
of such beneficial interest for a beneficial interest in the Regulation S Global
Note (CUSIP  No.__________)  to be held [[include the following for any transfer
made pursuant to Section  2.16(b)(iii):  with [Euroclear]  [Clearstream] (Common
Code  No.__________)]  through  the  Depositary  in the name of [insert  name of
transferee] (the "Transferee").]

[Insert  the  following  paragraph  for any  transfer  made  pursuant to Section
2.16(c)(iii):

                  This certificate relates to US$__________  principal amount of
Notes which are held in the form of one or more Certificated Notes registered in
the name of [insert name of transferor) (the  "Transferor").  The Transferor has
requested a transfer of such Certificated Notes for a beneficial interest in the
Regulation  S Global Note  (CUSIP  No.__________)  to be held [with  [Euroclear]
[Clearstream]] through the Depositary in the name of [insert name of transferee]
(the "Transferee").]

                  In connection with such request for transfer and in respect of
such Notes,  the  Transferor  does hereby  certify  that such  transfer is being
effected in accordance with the transfer restrictions set forth in the Indenture
and  the  Notes  and  pursuant  to and in  accordance  with  Regulation  S,  and
accordingly the Transferor does hereby certify:

                           (1) the offer of such Notes  was not made to a person
         in the  United States;

                           (2)  either  (A) at the time the buy  order  for such
         Notes was  originated,  the Transferee was outside the United States or
         the Transferor and any person acting on its behalf reasonably  believed
         that  the   Transferee  was  outside  the  United  States  or  (B)  the
         transaction was executed in, or through the facilities of, a designated
         offshore  securities  market and neither the  Transferor nor any person
         acting on its behalf knew that the transaction was pre-arranged  with a
         buyer in the United States,

<PAGE>
                           (3) no directed selling efforts have been made in the
         United States in  contravention  of the  requirements of Rule 903(b) or
         904(b) of the Securities Act, as applicable, and

                           (4) the  transaction  is not part of a plan or scheme
          to evade the registration requirements of the
         Securities Act.

[Add the following for transfers made during the Regulation S Restricted Period:

                  In addition,  (A) if the  provisions of Rule 903(c)(3) or Rule
904(c)(1)  of  the  Securities  Act  are  applicable  to  the  transaction,  the
Transferor  hereby  certifies that the transfer is being made in accordance with
the  requirements of Rule 903(c)(3) or Rule  904(c)(1),  as the case may be, and
(B) upon completion of the transaction, the Transferee will hold the transferred
beneficial interest through Euroclear or Clearstream.]

                  You and the Company are entitled to rely upon this certificate
and are irrevocably  authorized to produce this  certificate or a copy hereof to
any  interested  party in any  administrative  or legal  proceedings or official
inquiry with respect to the matters covered hereby.

                                        [Name of Transferor]

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

                                      D-2
<PAGE>

                                                                       EXHIBIT E

                     [FORM OF RULE 144 TRANSFER CERTIFICATE]

                                     [date]

[Name of Registrar]
[Address of Registrar]
Ladies and Gentlemen:

                  Reference  is  hereby  made  to  the  Indenture,  dated  as of
February 1, 2001, between  HEALTHSOUTH  Corporation,  as Issuer (the "Company"),
and The Bank of New York,  as  Trustee.  Capitalized  terms used but not defined
herein shall have the  respective  meanings given to such terms in the Indenture
or Rule 144, as the case may be.

[Insert  the  following  paragraph  for any  transfer  made  pursuant to Section
2.16(b)(iii):

                  This certificate relates to US$__________  principal amount of
Notes  which are held in the form of a  beneficial  interest  in the  Restricted
Global Note (CUSIP  No.__________)  with the  Depositary  in the name of [insert
name of transferor] (the "Transferor").  The Transferor has requested a transfer
of such beneficial interest for a beneficial interest in the Regulation S Global
Note (CUSIP No.__________) to be held with the Depositary in the name of [insert
name of transferee] (the "Transferee").]

[Insert  the  following  paragraph  for any  transfer  made  pursuant to Section
2.16(b)(vi):

                  This certificate relates to US$__________  principal amount of
Notes  which are held in the form of a  beneficial  interest  in the  Restricted
Global Note (CUSIP  No.__________)  with the  Depositary  in the name of [insert
name of transferor] (the "Transferor").  The Transferor has requested a transfer
of such beneficial  interest for one or more Certificated Notes to be registered
in the name of [insert name of transferee] (the "Transferee").]

[Insert  the  following  paragraph  for any  transfer  made  pursuant to Section
2.16(b)(vii):

                  This certificate relates to US$__________  principal amount of
Notes which are held in the form of a  beneficial  interest in the  Regulation S
Global Note (CUSIP  No.__________)  with the  Depositary  in the name of [insert
name of transferor] (the "Transferor").  The Transferor has requested a transfer
of such beneficial  interest for one or more Certificated Notes to be registered
in the name of [insert name of transferee] (the "Transferee").]

                  In connection with such request for transfer and in respect of
such Notes,  the  Transferor  does hereby  certify  that such  transfer has been
effected in accordance with the transfer restrictions set forth in the Indenture
and the  Notes,  and that the  Notes  are  being  transferred  in a  transaction
permitted by Rule 144 under the Securities Act.

<PAGE>

                  You and the Company are entitled to rely upon this certificate
and are irrevocably  authorized to produce this  certificate or a copy hereof to
any  interested  party in any  administrative  or legal  proceedings or official
inquiry with respect to the matters covered hereby,

                                           [Name of Transferor]

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

                                      E-2

<PAGE>
                                                                       EXHIBIT F

               [FORM OF ACCREDITED INVESTOR TRANSFER CERTIFICATE]

                                     [date]

[Name of Registrar]
[Address of Registrar]

Ladies and Gentlemen:

                  Reference  is  hereby  made  to  the  Indenture,  dated  as of
February 1, 2001, between  HEALTHSOUTH  Corporation,  as Issuer (the "Company"),
and The Bank of New York,  as  Trustee.  Capitalized  terms used but not defined
herein shall have the  respective  meanings given to such terms in the Indenture
or Regulation D, as the case may be.

[Insert  the  following  paragraph  for any  transfer  made  pursuant to Section
2.16(b)(vi):

                  This certificate relates to US$__________  principal amount of
Notes  which are held in the form of a  beneficial  interest  in the  Restricted
Global Note (CUSIP  No.__________)  with the  Depositary  in the name of [insert
name of transferor] (the "Transferor").  The Transferor has requested a transfer
of  such  beneficial   interest  for  a  beneficial  interest  in  one  or  more
Certificated  Notes (CUSIP  No.__________) to be held with the Depositary in the
name of [insert name of transferee] (the "Transferee"].

[Insert  the  following  paragraph  for any  transfer  made  pursuant to Section
2.16(b)(vii) of the Indenture:

                  This certificate relates to US$__________  principal amount of
Notes which are held in the form of a  beneficial  interest in the  Regulation S
Global Note (CUSIP  No.__________)  with the  Depositary  in the name of [insert
name of transferor] (the "Transferor").  The Transferor has requested a transfer
of such beneficial  interest for one or more Certificated Notes to be registered
in the name of [insert name of transferee] (the "Transferee").]

[Insert  the  following  paragraph  for any  transfer  made  pursuant to Section
2.16(c)(i) of the Indenture:

                  This certificate relates to US$__________  principal amount of
Notes which are held in the form of one or more Certificated Notes registered in
the name of [insert name of transferor] (the  "Transferor").  The Transferor has
requested a transfer  of such  Certificated  Notes for one or more  Certificated
Notes  to be  registered  in the  name  of  [insert  name  of  transferee]  (the
"Transferee").]

                  The undersigned represents and warrants to you that:

                           (1) We are an institutional "accredited investor" (as
         defined in Rule  501(a)(1).  (2), (3) or (7) of  Regulation D under the
         Securities Act of 1933, as amended (the "Securities  Act"))  purchasing
         for  our  own  account  or for the  account  of  such an  institutional
         "accredited  investor",  and we are acquiring the Notes not with a view
         to,  or for  offer or sale in  connection  with,  any  distribution  in
         violation of the Securities Act or other applicable

<PAGE>

         securities  law and we have such  knowledge and experience in financial
         and  business  matters as to be capable  of  evaluating  the merits and
         risks  of our  investment  in  the  Notes  and  invest  in or  purchase
         securities  similar to the Notes in the normal  course of our business.
         We and any  accounts  for which we are acting are each able to bear the
         economic risk of our investment.

                           (2) We understand and acknowledge that the Notes have
         not been  registered  under the Securities Act or any other  applicable
         securities  law and  unless so  registered,  may not be sold  except as
         permitted in the following sentence.  We agree on our own behalf and on
         behalf of any  investor  account for which we are  purchasing  Notes to
         offer, sell or otherwise transfer such Notes prior to the date which is
         two (2) years  after the  later of the date of  original  issue and the
         last date on which the Company or any  Affiliate of the Company was the
         owner of such Notes (or any predecessor  thereto) (such later date, the
         "Resale  Restriction  Termination  Date")  only  (a)  to  a  Person  we
         reasonably  believe is a qualified  institutional  buyer (as defined in
         Rule 144A under the Securities  Act) that purchases for its own account
         or for the account of a qualified institutional buyer to whom notice is
         given  that  the  resale,  pledge  or  transfer  is  being  made  in  a
         transaction  meeting the requirements of Rule 144A under the securities
         act, (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 of Regulation S
         under the  Securities Act or (d) in accordance  with another  exemption
         from the registration requirements of the Securities Act, provided that
         in the case of a transfer,  pledge or sale  pursuant to this clause (d)
         such  transfer  is subject to the  receipt  by the  Registrar  (and the
         Company, if it so requests) of a certification of the transferor and an
         Opinion of Counsel t the effect  that such  transfer  is in  compliance
         with the  Securities  Act, (e) to the Company or its  Affiliates or (f)
         pursuant to an effective  registration  statement  under the Securities
         Act and, in each case, in  accordance  with any  applicable  securities
         laws  of any  state  of the  United  States  or  any  other  applicable
         jurisdiction  and the Indenture  governing  the notes.  Any transfer of
         Notes  pursuant  to clause  (d) above to an  institutional  "accredited
         investor"  within  the  meaning  of Rule  501(a)(1),  (2) (3) or (7) of
         Regulation D under the  Securities Act that is purchasing the Notes for
         its own account or for the account of such an institutional "accredited
         investor,"  shall involve a minimum  purchase  price of US$250,000  for
         such Notes,  subject in each of the foregoing  cases to any requirement
         of law that the  disposition  of our  property or the  property of such
         investor  account  or  accounts  be at all  times  within  our or their
         control and in compliance with any applicable  state  securities  laws.
         The foregoing  restrictions on resale will not apply  subsequent to the
         Resale Restriction Termination Date. If any resale or other transfer of
         the Notes is proposed to an institutional  "accredited  investor" prior
         to the  Resale  Restriction  Termination  Date,  the  transferor  shall
         deliver to the Company  and the  Trustee a letter  from the  transferee
         substantially  in the form of this letter,  which shall provide,  among
         other  things,  that the  transferee  is an  institutional  "accredited
         investor"  within the  meaning of Rule 501 (a)(l),  (2),  (3) or (7) of
         Regulation D under the  Securities  Act and that it is  acquiring  such
         Notes for investment  purposes and not for distribution in violation of
         the  Securities  Act. We  acknowledge  that the Company and the Trustee
         reserve  the right  prior to any offer,  sale or other  transfer of the
         Notes  pursuant  to  clause  (c)  or (d)  above  prior  to  the  Resale
         Restriction  Termination  Date to require the delivery of an opinion of
         counsel,  certifications  and/or other information  satisfactory to the
         Company and the Trustee.

