Document:

EXHIBIT 10.2

                            Exhibit A

            Certificate of Designations, Preferences
                  and Rights of Payable in Kind
                      Cumulative Redeemable
              Convertible Preferred Stock, Series B

                               OF

                  Vanguard Health Systems, Inc.

     Pursuant to Section 151 of the General Corporation Law
                    of the State of Delaware

     We, the undersigned, Joseph D. Moore, Executive Vice
President, and Ronald P. Soltman, Secretary, of Vanguard Health
Systems, Inc., a Delaware corporation (hereinafter called the
"Corporation"), pursuant to the provisions of Sections 103 and
151 of the General Corporation Law of the State of Delaware, do
hereby make this Certificate of Designations and do hereby state
and certify that pursuant to the authority expressly vested in
the Board of Directors of the Corporation by the Certificate of
Incorporation, the Board of Directors duly adopted the following
resolutions:

     RESOLVED, that, pursuant to Article Fourth of the Amended
and Restated Certificate of Incorporation, as amended (which
authorizes 150,000 shares of preferred stock, $.01 par value (the
"Preferred Stock")), the Board of Directors hereby fixes the
powers, designations, preferences and relative, participating,
optional and other special rights, and the qualifications,
limitations and restrictions, of a series of Preferred Stock.

     RESOLVED, that each share of such series of Preferred Stock
shall rank equally in all respects and shall be subject to the
following provisions:

     1.   Number and Designation.  30,000 shares of the Preferred
Stock of the Corporation shall be designated as Payable In Kind
Cumulative Redeemable Convertible Preferred Stock, Series B (the
"PIK Preferred Stock").

     2.   Rank.  (a) The PIK Preferred Stock shall, with respect
to dividend rights and rights on liquidation, dissolution and
winding up, rank prior to all classes or series of the
Corporation's common stock, $.01 par value (the "Common Stock").
All equity securities of the Corporation to which the PIK
Preferred Stock ranks prior (whether with respect to dividends or
upon liquidation, dissolution, winding up or otherwise),
including the Common Stock, are collectively referred to herein
as the "Junior Securities." All equity securities of the
Corporation with which the PIK Preferred Stock ranks on a parity
(whether with respect to dividends or upon liquidation,
dissolution winding up or otherwise) are collectively referred to
herein as the "Parity Securities."  All shares of any series of
Preferred Stock of the Corporation to which the PIK Preferred
Stock ranks junior (whether with respect to dividends or upon
liquidation, dissolution, winding up or otherwise) are
collectively referred to herein as the "Senior Securities."  The
respective definitions of Junior Securities, Parity Securities
and Senior

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Securities shall also include any rights or options
exercisable for or convertible into any of the Junior Securities,
Parity Securities and Senior Securities, as the case may be.
Subject to paragraph (b) of Section 7, the PIK Preferred Stock
shall be subject to the creation of Junior Securities and Parity
Securities.

          (b)  The PIK Preferred Stock shall be Parity Securities
(with respect to dividends and upon liquidation, dissolution or
winding up of the Corporation) in respect of the Corporation's
20,000 shares of Payable In Kind Cumulative Redeemable
Convertible Preferred Stock (plus additional preferred shares
issued in kind as dividends thereon) created by the Corporation's
Certificate of Designations, Preferences and Rights of Payable In
Kind Cumulative Redeemable Convertible Preferred Stock filed with
the Secretary of State of the State of Delaware on January 31,
2001 (the "Series A PIK Preferred Stock").

     3.   Dividends.  (a) The holders of shares of PIK Preferred
Stock shall be entitled to receive, when, as and if declared by
the Board of Directors, out of funds legally available for the
payment of dividends, dividends at the annual rate of $62.50 per
share. Such dividends shall be payable in arrears annually on
[Payment Date] of each year for the fiscal period [Closing Date]
through [Yearend Date] (unless [Payment Date] in any year is not
a business day, in which event on the next succeeding business
day) (each of such dates being a "Dividend Payment Date" and each
such annual period ending on [Yearend Date] in each year
commencing [Yearend Date], 2003 being a "Dividend Period"). Such
dividends shall be cumulative from the date of issue, whether or
not in any Dividend Period or Periods there shall be funds of the
Corporation legally available for the payment of such dividends.
Each such dividend shall be payable to the holders of record of
shares of the PIK Preferred Stock, as they appear on the stock
records of the Corporation at the close of business on [Record
Date] in each such year. Accrued and unpaid dividends for any
past Dividend Periods may be declared and paid at any time,
without reference to any Dividend Payment Date, to holders of
record on such date, not more than 45 days preceding the payment
date thereof, as may be fixed by the Board of Directors.  Any
dividend payments made with respect to PIK Preferred Stock shall
be made in cash; provided that, notwithstanding anything to the
contrary set forth herein, during any Dividend Period prior to
the Dividend Period ending [Yearend Date], 2010 (the "Pay in Kind
Period"), such dividend payments may be made, in the sole
discretion of the Corporation, in lieu of the payment in whole or
in part of dividends in cash, by issuing additional fully paid,
duly authorized, validly issued and nonassessable shares of PIK
Preferred Stock at the rate of 0.0625 shares of PIK Preferred Stock
for each $62.50 of such dividend not paid in cash, and the
issuance of such additional shares shall constitute full payment
of such dividend; provided further that the Pay in Kind Period
shall immediately terminate upon the Corporation's payment of a
cash dividend upon any share of its capital stock other than cash
dividends paid upon shares of Series A PIK Preferred Stock for
dividend periods ending on and after January 31, 2008.

          (b)  The amount of dividends payable for the initial
Dividend Period, or any other period shorter or longer than a
full Dividend Period, on the PIK Preferred Stock shall be
computed on the basis of twelve 30-day months and a 360-day year.
Holders of shares of PIK Preferred Stock shall not be entitled to
any dividends, whether payable in cash, property or stock, in
excess of cumulative dividends, as herein provided, on the PIK
Preferred Stock. No interest,

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or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the PIK Preferred Stock that may
be in arrears.

          (c)  Notwithstanding anything contained herein to the
contrary, no cash dividends on shares of PIK Preferred Stock
shall be declared by the Board of Directors or paid or set apart
for payment by the Corporation at such time as the terms and
provisions of any financing or working capital agreement of the
Corporation specifically prohibit such declaration, payment or
setting apart for payment or if such declaration, payment or
setting apart for payment would constitute a breach thereof or a
default thereunder or if such declaration, payment or setting
apart for payment would, upon the giving of notice or passage of
time or both, constitute such a breach or default; provided that
subject to applicable law, if any cash dividends are prohibited
in whole or in part during the Pay In Kind Period, the
Corporation may, to the extent payment in cash of such dividends
is not made, pay such dividends in shares of PIK Preferred Stock
in accordance with paragraph (a) of this Section 3; and provided
further that nothing herein contained shall in any way or under
any circumstances be construed or deemed to require the Board of
Directors to declare or the Corporation to pay or set apart for
payment any dividends on shares of the PIK Preferred Stock at any
time, whether permitted by any of such agreements or not.

          (d)  So long as any shares of the PIK Preferred Stock
are outstanding, no dividends, except as described in the next
succeeding sentence, shall be declared or paid or set apart for
payment on Parity Securities, for any period unless full
cumulative dividends have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof
set apart for such payment on the PIK Preferred Stock for all
Dividend Periods terminating on or prior to the date of payment
of the dividend on such class or series of Parity Securities.
When dividends are not paid in full or a sum sufficient for such
payment is not set apart, as aforesaid, all dividends declared
upon shares of the PIK Preferred Stock and all dividends declared
upon any other class or series of stock ranking on a parity as to
dividends and amounts distributable upon liquidation, dissolution
or winding up shall be declared ratably in proportion to the
respective amounts of dividends accumulated and unpaid on the PIK
Preferred Stock and accumulated and unpaid on such Parity
Securities.  No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments
on the PIK Preferred Stock or any other Parity Securities which
may be in arrears.

          (e) (i)  Holders of shares of the PIK Preferred Stock
shall be entitled to receive the dividends provided for in
paragraph (a) of this Section 3 in preference to and in priority
over any dividends upon any of the Junior Securities.

              (ii) The Corporation shall not declare, pay or set
     apart for payment any dividend on any of the Junior
     Securities or make any payment on account of or set apart
     for payment money for a sinking or other similar fund for
     the purchase, redemption or other retirement of, any of the
     Junior Securities or any warrants, rights, calls or options,
     exercisable for or convertible into any of the Junior
     Securities, or make any distribution in respect thereof,
     either directly or indirectly, and whether in cash,
     obligations or shares of the Corporation or other property
     (other than distributions or dividends in Junior Securities
     to the holders of Junior Securities), and shall not permit
     any corporation or

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<PAGE>

     other entity directly or indirectly
     controlled by the Corporation to purchase or redeem any of
     the Junior Securities so long as any shares of the PIK
     Preferred Stock are outstanding, unless prior to or
     concurrently with such declaration, payment, setting apart
     for payment, purchase, redemption or distribution, as the
     case may be, all accrued and unpaid dividends on shares of
     the PIK Preferred Stock not paid on the dates provided for
     in paragraph (a) of this Section 3 shall have been or be
     paid or set apart for payment.

          (f)  Subject to the foregoing provisions of this
Section 3 and applicable law, the Board of Directors may declare
and the Corporation may pay or set apart for payment dividends on
any of the Junior Securities or Parity Securities, may make any
payment on account of or set apart for payment money for a
sinking fund or other similar fund for the purchase, redemption
or other retirement of, any of the Junior Securities or Parity
Securities or any warrants, rights, calls or options, exercisable
for or convertible into any of the Junior Securities or Parity
Securities, and may make any distribution in respect thereof,
either directly or indirectly, and whether in cash, obligations
or shares of the Corporation or other property, and may purchase
or otherwise redeem any of the Junior Securities or Parity
Securities or any warrants, rights or options exercisable for or
convertible into any of the Junior Securities or Parity
Securities, and the holders of the shares of the PIK Preferred
Stock shall not be entitled to share therein; provided, however,
the holders of the PIK Preferred Stock shall receive written
notice at least 20 business days in advance of any record date to
be set with respect to any such dividend or other distribution on
Junior Securities.

