Document:

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EXECUTION COPY                                                       EXHIBIT 4.2

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                             MEDCATH HOLDINGS CORP.

                          9-7/8% SENIOR NOTES DUE 2012

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

                                    INDENTURE

                            DATED AS OF JULY 7, 2004

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

                         U.S. BANK NATIONAL ASSOCIATION

                                     TRUSTEE

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

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                             CROSS-REFERENCE TABLE*

<TABLE>
<CAPTION>
TRUST INDENTURE
   ACT SECTION                                                                                  INDENTURE SECTION
   -----------                                                                                  -----------------
<S>                                                                                             <C>
310(a)(1).............................................................................                 7.10
   (a)(2).............................................................................                 7.10
   (a)(3).............................................................................                 N.A.
   (a)(4).............................................................................                 N.A.
   (a)(5).............................................................................                 7.10
   (b)................................................................................                 7.10
   (c)................................................................................                 N.A.
311(a)................................................................................                 7.11
   (b)................................................................................                 7.11
   (c)................................................................................                 N.A.
312(a)................................................................................                 2.06
   (b)................................................................................                12.03
   (c)................................................................................                12.03
313(a)................................................................................                 7.06
   (b)(1).............................................................................                 N.A.
   (b)(2).............................................................................              7.06, 7.07
   (c)................................................................................             7.06, 12.02
   (d)................................................................................                 7.06
314(a)(4).............................................................................             4.04, 12.05
   (b)................................................................................                 N.A.
   (c)(1).............................................................................                 N.A.
   (c)(2).............................................................................                 N.A.
   (c)(3).............................................................................                 N.A.
   (d)................................................................................                 N.A.
   (e)................................................................................                12.05
   (f)................................................................................                 N.A.
315(a)................................................................................                 N.A.
   (b)................................................................................                 7.05
   (c)................................................................................                 N.A.
   (d)................................................................................                 N.A.
   (e)................................................................................                 N.A.
316(a) (last sentence)................................................................                 N.A.
   (a)(1)(A)..........................................................................                 N.A.
   (a)(1)(B)..........................................................................                 N.A.
   (a)(2).............................................................................                 N.A.
</TABLE>

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*     N.A. means not applicable.

      This Cross-Reference Table is not part of the Indenture

<PAGE>

<TABLE>
<CAPTION>
TRUST INDENTURE
   ACT SECTION                                                                                  INDENTURE SECTION
   -----------                                                                                  -----------------
<S>                                                                                             <C>
   (b)................................................................................                 N.A.
   (c)................................................................................                12.14
317(a)(1).............................................................................                 N.A.
   (a)(2).............................................................................                 N.A.
   (b)................................................................................                 N.A.
318(a)................................................................................                 N.A.
   (b)................................................................................                 N.A.
   (c)................................................................................                12.01
</TABLE>

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                   Page
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<S>                                                                                                                <C>
                                   ARTICLE ONE
                          DEFINITIONS AND INCORPORATION
                                  BY REFERENCE

Section 1.01. Definitions.......................................................................................      1
Section 1.02. Other Definitions.................................................................................     25
Section 1.03. Incorporation by Reference of Trust Indenture Act.................................................     25
Section 1.04. Rules of Construction.............................................................................     26

                                   ARTICLE TWO
                                    THE NOTES

Section 2.01. Form and Dating...................................................................................     26
Section 2.02. Execution and Authentication......................................................................     27
Section 2.03. Methods of Receiving Payments on the Notes........................................................     28
Section 2.04. Registrar and Paying Agent........................................................................     28
Section 2.05. Paying Agent to Hold Money in Trust...............................................................     29
Section 2.06. Holder Lists......................................................................................     29
Section 2.07. Transfer and Exchange.............................................................................     29
Section 2.08. Replacement Notes.................................................................................     41
Section 2.09. Outstanding Notes.................................................................................     42
Section 2.10. Treasury Notes....................................................................................     42
Section 2.11. Temporary Notes...................................................................................     42
Section 2.12. Cancellation......................................................................................     43
Section 2.13. Defaulted Interest................................................................................     43
Section 2.14. CUSIP Numbers.....................................................................................     43