                           (3) We are  acquiring  the Notes  purchased by us for
         our own  account  or for one or more  accounts  as to each of  which we
         exercise sole investment discretion.
                                      F-2
<PAGE>

                  You and the Company are entitled to rely upon this certificate
and are irrevocably  authorized to produce this  certificate or a copy hereof to
any  interested  party in any  administrative  or legal  proceedings or official
inquiry with respect to the matters covered hereby.

                                          [Name of Transferee]

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

                                      F-3EXHIBIT (4)-7
================================================================================

                          REGISTRATION RIGHTS AGREEMENT

                          Dated as of February 1, 2001

                                  By and Among

                            HEALTHSOUTH CORPORATION,
                                   as Issuer,

                                       and

                                UBS WARBURG LLC,
                         DEUTSCHE BANC ALEX. BROWN INC.,
                             CHASE SECURITIES INC.,
                          FIRST UNION SECURITIES, INC.,
                                       and
                            SCOTIA CAPITAL (USA) INC.
                              as Initial Purchasers

                          8 1/2% Senior Notes due 2008

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

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

1.       Definitions...........................................................1

2.       Exchange Offer........................................................4

3.       Shelf Registration....................................................7

4.       Additional Interest...................................................8

5.       Registration Procedures..............................................10

6.       Registration Expenses................................................18

7.       Indemnification......................................................18

8.       Rules 144 and 144A...................................................21

9.       Underwritten Registrations...........................................22

10.      Miscellaneous........................................................22

         (a)      No Inconsistent Agreements..................................22
         (b)      Adjustments Affecting Registrable Notes.....................22
         (c)      Amendments and Waivers......................................22
         (d)      Notices.....................................................23
         (e)      Successors and Assigns......................................23
         (f)      Counterparts................................................24
         (g)      Headings................................................... 24
         (H)      GOVERNING LAW...............................................24
         (i)      Severability................................................24
         (j)      Securities Held by the Issuer or Its Affiliates.............24
         (k)      Third Party Beneficiaries...................................24
         (l)      Attorneys' Fees.............................................24
         (m)      Entire Agreement............................................24

                                       -i-
<PAGE>

                          REGISTRATION RIGHTS AGREEMENT

                  This Registration Rights Agreement (this "Agreement") is dated
as of  February  1,  2001,  by and among  HEALTHSOUTH  Corporation,  a  Delaware
corporation (the "Issuer"),  on the one hand, and UBS WARBURG LLC, DEUTSCHE BANC
ALEX. BROWN INC., CHASE SECURITIES INC., FIRST UNION SECURITIES, INC. and SCOTIA
CAPITAL (USA) INC. (collectively, the "Initial Purchasers"), on the other hand.

                  This Agreement is entered into in connection with the Purchase
Agreement,  dated as of January  25,  2001,  among the  Issuer  and the  Initial
Purchasers (the "Purchase  Agreement"),  relating to the $375,000,000  aggregate
principal  amount of the Issuer's 8 1/2% Senior  Notes due 2008  (the  "Notes").
The  execution  and  delivery of this  Agreement  is a condition  to the Initial
Purchasers' obligation to purchase the Notes under the Purchase Agreement.

                  The parties hereby agree as follows:

         Section 1. Definitions

                  As used in this Agreement,  the following terms shall have the
following meanings:

                  "Additional  Interest"  shall  have the  meaning  set forth in
Section 4(a) hereof.

                  "Advice"  shall  have  the  meaning  set  forth  in the  final
paragraph of Section 5 hereof.

                  "Agreement"   shall  have  the   meaning   set  forth  in  the
introductory paragraph hereto.

                  "Applicable  Period"  shall  have  the  meaning  set  forth in
Section 2(b) hereof.

                  "Business Day" shall mean a day that is not a Legal Holiday.

                  "Commission"   shall   mean  the   Securities   and   Exchange
Commission.

                  "day" means a calendar day.

                  "Effectiveness Period" shall have the meaning set forth in the
second paragraph of Section 3(a) hereof.

                  "Event  Date" shall have the meaning set forth in Section 4(b)
hereof.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as  amended,  and  the  rules  and  regulations  of the  Commission  promulgated
thereunder.

                  "Exchange  Notes"  shall have the meaning set forth in Section
2(a) hereof.

                  "Exchange  Offer"  shall have the meaning set forth in Section
2(a) hereof.

<PAGE>

                  "Exchange Offer Registration Statement" shall have the meaning
set forth in Section 2(a) hereof.

                  "Holder"  shall  mean  any  holder  of a  Registrable  Note or
Registrable Notes.

                  "Indemnified  Person"  shall  have the  meaning  set  forth in
Section 7(c) hereof.

                  "Indemnifying  Person"  shall  have the  meaning  set forth in
Section 7(c) hereof.

                  "Indenture" shall mean the Indenture,  dated as of February 1,
2001, by and among the Issuer and The Bank of New York, as trustee,  pursuant to
which the Notes are being issued,  as amended or supplemented  from time to time
in accordance with the terms thereof.

                  "Initial  Purchasers"  shall have the meaning set forth in the
preamble hereof.

                  "Initial Shelf  Registration" shall have the meaning set forth
in Section 3(a) hereof.

                  "Inspectors"  shall have the meaning set forth in Section 5(n)
hereof.

                  "Issue Date" shall mean February 1, 2001, the date of original
issuance of the Notes.

                  "Issuer" shall have the meaning set forth in the  introductory
paragraph  hereto and shall also include the Issuer's  permitted  successors and
assigns.

                  "Legal Holiday" shall mean a Saturday,  a Sunday,  a federally
recognized holiday or a day on which banking institutions are not required to be
open in the State of New York.

                  "NASD"  shall  have the  meaning  set  forth in  Section  5(s)
hereof.

                  "Notes"  shall  have  the  meaning  set  forth  in the  second
introductory paragraph hereto.

                  "Participant" shall have the meaning set forth in Section 7(a)
hereof.

                  "Participating Broker-Dealer" shall have the meaning set forth
in Section 2(b) hereof.

                  "Person"  shall  mean  an  individual,  trustee,  corporation,
partnership,  joint stock company,  trust,  unincorporated  association,  union,
business  association,  firm,  government  or  agency or  political  subdivision
thereof or other legal entity.

                  "Private Exchange" shall have the meaning set forth in Section
2(b) hereof.

                  "Private  Exchange  Notes" shall have the meaning set forth in
Section 2(b) hereof.

                  "Prospectus"  shall  mean  the  prospectus   included  in  any
Registration Statement (including, without limitation, any prospectus subject to
completion and a prospectus  that includes any  information  previously  omitted
from a  prospectus  filed  as part of an  effective  registration  statement  in

                                      -2-
<PAGE>

reliance upon Rule 430A  promulgated  under the  Securities  Act), as amended or
supplemented  by  any  prospectus  supplement,  and  all  other  amendments  and
supplements to the  Prospectus,  including  post-effective  amendments,  and all
material  incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

                  "Purchase  Agreement"  shall have the meaning set forth in the
introductory paragraphs hereof.

                  "Records"  shall have the  meaning  set forth in Section  5(n)
hereof.

                  "Registrable  Notes"  shall  mean each Note upon its  original
issuance and at all times  subsequent  thereto,  each  Exchange Note as to which
Section  2(c)(iv) hereof is applicable  upon original  issuance and at all times
subsequent thereto and each Private Exchange Note upon original issuance thereof
and at all times subsequent thereto,  until (i) a Registration  Statement (other
than,  with respect to any Exchange Note as to which Section  2(c)(iv) hereof is
applicable,  the Exchange  Offer  Registration  Statement)  covering  such Note,
Exchange  Note or  Private  Exchange  Note has been  declared  effective  by the
Commission  and such Note,  Exchange Note or such Private  Exchange Note, as the
case may be, has been disposed of in accordance with such effective Registration
Statement,  (ii) such Note has been exchanged pursuant to the Exchange Offer for
one or more Exchange  Notes that may be resold without  restriction  under state
and federal securities laws, (iii) such Note,  Exchange Note or Private Exchange
Note, as the case may be, ceases to be outstanding for purposes of the Indenture
or (iv) the date on which any such Note,  Exchange Note or Private Exchange Note
is  distributed  to the public  pursuant to Rule 144 or is saleable  pursuant to
Rule 144(k) under the Securities Act.

                  "Registration  Default"  shall have the  meaning  set forth in
Section 4(a) hereof.

                  "Registration    Statement"   shall   mean   any   appropriate
registration  statement  of the Issuer  covering  any of the  Registrable  Notes
pursuant to the provisions of this Agreement, including, but not limited to, the
Exchange  Offer  Registration  Statement,  filed with the  Commission  under the
Securities  Act, and all  amendments and  supplements  to any such  Registration
Statement,  including  post-effective  amendments,  in each case  including  the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.

                  "Requesting   Participating   Broker-Dealer"  shall  have  the
meaning set forth in Section 2(b) hereof.

                  "Rule  144"  shall  mean  Rule  144   promulgated   under  the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule (other than Rule 144A) or regulation  hereafter  adopted by the  Commission
providing  for  offers  and sales of  securities  made in  compliance  therewith
resulting in offers and sales by subsequent  holders that are not  affiliates of
an issuer of such  securities  being  free of the  registration  and  prospectus
delivery requirements of the Securities Act.

                                      -3-
<PAGE>

                  "Rule  144A"  shall  mean  Rule  144A  promulgated  under  the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule (other than Rule 144) or regulation hereafter adopted by the Commission.

                  "Rule  415"  shall  mean  Rule  415   promulgated   under  the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
rule or regulation hereafter adopted by the Commission.

                  "Securities  Act" shall mean the  Securities  Act of 1933,  as
amended, and the rules and regulations of the Commission promulgated thereunder.

                  "Shelf  Filing  Event"  shall  have the  meaning  set forth in
Section 2(c) hereof.

                  "Shelf  Registration"  shall  have the  meaning  set  forth in
Section 3(b) hereof.

                  "Subsequent  Shelf  Registration"  shall have the  meaning set
forth in Section 3(b) hereof.

                  "TIA" shall mean the Trust Indenture Act of 1939, as amended.

                  "Trustee"  shall mean the trustee  under the Indenture and the
trustee (if any) under any indenture  governing  the Exchange  Notes and Private
Exchange Notes.

                  "Underwritten  registration  or  underwritten  offering" shall
mean a registration in which securities of the Issuer are sold to an underwriter
for reoffering to the public.

         Section 2. Exchange Offer

                  (a) The Issuer  shall,  at the Issuer's  cost (as set forth in
Section 6 hereof), (i) file (or confidentially  submit) a Registration Statement
(the "Exchange  Offer  Registration  Statement")  within 60 days after the Issue
Date with the Commission on an appropriate  registration  form with respect to a
registered  offer  (the  "Exchange  Offer")  to  exchange  any  and  all  of the
Registrable Notes for a like aggregate  principal amount of notes (the "Exchange
Notes") that are  identical in all material  respects to the Notes  (except that
the Exchange Notes shall not contain terms with respect to transfer restrictions
or Additional Interest upon a Registration  Default) and (ii) use its reasonable
best efforts to cause the Exchange Offer  Registration  Statement to be declared
effective  under the Securities Act on or prior to 120 days after the Issue Date
and (iii) use its reasonable best efforts to consummate the Exchange Offer on or
prior to 150 days after the Issue Date.  Upon the  Exchange  Offer  Registration
Statement being declared effective by the Commission,  the Issuer will offer the
Exchange Notes in exchange for surrender of the Notes. The Issuer shall keep the
Exchange Offer open for not less than 20 Business Days (or longer if required by
applicable  law)  after  the date  notice  of the  Exchange  Offer is  mailed to
Holders.