     4.   Liquidation Preference.  (a)  In the event of any
liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or
surplus) shall be made to or set apart for the holders of Junior
Securities, the holders of the shares of PIK Preferred Stock
shall be entitled to receive $1,000 per share of PIK Preferred
Stock plus an amount equal to all dividends (whether or not
earned or declared) accrued and unpaid thereon to the date of
final distribution to such holders; but such holders shall not be
entitled to any further payment; provided, however, the holders
of the PIK Preferred Stock shall receive written notice at least
20 business days in advance of any record date to be set with
respect to any such dividend or other distribution on Junior
Securities.  If, upon any liquidation, dissolution or winding up
of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the shares of PIK
Preferred Stock shall be insufficient to pay in full the
preferential amount aforesaid and liquidating payments on any
Parity Securities, then such assets, or the proceeds thereof,
shall be distributed among the holders of shares of PIK Preferred
Stock and any such other Parity Securities ratably in accordance
with the respective amounts that would be payable on such shares
of PIK Preferred Stock and any such other stock if all amounts
payable thereon were paid in full. Notwithstanding anything else
in this Certificate of Designations, a liquidation, dissolution
or winding up, voluntary or involuntary, of the Corporation shall
not be deemed to have occurred upon (i) the acquisition of the
Corporation by another entity by means of any transaction or
series of related transactions (including, without limitation,
any reorganization, merger or consolidation, whether of the
Corporation with or into any other corporation or corporations or
of any other corporation or corporations with or into the
Corporation; or (ii) a sale of all or substantially all of the
assets of the Corporation.

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<PAGE>

          (b)  Subject to the rights of the holders of any Parity
Securities, after payment shall have been made in full to the
holders of the PIK Preferred Stock, as provided in paragraph (a)
of this Section 4, any other series or class or classes of Junior
Securities shall, subject to the respective terms and provisions
(if any) applying thereto, be entitled to receive any and all
assets remaining to be paid or distributed, and the holders of
the PIK Preferred Stock shall not be entitled to share therein.

     5.   Redemption.  (a) The Corporation shall not have the
option to redeem any shares of PIK Preferred Stock prior to
__________ 1, 2007.  On and after __________ 1, 2007, to the
extent the Corporation shall have funds legally available for
such payment, the Corporation may redeem at its option shares of
PIK Preferred Stock, at any time in whole or from time to time in
part, at the following redemption prices per share, together with
accrued and unpaid dividends thereon to the date fixed for
redemption, without interest, if redeemed during the twelve-month
period beginning on __________ 1 of the years indicated below:

      If Redeemed During the
      12-Month Period Commencing       Redemption Price Per Share

      __________ 1, 2007               $1,030

      __________ 1, 2008               $1,020

      __________ 1, 2009               $1,010

      __________ 1, 2010 and           $1,000
      thereafter

          (b)  To the extent the Corporation shall have funds legally
available for payment, the Corporation shall redeem all
outstanding shares of PIK Preferred Stock upon the earliest to
occur of the following dates:

               (i)  January 31, 2015; and

               (ii) no later than 90 days after there shall have been a Change
                    in Control of the Corporation, subject to the prior payment
		    of Vanguard's 9.75% Senior Subordinated Notes due 2011 (the
		    "Public Notes") and all other applicable Senior Indebtedness
		    (as such term is defined in the indenture relating to the
		    Public Notes).

Such shares shall be redeemed at a redemption price of $1,000 per
share, together with accrued and unpaid dividends thereon to the
redemption date, without interest.

          (c)  Shares of PIK Preferred Stock which have been issued and
reacquired in any manner, including shares purchased or redeemed,
shall (upon compliance with any applicable provisions of the laws
of the State of Delaware) have the status of authorized and
unissued shares of the class of Preferred Stock undesignated as
to series and may be redesignated and reissued as part of any
series of the Preferred Stock; provided that no such issued and

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<PAGE>

reacquired shares of PIK Preferred Stock shall be reissued or
sold as PIK Preferred Stock unless reissued as a stock or pay in
kind dividend on shares of PIK Preferred Stock.

          (d)  If the Corporation is unable or shall fail to discharge its
obligation to redeem all outstanding shares of PIK Preferred
Stock pursuant to paragraph (b) of this Section 5 (the "Mandatory
Redemption Obligation"), the Mandatory Redemption Obligation
shall be discharged as soon as the Corporation is able to
discharge such Mandatory Redemption Obligation.  If and so long
as any Mandatory Redemption Obligation with respect to the PIK
Preferred Stock shall not be fully discharged, the Corporation
shall not (i) declare or pay any dividends or make any
distribution on or, directly or indirectly, purchase, redeem or
discharge any mandatory redemption, sinking fund or other similar
obligation in respect of any Parity Securities or any warrants,
rights or options exercisable for or convertible into any of the
Parity Securities (except in connection with a redemption,
sinking fund or other similar obligation to be satisfied pro rata
with PIK Preferred Stock) or (ii) declare or pay any dividend or
make any distributions on, or, directly or indirectly, purchase,
redeem or satisfy any such mandatory redemption, sinking fund or
other similar obligation in respect of the Junior Securities or
any warrants, rights or options exercisable for or convertible
into any of the Junior Securities.

          (e)  Notwithstanding the foregoing provisions of this Section 5,
unless the full cumulative dividends on all outstanding shares of
PIK Preferred Stock shall have been paid or contemporaneously are
declared and payable for all past and current dividend periods,
none of the shares of PIK Preferred Stock shall be redeemed, and
no sum shall be set aside for such redemption, unless shares of
PIK Preferred Stock are redeemed pro rata.

          (f)  For purposes of this Certificate of Designations, a Change
in Control of the Corporation shall have occurred if:

               (i)  the consummation of any transaction,
          including, without limitation, any merger or
          consolidation, the result of which is that any "person"
          or "group" (within the meaning of Sections 13(d) and
          14(d)(2) of the Securities Exchange Act of 1934), other
          than (A) any of the officers of the Corporation on
          __________ 1, 2002 holding the office of Executive Vice
          President or a higher office or (B) Morgan Stanley
          Capital Partners III, L.P., MSCP III 892 Investors,
          L.P., Morgan Stanley Capital Investors, L.P., Morgan
          Stanley Dean Witter Capital Partners IV, L.P., MSDW IV
          892 Investors, L.P. and Morgan Stanley Dean Witter
          Capital Investors IV, L.P., or any other merchant
          banking or similar fund under common control with any
          of the aforementioned entities (such Persons defined in
          the foregoing clauses (A) and (B) being referred to
          hereinafter as "Existing Shareholders"), becomes the
          ultimate "beneficial owner" (as defined in Rule 13d-3
          under the Securities Exchange Act of 1934) of shares of
          capital stock of any class or kind ordinarily having
          the power to vote for the election of directors of the
          Corporation representing more than 50% of the total
          voting power of all such shares of capital stock on a
          fully diluted basis;

               (ii) the direct or indirect sale, transfer,
          conveyance or other disposition, not including a merger
          or consolidation, in one or a series of related
          transactions,

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          of all or substantially all of the
          properties or assets of the Corporation and its
          subsidiaries taken as a whole to any "person" or
          "group" (as those terms are defined in clause (i)
          above), other than to the Existing Stockholders;

               (iii)     the adoption of a plan relating to the
          liquidation or dissolution of the Corporation; or

               (iv) during any consecutive two year period,
          individuals who at the beginning of such period
          constituted the Board of Directors (together with any
          new directors (a) appointed or nominated by one or more
          Existing Stockholders or (b) whose election by the
          Board of Directors or whose nomination by the Board of
          Directors for election by the Corporation's
          stockholders was approved by a vote of at least a
          majority of the members of the Board of Directors then
          in office who either were members of the Board of
          Directors on __________ 1, 2002 or whose election or
          nomination for election was previously so approved)
          cease for any reason during such period to constitute a
          majority of the members of the Board of Directors then
          in office.

     6.   Procedure for Redemption.  (a) In the event the
Corporation shall redeem shares of PIK Preferred Stock, notice of
such redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 days nor more than 60 days prior
to the redemption date, to each holder of record of the shares to
be redeemed at such holder's address as the same appears on the
stock register of the Corporation; provided that neither the
failure to give such notice nor any defect therein shall affect
the validity of the giving of notice for the redemption of any
share of PIK Preferred Stock to be redeemed except as to the
holder to whom the Corporation has failed to give said notice or
except as to the holder whose notice was defective. Each such
notice shall state: (i) the redemption date; (ii) the amount of
shares of PIK Preferred Stock that are being redeemed and, if
less than all the shares held by such holder are to be redeemed
from such holder, the number of shares to be redeemed from such
holder; (iii) the redemption price; (iv) the place or places
where certificates for such shares are to be surrendered for
payment of the redemption price; and (v) that dividends on the
shares to be redeemed will cease to accrue on such redemption
date.  In the event that fewer than all the outstanding shares of
PIK Preferred Stock are to be redeemed, the number of shares to
be redeemed shall be determined by the Board of Directors and the
shares to be redeemed shall be selected pro rata, except that in
any redemption of fewer than all the outstanding shares of PIK
Preferred Stock, the Corporation may redeem all shares held by
any holders of a number of shares not to exceed 100 as may be
specified by the Corporation.

          (b)  Notice having been mailed as aforesaid, from and
after the redemption date (provided that on or prior to the
redemption date the Corporation shall have irrevocably deposited
funds for such redemption in trust for the holders of PIK
Preferred Stock), dividends on the shares of PIK Preferred Stock
so called for redemption shall cease to accrue, and such shares
shall no longer be deemed to be outstanding and shall have the
status of authorized but unissued shares of Preferred Stock,
unclassified as to series, and shall not be reissued as shares of
PIK Preferred Stock unless reissued as a stock dividend on shares
of PIK Preferred Stock, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive from
the Corporation the redemption price) shall cease.  Upon
surrender in accordance with said

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notice of the certificates for any shares so redeemed (properly endorsed
or assigned for transfer, if the Board of Directors of the Corporation
shall so require and the notice shall so state), such share shall be
redeemed by the Corporation at the redemption price.  In case
fewer than all the shares represented by any such certificate are
redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof.