                                  ARTICLE THREE
                            REDEMPTION AND OFFERS TO
                                    PURCHASE

Section 3.01. Notices to Trustee................................................................................     44
Section 3.02. Selection of Notes to Be Redeemed.................................................................     44
Section 3.03. Notice of Redemption..............................................................................     44
Section 3.04. Effect of Notice of Redemption....................................................................     45
Section 3.05. Deposit of Redemption Price.......................................................................     45
Section 3.06. Notes Redeemed in Part............................................................................     46
Section 3.07. Optional Redemption...............................................................................     46
Section 3.08. Repurchase Offers.................................................................................     47
Section 3.09. Mandatory Redemption..............................................................................     48
Section 3.10. Application of Trust Money........................................................................     49
</TABLE>

                                       i

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<TABLE>
<S>                                                                                                                  <C>
                                  ARTICLE FOUR
                                    COVENANTS

Section 4.01. Payment of Notes..................................................................................     49
Section 4.02. Maintenance of Office or Agency...................................................................     49
Section 4.03. Reports...........................................................................................     50
Section 4.04. Compliance Certificate............................................................................     51
Section 4.05. Taxes.............................................................................................     51
Section 4.06. Stay, Extension and Usury Laws....................................................................     52
Section 4.07. Restricted Payments...............................................................................     52
Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.........................     56
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock........................................     58
Section 4.10. Asset Sales.......................................................................................     60
Section 4.11. Transactions with Affiliates......................................................................     62
Section 4.12. Liens.............................................................................................     63
Section 4.13. Business Activities...............................................................................     63
Section 4.14. Offer to Repurchase upon a Change of Control......................................................     63
Section 4.15. [INTENTIONALLY LEFT BLANK]........................................................................     64
Section 4.16. Designation of Restricted and Unrestricted Subsidiaries...........................................     64
Section 4.17. Payments for Consent..............................................................................     66
Section 4.18. Guarantees........................................................................................     66
Section 4.19. Sale and Leaseback Transactions...................................................................     66
Section 4.20. Limitation on Issuances and Sales of Equity Interests in Restricted Subsidiaries..................     67
Section 4.21. Use of Net Proceeds from the Issuance of the Notes................................................     67

                                  ARTICLE FIVE
                                   SUCCESSORS

Section 5.01. Merger, Consolidation or Sale of Assets...........................................................     68
Section 5.02. Successor Corporation Substituted.................................................................     69

                                   ARTICLE SIX
                              DEFAULTS AND REMEDIES

Section 6.01. Events of Default.................................................................................     69
Section 6.02. Acceleration......................................................................................     71
Section 6.03. Other Remedies....................................................................................     71
Section 6.04. Waiver of Past Defaults...........................................................................     72
Section 6.05. Control by Majority...............................................................................     72
Section 6.06. Limitation on Suits...............................................................................     73
Section 6.07. Rights of Holders of Notes to Receive Payment.....................................................     73
Section 6.08. Collection Suit by Trustee........................................................................     73
Section 6.09. Trustee May File Proofs of Claim..................................................................     73
Section 6.10. Priorities........................................................................................     74
Section 6.11. Undertaking for Costs.............................................................................     74
</TABLE>

                                       ii

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<TABLE>
<S>                                                                                                                  <C>
                                  ARTICLE SEVEN
                                     TRUSTEE

Section 7.01. Duties of Trustee.................................................................................     75
Section 7.02. Certain Rights of Trustee.........................................................................     76
Section 7.03. Individual Rights of Trustee......................................................................     77
Section 7.04. Trustee's Disclaimer..............................................................................     77
Section 7.05. Notice of Defaults................................................................................     77
Section 7.06. Reports by Trustee to Holders of the Notes........................................................     77
Section 7.07. Compensation and Indemnity........................................................................     78
Section 7.08. Replacement of Trustee............................................................................     78
Section 7.09. Successor Trustee by Merger, Etc..................................................................     79
Section 7.10. Eligibility; Disqualification.....................................................................     80
Section 7.11. Preferential Collection of Claims Against Company.................................................     80