                  Each Holder that  participates  in the Exchange  Offer will be
required to  represent  to the Issuer in writing  that (i) such Holder is not an
affiliate  of the Issuer  within the  meaning of the  Securities  Act,  (ii) any
Exchange  Notes to be received by it will be acquired in the ordinary  course of

                                      -4-
<PAGE>

its business,  (iii) at the time of the  commencement of the Exchange Offer such
Holder will have no arrangement or understanding  with any Person to participate
in the distribution (as such term is used in the Securities Act) of the Exchange
Notes in violation of the provisions of the Securities  Act, (iv) if such Holder
is not a broker-dealer, that it is not engaged in, and does not intend to engage
in, a distribution  of Exchange Notes and (v) if such Holder is a  broker-dealer
that will receive  Exchange Notes for its own account in exchange for Notes that
were acquired as a result of market-making or other trading activities,  it will
deliver a Prospectus in connection with any resale of such Exchange Notes.

                  Upon  consummation  of the Exchange  Offer in accordance  with
this  Section 2, the  provisions  of this  Agreement  shall  continue  to apply,
mutatis  mutandis,  solely with  respect to  Registrable  Notes that are Private
Exchange  Notes,  Exchange Notes as to which Section  2(c)(iv) is applicable and
Exchange Notes held by Participating Broker-Dealers (as defined), and the Issuer
shall have no further  obligation  to  register  Registrable  Notes  (other than
Private  Exchange  Notes and other than in respect of any  Exchange  Notes as to
which  clause  2(c)(iv)  hereof  applies)  pursuant  to  Section  3  hereof.  No
securities other than the Exchange Notes shall be included in the Exchange Offer
Registration Statement.

                  (b) The Issuer and the Initial Purchasers acknowledge that the
staff of the  Commission  has taken the  position  that any  broker-dealer  that
elects to exchange  Notes that were acquired by such  broker-dealer  for its own
account as a result of  market-making  or other trading  activities for Exchange
Notes in the Exchange Offer (a "Participating  Broker-Dealer")  may be deemed to
be an "underwriter"  within the meaning of the Securities Act and must deliver a
Prospectus meeting the requirements of the Securities Act in connection with any
resale of such  Exchange  Notes  (other  than a resale  of an  unsold  allotment
resulting from the original offering of the Notes).

                  The Issuer and the Initial Purchasers also acknowledge that it
is the staff of the  Commission's  position that if the Prospectus  contained in
the  Exchange  Offer  Registration  Statement  includes  a plan of  distribution
containing a statement to the above effect and the means by which  Participating
Broker-Dealers  may resell the Exchange Notes,  without naming the Participating
Broker-Dealers  or specifying the amount of Exchange  Notes owned by them,  such
Prospectus  may be delivered by  Participating  Broker-Dealers  to satisfy their
prospectus  delivery  obligations  under the Securities  Act in connection  with
resales of  Exchange  Notes for their own  accounts,  so long as the  Prospectus
otherwise meets the requirements of the Securities Act.

                  In light of the  foregoing,  if requested  by a  Participating
Broker-Dealer (a "Requesting Participating Broker-Dealer"), the Issuer agrees to
use  its  reasonable  best  efforts  to keep  the  Exchange  Offer  Registration
Statement  continuously  effective for a period of up to 180 days after the date
on which the Exchange Offer  Registration  Statement is declared  effective,  or
such longer  period if  extended  pursuant  to the last  paragraph  of Section 5
hereof  (such  period,  the  "Applicable  Period"),  or such earlier date as all
Requesting  Participating  Broker-Dealers  shall  have  notified  the  Issuer in
writing  that such  Requesting  Participating  Broker-Dealers  have  resold  all
Exchange Notes acquired in the Exchange  Offer.  The Issuer shall include a plan
of  distribution  in such Exchange Offer  Registration  Statement that meets the
requirements set forth in the preceding paragraph.

                                      -5-
<PAGE>

                  If, prior to consummation  of the Exchange  Offer,  any Holder
holds any Notes  acquired by it that have, or that are  reasonably  likely to be
determined  to  have,   the  status  of  an  unsold   allotment  in  an  initial
distribution,  or if any Holder is not entitled to  participate  in the Exchange
Offer, the Issuer upon the request of any such Holder shall, simultaneously with
the delivery of the Exchange Notes in the Exchange  Offer,  issue and deliver to
any such Holder, in exchange (the "Private Exchange") for such Notes held by any
such Holder, a like principal amount of notes (the "Private  Exchange Notes") of
the Issuer that are  identical in all material  respects to the Exchange  Notes.
The Private Exchange Notes shall be issued pursuant to the same indenture as the
Exchange Notes and bear the same CUSIP number as the Exchange Notes.

                  In connection with the Exchange Offer, the Issuer shall:

                  (1)  mail  to  each  Holder  entitled  to  participate  in the
         Exchange  Offer a copy of the  Prospectus  forming part of the Exchange
         Offer  Registration  Statement,  together with an appropriate letter of
         transmittal and related documents;

                  (2) utilize  the  services of a  depositary  for the  Exchange
         Offer  with an address in the  Borough  of  Manhattan,  The City of New
         York;

                  (3) permit  Holders  to  withdraw  tendered  Notes at any time
         prior to the close of business, New York time, on the last Business Day
         on which the Exchange Offer shall remain open; and

                  (4)  otherwise  comply  in  all  material  respects  with  all
         applicable laws, rules and regulations.

                  As soon as  practicable  after the close of the Exchange Offer
and the Private Exchange, if any, the Issuer shall:

                  (1) accept for  exchange  all Notes  validly  tendered and not
         validly  withdrawn  pursuant  to the  Exchange  Offer  and the  Private
         Exchange;

                  (2)  deliver  to the  Trustee  for  cancellation  all Notes so
         accepted for exchange; and

                  (3) cause the Trustee to authenticate  and deliver promptly to
         each Holder of Notes Exchange Notes or Private  Exchange  Notes, as the
         case may be, equal in  principal  amount to the Notes of such Holder so
         accepted for exchange.

                  The  Exchange  Offer  and the  Private  Exchange  shall not be
subject to any  conditions,  other than that (i) the  Exchange  Offer or Private
Exchange,  as the case may be, does not violate applicable law or any applicable
interpretation  of the staff of the  Commission,  (ii) no  action or  proceeding
shall have been  instituted or  threatened  in any court or by any  governmental
agency which might  materially  impair the ability of the Issuer to proceed with
the Exchange Offer or the Private Exchange,  and no material adverse development
shall have  occurred in any existing  action or  proceeding  with respect to the
Issuer and (iii) all  governmental  approvals  shall have been  obtained,

                                      -6-
<PAGE>

which approvals the Issuer deems necessary for the  consummation of the Exchange
Offer or Private Exchange.

                  The  Exchange  Notes and the Private  Exchange  Notes shall be
issued under (i) the  Indenture  or (ii) an indenture  identical in all material
respects to the Indenture (in either case, with such changes as are necessary to
comply  with any  requirements  of the  Commission  to  effect or  maintain  the
qualification  thereof  under  the TIA) and  which,  in  either  case,  has been
qualified  under the TIA and shall provide that the Exchange  Notes shall not be
subject to the transfer  restrictions  set forth in the  Indenture or Additional
Interest upon a  Registration  Default.  The Indenture or such  indenture  shall
provide that the Exchange Notes,  the Private Exchange Notes and the Notes shall
vote and  consent  together  on all  matters  as one  class and that none of the
Exchange Notes,  the Private  Exchange Notes or the Notes will have the right to
vote or consent as a separate class on any matter.

                  (c) In the event that (i) any changes in law or the applicable
interpretations  of the staff of the  Commission  do not  permit  the  Issuer to
effect the  Exchange  Offer,  (ii) if for any reason the  Exchange  Offer is not
consummated  within  150 days of the Issue  Date,  (iii) any  Holder of  Private
Exchange Notes so requests;  or (iv) in the case of any Holder that participates
in the Exchange Offer,  such Holder does not receive  Exchange Notes on the date
of the exchange that may be sold without  restriction  under federal  securities
laws (other than due solely to the status of such Holder as an  affiliate of the
Issuer within the meaning of the Securities Act) (each such event referred to in
clauses (i) through (iv) of this  sentence,  a "Shelf Filing  Event"),  then the
Issuer shall file a Shelf Registration pursuant to Section 3 hereof.

         Section 3. Shelf Registration

                  If at any time a Shelf Filing Event shall occur, then:

                  (a)  Shelf  Registration.  The  Issuer  shall  file  with  the
Commission a  Registration  Statement for an offering to be made on a continuous
basis pursuant to Rule 415 covering all of the  Registrable  Notes not exchanged
in the Exchange  Offer,  Private  Exchange  Notes and Exchange Notes as to which
Section  2(c)(iv) is applicable (the "Initial Shelf  Registration").  The Issuer
shall use its  reasonable  best efforts to file with the  Commission the Initial
Shelf  Registration  as promptly as  practicable,  but in no event later than 45
days after the Issuer has notice of the Shelf Filing  Event.  The Initial  Shelf
Registration  shall  be on  Form  S-3 or  another  appropriate  form  permitting
registration  of such  Registrable  Notes for resale by Holders in the manner or
manners  designated  by  them  (including,   without  limitation,  one  or  more
underwritten  offerings).  The Issuer shall not permit any securities other than
the  Registrable  Notes to be included in the Initial Shelf  Registration or any
Subsequent Shelf Registration (as defined below).

                  The Issuer shall use its reasonable  best efforts (x) to cause
the Initial Shelf Registration to be declared effective under the Securities Act
on or prior to the later of the 60th day after  the  Shelf  Filing  Event or the
150th day after the Issue Date and (y) to keep the  Initial  Shelf  Registration
continuously  effective  under the  Securities  Act for the period ending on the
date which is two years from the Issue Date,  subject to  extension  pursuant to
the last  paragraph of Section 5 hereof (the  "Effectiveness  Period"),  or such
shorter  period  ending when (i) all  Registrable  Notes  covered by

                                      -7-
<PAGE>

the  Initial  Shelf  Registration  have been sold in the manner set forth and as
contemplated  in the  Initial  Shelf  Registration  or (ii) a  Subsequent  Shelf
Registration covering all of the Registrable Notes covered by and not sold under
the Initial Shelf  Registration or an earlier  Subsequent Shelf Registration has
been declared  effective under the Securities Act; provided,  however,  that the
Effectiveness  Period in  respect of the  Initial  Shelf  Registration  shall be
extended to the extent  required to permit dealers to comply with the applicable
prospectus  delivery  requirements  of Rule 174 under the  Securities Act and as
otherwise provided herein;  provided,  further,  that the Issuer may suspend the
effectiveness of a Shelf Registration Statement by written notice to the Holders
for a period not to exceed 30 days in any  calendar  year if (i) an event occurs
and is continuing as a result of which the Shelf  Registration  Statement would,
in the Issuer's good faith judgment,  contain an untrue  statement of a material
fact or omit to state a material fact  necessary in order to make the statements
therein not misleading and (ii) (a) the Issuer determines in good faith that the
disclosure  of such event at such time would have a material  adverse  effect on
the business, operations or prospects of the Issuer and its subsidiaries,  taken
as a whole, or (b) the disclosure otherwise relates to a previously  undisclosed
pending material business transaction,  the disclosure of which would impede the
Issuer's ability to consummate such transaction.