     7.   Voting Rights.  (a) The holders of record of shares of
PIK Preferred Stock shall not be entitled to any voting rights
except as hereinafter provided in this paragraph 7 or as
otherwise provided by law.

          (b) (i) If at any time or times dividends payable
(whether in cash or shares of PIK Preferred Stock) on PIK
Preferred Stock shall be in arrears and unpaid in an amount equal
to two full annual dividends (whether or not consecutive) or if
the Corporation shall have failed to discharge its Mandatory
Redemption Obligation, then the number of directors constituting
the Board of Directors, without further action, shall be
increased by two and the holders of PIK Preferred Stock shall
have the exclusive right, voting separately as a class, to elect
the directors of the Corporation to fill such newly created
directorships, the remaining directors to be elected by the other
class or classes of stock entitled to vote therefor, at each
meeting of stockholders held for the purpose of electing
directors.

               (ii) Whenever such voting right shall have vested, such right
	  may be exercised initially either at a special meeting of the holders
          of PIK Preferred Stock, called as hereinafter provided, or at any
          annual meeting of stockholders held for the purpose of electing
          directors, and thereafter at such annual meetings or by the
          written consent of the holders of PIK Preferred Stock.  Such
          voting right shall continue until such time as all accrued
          dividends accumulated on the PIK Preferred Stock shall have been
          paid in full, or the Corporation has fulfilled its Mandatory
          Redemption Obligation, as the case may be, at which time such
          voting right of the holders of PIK Preferred Stock shall
          terminate, subject to revesting in the event of each and every
          subsequent failure of the Corporation of the character described
          above.

               (iii) At any time when such voting right shall have vested in
          the holders of PIK Preferred Stock and if such right shall not
          already have been initially exercised, a proper officer of the
          Corporation shall, upon the written request of any holder of
          record of PIK Preferred Stock then outstanding, addressed to the
          Secretary of the Corporation, call a special meeting of holders
          of PIK Preferred Stock.  Such meeting shall be held at the
          earliest practicable date upon the notice required for annual
          meetings of stockholders at the place for holding annual meetings
          of stockholders of the Corporation or, if none, at a place
          designated by the Secretary of the Corporation or if the request
          is delivered by the holder of more than a majority of the
          outstanding PIK Preferred Stock, then at the location within the
          U.S. reasonably designated by the requesting holder. If such
          meeting shall not be called by the proper officer of the
          Corporation within 30 days after the personal service of such
          written request upon the Secretary of the Corporation, or within
          30 days after mailing the same within the United States, by
          registered

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	  mail, addressed to the Secretary of the Corporation at
          its principal office (such mailing to be evidenced by the
          registry receipt issued by the postal authorities), then the
          holders of record of 10% of the shares of PIK Preferred Stock
          then outstanding may designate in writing a holder of PIK
          Preferred Stock to call such meeting at the expense of the
          Corporation, and such meeting may be called by such Person so
          designated upon the notice required for annual meetings of
          stockholders and shall be held at the same place as is elsewhere
          provided in this paragraph (b)(iii) of this Section 7.  Any
          holder of PIK Preferred Stock which would be entitled to vote at
          such meeting shall have access to the stock books of the
          Corporation for the purpose of causing a meeting of holders of
          PIK Preferred Stock to be called pursuant to the provisions of
          this paragraph.  Notwithstanding the provisions of this
          paragraph, however, no such special meeting shall be called
          during a period within 90 days immediately preceding the date
          fixed for the next annual meeting of stockholders.

               (iv) At any meeting held for the purpose of electing directors at
          which the holders of PIK Preferred Stock shall have the right to
          elect directors as provided herein, the presence in person or by
          proxy of the holders of at least a majority of the then
          outstanding shares of PIK Preferred Stock shall be required and
          be sufficient to constitute a quorum of such class for the
          election of directors by such class.  At any such meeting or
          adjournment thereof (A) the absence of a quorum of the holders of
          PIK Preferred Stock shall not prevent the election of directors
          other than those to be elected by the holders of stock of such
          class and the absence of a quorum or quorums of the holders of
          capital stock entitled to elect such other directors shall not
          prevent the election of directors to be elected by the holders of
          PIK Preferred Stock and (B) in the absence of a quorum of the
          holders of any class of stock entitled to vote for the election
          of directors, a majority of the holders present in person or by
          proxy of such class shall have the power to adjourn the meeting
          for the elections of directors which the holders of such class
          are entitled to elect, from time to time, without notice (except
          as required by law) other than announcement at the meeting, until
          a quorum shall be present.

               (v) The term of office of all directors elected by the holders
          of PIK Preferred Stock pursuant to paragraph (b)(i) of this
          Section 7 in office at any time when the aforesaid voting rights
          are vested in the holders of PIK Preferred Stock shall terminate
          upon the election of their successors at any meeting of holders
          of PIK Preferred Stock for the purpose of electing directors.
          Upon any termination of the aforesaid voting rights in accordance
          with paragraph (b)(ii) of this Section 7, the term of office of
          all directors elected by the holders of PIK Preferred Stock
          pursuant to paragraph (b)(i) of this Section 7 then in office
          shall thereupon terminate and upon such termination the number of
          directors constituting the Board of Directors, shall, without
          further action, be reduced by two, subject always to the increase
          of the number of directors pursuant to paragraph (b)(i) of this
          Section 7 in case of the future right of holders of PIK Preferred
          Stock to elect directors as provided herein.

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               (vi) In case of any vacancy occurring among the directors so
          elected, the remaining director who shall have been so elected
          may appoint a successor to hold office for the unexpired term of
          the director whose place shall be vacant.  If both directors so
          elected by the holders of PIK Preferred Stock shall cease to
          serve as directors before their terms shall expire, the holders
          of PIK Preferred Stock then outstanding may, at a special meeting
          of the holders called as provided above, elect successors to hold
          office for the unexpired terms of such directors whose places
          shall be vacant.

  	  (c)  Without the written consent of a majority of the
outstanding shares of PIK Preferred Stock or the vote of holders
of a majority of the outstanding shares of PIK Preferred Stock at
a meeting of the holders of PIK Preferred Stock called for such
purpose, the Corporation will not authorize the issuance of any
Senior Securities or any securities exchangeable or convertible
into any Senior Securities or amend, alter or repeal any
provision of this Certificate of Designations (by merger or
otherwise) so as to materially and adversely affect the
preferences, rights or powers of the PIK Preferred Stock.  No
other series of the Corporation's preferred stock shall have the
right to vote with the PIK Preferred Stock as a single class on
any matter.

          (d) (i)  The creation, authorization or issuance of any
shares of any Junior Securities or Parity Securities, or the
creation, authorization or issuance of any obligation or security
convertible into or evidencing the right to purchase any Junior
Securities or Parity Securities, (ii) the creation of any
indebtedness of any kind of the Corporation, or (iii) the
increase or decrease in the amount of authorized capital stock of
any class (including the Preferred Stock, but excluding the PIK
Preferred Stock) or any increase, decrease or change in the par
value of any such class other than the Preferred Stock, shall not
require the consent of the holders of PIK Preferred Stock and
shall not be deemed to affect adversely the rights, preferences,
privileges and voting rights of shares of PIK Preferred Stock.

          (e)  In exercising the voting rights set forth in this
Section 7, each share of PIK Preferred Stock shall have one vote
per share.  Except as otherwise required by applicable law or as
set forth herein, the shares of PIK Preferred Stock shall not
have any relative, participating, optional or other special
voting rights and powers and the consent of the holders thereof
shall not be required for the taking of any corporate action.

     8.   Reports. So long as any of the PIK Preferred Stock is
outstanding, the Corporation will furnish the holders thereof
with the quarterly and annual financial reports that the
Corporation is required to file with the Securities and Exchange
Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934.

     9.   Conversion Rights.  The holders of the PIK Preferred Stock
shall be subject to the following with respect to the conversion
of the PIK Preferred Stock into shares of Common Stock (the
"Conversion Rights"):

          (a)  Conversion.

				10
<PAGE>

               (i) Each holder of PIK Preferred Stock is entitled, at such
          holder's option, at any time on or before the close of business
          on the business day prior to __________ 30, 2017, or in case the
          PIK Preferred Stock or a portion thereof is called for redemption
          or the holder thereof has exercised the holder's right to require
          the Corporation to repurchase his shares of PIK Preferred Stock
          or such portion thereof, then in respect of such shares until and
          including, but (unless the Corporation defaults in making the
          payment due upon redemption or repurchase, as the case may be)
          not after, the close of business on the business day prior to the
          redemption date or such repurchase date, as the case may be, to
          convert such holder's shares of PIK Preferred Stock into fully
          paid and nonassessable shares of Common Stock of the Corporation
          at the Conversion Rate of shares of Common Stock of the
          Corporation which is set forth in Section 11(b) below, by
          surrender of his shares of PIK Preferred Stock, duly endorsed or
          assigned to the Corporation or in blank, to the Corporation or
          any transfer agent for the PIK Preferred Stock.

               (ii) The Corporation shall not be obligated to issue certificates
          evidencing the shares of Common Stock issuable upon such
          conversion unless the certificates evidencing such shares of PIK
          Preferred Stock are either delivered to the Corporation or its
          transfer agent as provided below, or the holder notifies the
          Corporation or its transfer agent that such certificates have
          been lost, stolen or destroyed and executes an agreement
          satisfactory to the Corporation to indemnify the Corporation from
          any loss incurred by it in connection with such certificates.
          Upon the conversion of the PIK Preferred Stock, the holders of
          PIK Preferred Stock shall surrender the certificates representing
          such shares at the office of the Corporation or any transfer
          agent for the PIK Preferred Stock.  Thereupon, there shall be
          issued and delivered to such holder promptly at such office and
          in its name as shown on such surrendered certificate or
          certificates, a certificate or certificates for the number of
          shares of Common Stock into which the shares of PIK Preferred
          Stock surrendered were convertible on the date on which such
          conversion occurred.