                                  ARTICLE EIGHT
                       DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance..........................................     80
Section 8.02. Legal Defeasance and Discharge....................................................................     80
Section 8.03. Covenant Defeasance...............................................................................     81
Section 8.04. Conditions to Legal or Covenant Defeasance........................................................     81
Section 8.05. Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions.....     83
Section 8.06. Repayment to the Company..........................................................................     83
Section 8.07. Reinstatement.....................................................................................     84

                                  ARTICLE NINE
                        AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01. Without Consent of Holders of Notes...............................................................     84
Section 9.02. With Consent of Holders of Notes..................................................................     85
Section 9.03. Compliance with Trust Indenture Act...............................................................     87
Section 9.04. Revocation and Effect of Consents.................................................................     87
Section 9.05. Notation on or Exchange of Notes..................................................................     87
Section 9.06. Trustee to Sign Amendments, Etc...................................................................     87

                                   ARTICLE TEN
                                 NOTE GUARANTEES

Section 10.01. Guarantee........................................................................................     88
Section 10.02. Limitation on Guarantor Liability................................................................     89
Section 10.03. Execution and Delivery of Note Guarantee.........................................................     89
Section 10.04. Guarantors May Consolidate, Etc., on Certain Terms...............................................     90
Section 10.05. Release of Guarantor.............................................................................     90
</TABLE>

                                      iii

<PAGE>

<TABLE>
<S>                                                                                                                  <C>
                                 ARTICLE ELEVEN
                           SATISFACTION AND DISCHARGE

Section 11.01. Satisfaction and Discharge.......................................................................     91
Section 11.02. Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions....     92
Section 11.03. Repayment to the Company.........................................................................     93

                                 ARTICLE TWELVE
                                  MISCELLANEOUS

Section 12.01. Trust Indenture Act Controls.....................................................................     93
Section 12.02. Notices..........................................................................................     93
Section 12.03. Communication by Holders of Notes with Other Holders of Notes....................................     94
Section 12.04. Certificate and Opinion as to Conditions Precedent...............................................     94
Section 12.05. Statements Required in Certificate or Opinion....................................................     95
Section 12.06. Rules by Trustee and Agents......................................................................     95
Section 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders.........................     95
Section 12.08. Governing Law....................................................................................     96
Section 12.09. Consent to Jurisdiction..........................................................................     96
Section 12.10. No Adverse Interpretation of Other Agreements....................................................     96
Section 12.11. Successors.......................................................................................     96
Section 12.12. Severability.....................................................................................     96
Section 12.13. Counterpart Originals............................................................................     96
Section 12.14. Acts of Holders..................................................................................     96
Section 12.15. Benefit of Indenture.............................................................................     98
Section 12.16. Table of Contents, Headings, Etc.................................................................     98
</TABLE>

                                    EXHIBITS

Exhibit A         FORM OF NOTE

Exhibit B         FORM OF CERTIFICATE OF TRANSFER

Exhibit C         FORM OF CERTIFICATE OF EXCHANGE

Exhibit D         FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL
                  ACCREDITED INVESTOR

Exhibit E         FORM OF NOTATION OF GUARANTEE

Exhibit F         FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY
                  SUBSEQUENT GUARANTORS

                                       iv
<PAGE>

            INDENTURE dated as of July 7, 2004 among MedCath Holdings Corp., a
Delaware corporation (the "COMPANY"), each of the Guarantors (as defined below)
listed on the signature pages hereto and U.S. Bank National Association, a
national banking corporation, as trustee.