                  (b)  Subsequent  Shelf  Registrations.  If the  Initial  Shelf
Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time during the  Effectiveness  Period  (other than because of the
sale of all of the securities registered  thereunder),  the Issuer shall use its
reasonable best efforts to obtain the prompt  withdrawal of any order suspending
the effectiveness  thereof,  and in any event shall as soon as practicable after
such cessation amend the Initial Shelf  Registration  or such  Subsequent  Shelf
Registration,  as the case may be, in a manner to obtain the  withdrawal  of the
order  suspending  the  effectiveness  thereof,  or file an  additional  "shelf"
Registration  Statement  pursuant to Rule 415  covering  all of the  Registrable
Notes  covered  by and not sold under the  Initial  Shelf  Registration  or such
earlier Subsequent Shelf Registration (each, a "Subsequent Shelf Registration").
If a Subsequent Shelf Registration is filed, the Issuer shall use its reasonable
best efforts to cause the Subsequent Shelf Registration to be declared effective
under the Securities  Act as soon as  practicable  after such filing and to keep
such  Registration  Statement  continuously  effective for a period equal to the
number of days in the  Effectiveness  Period less the  aggregate  number of days
during  which  the  Initial  Shelf   Registration   and  any  Subsequent   Shelf
Registration was previously  continuously  effective.  As used herein,  the term
"Shelf  Registration"  means the Initial Shelf  Registration  and any Subsequent
Shelf Registration.

                  (c)  Supplements  and  Amendments.  The Issuer shall  promptly
supplement  and  amend  the  Shelf   Registration  if  required  by  the  rules,
regulations or instructions  applicable to the  registration  form used for such
Shelf  Registration,  if  required  by  the  Securities  Act,  or if  reasonably
requested  by the Holders of a majority  in  aggregate  principal  amount of the
Registrable Notes covered by such  Registration  Statement or by any underwriter
of such Registrable Notes.

         Section 4. Additional Interest

                  (a) The  Issuer  and the  Initial  Purchasers  agree  that the
Holders will suffer damages if the Issuer fails to fulfill its obligations under
Section 2 or Section 3 hereof and that it would not be feasible to ascertain the
extent of such damages with precision. Accordingly, in the event that:

                                      -8-
<PAGE>

         (i) the  Issuer  does  not  file (or  confidentially  submit)  with the
         Commission  on or prior to the 60th day  following  the Issue Date,  or
         cause to become  effective on or prior to the 120th day  following  the
         Issue Date, the Exchange Offer Registration Statement,

         (ii) the Issuer is obligated to file the Shelf  Registration  Statement
         and such Shelf Registration  Statement is not filed with the Commission
         on or prior to the 45th day  following the date on which the Issuer has
         notice of the Shelf Filing Event or such Shelf  Registration  Statement
         is not  declared  effective  on or prior  to the  later of the 60th day
         following  the Shelf Filing Event or the 150th day  following the Issue
         Date,

         (iii) the Issuer fails to consummate  the Exchange Offer on or prior to
         the 150th day following the Issue Date or

         (iv)  the  Shelf   Registration   Statement  or  the   Exchange   Offer
         Registration  Statement is declared  effective but thereafter ceases to
         be  declared   effective  or  usable  in  connection  with  resales  of
         Registrable Notes during the periods  specified  herein,  except if the
         Shelf Registration or the Exchange Offer Registration  Statement ceases
         to be effective or usable as specifically permitted herein or solely as
         a result of (x) the filing of a post-effective  amendment to such Shelf
         Registration   Statement  to  incorporate   annual  audited   financial
         information  with  respect  to the  Issuer  where  such  post-effective
         amendment is not yet  effective  and needs to be declared  effective to
         permit  holders to use the  related  Prospectus  or (y) other  material
         events,  with respect to the Issuer, that would need to be described in
         such Shelf Registration Statement or the related Prospectus and, in the
         case of this clause (y), the Issuer is proceeding  promptly and in good
         faith to amend or supplement  the Shelf  Registration  Statement or the
         Exchange  Offer  Registration   Statement  and  related  Prospectus  to
         describe such events

(each such event referred to in clauses (i) through (iv) above, a  "Registration
Default"), then the Issuer shall pay, as liquidated damages, additional interest
("Additional  Interest")  on the  Registrable  Notes  in cash  on each  Interest
Payment Date (as defined in the  Indenture) in an amount equal to one-quarter of
one  percent  (0.25%)  per  annum  of  the  aggregate  principal  amount  of the
Registrable  Notes,  with  respect to the first  90-day  period  following  such
Registration Default. The amount of such Additional Interest will increase by an
additional one-quarter of one percent (0.25%) to a maximum of one percent (1.0%)
per annum of the aggregate  principal  amount of the Registrable  Notes for each
subsequent  90-day period until such  Registration  Default has been cured. Upon
(1) the filing (or confidential  submission) of the Exchange Offer  Registration
Statement  after the  60-day  period  described  in clause  (i)  above,  (2) the
effectiveness  of the Exchange Offer  Registration  Statement  after the 120-day
period   described  in  clause  (i)  above,  (3)  the  filing  (or  confidential
submission)  of  the  Shelf  Registration  Statement  after  the  45-day  period
described in clause (ii) above, (4) the effectiveness of the Shelf  Registration
Statement  after the 60-day  period or the 150-day  period,  as the case may be,
described in clause (ii) above, (5) the consummation of the Exchange Offer after
the 150-day  period  described  in clause  (iii)  above,  or (6) the cure of any
Registration  Default described in clause (iv) above, the interest rate borne by
the Notes from the date of such filing,  effectiveness or  consummation,  as the
case may be,  will be reduced  to the  original  interest  rate if the Issuer is
otherwise in compliance with this paragraph;  provided,  however, that if, after
any such reduction in interest rate, a different

                                      -9-
<PAGE>

event specified above occurs,  the interest rate may again be increased pursuant
to the foregoing provisions.

                  (b) The Issuer  shall  notify the Trustee  within one Business
Day after  each and every  date on which an event  occurs  in  respect  of which
Additional  Interest is required  to be paid (an "Event  Date").  Any amounts of
Additional  Interest due pursuant to Section 4(a) hereof will be payable in cash
semi-annually  on the Interest  Payment Dates specified in the Indenture (to the
holders of record as specified in the Indenture), commencing with the first such
Interest Payment Date occurring after any such Additional  Interest commences to
accrue. The amount of Additional  Interest will be determined by multiplying the
applicable  Additional  Interest rate by the principal amount of the Registrable
Notes,  multiplied  by a fraction,  the numerator of which is the number of days
such Additional  Interest rate was applicable during such period  (determined on
the basis of a 360-day year  comprised of twelve  30-day months and, in the case
of a partial month,  the actual number of days elapsed),  and the denominator of
which is 360.

         Section 5. Registration Procedures

                  In connection  with the filing of any  Registration  Statement
pursuant to Section 2 or 3 hereof, the Issuer shall effect such registrations to
permit  the  sale of the  securities  covered  thereby  in  accordance  with the
intended method or methods of disposition  thereof,  and pursuant thereto and in
connection with any  Registration  Statement  filed by the Issuer  hereunder the
Issuer shall:

                  (a)  Prepare  and file  (or  confidentially  submit)  with the
         Commission,  a  Registration  Statement or  Registration  Statements as
         prescribed  by  Section  2 or 3  hereof,  and use its  reasonable  best
         efforts to cause each such  Registration  Statement to become effective
         and remain effective as provided herein;  provided,  however,  that, if
         (1) such filing is pursuant  to Section 3 hereof,  or (2) a  Prospectus
         contained in the Exchange Offer  Registration  Statement filed pursuant
         to Section 2 hereof is required to be  delivered  under the  Securities
         Act by any Participating Broker-Dealer who seeks to sell Exchange Notes
         during  the  Applicable  Period  relating  thereto,  before  filing any
         Registration  Statement or Prospectus or any  amendments or supplements
         thereto,  the Issuer  shall  furnish  to and afford the  Holders of the
         Registrable Notes covered by such  Registration  Statement or each such
         Participating Broker-Dealer,  as the case may be, their counsel and the
         managing  underwriters,  if any,  a  reasonable  opportunity  to review
         copies of all such documents  (including  copies of any documents to be
         incorporated by reference therein and all exhibits thereto) proposed to
         be  filed  (in each  case at least  five  Business  Days  prior to such
         filing).  The  Issuer  shall  not file any  Registration  Statement  or
         Prospectus or any amendments or supplements thereto if the Holders of a
         majority in aggregate principal amount of the Registrable Notes covered
         by   such   Registration   Statement,   or   any   such   Participating
         Broker-Dealer,  as the  case may be,  their  counsel,  or the  managing
         underwriters, if any, shall reasonably object.

                  (b) Prepare and file with the Commission  such  amendments and
         post-effective  amendments  to each  Shelf  Registration  Statement  or
         Exchange Offer  Registration  Statement,  as the case may be, as may be
         necessary to keep such Registration  Statement  continuously  effective
         for the Effectiveness  Period or the Applicable Period, as the case may
         be; cause the

                                      -10-
<PAGE>

         related  Prospectus to be  supplemented  by any  Prospectus  supplement
         required by applicable law, and as so supplemented to be filed pursuant
         to Rule 424 (or any similar provisions then in force) promulgated under
         the  Securities  Act; and comply with the  provisions of the Securities
         Act and the Exchange Act applicable to each of them with respect to the
         disposition of all securities covered by such Registration Statement as
         so amended or in such Prospectus as so supplemented and with respect to
         the subsequent  resale of any securities  being sold by a Participating
         Broker-Dealer  covered  by  any  such  Prospectus,  in  each  case,  in
         accordance with the intended  methods of distribution set forth in such
         Registration  Statement or Prospectus,  as so amended. The Issuer shall
         be  deemed  not to have  used its  reasonable  best  efforts  to keep a
         Registration Statement effective during the Effectiveness Period or the
         Applicable  Period,  as the case may be, relating thereto if the Issuer
         voluntarily  takes any action that would  result in selling  Holders of
         the Registrable  Notes covered thereby or Participating  Broker-Dealers
         seeking to sell Exchange Notes not being able to sell such  Registrable
         Notes or such  Exchange  Notes during that period unless such action is
         required by  applicable  law;  provided,  however,  that the Issuer may
         suspend the effectiveness of a Registration Statement by written notice
         to the Holders or the Participating  Broker-Dealers for a period not to
         exceed  30 days in any  calendar  year if (i) an  event  occurs  and is
         continuing as a result of which the  Registration  Statement  would, in
         the  Issuer's  good faith  judgment,  contain an untrue  statement of a
         material  fact or omit to state a material  fact  necessary in order to
         make the  statements  therein  not  misleading  and (ii) (a) the Issuer
         determines in good faith that the disclosure of such event at such time
         would have a material  adverse  effect on the  business,  operations or
         prospects of the Issuer and its subsidiaries,  taken as a whole, or (b)
         the disclosure  otherwise relates to a previously  undisclosed  pending
         material business transaction, the disclosure of which would impede the
         Issuer's ability to consummate such transaction.