               (iii) Notwithstanding anything to the contrary set forth
          herein, as a condition to the Corporation's obligation to issue
          to each holder of PIK Preferred a certificate or certificates for
          the number of shares of Common Stock to which such holder is
          entitled, each such holder (by acceptance of any certificate for
          shares of PIK Preferred Stock) agrees, in connection with the
          Corporation's Qualifying IPO (as defined in this clause (iii)
          below), to enter into a written agreement not to effect any
          public sale or distribution of any shares of Common Stock
          issuable to such holder, if and to the extent requested by the
          managing underwriter for the Qualifying IPO as to the PIK
          Preferred Stock and substantially all Parity Securities and
          Junior Securities during the 14 days prior to, and during an up
          to 180-day period beginning on, the effective date of the
          registration statement relating to the Qualifying IPO without the
          written consent of such managing underwriter; provided that each
          such holder has received written notice of such registration at
          least 5 business days prior to the anticipated beginning of the
          14-day period referred to above.  The term "Qualifying IPO" means
          a firmly

				11
<PAGE>

	  underwritten public offering pursuant to an effective
          registration statement under the Securities Act of 1933 covering
          the offer and sales of shares of Common Stock for the account of
          the Corporation in which the gross cash proceeds to the
          Corporation (before underwriting discounts, commissions and fees)
          are not less than $50,000,000.

          (b)  Conversion Rate.  The Conversion Rate shall be 0.2857142
shares of Common Stock for each share of PIK Preferred Stock.  In
case outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the Conversion Rate
in effect at the opening of business on the day following the day
upon which such subdivision becomes effective shall be
proportionately increased, and, conversely, in case outstanding
shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such
subdivision or combination becomes effective shall be
proportionately reduced, such increase or reduction, as the case
may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision
or combination becomes effective.

          (c)  Mechanics of Conversion.  Each holder of PIK Preferred Stock
who wishes to convert his shares of PIK Preferred Stock into
shares of Common Stock pursuant to this Section 9 shall surrender
the certificate or certificates therefor, duly endorsed, at the
office of the Corporation or any transfer agent for the PIK
Preferred Stock.  Thereupon, the Corporation shall promptly issue
and deliver at such office to such holder a certificate or
certificates for the number of shares of Common Stock to which
such holder is entitled and shall promptly pay in cash or in
additional shares of Common Stock, any declared and unpaid
dividends on the shares of PIK Preferred Stock being converted.

          (d)  Fractional Shares.  At the option of the Corporation, no
fractional shares of Common Stock shall be issued upon conversion
of PIK Preferred Stock and all shares of Common Stock (including
fractions thereof) issuable upon conversion of more than one
share of PIK Preferred Stock by a holder thereof shall be
aggregated for purposes of determining whether the conversion
would result in the issuance of any fractional share.  If, after
the aforementioned aggregation, the conversion would result in
the issuance of any fractional share, the Corporation may at its
option, in lieu of issuing any fractional share, pay cash equal
to the product of such fraction multiplied by the Current Market
Price (as defined below) of the Common Stock.  "Current Market
Price" means, in the event the Common Stock is publicly traded,
the average of the daily closing prices per share of Common Stock
for 30 consecutive trading days ending no more than 15 business
days before the conversion date (as adjusted for any stock
dividend, split, combination or reclassification that took effect
during such period).  The closing price for each day shall be the
last reported sale price regular way or, in case no such reported
sale takes place on such day, the average of the last closing bid
and asked prices regular way, in either case on the principal
national securities exchange on which the Common Stock is listed
or admitted to trading, or if not listed or admitted to trading
on any national securities exchange, the closing sale price for
such day reported by NASDAQ, if the Common Stock is traded over-
the-counter and quoted in the National Market System, or if the
Common Stock is so traded, but not so quoted, the average of the
closing bid and asked prices of the Common Stock as reported by

				12
<PAGE>

NASDAQ or any comparable system or, if the Common Stock is not
listed on NASDAQ or any comparable system, the average of the
closing bid and asked prices as furnished by two members of the
National Association of Securities Dealers, Inc. selected from
time to time by the Corporation for that purpose.  If the Common
Stock is not traded in such manner that the quotations referred
to above are available for the period required hereunder, Current
Market Price per share of Common Stock shall be deemed to be the
fair value as determined by the Board of Directors, irrespective
of any accounting treatment.

          (e)  Reservation of Stock Issuable Upon Conversion.  The
Corporation shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock, solely for
the purpose of effecting the conversion of the shares of the PIK
Preferred Stock, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of
all outstanding shares of the PIK Preferred Stock.  If at any
time the number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the conversion of all then
outstanding shares of the PIK Preferred Stock, the Corporation
with take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be
sufficient for such purpose.

          (f)  Notices.  Any notice to a holder of shares of PIK Preferred
Stock pursuant to the provisions of this Section 9 shall be in
writing and shall be deemed effectively given: (i) upon personal
delivery to the party to be notified, (ii) when sent by confirmed
facsimile if sent during normal business hours of the recipient;
if not, then on the next business day, (iii) five (5) days after
having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt.  All notices
shall be addressed to each holder of record at the address of
such holder appearing on the books of the Corporation.

     10.  Offer to Purchase in Connection with Asset Sales.  (a) If,
as of the last day of any calendar month, the Corporation has
Excess Proceeds (as defined below) not theretofore subject to an
Offer to Purchase pursuant to this Section 10 totaling at least
$10 million, the Corporation must commence, not later than 30
days after such date, and consummate an Offer to Purchase from
the holder of the PIK Preferred Stock (and if required by the
terms of Parity Securities from the holders thereof), on a pro
rata basis, such amount of shares of PIK Preferred Stock (and
Parity Securities) which is equal to the Excess Proceeds on such
date, at a purchase price per share equal to $1,000, plus accrued
and unpaid dividends to the payment date.

          (b)  The following terms shall have the following meanings:

               (i) The term "Excess Proceeds" means the Corporation has Net
          Cash Proceeds (as defined in the Indenture referred to in clause
          (ii) below) from its Asset Sales (as defined in the Indenture)
          after complying with (A) the provisions of Section 4.10 of the
          Indenture which require the Company to utilize such proceeds (1)
          to permanently repay its Senior Indebtedness (as defined in the
          Indenture) within 12 months of the receipt of such Net Cash
          Proceeds, (2) to invest such Net Cash Proceeds within such 12
          months in Replacement Assets (as

				13
<PAGE>

	  defined in the Indenture) or (3)
          to fund an offer to purchase the Public Notes (as defined in
          clause (iii) below) (and, if required by the terms of any
          Indebtedness (as defined in the Indenture) that is pari passu
          with the Public Notes, from the holders of such pari passu
          Indebtedness) pursuant to Section 4.10 of the Indenture and (B)
          the provisions of Section 5 of a certain 8.18% Convertible
          Subordinated Note due 2012, originally issued on __________,
          2002, in $17,641,800 aggregate principal amount, to fund an offer
          to purchase such note pursuant to such Section 5.

               (ii) The term "Indenture" means the Indenture dated as of July
          30, 2001, in respect of the Public Notes.

               (iii) The term "Public Notes" means the Corporation's 9 3/4%
          Senior Subordinated Notes due 2011, originally issued in $300
          million aggregate principal amount.

     11.  Sale or Assignment of Shares of PIK Preferred Stock.  A
holder of shares of PIK Preferred Stock may not sell or assign
any shares of PIK Preferred Stock except in a transaction which
is entitled to an exception from, or is not subject to the
registration requirements of, the Securities Act of 1933 and,
before making a sale or assignment of such shares, the holder
agrees, by its acceptance hereof, to provide the Corporation with
an opinion of counsel satisfactory to the Corporation that such
registration is not required.

     12.  General Provisions.  (a) The term "Person" as used herein
means any corporation, limited liability company, partnership,
trust, organization, association, other entity or individual
provided that notwithstanding the foregoing, for the purposes
only of the provisions of paragraph (f) of Section 5 above, the
term "Person" as used in such paragraph means the definition of
the term "Person" found in Section 3(a)(9) of the Securities
Exchange Act of 1934.

          (b)  The term "outstanding", when used with reference
to shares of stock, shall mean issued shares, excluding shares
held by the Corporation or a subsidiary.

          (c)  The headings of the paragraphs, subparagraphs,
clauses and subclauses of this Certificate of Designations are
for convenience of reference only and shall not define, limit or
affect any of the provisions hereof.

				14
<PAGE>

     IN WITNESS WHEREOF, Vanguard Health Systems, Inc. has caused
this Certificate of Designations to be signed and attested by the
undersigned this __ day of ______, 2002.

                         VANGUARD HEALTH SYSTEMS, INC.

                         By:__________________________
                            Name: Joseph D. Moore
                            Title:Executive Vice President

ATTEST:

__________________________
Name:  Ronald P. Soltman
Secretary

				15EXHIBIT 10.3

                            Exhibit B

This  Note  has not been registered under the Securities  Act  of
1933  and  may  not  be  offered or sold except  pursuant  to  an
exemption  from,  or  in  a  transaction  not  subject  to,   the
registration requirements of the Securities Act of 1933.

                  VANGUARD HEALTH SYSTEMS, INC.

          8.18% Convertible Subordinated Note due 2012

$17,641,800                                         Nashville, TN
                                               __________ 1, 2002

     VANGUARD HEALTH SYSTEMS, INC. a Delaware corporation (the
"Company"), for value received, promises to pay to Baptist Health
System, or its assigns, the principal sum of Seventeen Million
Six Hundred Forty One Thousand Eight Hundred dollars
($17,641,800) on __________ 1, 2012.

     Interest Payment Dates: __________ 1, commencing __________
1, 2003.

     Reference is hereby made to the further provisions of this
Note set forth on Annex A attached hereto, which further
provisions (including, without limitation, the subordination
provisions contained in Section 10 hereof) shall for all purposes
have the same effect as if set forth at this place.

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

                              VANGUARD HEALTH SYSTEMS, INC.