            The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its 9-7/8% Senior
Notes due 2012 to be issued in one or more series as provided in this Indenture.
Each of the Guarantors have duly authorized the execution and delivery of this
Indenture to provide for a guarantee of the Notes and of certain of the
Company's obligations hereunder. All things necessary to make this Indenture a
valid agreement of the Company and the initial Guarantors, in accordance with
its terms, have been done.

            The Company, the Guarantors and the Trustee (as defined below) agree
as follows for the benefit of each other and for the equal and ratable benefit
of the Holders (as defined below) of the 9-7/8% Senior Notes due 2012:

                                   ARTICLE ONE
                          DEFINITIONS AND INCORPORATION
                                  BY REFERENCE

Section 1.01. Definitions.

            "144A GLOBAL NOTE" means a global note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee, that shall be issued in a denomination equal to the
outstanding principal amount at maturity of the Notes sold in reliance on Rule
144A.

            "ACQUIRED DEBT" means, with respect to any specified Person:

      (1)   Indebtedness of any other Person existing at the time such other
            Person is merged with or into, or becomes a Subsidiary of, such
            specified Person, whether or not such Indebtedness is incurred in
            connection with, or in contemplation of, such other Person merging
            with or into, or becoming a Subsidiary of, such specified Person;
            and

      (2)   Indebtedness secured by a Lien encumbering any asset acquired by
            such specified Person.

            "ADDITIONAL NOTES" means an unlimited maximum aggregate principal
amount of Notes (other than the Notes issued on the date hereof) issued under
this Indenture in accordance with Sections 2.02 and 4.09 hereof.

            "AFFILIATE" of any specified Person means (1) any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person or (2) any executive officer or
director of such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession,

                                       1
<PAGE>

directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise; provided that beneficial ownership of 10%
or more of the Voting Stock of a Person shall be deemed to be control. For
purposes of this definition, the terms "controlling," "controlled by" and "under
common control with" shall have correlative meanings.

            "AGENT" means any Registrar, Paying Agent or co-registrar.

            "APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.

            "APPROVED AFFILIATE AGREEMENTS" means agreements or arrangements
between the Company or any Restricted Subsidiary, on the one hand, and the
Parent or any Principal, on the other hand, (including transactions directly
with the Principals or indirectly through the Parent with the Principals)
described under the caption "Certain Transactions" in the Parent's definitive
Proxy Statement on Schedule 14A filed on January 28, 2004 with the Commission,
in each case as in effect as of the date of this Indenture, or any amendment or
substitute thereto (so long as the amended or substituted agreement is not more
disadvantageous to the Holders in any material respect than such agreement
immediately prior to such amendment or substitution) or any transaction
contemplated thereby.

            "ASSET SALE" means:

      (1)   the sale, lease, conveyance or other disposition of any assets or
            rights; provided that the sale, conveyance or other disposition of
            all or substantially all of the assets of the Company and its
            Restricted Subsidiaries, taken as a whole, will be governed by
            Section 4.14 and/or Section 5.01 and not by Section 4.10; and

      (2)   the issuance of Equity Interests by any of the Company's Restricted
            Subsidiaries or the sale by the Company or any Restricted Subsidiary
            thereof of Equity Interests in any of its Subsidiaries (other than
            directors' qualifying shares and shares to be issued to foreign
            nationals under applicable law).

Notwithstanding the preceding, the following items shall be deemed not to be
Asset Sales:

      (1)   any single transaction or series of related transactions that
            involves assets or Equity Interests having a Fair Market Value of
            less than $2.0 million;

      (2)   a transfer of assets between or among the Company and its Restricted
            Subsidiaries;

      (3)   an issuance of Equity Interests by a Restricted Subsidiary of the
            Company to the Company or to another Restricted Subsidiary of the
            Company;

      (4)   the sale or lease of equipment, inventory, accounts receivable or
            other assets in the ordinary course of business;

                                       2
<PAGE>

      (5)   the sale or other disposition of Cash Equivalents;

      (6)   a Restricted Payment that is permitted by Section 4.07 of this
            Indenture and;

      (7)   any sale or disposition of any property equipment that has become
            damaged, worn out, obsolete or otherwise unsuitable for use in
            connection with the business of the Company or its Restricted
            Subsidiaries.