                  (c) If (1) a Shelf Registration is filed pursuant to Section 3
         hereof,   or  (2)  a  Prospectus   contained  in  the  Exchange   Offer
         Registration  Statement  filed pursuant to Section 2 hereof is required
         to  be  delivered  under  the  Securities  Act  by  any   Participating
         Broker-Dealer  who seeks to sell Exchange  Notes during the  Applicable
         Period  relating  thereto,  notify the selling  Holders of  Registrable
         Notes, or each such  Participating  Broker-Dealer,  as the case may be,
         their  counsel and the  managing  underwriters,  if any, as promptly as
         possible,  and, if requested by any such Person, confirm such notice in
         writing,  (i)  when  a  Prospectus  or  any  Prospectus  supplement  or
         post-effective  amendment  has  been  filed,  and,  with  respect  to a
         Registration Statement or any post-effective  amendment,  when the same
         has become effective under the Securities Act (including in such notice
         a written  statement that any Holder may, upon request,  obtain, at the
         sole expense of the Issuer,  one  conformed  copy of such  Registration
         Statement or post-effective  amendment including  financial  statements
         and schedules,  documents  incorporated or deemed to be incorporated by
         reference and exhibits),  (ii) of the issuance by the Commission of any
         stop order suspending the effectiveness of a Registration  Statement or
         of any  order  preventing  or  suspending  the  use of any  preliminary
         prospectus or the initiation of any proceedings for that purpose, (iii)
         if at any time when a Prospectus is required by the  Securities  Act to
         be  delivered  in  connection  with sales of the  Registrable  Notes or
         resales  of  Exchange  Notes  by   Participating   Broker-Dealers   the
         representations and warranties of the Issuer contained in any agreement
         (including any  underwriting  agreement)  contemplated  by Section 5(m)
         hereof cease to be true and correct in

                                      -11-
<PAGE>

         all  material  respects,  (iv)  of the  receipt  by the  Issuer  of any
         notification  with respect to the  suspension of the  qualification  or
         exemption from qualification of a Registration  Statement or any of the
         Registrable Notes or the Exchange Notes to be sold by any Participating
         Broker-Dealer for offer or sale in any jurisdiction,  or the initiation
         or threatening of any proceeding for such purpose, (v) of the happening
         of any  event,  the  existence  of  any  condition  or any  information
         becoming  known to the  Issuer  that makes any  statement  made in such
         Registration   Statement   or  related   Prospectus   or  any  document
         incorporated or deemed to be incorporated  therein by reference  untrue
         in any material  respect or that  requires the making of any changes in
         or amendments or supplements to such Registration Statement, Prospectus
         or documents so that,  in the case of the  Registration  Statement,  it
         will not contain  any untrue  statement  of a material  fact or omit to
         state any material fact  required to be stated  therein or necessary to
         make the statements therein not misleading, and that in the case of the
         Prospectus, it will not contain any untrue statement of a material fact
         or omit to state any material  fact  necessary  to make the  statements
         therein,  in the light of the circumstances under which they were made,
         not  misleading,   and  (vi)  of  the  Issuer's  determination  that  a
         post-effective   amendment  to  a  Registration   Statement   would  be
         appropriate.

                   (d) If (1) a Shelf  Registration is filed pursuant to Section
         3  hereof,  or  (2)  a  Prospectus  contained  in  the  Exchange  Offer
         Registration  Statement  filed pursuant to Section 2 hereof is required
         to  be  delivered  under  the  Securities  Act  by  any   Participating
         Broker-Dealer  who seeks to sell Exchange  Notes during the  Applicable
         Period relating thereto, use its reasonable best efforts to prevent the
         issuance of any order  suspending the  effectiveness  of a Registration
         Statement  or of  any  order  preventing  or  suspending  the  use of a
         Prospectus  or  suspending   the   qualification   (or  exemption  from
         qualification) of any of the Registrable Notes or the Exchange Notes to
         be  sold  by  any   Participating   Broker-Dealer,   for  sale  in  any
         jurisdiction,  and, if any such order is issued,  to use its reasonable
         best efforts to obtain the withdrawal of any such order at the earliest
         practicable moment.

                   (e) If (1) a Shelf  Registration is filed pursuant to Section
         3 hereof and if requested by the managing  underwriter or  underwriters
         (if any),  the Holders of a majority in aggregate  principal  amount of
         the  Registrable  Notes being sold in connection  with an  underwritten
         offering,   or  (2)  a  Prospectus  contained  in  the  Exchange  Offer
         Registration  Statement  filed pursuant to Section 2 hereof is required
         to  be  delivered  under  the  Securities  Act  by  any   Participating
         Broker-Dealer  who seeks to sell Exchange  Notes during the  Applicable
         Period  relating   thereto  and  if  requested  by  any   Participating
         Broker-Dealer,  (i) promptly incorporate in a Prospectus  supplement or
         post-effective  amendment such information as the managing  underwriter
         or   underwriters   (if  any),   such  Holders  or  any   Participating
         Broker-Dealer  (based upon advice of counsel)  determine is  reasonably
         necessary to be included  therein,  (ii) make all  required  filings of
         such Prospectus supplement or such post-effective  amendment as soon as
         practicable  after the Issuer has received  notification of the matters
         to be  incorporated  in such  Prospectus  supplement or  post-effective
         amendment;  provided, however, that the Issuer shall not be required to
         take any action hereunder that would, in the written opinion of counsel
         to the Issuer,  violate  applicable  laws, and (iii) supplement or make
         amendments  to  such  Registration  Statement  (based  upon  advice  of
         counsel).

                                      -12-
<PAGE>

                   (f) If (1) a Shelf  Registration is filed pursuant to Section
         3  hereof,  or  (2)  a  Prospectus  contained  in  the  Exchange  Offer
         Registration  Statement  filed pursuant to Section 2 hereof is required
         to  be  delivered  under  the  Securities  Act  by  any   Participating
         Broker-Dealer  who seeks to sell Exchange  Notes during the  Applicable
         Period relating thereto,  furnish to each selling Holder of Registrable
         Notes and to each such Participating  Broker-Dealer who so requests and
         to counsel and each managing  underwriter,  if any, at the sole expense
         of the Issuer,  one  conformed  copy of the  Registration  Statement or
         Registration  Statements  and each  post-effective  amendment  thereto,
         including financial  statements and schedules,  and, if requested,  all
         documents   incorporated  or  deemed  to  be  incorporated  therein  by
         reference and all exhibits.

                   (g) If (1) a Shelf  Registration is filed pursuant to Section
         3  hereof,  or  (2)  a  Prospectus  contained  in  the  Exchange  Offer
         Registration  Statement  filed pursuant to Section 2 hereof is required
         to  be  delivered  under  the  Securities  Act  by  any   Participating
         Broker-Dealer  who seeks to sell Exchange  Notes during the  Applicable
         Period relating thereto,  deliver to each selling Holder of Registrable
         Notes, or each such  Participating  Broker-Dealer,  as the case may be,
         their respective counsel, and the underwriter or underwriters,  if any,
         at the sole expense of the Issuer,  as many copies of the Prospectus or
         Prospectuses  (including each form of preliminary  prospectus) and each
         amendment  or  supplement  thereto and any  documents  incorporated  by
         reference therein as such Persons may reasonably request;  and, subject
         to the last paragraph of this Section 5, the Issuer hereby  consents to
         the use of such Prospectus and each amendment or supplement  thereto by
         each  of  the  selling  Holders  of  Registrable  Notes  or  each  such
         Participating  Broker-Dealer,  as the case may be, and the underwriters
         or  agents,  if any,  and  dealers  (if any),  in  connection  with the
         offering and sale of the  Registrable  Notes covered by, or the sale by
         Participating  Broker-Dealers  of the Exchange  Notes pursuant to, such
         Prospectus and any amendment or supplement thereto.

                   (h) Prior to any public offering of Registrable  Notes or any
         delivery of a Prospectus  contained in the Exchange Offer  Registration
         Statement by any Participating Broker-Dealer who seeks to sell Exchange
         Notes during the Applicable  Period, use its reasonable best efforts to
         register  or qualify,  and to  cooperate  with the  selling  Holders of
         Registrable Notes or each such Participating Broker-Dealer, as the case
         may be, the managing  underwriter  or  underwriters,  if any, and their
         respective counsel in connection with the registration or qualification
         (or  exemption  from  such  registration  or  qualification)  of,  such
         Registrable  Notes for offer and sale under the  securities or Blue Sky
         laws of such  jurisdictions  within  the United  States as any  selling
         Holder,  Participating  Broker-Dealer,  or the managing  underwriter or
         underwriters reasonably request; provided, however, that where Exchange
         Notes held by  Participating  Broker-Dealers  or Registrable  Notes are
         offered other than through an underwritten  offering, the Issuer agrees
         to cause the Issuer's  counsel to perform Blue Sky  investigations  and
         file registrations and qualifications  required to be filed pursuant to
         this Section 5(h); and keep each such registration or qualification (or
         exemption  therefrom)  effective  during the period  such  Registration
         Statement  is  required to be kept  effective  and do any and all other
         acts  or  things  reasonably  necessary  or  advisable  to  enable  the
         disposition  in  such  jurisdictions  of the  Exchange  Notes  held  by
         Participating  Broker-Dealers  or the Registrable  Notes covered by the
         applicable Registration Statement;  provided,  however, that

                                      -13-
<PAGE>

         the  Issuer  shall  not be  required  to (A)  qualify  generally  to do
         business in any  jurisdiction  where it is not then so  qualified,  (B)
         take any action that would subject it to general  service of process in
         any such  jurisdiction  where it is not then so subject or (C)  subject
         itself to  taxation  in excess of a nominal  dollar  amount in any such
         jurisdiction where it is not then so subject.

                  (i) If a Shelf  Registration  is filed  pursuant  to Section 3
         hereof, cooperate with the selling Holders of Registrable Notes and the
         managing underwriter or underwriters,  if any, to facilitate the timely
         preparation and delivery of certificates representing Registrable Notes
         to be sold, which certificates  shall not bear any restrictive  legends
         and shall be in a form eligible for deposit with The  Depository  Trust
         Company;  and enable such Registrable Notes to be in such denominations
         and   registered  in  such  names  as  the  managing   underwriter   or
         underwriters, if any, or Holders may request at least two Business Days
         prior to any sale of such Registrable Notes.

                  (j) Use its reasonable  best efforts to cause the  Registrable
         Notes covered by the  Registration  Statement to be registered  with or
         approved by such other  governmental  agencies or authorities as may be
         reasonably  necessary  to enable the  seller or sellers  thereof or the
         underwriter or  underwriters,  if any, to consummate the disposition of
         such  Registrable  Notes,  except  as  may  be  required  solely  as  a
         consequence of the nature of such selling Holder's  business,  in which
         case the Issuer will  cooperate  in all  reasonable  respects  with the
         filing  of  such  Registration  Statement  and  the  granting  of  such
         approvals.

                  (k) If (1) a Shelf Registration is filed pursuant to Section 3
         hereof,   or  (2)  a  Prospectus   contained  in  the  Exchange   Offer
         Registration  Statement  filed pursuant to Section 2 hereof is required
         to  be  delivered  under  the  Securities  Act  by  any   Participating
         Broker-Dealer  who seeks to sell Exchange  Notes during the  Applicable
         Period relating thereto,  upon the occurrence of any event contemplated
         by paragraph  5(c)(v) or 5(c)(vi)  hereof,  as promptly as  practicable
         prepare and (subject to Section 5(a) hereof) file with the  Commission,
         at the sole  expense of the  Issuer,  a  supplement  or  post-effective
         amendment to the Registration  Statement or a supplement to the related
         Prospectus or any document  incorporated  or deemed to be  incorporated
         therein by reference,  or file any other required  document so that, as
         thereafter  delivered to the purchasers of the Registrable  Notes being
         sold thereunder or to the purchasers of the Exchange Notes to whom such
         Prospectus will be delivered by a Participating Broker-Dealer, any such
         Prospectus  will not contain an untrue  statement of a material fact or
         omit to  state  a  material  fact  required  to be  stated  therein  or
         necessary  to  make  the  statements  therein,  in  the  light  of  the
         circumstances under which they were made, not misleading.