                              By:__________________________
                                 Name:
                                 Title:

<PAGE>

                             ANNEX A

                               to

          8.18% Convertible Subordinated Note due 2012

                 Principal Amount:  $17,641,800

1.   Principal and Interest.

     The Company will pay the principal of this Note on
__________ 1, 2012.

     The Company promises to pay interest on the principal amount
of this Note on each Interest Payment Date, as set forth below,
at the rate of 8.18% per annum, for an annual interest payment
amount of $______ $1,443,099.

     Interest will be payable annually to the Person (as defined
below), who is the holder of this Note in the records of the
Company (the "Holder") at the close of business on the __________
15 immediately preceding the Interest Payment Date, on each
__________ 1 ("Interest Payment Date"), commencing __________ 1,
2003.

     Interest on this Note will accrue from the most recent date
to which interest has been paid or, if no interest has been paid,
from __________ 1, 2002.

     The Company shall pay interest on overdue principal, and
interest on overdue installments of interest, to the extent
lawful, at the rate of 10.18% per annum.

     The term "Person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-
stock company, trust or unincorporated organization.

2.   Method of Payment.

     The Company will pay principal and, as provided above,
interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts.
However, the Company may pay principal and interest by its check
payable in such money. It may mail an interest check to a
Holder's address (as reflected in the records of the Company). If
a payment date is a date other than a business day, payment may
be made at that place on the next succeeding day that is a
business day and no interest shall accrue for the intervening
period.

3.   Optional Redemption.

     The Company shall not have the option to redeem this Note
prior to __________ 1, 2007.  On and after __________ 1, 2007 and
prior to maturity, this Note is redeemable, at the Company's
option, in whole or in part, upon not less than 30 nor more than
60 days' prior notice mailed by first-class mail to the Holder's
last address, as it appears in the Company's records, at the
redemption prices prior to maturity (expressed as percentages of
principal amount) set forth

				1
<PAGE>

below, plus accrued and unpaid interest to the date fixed for such
redemption (the "Redemption Date") if redeemed during the twelve-month
period beginning on __________ 1 of the years indicated below:

     If Redeemed During the
     12-Month Period Commencing      Redemption Price

     __________ 1, 2007		     102%

     __________ 1, 2008		     101%

     __________ 1, 2009 and          100%
     thereafter

     On and after the Redemption Date, interest shall cease to
accrue on this Note, or portion thereof called for redemption,
unless the Company defaults in the payment of the redemption
price.

4.   Repurchase upon Change of Control.

     Within 30 days after the occurrence of a Change of Control
(as defined below), the Company must commence and consummate an
offer to purchase (the "Offer to Purchase") this Note, at a
purchase price equal to 100% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase (the
"Payment Date").

     The Company will not be required to make an Offer to
Purchase if a third party makes an offer to purchase this Note in
the manner, at the times and at the price otherwise in compliance
with this Note and actually purchases this Note, if validly
tendered and not withdrawn.

     Prior to the commencement (or mailing) of the Offer to
Purchase, but in any event within 30 days following the
occurrence of a Change of Control, the Company must either (a)
repay in full and terminate all commitments under Indebtedness
(as defined below) under the Credit Agreement (as defined below),
all other Special Senior Indebtedness (as defined below), the
terms of which require repayment upon a Change of Control, and
repay in full the Public Notes (as defined below) under the
Indenture (as defined below), or offer to repay in full and
terminate all commitments under all Indebtedness under the Credit
Agreement, all other such Special Senior Indebtedness and the
Public Notes under the Indenture and to repay the Indebtedness
owed to, and terminate all commitments of, each lender which has
accepted such offer; or (b) obtain the requisite consents under
the Credit Agreement, all other Special Senior Indebtedness and
the Indenture to permit the repurchase of this Note as provided
above.

     The term "Change of Control" means such time as one of the
following shall occur:

          (i)  the consummation of any transaction, including,
     without limitation, any merger or consolidation, the result
     of which is that any "Person" or "group" (within the meaning
     of Sections 13(d) and 14(d)(2) of the Securities Exchange
     Act of 1934), other

				2
<PAGE>

     than (A) any of the officers of the
     Company on __________ 1, 2002 holding the office of
     Executive Vice President or a higher office or (B) Morgan
     Stanley Capital Partners III, L.P., MSCP III 892 Investors,
     L.P., Morgan Stanley Capital Investors, L.P., Morgan Stanley
     Dean Witter Capital Partners IV, L.P., MSDW IV 892
     Investors, L.P. and Morgan Stanley Dean Witter Capital
     Investors IV, L.P., or any other merchant banking or similar
     fund under common control with any of the aforementioned
     entities (such Persons defined in the foregoing clauses (A)
     and (B) being referred to hereinafter as "Existing
     Shareholders"), becomes the ultimate "beneficial owner" (as
     defined in Rule 13d-3 under the Securities Exchange Act of
     1934) of  shares of capital stock of any class or kind
     ordinarily having the power to vote for the election of
     directors of the Company representing more than 50% of the
     total voting power of all such shares of capital stock on a
     fully diluted basis;

          (ii) the direct or indirect sale, transfer, conveyance
     or other disposition, not including a merger or
     consolidation, in one or a series of related transactions,
     of all or substantially all of the properties or assets of
     the Company and its subsidiaries taken as a whole to any
     "Person" or "group" (as those terms are defined in clause
     (i) above), other than to the Existing Stockholders;

          (iii)     the adoption of a plan relating to the
     liquidation or dissolution of the Company; or

          (iv) during any consecutive two year period,
     individuals who at the beginning of such period constituted
     the Board of Directors (together with any new directors (a)
     appointed or nominated by one or more Existing Stockholders
     or (b) whose election by the Board of Directors or whose
     nomination by the Board of Directors for election by the
     Company's stockholders was approved by a vote of at least a
     majority of the members of the Board of Directors then in
     office who either were members of the Board of Directors on
     __________ 1, 2002 or whose election or nomination for
     election was previously so approved) cease for any reason
     during such period to constitute a majority of the members
     of the Board of Directors then in office.

     The term "Common Stock" means the Company's common stock,
$.01 par value.

     The term "Credit Agreement" means the Credit Agreement among
the Company, the lenders, agents and co-agents (and joint lead
arrangers and book managers) from time to time party thereto and
Bank of America, N.A., as Administrative Agent, dated as of July
30, 2001, together with all agreements, notes, instruments and
documents executed or delivered pursuant thereto and in
connection therewith, including, without limitation, all
mortgages, other security documents and guarantees, in each case
as amended (including any amendment and restatement),
supplemented, extended, renewed, replaced (by one or more credit
facilities, debt instruments and/or related documentation) or
otherwise modified from time to time including, without
limitation, any agreement increasing the amount of, extending the
maturity of or refinancing (in whole or in part) (including, but
not limited to, by the inclusion of additional or different
lenders thereunder or additional borrowers or guarantors thereof)
all or any portion of the Indebtedness (as defined below) under
such agreement or any successor agreement or agreements and
whether by the same or any other agent, lender or group of
lenders.

				3
<PAGE>

     The term "Indebtedness" means, with respect to any Person at
any date of determination (without duplication):

          (i)  all indebtedness of such Person for borrowed money;

          (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 (including reimbursement
     obligations with respect thereto, but excluding obligations with
     respect to letters of credit (including trade letters of credit)
     securing obligations (other than obligations described in (i) or
     (ii) above or (v) or (vi) below) entered into in the ordinary
     course of business of such Person to the extent such letters of
     credit are not drawn upon or, if drawn upon, to the extent such
     drawing is reimbursed no later than the 15th day following
     receipt by such Person of a demand for reimbursement);

          (iv) all obligations of such Person to pay the deferred and
     unpaid purchase price of property or services, which purchase
     price is due more than six months after the date of placing such
     property in service or taking delivery and title thereto or the
     completion of such services if, and to the extent that, such
     amount would appear as a liability on the balance sheet of such
     Person, except trade payables and other accrued expenses arising
     in the ordinary course of business and payable within one year of
     the incurrence thereof;

          (v)  all capitalized lease obligations;

          (vi) all Indebtedness of other Persons secured by a lien on any
     asset of such Person, whether or not such Indebtedness is assumed
     by such Person; provided that the amount of such Indebtedness
     shall be the lesser of (a) the fair market value of such asset at
     such date of determination and (b) the amount of such
     Indebtedness;

          (vii)     all Indebtedness of other Persons guaranteed by such
     Person to the extent such Indebtedness is guaranteed by such
     Person; and

          (viii)    to the extent not otherwise included in this
     definition, obligations under commodity agreements, currency
     agreements and interest rate agreements (other than, [except for
     the purposes of the definition of Special Senior Indebtedness,]
     commodity agreements, currency agreements and interest rate
     agreements designed to protect the Company or its subsidiaries
     against fluctuations in commodity prices, foreign currency
     exchange rates or interest rates and that do not increase the
     Indebtedness of the obligor outstanding at any time other than as
     a result of fluctuations in commodity prices, foreign currency
     exchange rates or interest rates or by reason of fees,
     indemnities and compensation payable thereunder).

				4
<PAGE>

The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations
as described above and, with respect to contingent obligations, the maximum
liability upon the occurrence of the contingency giving rise to the
obligation; provided that

          (A)  the amount outstanding at any time of any Indebtedness
     issued with original issue discount is the face amount of such
     Indebtedness less the remaining unamortized portion of the
     original issue discount of such Indebtedness at such time as
     determined in conformity with generally accepted accounting
     principles,

          (B)  money borrowed and set aside at the time of the incurrence
     of any Indebtedness in order to pre-fund the payment of the
     interest on such Indebtedness shall not be deemed to be
     "Indebtedness" so long as such money is held to secure the
     payment of such interest,

          (C)  the amount of any Indebtedness secured by a lien on an asset
     of such Person but not otherwise the obligation, contingent or
     otherwise, of such Person, shall be the lesser of (x) the fair
     market value of such asset on the date the lien attached and (y)
     the amount of such Indebtedness,

          (D)  the amount of any Indebtedness under any commodity
     agreement, currency agreement or interest rate agreement that is
     Indebtedness shall be the net amount payable by such Person if
     such agreement were terminated at that time, and

          (E)  Indebtedness shall not include:

               (x)  liability for federal, state, local or other
          taxes,

               (y)  performance, surety or appeal bonds provided
          in the ordinary course of business or

               (z)  agreements providing for indemnification,
          adjustment of purchase price or similar obligations, or
          guarantees or letters of credit, surety bonds or
          performance bonds securing any obligations of the
          Company or any of its subsidiaries pursuant to such
          agreements, in any case incurred in connection with the
          disposition of any business, assets or subsidiary
          (other than guarantees of Indebtedness Incurred by any
          Person acquiring all or any portion of such business,
          assets or subsidiary for the purpose of financing such
          acquisition), so long as the principal amount does not
          exceed the gross proceeds actually received by the
          Company or any of its subsidiaries in connection with
          such disposition.