            "ATTRIBUTABLE DEBT" in respect of a sale and leaseback transaction
means, at the time of determination, the present value of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such sale and leaseback transaction, including any period for which such
lease has been extended or may, at the option of the lessor, be extended. Such
present value shall be calculated using a discount rate equal to the rate of
interest implicit in such transaction, determined in accordance with GAAP.

            "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.

            "BENEFICIAL OWNER" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "Beneficially Owns" and "Beneficially Owned" shall have a
corresponding meaning.

            "BOARD OF DIRECTORS" means:

      (1)   with respect to a corporation, the board of directors of the
            corporation;

      (2)   with respect to a partnership, the Board of Directors of the general
            partner of the partnership; and

      (3)   with respect to any other Person, the board or committee of such
            Person serving a similar function.

            "BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification.

            "BROKER-DEALER" has the meaning set forth in the Registration Rights
Agreement.

            "BUSINESS DAY" means any day other than a Legal Holiday.

            "CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at that time be required to be capitalized on a balance sheet in
accordance with GAAP.

                                       3
<PAGE>

            "CAPITAL STOCK" means:

      (1)   in the case of a corporation, corporate stock;

      (2)   in the case of an association or business entity, any and all
            shares, interests, participations, rights or other equivalents
            (however designated) of corporate stock;

      (3)   in the case of a partnership or limited liability company,
            partnership or membership interests (whether general or limited);
            and

      (4)   any other interest or participation that confers on a Person the
            right to receive a share of the profits and losses of, or
            distributions of assets of, the issuing Person.

            "CASH EQUIVALENTS" means:

      (1)   United States dollars;

      (2)   securities issued or directly and fully guaranteed or insured by the
            United States government or any agency or instrumentality thereof
            (provided that the full faith and credit of the United States is
            pledged in support thereof) having maturities of not more than six
            months from the date of acquisition;

      (3)   certificates of deposit and eurodollar time deposits with maturities
            of six months or less from the date of acquisition, bankers'
            acceptances with maturities not exceeding six months and overnight
            bank deposits, in each case, with any domestic commercial bank
            having capital and surplus in excess of $500.0 million;

      (4)   repurchase obligations with a term of not more than seven days for
            underlying securities of the types described in clauses (2) and (3)
            above entered into with any financial institution meeting the
            qualifications specified in clause (3) above;

      (5)   commercial paper having the highest rating obtainable from Moody's
            or S&P and in each case maturing within six months after the date of
            acquisition; and

      (6)   money market funds at least 95% of the assets of which constitute
            Cash Equivalents of the kinds described in clauses (1) through (5)
            of this definition.

            "CHANGE OF CONTROL" means the occurrence of any of the following:

      (1)   the direct or indirect sale, transfer, conveyance or other
            disposition (other than by way of 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 Restricted
            Subsidiaries, taken as a whole, to any "person" (as that term is
            used in Section 13(d)(3) of the Exchange Act) other than the
            Principals or Related Parties of the Principals;

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

                                       4
<PAGE>

      (3)   any "person" or "group" (as such terms are used in Sections 13(d)
            and 14(d) of the Exchange Act), other than the Principals and their
            Related Parties, becomes the ultimate Beneficial Owner, directly or
            indirectly, of 35% or more of the voting power of the Voting Stock
            of the Company;

      (4)   the first day on which a majority of the members of the Board of
            Directors of the Company are not Continuing Directors; or