                  (l)  Prior to the  effective  date of the  first  Registration
         Statement  relating to the Registrable  Notes,  (i) provide the Trustee
         with  certificates  for the  Registrable  Notes in a form  eligible for
         deposit  with The  Depository  Trust  Company and (ii)  provide a CUSIP
         number for the Registrable Notes.

                  (m)  In   connection   with  any   underwritten   offering  of
         Registrable  Notes  pursuant  to a Shelf  Registration,  enter  into an
         underwriting  agreement as is customary  in  underwritten  offerings of
         debt securities similar to the Notes and take all such other actions as
         are

                                      -14-
<PAGE>

         reasonably  requested by the managing  underwriter or  underwriters  in
         order to expedite or facilitate the  registration or the disposition of
         such  Registrable  Notes  and,  in  such  connection,   (i)  make  such
         representations and warranties to, and covenants with, the underwriters
         with  respect  to the  business  of the  Issuer  and  its  subsidiaries
         (including any acquired business,  properties or entity, if applicable)
         and the  Registration  Statement,  Prospectus  and  documents,  if any,
         incorporated or deemed to be incorporated by reference therein, in each
         case,  as  are   customarily   made  by  issuers  to   underwriters  in
         underwritten  offerings of debt securities similar to the Notes (but in
         no  event   materially  more  extensive  than  those  in  the  Purchase
         Agreement), and confirm the same in writing if and when requested; (ii)
         use its  reasonable  best  efforts to obtain the  written  opinions  of
         counsel to the Issuer and written  updates  thereof in form,  scope and
         substance  reasonably  satisfactory  to  the  managing  underwriter  or
         underwriters,  addressed  to  the  underwriters  covering  the  matters
         customarily covered in opinions requested in underwritten offerings and
         such  other  matters as may be  reasonably  requested  by the  managing
         underwriter or underwriters  (but in no event materially more extensive
         than  those  required  by  the  Purchase  Agreement);   (iii)  use  its
         reasonable  best efforts to obtain "cold  comfort"  letters and updates
         thereof in form,  scope and substance  reasonably  satisfactory  to the
         managing  underwriter or underwriters  from the  independent  certified
         public  accountants  of  the  Issuer  (and,  if  necessary,  any  other
         independent  certified  public  accountants  of any  subsidiary  of the
         Issuer or of any  business  acquired by the Issuer for which  financial
         statements and financial  data are, or are required to be,  included or
         incorporated by reference in the Registration Statement),  addressed to
         each of the  underwriters,  such  letters to be in  customary  form and
         covering  matters of the type  customarily  covered  in "cold  comfort"
         letters in  connection  with  underwritten  offerings  (but in no event
         materially   more   extensive  than  those  required  by  the  Purchase
         Agreement);  and (iv) if an underwriting agreement is entered into, the
         same shall contain  indemnification  provisions  and procedures no less
         favorable  than  those set forth in  Section  7 hereof  (or such  other
         provisions  and  procedures  acceptable  to Holders  of a  majority  in
         aggregate  principal  amount  of  Registrable  Notes  covered  by  such
         Registration  Statement and the managing underwriter or underwriters or
         agents) with respect to all parties to be indemnified  pursuant to said
         Section.   The  above  shall  be  done  at  each  closing   under  such
         underwriting agreement, or as and to the extent required thereunder.

                  (n) If (1) a Shelf Registration is filed pursuant to Section 3
         hereof,   or  (2)  a  Prospectus   contained  in  the  Exchange   Offer
         Registration  Statement  filed pursuant to Section 2 hereof is required
         to  be  delivered  under  the  Securities  Act  by  any   Participating
         Broker-Dealer  who seeks to sell Exchange  Notes during the  Applicable
         Period relating  thereto,  make available for inspection by any selling
         Holder of such Registrable Notes being sold, or each such Participating
         Broker-Dealer, as the case may be, any underwriter participating in any
         such  disposition  of  Registrable  Notes,  if any,  and any  attorney,
         accountant or other agent  retained by any such selling  Holder or each
         such  Participating  Broker-Dealer,  as the case may be, or underwriter
         (collectively,  the "Inspectors"),  at the offices where normally kept,
         during  reasonable  business  hours,  all financial and other  records,
         pertinent  corporate  documents and  instruments  of the Issuer and its
         subsidiaries  (collectively,  the  "Records")  as shall  be  reasonably
         necessary  to enable  them to exercise  any  applicable  due  diligence
         responsibilities,  and cause the  officers,  directors,  employees  and
         agents of the Issuer  and its  subsidiaries  to supply all  information
         reasonably  requested  by any such  Inspector in  connection  with such

                                      -15-
<PAGE>

         Registration  Statement and  Prospectus.  Each Inspector shall agree in
         writing  that  it  will  not  disclose  any  records  that  the  Issuer
         determines,  in good faith, to be confidential and that it notifies the
         Inspectors  in writing are  confidential  unless (i) the  disclosure of
         such  Records  is  necessary  to avoid or  correct  a  misstatement  or
         omission in such Registration Statement or Prospectus, (ii) the release
         of such Records is ordered pursuant to a subpoena or other order from a
         court of competent  jurisdiction,  (iii) disclosure of such information
         is necessary or advisable in connection with any action, claim, suit or
         proceeding, directly or indirectly,  involving or potentially involving
         such  Inspector  and  arising  out of,  based  upon,  relating  to,  or
         involving this Agreement or the Purchase Agreement, or any transactions
         contemplated  hereby or thereby or arising hereunder or thereunder,  or
         (iv) the information in such Records has been made generally  available
         to the  public  other than by an act or a failure to act by a Holder or
         an Inspector;  provided,  however,  that such Inspector shall take such
         actions as are reasonably  necessary to protect the  confidentiality of
         such  information  (if  practicable)  to  the  extent  such  action  is
         otherwise not  inconsistent  with, an impairment of or in derogation of
         the rights and interests of the Holder or any Inspector.

                  (o) Provide an indenture  trustee for the Registrable Notes or
         the Exchange  Notes, as the case may be, and cause the Indenture or any
         other  indenture  provided for in Section 2(a) hereof,  as the case may
         be, to be qualified  under the TIA not later than the effective date of
         the first Registration  Statement relating to the Registrable Notes; in
         connection  therewith,  cooperate  with  the  trustee  under  any  such
         indenture  and the  Holders of the  Registrable  Notes,  to effect such
         changes to such  indenture as may be required for such  indenture to be
         so qualified in accordance with the terms of the TIA; and execute,  and
         use its reasonable  best efforts to cause such trustee to execute,  all
         documents  as may be  required to effect  such  changes,  and all other
         forms and documents  required to be filed with the Commission to enable
         such indenture to be so qualified in a timely manner.

                  (p) Comply with all  applicable  rules and  regulations of the
         Commission and make generally available to the Issuer's securityholders
         earnings  statements  satisfying the provisions of Section 11(a) of the
         Securities Act and Rule 158 thereunder (or any similar rule promulgated
         under  the  Securities  Act) (i)  commencing  at the end of any  fiscal
         quarter in which  Registrable  Notes are sold to underwriters in a firm
         commitment or best efforts  underwritten  offering and (ii) if not sold
         to underwriters in such an offering, commencing on the first day of the
         first  fiscal  quarter  of the  Issuer  after the  effective  date of a
         Registration Statement.

                  (q) Upon  consummation  of the  Exchange  Offer  or a  Private
         Exchange,  use its  reasonable  best  efforts  to obtain an  opinion of
         counsel  to  the  Issuer,   in  a  form   customary  for   underwritten
         transactions,  addressed  to the Trustee for the benefit of all Holders
         of Registrable Notes participating in the Exchange Offer or the Private
         Exchange,  as the  case  may be,  that the  Exchange  Notes or  Private
         Exchange  Notes,  as  the  case  may  be,  and  the  related  indenture
         constitute  legal,  valid  and  binding   obligations  of  the  Issuer,
         enforceable against the Issuer in accordance with its respective terms,
         subject to customary exceptions and qualifications.

                  (r) If the  Exchange  Offer  or a  Private  Exchange  is to be
         consummated,  upon delivery of the Registrable  Notes by Holders to the
         Issuer (or to such other  Person as directed

                                      -16-
<PAGE>

         by the  Issuer)  in  exchange  for the  Exchange  Notes or the  Private
         Exchange  Notes,  as the case may be, mark,  or cause to be marked,  on
         such Registrable  Notes that such Registrable Notes are being cancelled
         in exchange for the Exchange Notes or the Private  Exchange  Notes,  as
         the case may be; in no event shall such Registrable  Notes be marked as
         paid or otherwise satisfied.

                  (s) Cooperate with each seller of Registrable Notes covered by
         any Registration Statement and each underwriter,  if any, participating
         in the  disposition  of such  Registrable  Notes and  their  respective
         counsel in  connection  with any  filings  required to be made with the
         National Association of Securities Dealers, Inc. (the "NASD").

                  (t) Use its  reasonable  best  efforts to take all other steps
         necessary or advisable to effect the  registration  of the  Registrable
         Notes covered by a Registration Statement contemplated hereby.

                  The Issuer may require each seller of Registrable  Notes as to
which  any  registration  is  being  effected  to  furnish  to the  Issuer  such
information regarding such seller and the distribution of such Registrable Notes
as the Issuer may, from time to time, reasonably request. The Issuer may exclude
from  such  registration  the  Registrable  Notes of any  seller so long as such
seller  fails to  furnish  such  information  within  a  reasonable  time  after
receiving such request.  Each seller as to which any Shelf Registration is being
effected agrees to furnish promptly to the Issuer all information required to be
disclosed in order to make the information previously furnished to the Issuer by
such seller not materially misleading.

                  If any such  Registration  Statement  refers to any  Holder by
name or  otherwise  as the holder of any  securities  of the  Issuer,  then such
Holder shall have the right to require (i) the insertion therein of language, in
form and substance  reasonably  satisfactory to such Holder,  to the effect that
the  holding  by such  Holder of such  securities  is not to be  construed  as a
recommendation  by such  Holder  of the  investment  quality  of the  securities
covered  thereby  and that such  holding  does not imply that such  Holder  will
assist in meeting any future  financial  requirements of the Issuer,  or (ii) in
the event  that  such  reference  to such  Holder  by name or  otherwise  is not
required by the Securities Act or any similar federal statute then in force, the
deletion of the  reference to such Holder in any  amendment or supplement to the
Registration  Statement  filed or  prepared  subsequent  to the time  that  such
reference ceases to be required.

                  Each  Holder  of  Registrable  Notes  and  each  Participating
Broker-Dealer  agrees by acquisition of such Registrable Notes or Exchange Notes
to be sold by such Participating  Broker-Dealer,  as the case may be, that, upon
actual  receipt of any notice from the Issuer of the  happening  of any event of
the kind described in Section  5(c)(ii),  5(c)(iv),  5(c)(v) or 5(c)(vi) hereof,
such Holder will forthwith  discontinue  disposition of such  Registrable  Notes
covered by such  Registration  Statement or Prospectus  or Exchange  Notes to be
sold by such Holder or  Participating  Broker-Dealer,  as the case may be, until
such  Holder's  or  Participating  Broker-Dealer's  receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(k) hereof, or until
it is advised  in  writing  (the  "Advice")  by the  Issuer  that the use of the
applicable  Prospectus may be resumed, and has received copies of any amendments
or supplements thereto. In the event that the Issuer shall give any such notice,
each of the Effectiveness  Period and the Applicable Period shall be extended by
the number of

                                      -17-
<PAGE>

days  during  such  periods  from and  including  the date of the giving of such
notice to and including the date when each seller of  Registrable  Notes covered
by  such   Registration   Statement  or  Exchange  Notes  to  be  sold  by  such
Participating  Broker-Dealer,  as the case may be,  shall have  received (x) the
copies of the  supplemented or amended  Prospectus  contemplated by Section 5(k)
hereof or (y) the Advice.