     The term "Indenture" means the Indenture dated as of July
30, 2001, in respect of the Public Notes.

     The term "Public Notes" means the Company's 9 3/4% Senior
Subordinated Notes due 2011, originally issued in $300 million
principal amount.

				5
<PAGE>

     The term "Special Senior Indebtedness" means the following
obligations of the Company or any of its subsidiaries, whether
outstanding on __________ 1, 2002 or thereafter incurred: (i) all
Indebtedness and all other monetary obligations (including,
without limitation, expenses, fees, principal, premium, interest
(in each case, including any interest accruing subsequent to the
filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law), reimbursement
obligations under letters of credit and indemnities payable in
connection therewith) under (or in respect of) the Credit
Agreement or any commodity agreement, interest rate agreement or
currency agreement and (ii) all Indebtedness and all other
monetary obligations of the Company or any subsidiary of the
Company (other than the Public Notes and any guarantee thereof),
including principal, premium, and interest (in each case,
including any interest accruing subsequent to the filing of a
petition of bankruptcy at the rate provided for in the
documentation with respect thereto, whether or not such interest
is an allowed claim under applicable law) on such Indebtedness,
unless such Indebtedness, by its terms or by the terms of any
agreement or instrument pursuant to which such Indebtedness is
issued, is expressly made pari passu with, or subordinated in
right of payment to, the Public Notes or any guarantee thereof;
provided that the term "Special Senior Indebtedness" shall not
include (a) any Indebtedness of the Company or any subsidiary of
the Company to a subsidiary of the Company, or to a joint venture
in which the Company or any subsidiary of the Company has an
interest, (b) any repurchase, redemption or other obligation in
respect of Disqualified Stock (as defined in the Indenture), (c)
any Indebtedness to any employee of the Company or any of its
subsidiaries, (d) any liability for taxes owed or owing by the
Company or any of its subsidiaries or (e) any trade payables.

5.   Offer to Purchase in Connection with Asset Sales.

     If, as of the last day of any calendar month, the Company
has Excess Proceeds (as defined below) not theretofore subject to
an Offer to Purchase pursuant to this Section 5 totaling at least
$10 million, the Company must commence, not later than 30 days
after such date, and consummate an Offer to Purchase from the
Holder of this Note (and if required by the terms of any
Indebtedness that is pari passu with this Note, from the holders
thereof, on a pro rata basis), an aggregate principal amount of
this Note (and such pari passu Indebtedness) equal to the Excess
Proceeds on such date, at a purchase price equal to 100% of their
principal amount, plus accrued interest (if any) to the Payment
Date.

     The term "Excess Proceeds" means the Company has Net Cash
Proceeds (as defined in the Indenture) from its Asset Sales (as
defined in the Indenture) after utilizing such proceeds (1) to
permanently repay its Special Senior Indebtedness, if any, within
12 months of the receipt of such Net Cash Proceeds, (2) to invest
such Net Cash Proceeds within such 12 months in Replacement
Assets (as defined in the Indenture) or (3) to fund an offer to
purchase the Public Notes (and if required by the terms of any
Indebtedness that is pari passu with the Public Notes, from the
holders thereof), if any.

				6
<PAGE>

6.   Mandatory Redemption.

     Except as described in Sections 4 and 5 above, the Company
is not required to make mandatory redemption of, or sinking fund
payments with respect to, this Note.

7.   Successor Persons.

     When a successor Person assumes all the obligations of its
predecessor under this Note, the successor Person shall succeed
to and be substituted for the predecessor Person.

8.   Defaults and Remedies.

     Any of the following events constitutes an "Event of
Default" under this Note:

          (a)  default in the payment of principal of this Note when the
     same becomes due and payable at maturity, upon acceleration,
     redemption or otherwise;

          (b)  default in the payment of interest on this Note when the
     same becomes due and payable, and such default continues for a
     period of 30 days;

          (c)  the failure by the Company to make or consummate an Offer to
     Purchase in accordance with Section 4 or 5 above 30 days after
     notice of the Holder to the Borrower of such failure;

          (d)  any final judgment or order for the payment of money in
     excess of $10 million in the aggregate for all such final
     judgments or orders (not covered by insurance or indemnity
     provided by a reputable and creditworthy Person, but treating any
     deductibles, self-insurance or retention, or in the case of
     indemnity, amounts excluded by baskets, caps, thresholds or
     similar limitations, as not so covered) shall be rendered against
     the Company or any subsidiary of the Company, and shall not be
     paid or discharged, and there shall be any period of 60
     consecutive days following entry of the final judgment or order
     that causes the aggregate amount for all such final judgments or
     orders outstanding and not paid or discharged against the Company
     or any subsidiary of the Company to exceed $10 million during
     which a stay of enforcement of such final judgment or order, by
     reason of a pending appeal or otherwise, shall not be in effect;

          (e)  a court having jurisdiction in the premises enters a decree
     or order for (A) relief in respect of the Company, in an
     involuntary case under any applicable bankruptcy, insolvency or
     other similar law now or hereafter in effect, (B) appointment of
     a receiver, liquidator, assignee, custodian, trustee,
     sequestrator or similar official of the Company, for all or
     substantially all of the property and assets of the Company, or
     (C) the winding up or liquidation of the affairs of the Company,
     and such decree or order shall remain unstayed and in effect for
     a period of 60 consecutive days; or

          (f)  the Company (A) commences a voluntary case under any
     applicable bankruptcy, insolvency or other similar law now or
     hereafter in effect, or consents to the

				7
<PAGE>

     entry of an order for relief in an involuntary case under any such law,
     (B) consents to the appointment of or taking possession by a receiver,
     liquidator, assignee, custodian, trustee, sequestrator or similar
     official of the Company, or for all or substantially all of the
     property and assets of the Company, or (C) effects any general
     assignment for the benefit of creditors.

          If an Event of Default occurs and is continuing, the
     Holder may declare this Note to be due and payable unless
     there are any amounts outstanding under the Credit
     Agreement, in which case the same shall become immediately
     due and payable upon the first to occur of an acceleration
     under the Credit Agreement or the payment in full of all
     loans, reimbursement obligations and all other obligations
     and the termination of all commitments and letters of credit
     thereunder (but only if such Event of Default is then
     continuing). Upon a declaration of acceleration, such
     principal of, premium, if any, and accrued interest shall be
     immediately due and payable.  If a bankruptcy or insolvency
     default with respect to the Company occurs, this Note
     automatically becomes immediately due and payable.

9.   No Recourse Against Others.

     No incorporator or any past, present or future partner,
stockholder, other equityholder, officer, director, employee or
controlling Person, as such, of the Company, shall have any
liability for any obligations of the Company under this Note, or
for any claim based on, in respect of or by reason of, such
obligations or their creation. The Holder by accepting this Note
waives and releases all such liability. The waiver and release
are part of the consideration for this issuance of the Note.

10.  Subordination of this Note.

     10.1.     Agreement to Subordinate.  The Company covenants and
agrees, and the Holder of this Note, by its acceptance hereof,
likewise covenants and agrees, (i) that this Note shall be issued
subject to the provisions of this Section 10, and each Person
holding this Note, whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees that the
payment of all obligations on this Note by the Company shall, to
the extent and in the manner herein set forth, be subordinated
and junior in right of payment to the prior payment in full in
cash or cash equivalents of all existing and future Senior
Indebtedness (as defined in Section 10.11(b) below), including,
without limitation, the Company's obligations under the Credit
Agreement and (ii) that the subordination is for the benefit of,
and shall be enforceable directly by, the holders of Senior
Indebtedness, and that each holder of Senior Indebtedness whether
now outstanding or hereafter created, incurred, assumed or
guaranteed shall be deemed to have acquired Senior Indebtedness
in reliance upon the covenants and provisions contained in this
Note.

10.2.     Liquidation; Dissolution; Bankruptcy. (a) Upon any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors
upon any total or partial liquidation, dissolution, winding-up,
reorganization, assignment for the benefit of creditors or
marshaling of assets of the Company or in a bankruptcy,
reorganization, insolvency, receivership or other similar
proceeding relating to the

				8
<PAGE>

Company or its property, whether voluntary or involuntary, all amounts
due or to become due upon all Senior Indebtedness (including any interest
accruing subsequent to the filing of a petition for bankruptcy at the rate
provided for in the documentation with respect thereto, whether
or not such interest is an allowed claim under applicable law)
shall first be paid in full in cash or cash equivalents, before
any payment or distribution of any kind or character is made on
account of this Note, or for the acquisition of this Note for
cash, property, securities or otherwise or any distribution with
respect to this Note, whether of cash, property, securities or
otherwise. Before any payment may be made by, or on behalf of,
the Company on this Note upon any such dissolution, winding up,
liquidation or reorganization, all Senior Indebtedness (including
any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim
under applicable law) must be paid in full in cash or cash
equivalents.