      (5)   the Company or the Parent consolidates with, or merges with or into,
            any Person, or any Person consolidates with, or merges with or into
            the Company or the Parent, in any such event pursuant to a
            transaction in which any of the outstanding Voting Stock of the
            Company, the Parent or such other Person is converted into or
            exchanged for cash, securities or other property, other than any
            such transaction where (A) the Voting Stock of the Company or the
            Parent outstanding immediately prior to such transaction is
            converted into or exchanged for Voting Stock (other than
            Disqualified Stock) of the surviving or transferee Person
            constituting a majority of the outstanding shares of such Voting
            Stock of such surviving or transferee Person (immediately after
            giving effect to such issuance) and (B) immediately after such
            transaction, no "person" or "group" (as such terms are used in
            Section 13(d) and 14(d) of the Exchange Act), other than the
            Principals and their Related Parties, becomes, directly or
            indirectly, the beneficial owner (as defined above) of 35% or more
            of the voting power of the Voting Stock of the surviving or
            transferee Person.

            "CLEARSTREAM" means Clearstream Banking, societe anonyme, Luxembourg
(formerly Cedel Bank, societe anonyme), and any successor thereto.

            "CLOSING DATE" means July 7, 2004.

            "COMMISSION" means the United States Securities and Exchange
Commission.

            "CONSOLIDATED CASH FLOW" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus:

      (1)   provision for taxes based on income or profits of such Person and
            its Restricted Subsidiaries for such period, to the extent that such
            provision for taxes was deducted in computing such Consolidated Net
            Income; plus

      (2)   consolidated interest expense of such Person and its Restricted
            Subsidiaries for such period, whether or not paid or accrued and
            whether or not capitalized (including, without limitation,
            amortization of debt issuance costs and original issue discount,
            non-cash interest payments, the interest component of any deferred
            payment obligations, the interest component of all payments
            associated with Capital Lease Obligations (other than Capital Lease
            Obligations entered into in connection with a sale and leaseback
            transaction), commissions, discounts and other fees and charges
            incurred in respect of letter of credit or bankers' acceptance
            financings, and net of the effect of all payments made or received
            pursuant to Hedging Obligations, but excluding any imputed interest
            with respect to

                                       5
<PAGE>

            Attributable Debt), to the extent that any such expense was deducted
            in computing such Consolidated Net Income; plus

      (3)   depreciation, amortization (including amortization of goodwill and
            other intangibles but excluding amortization of prepaid cash
            expenses that were paid in a prior period) and other non-cash
            expenses (excluding any such non-cash expense to the extent that it
            represents an accrual of or reserve for cash expenses in any future
            period or amortization of a prepaid cash expense that was paid in a
            prior period) of such Person and its Restricted Subsidiaries for
            such period to the extent that such depreciation, amortization and
            other non-cash expenses were deducted in computing such Consolidated
            Net Income; plus

      (4)   pre-opening expenses relating to hospitals and related healthcare
            facilities of such Person and its Restricted Subsidiaries for such
            period as calculated and presented in accordance with GAAP on the
            face of such Person's consolidated statements of operations, to the
            extent deducted in computing such Consolidated Net Income, in
            aggregate amount not to exceed $10.0 million during any four-quarter
            period; plus

      (5)   minority interest, if any, deducted in computing such Consolidated
            Net Income for such period as calculated and presented in accordance
            with GAAP on the face of such Person's consolidated statements of
            operations, less any cash distributions (by dividend or otherwise)
            for such period by any Restricted Subsidiary of such Person to
            holders of Equity Interests of such Restricted Subsidiary in their
            capacity as such (other than to such Person or such Person's
            Wholly-Owned Restricted Subsidiaries); less

      (6)   non-cash items increasing such Consolidated Net Income for such
            period, other than the accrual of revenue consistent with past
            practice,

      in each case, on a consolidated basis and determined in accordance with
GAAP.

            "CONSOLIDATED LEVERAGE RATIO" means, as of any date of
determination, the ratio of:

      (1)         the aggregate outstanding amount of Indebtedness of the
                  Company and its Restricted Subsidiaries as of such date of
                  determination on a consolidated basis (subject to the terms
                  described in the paragraph below) after giving pro forma
                  effect to the incurrence of the Indebtedness giving rise to
                  the need to make such calculation (including a pro forma
                  application of the use of proceeds therefrom), on such date
                  to:

      (2)         the Consolidated Cash Flow of the Company for the most recent
                  four quarters for which internal financial statements are
                  available immediately prior to such date of determination.