         Section 6. Registration Expenses

                  All  fees  and  expenses  incident  to the  performance  of or
compliance  with this  Agreement  by the  Issuer  shall be borne by the  Issuer,
whether  or  not  the  Exchange  Offer  Registration   Statement  or  any  Shelf
Registration is filed or becomes effective or the Exchange Offer is consummated,
including,  without limitation, (i) all registration and filing fees (including,
without  limitation,  (A) fees with respect to filings  required to be made with
the NASD in connection with an  underwritten  offering and (B) fees and expenses
of  compliance  with  state  securities  or Blue  Sky laws  (including,  without
limitation, reasonable fees and disbursements of counsel in connection with Blue
Sky  qualifications of the Registrable Notes or Exchange Notes and determination
of the  eligibility  of the  Registrable  Notes or Exchange Notes for investment
under the laws of such  jurisdictions (x) where the holders of Registrable Notes
are located,  in the case of the Exchange  Notes,  or (y) as provided in Section
5(h) hereof,  in the case of Registrable Notes or Exchange Notes to be sold by a
Participating  Broker-Dealer  during  the  Applicable  Period)),  (ii)  printing
expenses,  including, without limitation,  expenses of printing certificates for
Registrable  Notes or Exchange  Notes in a form  eligible  for deposit  with The
Depository  Trust  Company  and of  printing  Prospectuses  if the  printing  of
Prospectuses is requested by the managing  underwriter or underwriters,  if any,
by the Holders of a majority in aggregate  principal  amount of the  Registrable
Notes included in any Registration  Statement or in respect of Registrable Notes
or  Exchange  Notes to be sold by any  Participating  Broker-Dealer  during  the
Applicable  Period, as the case may be, (iii) messenger,  telephone and delivery
expenses,  (iv) fees and  disbursements of counsel for the Issuer and reasonable
fees  and  disbursements  of one  special  counsel  for  all of the  sellers  of
Registrable  Notes  (exclusive  of any  counsel  retained  pursuant to Section 7
hereof),  (v)  fees  and  disbursements  of  all  independent  certified  public
accountants  referred  to  in  Section  5(m)(iii)  hereof  (including,   without
limitation,  the  expenses  of any  special  audit  and "cold  comfort"  letters
required by or incident to such  performance),  (vi)  Securities  Act  liability
insurance, if the Issuer desires such insurance,  (vii) fees and expenses of all
other Persons  retained by the Issuer,  (viii)  internal  expenses of the Issuer
(including,  without  limitation,  all  salaries  and  expenses of officers  and
employees of the Issuer performing legal or accounting duties), (ix) the expense
of any annual audit,  (x) the fees and expenses  incurred in connection with the
listing of the securities to be registered on any securities  exchange,  and the
obtaining of a rating of the  securities,  in each case if applicable,  and (xi)
the  expenses  relating  to  printing,  word  processing  and  distributing  all
Registration  Statements,  underwriting  agreements,  indentures  and any  other
documents necessary in order to comply with this Agreement.  Notwithstanding the
foregoing or anything to the  contrary,  each Holder shall pay all  underwriting
discounts and  commissions of any  underwriters  with respect to any Registrable
Notes sold by or on behalf of it.

         Section 7. Indemnification

                  (a) The Issuer  agrees to  indemnify  and hold  harmless  each
Holder  of  Registrable  Notes  and  each  Participating  Broker-Dealer  selling
Exchange  Notes during the Applicable  Period

                                      -18-
<PAGE>

relating  thereto,  the officers,  directors,  employees and agents of each such
Person,  and each  Person,  if any,  who  controls  any such  Person  within the
bmeaning  of  either  Section  15 of the  Securities  Act or  Section  20 of the
Exchange  Act (each,  a  "Participant"),  from and  against  any and all losses,
claims, damages and liabilities (including,  without limitation,  the reasonable
legal fees and other  expenses  actually  incurred in connection  with any suit,
action or proceeding or any claim  asserted)  caused by, arising out of or based
upon any  untrue  statement  or alleged  untrue  statement  of a  material  fact
contained in any Registration Statement (or any amendment thereto) or Prospectus
(as amended or supplemented if the Issuer shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by, arising out of
or based upon any omission or alleged  omission to state therein a material fact
required to be stated  therein or necessary to make the statements  therein,  in
the case of the  Prospectus in the light of the  circumstances  under which they
were made, not  misleading,  except insofar as such losses,  claims,  damages or
liabilities  are caused by any untrue  statement  or omission or alleged  untrue
statement or omission made in reliance upon and in conformity  with  information
relating to any  Participant  furnished to the Issuer in writing by or on behalf
of such Participant expressly for use therein.

                  (b) Each  Participant  agrees,  severally and not jointly,  to
indemnify and hold harmless the Issuer, its directors,  officers,  employees and
agents and each Person who controls the Issuer  within the meaning of Section 15
of the  Securities Act or Section 20 of the Exchange Act to the same extent (but
on a several,  and not joint,  basis) as the foregoing indemnity from the Issuer
to each Participant,  in each case to the extent,  but only to the extent,  that
any loss,  claim,  damage or  liability  is caused by any  untrue  statement  or
omission or alleged  untrue  statement or omission  made in reliance upon and in
conformity with information relating to any Participant  furnished to the Issuer
in  writing  by or on  behalf  of  such  Participant  expressly  for  use in any
Registration  Statement (or any amendment  thereto) or Prospectus (as amended or
supplemented  if the Issuer shall have  furnished any  amendments or supplements
thereto) or any preliminary prospectus.

                  (c)  If  any   suit,   action,   proceeding   (including   any
governmental or regulatory  investigation),  claim or demand shall be brought or
asserted against any Person in respect of which indemnity may be sought pursuant
to  either  of the two  preceding  paragraphs,  such  Person  (the  "Indemnified
Person")  shall promptly  notify the Persons  against whom such indemnity may be
sought (the "Indemnifying  Persons") in writing,  and the Indemnifying  Persons,
upon  request  of  the  Indemnified  Person,  shall  retain  counsel  reasonably
satisfactory to the Indemnified  Person to represent the Indemnified  Person and
any others the Indemnifying  Persons may reasonably designate in such proceeding
and shall pay the fees and expenses actually incurred by such counsel related to
such  proceeding;   provided,  however,  that  the  failure  to  so  notify  the
Indemnifying  Persons  shall  not  relieve  any of  them  of any  obligation  or
liability which any of the Indemnifying Persons may have hereunder or otherwise,
except  to the  extent  such  failure  materially  prejudices  the  Indemnifying
Persons. In any such proceeding,  any Indemnified Person shall have the right to
retain its own counsel,  but the fees and  expenses of such counsel  shall be at
the expense of such Indemnified  Person unless (i) the Indemnifying  Persons and
the  Indemnified  Person shall have mutually  agreed to the  contrary,  (ii) the
Indemnifying  Persons  shall have failed  within a reasonable  period of time to
retain counsel  reasonably  satisfactory to the Indemnified  Person or (iii) the
named parties in any such proceeding  (including any impleaded  parties) include
both any Indemnifying Person and the Indemnified Person or any affiliate thereof
and  representation  of both parties by the same counsel would be  inappropriate
due to actual or

                                      -19-
<PAGE>

potential  differing interests between them. It is understood that, unless there
exists a conflict among Indemnified Persons, the Indemnifying Persons shall not,
in connection with any one such proceeding or separate but substantially similar
related  proceeding  in the same  jurisdiction  arising out of the same  general
allegations,  be liable for the fees and expenses of more than one separate firm
(in addition to any local  counsel) for all  Indemnified  Persons,  and that all
such fees and expenses  shall be reimbursed  promptly as they are incurred.  Any
such separate firm for the Participants and such control Persons of Participants
shall be designated in writing by  Participants  who sold a majority in interest
of Registrable  Notes and Exchange Notes sold by all such Participants and shall
be  reasonably  acceptable  to the  Issuer  and any such  separate  firm for the
Issuer, their respective  directors,  their respective officers and such control
Persons of the Issuer shall be  designated in writing by the Issuer and shall be
reasonably  acceptable  to the Holders.  The  Indemnifying  Persons shall not be
liable for any settlement of any proceeding effected without their prior written
consent (which consent shall not be  unreasonably  withheld or delayed),  but if
settled with such consent or if there be a final  judgment for the plaintiff for
which the  Indemnified  Person is entitled to  indemnification  pursuant to this
Agreement,  each of the  Indemnifying  Persons  agrees  to  indemnify  and  hold
harmless  each  Indemnified  Person from and against  any loss or  liability  by
reason of such settlement or judgment. No Indemnifying Person shall, without the
prior written  consent of the  Indemnified  Persons  (which consent shall not be
unreasonably  withheld or delayed),  effect any  settlement or compromise of any
pending or threatened  proceeding in respect of which any Indemnified  Person is
or could have been a party and  indemnity  could have been sought  hereunder  by
such  Indemnified  Person,  unless such settlement (A) includes an unconditional
written release of such  Indemnified  Person,  in form and substance  reasonably
satisfactory to such Indemnified  Person,  from all liability on claims that are
the subject matter of such  proceeding and (B) does not include any statement as
to an admission of fault,  culpability or failure to act by or on behalf of such
Indemnified Person.

                  (d) If the  indemnification  provided  for  in the  first  and
second  paragraphs  of this  Section  7 is for any  reason  unavailable  to,  or
insufficient to hold harmless,  an Indemnified  Person in respect of any losses,
claims,  damages or  liabilities  referred  to therein,  then each  Indemnifying
Person under such paragraphs,  in lieu of indemnifying  such Indemnified  Person
thereunder  and in order to provide for just and equitable  contribution,  shall
contribute to the amount paid or payable by such Indemnified  Person as a result
of  such  losses,  claims,  damages  or  liabilities  in such  proportion  as is
appropriate to reflect the relative fault of the Indemnifying  Person or Persons
on the one hand and the Indemnified Person or Persons on the other in connection
with the  statements  or  omissions  or alleged  statements  or  omissions  that
resulted in such losses,  claims,  damages or liabilities (or actions in respect
thereof) as well as any other relevant  equitable  considerations.  The relative
fault of the parties  shall be  determined  by reference to, among other things,
whether  the  untrue or  alleged  untrue  statement  of a  material  fact or the
omission or alleged  omission to state a material  fact  relates to  information
supplied  by the  Issuer  on the  one  hand or such  Participant  or such  other
Indemnified  Person,  as the case may be, on the other,  the  parties'  relative
intent,  knowledge,  access to information and opportunity to correct or prevent
such statement or omission, and any other equitable  considerations  appropriate
in the circumstances.