          (b)  To the extent any payment of Senior Indebtedness
     (whether by or on behalf of the Company, as proceeds of
     security or enforcement of any right of setoff or otherwise)
     is declared to be fraudulent or preferential, set aside or
     required to be paid to any receiver, trustee in bankruptcy,
     liquidating trustee, agent or other similar Person under any
     bankruptcy, insolvency, receivership, fraudulent conveyance
     or similar law, then, if such payment is recovered by, or
     paid over to, such receiver, trustee in bankruptcy,
     liquidating trustee, agent or other similar Person, the
     Senior Indebtedness or part thereof originally intended to
     be satisfied shall be deemed to be reinstated and
     outstanding as if such payment had not occurred. To the
     extent that the obligation to repay any Senior Indebtedness
     is declared to be fraudulent, invalid, or otherwise set
     aside under any bankruptcy, insolvency, receivership,
     fraudulent conveyance or similar law, then the obligation so
     declared fraudulent, invalid or otherwise set aside (and all
     other amounts that would come due with respect thereto had
     such obligation not been so affected) shall be deemed to be
     reinstated and outstanding as Senior Indebtedness for all
     purposes hereof as if such declaration, invalidity or
     setting aside had not occurred.

          (c)  In the event that, notwithstanding the foregoing,
     any payment or distribution of assets or securities of the
     Company of any kind or character, whether in cash, property,
     securities or otherwise, to which the Holder of this Note
     would be entitled, but for Section 10.2(a) or Section
     10.2(b), shall be made by the Company or by any receiver,
     trustee in bankruptcy, liquidating trustee, agent or other
     similar Person making such payment or distribution for the
     Holder of this Note prior to payment in full in cash or cash
     equivalents of all Senior Indebtedness, such payment or
     distribution shall be held in trust for the benefit of, and
     shall be paid over or delivered to, the holders of Senior
     Indebtedness (proportionately to such holders on the basis
     of the respective amount of Senior Indebtedness held by such
     holders) or their respective representatives, or to the
     trustee or trustees under any indenture pursuant to which
     any of such Senior Indebtedness may have been issued, as
     their respective interests may appear, to the extent
     necessary to pay all such Senior Indebtedness in full in
     cash or cash equivalents, after giving effect to any
     concurrent payment, distribution or provision therefor to or
     for the holders of such Senior Indebtedness.

				9
<PAGE>

          (d)  The consolidation of the Company with, or the
     merger of the Company with or into, another corporation or
     the liquidation or dissolution of the Company
     following the conveyance or transfer of all or substantially all
     of its assets, to another corporation and as long as permitted
     under the terms of the Senior Indebtedness shall not be
     deemed a dissolution, winding-up, liquidation or
     reorganization for the purposes of this Section 10.2 if such
     other corporation shall, as a part of such consolidation,
     merger, conveyance or transfer, assume the Company's
     obligations hereunder.

     10.3.     Default on Senior Indebtedness.  (a) No direct or
indirect payment by or on behalf of the Company of this Note
whether pursuant to the terms of this Note or upon acceleration
or otherwise shall be made if, at the time of such payment, there
exists a default or an event of default under any Senior
Indebtedness and such default or event of default, as the case
may be, shall not have been cured or waived or the benefits of
this sentence waived by or on behalf of the holders of such
Senior Indebtedness, and to the extent that any payment under
this Note would otherwise be required pursuant to the terms
hereof, such payment shall be deferred until such time as such
payment may be made under the terms of this Annex A and the
failure to make any such payment shall not give rise to an Event
of Default under this Note.

          (b)  In the event that, notwithstanding the foregoing,
     any payment shall be received by the Holder when such
     payment is prohibited by Section 10.3(a), such payment shall
     be held in trust for the benefit of, and shall be paid over
     or delivered to, the holders of Senior Indebtedness
     (proportionately to such holders on the basis of the
     respective amount of Senior Indebtedness held by such
     holders) or their respective representatives, as their
     respective interests may appear.

     10.4.     Acceleration of this Note.  If payment of this Note is
accelerated because of an Event of Default, the Company shall
promptly notify holders of Senior Indebtedness of the
acceleration (although the failure to give any such notice shall
not affect the subordination provisions of this Section 10).

     10.5.     Notice by Company.  The Company shall give prompt
written notice to the Holder of any fact known to the Company
which would prohibit the making of any payment to the Holder in
respect of this Note pursuant to the provisions of this Section
10 (although the failure to give any such notice shall not affect
the subordination provisions of this Section 10). Regardless of
anything to the contrary contained in this Section 10 or
elsewhere in this Note, the Holder shall not be charged with
knowledge of the existence of any default or event of default
with respect to any Senior Indebtedness or of any other facts
which would prohibit the making of any payment to the Holder
unless and until the Holder shall have received notice in writing
from the Company, or from a holder of Senior Indebtedness or a
representative therefor and, prior to the receipt of any such
written notice, the Holder shall be entitled to assume (in the
absence of actual knowledge to the contrary) that no such facts
exist.

     10.6.     Subrogation.  (a) Subject to the payment in full in
cash or cash equivalents of all Senior Indebtedness, the Holder
of this Note shall be subrogated to the rights of the holders of
Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior
Indebtedness until this Note shall be paid in full; and, for the

				10
<PAGE>

purposes of such subrogation, no such payments or distributions
to the holders of the Senior Indebtedness by or on behalf of the
Company or by or on behalf of the Holder by virtue of this
Section 10 which otherwise would have been made to the Holder
shall, as between the Company and the Holder of this Note, be
deemed to be a payment by the Company to or on account of the
Senior Indebtedness, it being understood that the provisions of
this Section 10 are and are intended solely for the purpose of
defining the relative rights of the Holder of this Note, on the
one hand, and the holders of the Senior Indebtedness, on the
other hand.

          (b)  If any payment or distribution to which the Holder
     would otherwise have been entitled but for the provisions of
     this Section 10 shall have been applied, pursuant to the
     provisions of this Section 10, to the payment of all amounts
     payable under Senior Indebtedness, then in such case, the
     Holder shall be entitled to receive from the holders of such
     Senior Indebtedness any payments or distributions received
     by such holders of Senior Indebtedness in excess of the
     amount required to make payment in full, in cash or cash
     equivalents, of such Senior Indebtedness of such holders.

     10.7.     Relative Rights.  Nothing contained in this Section 10
or elsewhere in this Note is intended to or shall impair, as
between the Company and the Holder, the obligation of the
Company, which is absolute and unconditional, to pay to the
Holder the principal of and interest on this Note as and when the
same shall become due and payable in accordance with its terms,
or is intended to or shall affect the relative rights of the
Holder and creditors of the Company other than the holders of the
Senior Indebtedness, nor, except as specifically provided herein,
shall anything herein or therein prevent the Holder from
exercising all remedies otherwise permitted by applicable law
upon default under this Note, subject to the rights, if any,
under this Section 10 of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received
upon the exercise of any such remedy. Upon any payment or
distribution of assets or securities of the Company referred to
in this Section 10, the Holder shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in
which any liquidation, dissolution, winding-up or reorganization
proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidating trustee or agent or other
Person making any payment or distribution to the Holder for the
purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of Senior Indebtedness
and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Section
10.  The Holder shall be entitled to rely on the delivery to it
of a written notice by a Person representing himself or itself to
be a holder of any Senior Indebtedness (or a trustee on behalf
of, or other representative of, such holder) to establish that
such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such
holder.

     In the event that the Holder of this Note determines in good
faith that any evidence is required with respect to the right of
any Person as a holder of Senior Indebtedness to participate in
any payment or distribution pursuant to this Section 10, the
Holder may request such Person to furnish evidence to the
reasonable satisfaction of the Holder as to the amount of Senior
Indebtedness held by such Person, the extent to which such Person
is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under this

				11
<PAGE>

Section 10, and if such evidence is not furnished, the Holder may
defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.

     10.8.     Subordination May Not Be Impaired by Company.  (a) No
right of any present or future holder of any Senior Indebtedness
to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on
the part of the Company or by any act or failure to act by any
such holder, or by any non-compliance by the Company with the
terms, provisions and covenants of this Note, regardless of any
knowledge thereof any such holder may have or be otherwise
charged with.

          (b)  Without limiting the generality of subsection (a)
     of this Section 10.8, the holders of Senior Indebtedness
     may, at any time and from time to time, without the consent
     of or notice to the Holder of this Note, without incurring
     responsibility to the Holder of this Note and without
     impairing or releasing the subordination provided in this
     Section 10 or the obligations hereunder of the Holder of
     this Note to the holders of Senior Indebtedness, do any one
     or more of the following: (1) change the manner, place,
     terms or time of payment of, or renew or alter, Senior
     Indebtedness or any instrument evidencing the same or any
     agreement under which Senior Indebtedness is outstanding;
     (2) sell, exchange, release or otherwise deal with any
     property pledged, mortgaged or otherwise securing Senior
     Indebtedness; (3) release any Person liable in any manner
     for the collection or payment of Senior Indebtedness; and
     (4) exercise or refrain from exercising any rights against
     the Company and any other Person.

     10.9.     Distribution or Notice to Representative.  Whenever a
distribution is to be made or a notice given to holders of Senior
Indebtedness, the distribution may be made and the notice given
to their representative (if any).

     Upon any payment or distribution of assets of the Company
referred to in this Section 10, the Holder of this Note shall be
entitled to rely upon any order or decree made by any court of
competent jurisdiction or upon any certificate of such
representative or of the liquidating trustee or agent or other
Person making any distribution to the Holder of this Note for the
purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and
other Indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and
all other facts pertinent thereto or to this Section 10.

     10.10.    Authorization to Effect Subordination.  The Holder of
this Note by the Holder's acceptance hereof authorizes and
expressly directs the Company on such Holder's behalf to take
such action as may be necessary or appropriate to effect the
subordination provisions contained in this Section 10, and
appoints the Company such Holder's attorney-in-fact for such
purpose, including, in the event of any liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of
creditors or marshaling of assets of the Company tending towards
liquidation or reorganization of the business and assets of the
Company, the immediate filing of a claim for the unpaid balance
of the Holder's Note in the form required in said proceedings and
cause said claim to be approved. If the Company does not file a
proper claim or proof of debt in the form required in any
judicial proceeding related to the Company prior to 30 days
before the expiration

				12
<PAGE>

of the time to file such claim or claims,
then any of the holders of the Senior Indebtedness or their
representative is hereby authorized to file an appropriate claim
for and on behalf of the Holder of this Note. Nothing herein
contained shall be deemed to authorize the Company or the
holders of Senior Indebtedness or their representative to authorize or
consent to or accept or adopt on behalf of the Holder any plan of
reorganization, arrangement, adjustment or composition affecting
this Note or the rights of the Holder, or to authorize the
Company or the holders of Senior Indebtedness or their
representative to vote in respect of the claim of the Holder in
any such proceeding.

     10.11.    Certain Defined Terms.

          The term "Senior Indebtedness" means (i) Special Senior
     Indebtedness, (ii) the Public Notes and any Indebtedness
     that is pari passu with the Public Notes, (iii) any monetary
     obligation of the Company, whether outstanding at
     __________, 2002 or thereafter incurred, for the payment of
     principal or interest which obligation (a) is for money
     borrowed or is evidenced by notes, bonds, debentures or
     similar instruments, (b) arises under a capital lease, (c)
     is a guarantee of an obligation which, if incurred directly
     by the Company, would constitute Senior Indebtedness, (d)
     arises under commodity agreements, currency agreements and
     interest rate agreements (other than, except for the
     purposes of the definition of Special Senior Indebtedness,
     commodity agreements, currency agreements and interest rate
     agreements designed to protect the Company or its
     subsidiaries against fluctuations in commodity prices,
     foreign currency exchange rates or interest rates and that
     do not increase the Indebtedness of the obligor outstanding
     at any time other than as a result of fluctuations in
     commodity prices, foreign currency exchange rates or
     interest rates or by reason of fees, indemnities and
     compensation payable thereunder), (e) is a reimbursement
     obligation in respect of any letter of credit or other
     similar instrument; (f) represents the deferred and unpaid
     purchase price of property or services, which purchase price
     is due more than six months after the date of placing such
     property in service or taking delivery and title thereto or
     the completion of such services if, and to the extent that,
     such amount would appear as a liability on the balance sheet
     of such Person; or (g) is an amendment, extension, renewal,
     restructuring or refinancing of Senior Indebtedness; and
     (iv) interest that would accrue but for the filing of a
     petition under any bankruptcy law on any obligation
     described in clause (i), (ii) or (iii) above, unless the
     instrument creating such obligation expressly provides that
     it is not senior in right of payment to this Note.
     Notwithstanding the foregoing, Senior Indebtedness does not
     include (a) accounts payable or other indebtedness to trade
     creditors created in the ordinary course of business, or (b)
     any liability for federal, state, local or other taxes owed
     or owing by the Company.

11.  Conversion Rights.  The Holder of this Note shall be subject
to the following with respect to the conversion of this Note into
shares of the Common Stock of the Company (the "Conversion
Rights"):

          (a)  Conversion.  The Holder of this Note is entitled, at his
     option, at any time on or before the close of business on the
     business day prior to __________ 1, 2012, or in case this Note or
     a portion hereof is called for redemption or the Holder hereof has

				13
<PAGE>

     exercised his right to require the Company to repurchase this
     Note or such portion hereof, then in respect of this Note until
     and including, but (unless the Company defaults in making the
     payment due upon redemption or repurchase, as the case may be)
     not after, the close of business on the business day prior to the
     Redemption Date or such repurchase date, as the case may be, to
     convert this Note (or any portion of the principal amount hereof
     that is an integral multiple of $1,000, provided that the
     unconverted portion of such principal amount is $1,000 or any
     integral multiple of U.S. in excess thereof) into fully paid and
     nonassessable shares of Common Stock of the Company at a
     Conversion Rate of shares of Common Stock of the Company which is
     set forth in Section 11(c) below for each $1,000 principal amount
     of this Note, by surrender of this Note, duly endorsed or
     assigned to the Company or in blank.

          (b)  Lock-Up.  Notwithstanding anything to the contrary set forth
     herein, as a condition to the Company's obligation to issue to
     the Holder of this Note a certificate or certificates for the
     number of shares of Common Stock to which the Holder is entitled,
     the Holder (by acceptance of this Note) agrees, in connection
     with the Company's Qualifying IPO (as defined in this Section
     11(b) below), to enter into a written agreement not to effect any
     public sale or distribution of any shares of Common Stock
     issuable to the Holder, if and to the extent requested by the
     managing underwriter for the Qualifying IPO as to the Notes and
     substantially all parity or junior securities and substantially
     all equity securities of the Company during the 14 days prior to,
     and during an up to 180-day period beginning on, the effective
     date of the registration statement relating to the Qualifying IPO
     without the written consent of such managing underwriter;
     provided that the Holder of this Note has received written notice
     of such registration at least 5 business days prior to the
     anticipated beginning of the 14-day period referred to above.
     The term "Qualifying IPO means a firmly underwritten public
     offering pursuant to an effective registration statement under
     the Securities Act of 1933 covering the offer and sales of shares
     of Common Stock for the account of the Company in which the gross
     cash proceeds to the Company (before underwriting discounts,
     commissions and fees) are not less than $50,000,000.

          (c)  Conversion Rate.  The Conversion Rate shall be 0.2857142
     shares of Common Stock for each $1,000 principal amount of this
     Note.  In case outstanding shares of Common Stock shall be
     subdivided into a greater number of shares of Common Stock, the
     Conversion Rate in effect at the opening of business on the day
     following the day upon which such subdivision becomes effective
     shall be proportionately increased, and, conversely, in case
     outstanding shares of Common Stock shall be combined into a
     smaller number of shares of Common Stock, the Conversion Rate in
     effect at the opening of business on the day following the day
     upon which such subdivision or combination becomes effective
     shall be proportionately reduced, such increase or reduction, as
     the case may be, to become effective immediately after the
     opening of business on the day following the day upon which such
     subdivision or combination becomes effective.

          (d)  Mechanics of Conversion.  Upon conversion of this Note, the
     Holder of this Note shall surrender the original executed Note,
     duly endorsed, at the office of the Company or its transfer
     agent.  Thereupon, the Company shall promptly issue and deliver

				14
<PAGE>

     at such office to the Holder a certificate or certificates for
     the number of shares of Common Stock to which the Holder is
     entitled and shall promptly pay in cash or in
     additional shares of Common Stock, any accrued and unpaid interest
     on this Note being converted.

          (e)  Fractional Shares.  At the option of the Company, no
     fractional shares of Common Stock shall be issued upon conversion
     of this Note and all shares of Common Stock (including fractions
     thereof) issuable upon conversion of this Note by the Holder
     shall be aggregated for purposes of determining whether the
     conversion would result in the issuance of any fractional share.
     If, after the aforementioned aggregation, the conversion would
     result in the issuance of any fractional share, the Company may
     at its option, in lieu of issuing any fractional share, pay cash
     equal to the product of such fraction multiplied by the Current
     Market Price (as defined below) of the Common Stock.  "Current
     Market Price" means, in the event the Common Stock is publicly
     traded, the average of the daily closing prices per share of
     Common Stock for 30 consecutive trading days ending no more than
     15 business days before the conversion date (as adjusted for any
     stock dividend, split, combination or reclassification that took
     effect during such period).  The closing price for each day shall
     be the last reported sale price regular way or, in case no such
     reported sale takes place on such day, the average of the last
     closing bid and asked prices regular way, in either case on the
     principal national securities exchange on which the Common Stock
     is listed or admitted to trading, or if not listed or admitted to
     trading on any national securities exchange, the closing sale
     price for such day reported by NASDAQ, if the Common Stock is
     traded over-the-counter and quoted in the National Market System,
     or if the Common Stock is so traded, but not so quoted, the
     average of the closing bid and asked prices of the Common Stock
     as reported by NASDAQ or any comparable system or, if the Common
     Stock is not listed on NASDAQ or any comparable system, the
     average of the closing bid and asked prices as furnished by two
     members of the National Association of Securities Dealers, Inc.
     selected from time to time by the Corporation for that purpose.
     If the Common Stock is not traded in such manner that the
     quotations referred to above are available for the period
     required hereunder, Current Market Price per share of Common
     Stock shall be deemed to be the fair value as determined by the
     Board of Directors, irrespective of any accounting treatment.

          (f)  Reservation of Stock Issuable Upon Conversion.  The Company
     shall at all times reserve and keep available out of its
     authorized but unissued shares of Common Stock, solely for the
     purpose of effecting the conversion of this Note, such number of
     its shares of Common Stock as shall from time to time be
     sufficient to effect the conversion of all of the principal
     amount of this Note.  If at any time the number of authorized but
     unissued shares of Common Stock shall not be sufficient to effect
     the conversion of all principal amount of this Note, the Company
     will take such corporate action as may, in the opinion of its
     counsel, be necessary to increase its authorized but unissued
     shares of Common Stock to such number of shares as shall be
     sufficient for such purpose.

          (g)  Notices.  Any notice to the Holder of this Note pursuant to
     the provisions of this Section 11 shall be in writing and shall
     be deemed effectively given: (i) upon

				15
<PAGE>

     Personal delivery to the party to be notified, (ii) when sent by
     confirmed facsimile if sent during normal business hours of the
     recipient; if not, then on the next business day, (iii)
     five (5) days after having been sent by registered or certified mail,
     return receipt requested, postage prepaid, or (iv) one (1) day after
     deposit with a nationally recognized overnight courier, specifying next
     day delivery, with written verification of receipt.  All notices
     shall be addressed to the Holder of this Note at the address of
     the Holder appearing on the books of the Company.

12.  Sale or Assignment of this Note.  The Holder of this Note
may not sell or assign this Note except in a transaction which is
entitled to an exception from, or is not subject to the
registration requirements of, the Securities Act of 1933 and,
before making a sale or assignment of this Note, the Holder of
this Note agrees, by its acceptance hereof, to provide the
Company with an opinion of counsel satisfactory to the Company
that such registration is not required.

13.  Reports.  So long as this Note is outstanding, the Company
will furnish the Holder hereof with the quarterly and annual
financial reports that the Company is required to file with the
Securities and Exchange Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934.

14.  GOVERNING LAW.  THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS NOTE WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

				16

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