                  (e) The parties  agree that it would not be just and equitable
if  contribution  pursuant  to  this  Section  7 were  determined  by  pro  rata
allocation  (even  if the  Participants  were  treated  as one  entity  for such
purpose) or by any other method of allocation  that does not take account of the
equitable

                                      -20-
<PAGE>

considerations  referred to in the immediately  preceding paragraph.  The amount
paid or  payable by an  Indemnified  Person as a result of the  losses,  claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any reasonable
legal  or  other  expenses  actually  incurred  by such  Indemnified  Person  in
connection   with   investigating   or  defending  any  such  action  or  claim.
Notwithstanding  the  provisions  of  this  Section  7,  in  no  event  shall  a
Participant  be  required  to  contribute  any amount in excess of the amount by
which proceeds  received by such Participant from sales of Registrable  Notes or
Exchange  Notes, as the case may be, exceeds the amount of any damages that such
Participant  has  otherwise  been  required to pay or has paid by reason of such
untrue or alleged untrue  statement or omission or alleged  omission.  No Person
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(f) of
the Securities  Act) shall be entitled to  contribution  from any Person who was
not guilty of such fraudulent misrepresentation.

                  (f) Any losses, claims,  damages,  liabilities or expenses for
which an Indemnified Person is entitled to indemnification or contribution under
this  Section  7 shall be paid by the  Indemnifying  Person  to the  Indemnified
Person as such losses,  claims,  damages,  liabilities or expenses are incurred.
The indemnity and  contribution  agreements  contained in this Section 7 and the
representations  and warranties of the Issuer set forth in this Agreement  shall
remain  operative  and  in  full  force  and  effect,   regardless  of  (i)  any
investigation  made by or on behalf of any Holder or any  person who  controls a
Holder, the Issuer, their respective directors, officers, employees or agents or
any person controlling the Issuer, and (ii) any termination of this Agreement.

                  (g) The indemnity  and  contribution  agreements  contained in
this  Section 7 will be in  addition  to any  liability  which the  Indemnifying
Persons may otherwise have to the Indemnified Persons referred to above.

         Section 8. Rules 144 and 144A

                  The Issuer covenants that it will file the reports required to
be filed by it under the  Securities  Act and the Exchange Act and the rules and
regulations  adopted  by  the  Commission  thereunder  in  a  timely  manner  in
accordance with the requirements of the Securities Act and the Exchange Act and,
if at any time the Issuer is not required to file such  reports,  it will,  upon
the  request  of any  Holder or  beneficial  owner of  Registrable  Notes,  make
available such information necessary to permit sales pursuant to Rule 144A under
the Securities Act. The Issuer further  covenants that it will take such further
action as any Holder of  Registrable  Notes may reasonably  request,  all to the
extent  required  from time to time to enable  such  Holder to sell  Registrable
Notes without registration under the Securities Act within the limitation of the
exemptions  provided by (a) Rule 144(k) and Rule 144A under the Securities  Act,
as such  Rules may be  amended  from time to time,  or (b) any  similar  rule or
regulation  hereafter adopted by the Commission.  Notwithstanding the foregoing,
nothing in this  Section 8 shall be deemed to require the Issuer to register any
of its securities pursuant to the Exchange Act.

                                      -21-
<PAGE>

         Section 9. Underwritten Registrations

                  If  any  of  the  Registrable   Notes  covered  by  any  Shelf
Registration are to be sold in an underwritten  offering,  the investment banker
or investment bankers and manager or managers that will manage the offering will
be selected by the Holders of a majority in aggregate  principal  amount of such
Registrable  Notes included in such offering and shall be reasonably  acceptable
to the Issuer.

                  No  Holder  of  Registrable   Notes  may  participate  in  any
underwritten  registration  hereunder unless such Holder (i) agrees to sell such
Holder's   Registrable   Notes  on  the  basis  provided  in  any   underwriting
arrangements  approved  by  the  Persons  entitled  hereunder  to  approve  such
arrangements  and (ii)  completes  and  executes all  questionnaires,  powers of
attorney,  indemnities,  underwriting  agreements and other  documents  required
under the terms of such underwriting arrangements.

         Section 10. Miscellaneous

                  (a) No Inconsistent Agreements.  The Issuer has not, as of the
date hereof,  and the Issuer shall not, after the date of this Agreement,  enter
into any agreement  with respect to any of its securities  that is  inconsistent
with the rights granted to the Holders of Registrable Notes in this Agreement or
otherwise  conflicts  with the  provisions  hereof.  The  rights  granted to the
Holders  hereunder do not conflict  with and are not  inconsistent  with, in any
material respect, the rights granted to the holders of the Issuer's other issued
and outstanding securities under any such agreements. The Issuer has not entered
and will not enter into any  agreement  with  respect  to any of its  securities
which will grant to any Person  piggy-back  registration  rights with respect to
any Registration Statement.

                  (b) Adjustments  Affecting Registrable Notes. The Issuer shall
not,  directly or  indirectly,  take any action with respect to the  Registrable
Notes as a class  that would  adversely  affect  the  ability of the  Holders of
Registrable Notes to include such Registrable Notes in a registration undertaken
pursuant to this Agreement.

                  (c) Amendments  and Waivers.  The provisions of this Agreement
may not be  amended,  modified  or  supplemented,  and  waivers or  consents  to
departures  from the  provisions  hereof may not be given  except  pursuant to a
written  agreement  duly signed and  delivered by (i) the Issuer and (ii)(1) the
Holders of not less than a majority in  aggregate  principal  amount of the then
outstanding  Registrable  Notes and (2) in  circumstances  that would  adversely
affect  the  Participating  Broker-Dealers,   the  Participating  Broker-Dealers
holding not less than a majority in aggregate  principal  amount of the Exchange
Notes held by all Participating Broker-Dealers;  provided, however, that Section
7 and this Section  10(c) may not be amended,  modified or  supplemented  except
pursuant to a written  agreement  duly signed and  delivered  by each Holder and
each  Participating  Broker-Dealer  (including  any  person  who was a Holder or
Participating  Broker-Dealer of Registrable Notes or Exchange Notes, as the case
may be, disposed of pursuant to any Registration Statement) affected by any such
amendment,  modification or supplement.  Notwithstanding the foregoing, a waiver
or consent to depart from the  provisions  hereof with  respect to a matter that
relates  exclusively  to the  rights  of  Holders  of  Registrable  Notes  whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect,  impair,  limit or compromise the rights of other
Holders of

                                      -22-
<PAGE>

Registrable  Notes may be given by Holders of at least a majority  in  aggregate
principal  amount  of  the  Registrable   Notes  being  sold  pursuant  to  such
Registration Statement.

                  (d) Notices. All notices and other communications  (including,
without limitation, any notices or other communications to the Trustee) provided
for or permitted hereunder shall be made in writing by hand-delivery, registered
or certified first-class mail, next-day air courier or telecopier:

         (i)  if to a  Holder  of the  Registrable  Notes  or any  Participating
         Broker-Dealer,   at  the  most  current   address  of  such  Holder  or
         Participating  Broker-Dealer,  as the  case  may be,  set  forth on the
         records of the registrar under the Indenture.

         (ii) if to the Issuer, at the address as follows:

                         HEALTHSOUTH Corporation
                         One HealthSouth Parkway
                         Birmingham, Alabama 35243
                         Telephone: (205) 969-4977
                         Fax number: (205) 969-4730
                         Attention:  William W. Horton

         (iii) if to the Initial Purchasers, at the address as follows:

                         UBS Warburg LLC
                         299 Park Avenue
                         New York, New York 10171
                         Telephone: (203) 719-7166
                         Fax number: (203) 719-8620
                         Attention:  Syndicate Department

                  All such  notices and  communications  shall be deemed to have
been duly given: when delivered by hand, if personally delivered;  five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged by the recipient's telecopier machine, if telecopied; and on the
next Business Day, if timely delivered to an air courier guaranteeing  overnight
delivery.

                  Copies of all such  notices,  demands or other  communications
shall be concurrently  delivered by the Person giving the same to the Trustee at
the address and in the manner specified in the Indenture.

                  (e) Successors and Assigns.  This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto,  the Holders and the Participating  Broker-Dealers;  provided,  however,
that this  Agreement  shall not inure to the  benefit  of or be  binding  upon a
successor  or assign of a Holder  unless and to the  extent  such  successor  or
assign holds Registrable Notes.

                                      -23-
<PAGE>

                  (f) Counterparts. This Agreement may be executed in any number
of  counterparts  and by the parties  hereto in separate  counterparts,  each of
which when so executed  shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

                  (g)  Headings.   The  headings  in  this   Agreement  are  for
convenience  of  reference  only and  shall not limit or  otherwise  affect  the
meaning hereof.

                  (H)  GOVERNING  LAW. THIS  AGREEMENT  SHALL BE GOVERNED BY AND
CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK,  AS APPLIED TO
CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.

                  (i)  Severability.   If  any  term,  provision,   covenant  or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants  and  restrictions  set forth  herein  shall  remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an  alternative  means to
achieve the same or substantially  the same result as that  contemplated by such
term, provision,  covenant or restriction.  It is hereby stipulated and declared
to be the  intention of the parties that they would have  executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

                  (j) Securities Held by the Issuer or Its Affiliates.  Whenever
the  consent or approval of Holders of a  specified  percentage  of  Registrable
Notes is required hereunder,  Registrable Notes held by the Issuer or any of its
affiliates (as such term is defined in Rule 405 under the Securities  Act) shall
not be counted in determining  whether such consent or approval was given by the
Holders of such required percentage.

                  (k) Third Party Beneficiaries.  Holders,  beneficial owners of
Registrable Notes, Participating  Broker-Dealers and the controlling persons and
agents referred to in Section 7 are intended third party  beneficiaries  of this
Agreement,  and this Agreement may be enforced by such Persons.  No other Person
is intended to be, or shall be construed as, a third-party  beneficiary  of this
Agreement.

                  (l) Attorneys' Fees. As between the parties to this Agreement,
in any action or proceeding  brought to enforce any provision of this Agreement,
or where any provision hereof is validly  asserted as a defense,  the successful
party shall be entitled to recover reasonable  attorneys' fees actually incurred
in addition to its costs and expenses and any other available remedy.

                  (m)  Entire  Agreement.  This  Agreement,  together  with  the
Purchase Agreement and the Indenture,  is intended by the parties as a final and
exclusive  statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein and any and all prior
oral  or  written  agreements,   representations,   or  warranties,   contracts,
understandings,  correspondence, conversations and memoranda between the Holders
on the one hand and the  Issuer on the other,  or  between or among any  agents,
representatives,  parents, subsidiaries, affiliates, predecessors in interest or
successors in interest with respect to the subject matter hereof and thereof are
merged herein and replaced hereby.

                                      -24-
<PAGE>

                  IN WITNESS  WHEREOF,  the parties have executed this Agreement
as of the date first written above.

                                        HEALTHSOUTH CORPORATION

                                        By:          /s/ William T. Owens
                                             -----------------------------------
                                             Name:   William T. Owens
                                             Title:  Executive Vice President
                                                     and Chief Financial Officer

                                      -25-
<PAGE>

                                        UBS WARBURG LLC
                                        DEUTSCHE BANC ALEX. BROWN INC.
                                        CHASE SECURITIES INC.
                                        FIRST UNION SECURITIES, INC.
                                        SCOTIA CAPITAL (USA) INC.

                                        By:  UBS WARBURG LLC

                                        By:          /s/ Michael Y. Leder
                                             -----------------------------------
                                             Name:   Michael Y. Leder
                                             Title:  Managing Director
                                                     Leveraged Finance

                                        By:          /s/ David W. Barth
                                             -----------------------------------
                                             Name:   David W. Barth
                                             Title:  Director
                                                     Leveraged Finance

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