      For purposes of this definition:

                                       6
<PAGE>

      (1)   Consolidated Cash Flow shall be calculated on a pro forma basis
            after giving effect to (A) the incurrence of the Indebtedness of the
            Company and its Restricted Subsidiaries (and the application of the
            proceeds therefrom) giving rise to the need to make such calculation
            and any incurrence (and the application of the proceeds therefrom)
            or repayment of other Indebtedness on the date of determination, and
            (B) any acquisition or disposition (including, without limitation,
            any acquisition giving rise to the need to make such calculation as
            a result of the Company or one of its Restricted Subsidiaries
            (including any Person that becomes a Restricted Subsidiary as a
            result of such acquisition) incurring, assuming or otherwise
            becoming liable for Indebtedness) at any time on or subsequent to
            the first day of the applicable four-quarter period specified in
            clause (2) of the immediately preceding paragraph and on or prior to
            the date of determination, as if such acquisition or disposition
            (including the incurrence or assumption of any such Indebtedness and
            also including any Consolidated Cash Flow associated with such
            acquisition or disposition) occurred on the first day of such
            four-quarter period;

      (2)   pro forma calculations shall be made in good faith by a responsible
            financial or accounting officer of the Company consistent with
            Article 11 of Regulation S-X, promulgated pursuant to the Securities
            Act, as such Regulation may be amended;

      (3)   any Guarantee by the Company or the Parent of Indebtedness of Heart
            Hospital of South Dakota LLC, in an aggregate principal amount (or
            accreted value, as applicable) at any time outstanding not to exceed
            $16.7 million, shall be excluded from Indebtedness for purposes of
            clause (1) of the preceding paragraph; provided that no Default,
            Event of Default or default under any Indebtedness of Heart Hospital
            of South Dakota LLC has occurred and is continuing as of such date
            of determination; and

      (4)   any unfunded commitments that constitute Existing Indebtedness and
            that are not funded as of such date of determination shall be
            included as Indebtedness.

            "CONSOLIDATED NET INCOME" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:

      (1)   the Net Income (but not loss) of any Person that is not a Restricted
            Subsidiary or that is accounted for by the equity method of
            accounting shall be included only to the extent of the amount of
            dividends or distributions paid in cash to the specified Person or a
            Restricted Subsidiary thereof;

      (2)   the Net Income of any Restricted Subsidiary shall be excluded to the
            extent that the declaration or payment of dividends or similar
            distributions by that Restricted Subsidiary of that Net Income is
            not at the date of determination permitted without any prior
            governmental approval (that has not been obtained) or, directly or
            indirectly, by operation of the terms of its charter or any
            agreement, instrument,

                                       7
<PAGE>

            judgment, decree, order, statute, rule or governmental regulation
            applicable to that Restricted Subsidiary or its equityholders;

      (3)   the Net Income of any Person acquired during the specified period
            for any period prior to the date of such acquisition shall be
            excluded;

      (4)   the cumulative effect of a change in accounting principles shall be
            excluded; and

      (5)   notwithstanding clause (1) above, the Net Income (but not loss) of
            any Unrestricted Subsidiary shall be excluded, whether or not
            distributed to the specified Person or one of its Subsidiaries.

            "CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company or the Parent who:

      (1)   was a member of such Board of Directors on the date of this
            Indenture; or

      (2)   was nominated for election or elected to such Board of Directors
            with the approval of a majority of the Continuing Directors who were
            members of such Board at the time of such nomination or election.

            "CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of
the Trustee specified in Section 12.02 hereof or such other address as to which
the Trustee may give notice to the Company.

            "CREDIT AGREEMENT" means that certain Credit Agreement, to be dated
the date of this Indenture, by and among the Company, the guarantors named
therein, Bank of America, N.A. and the other lenders named therein providing for
up to $100.0 million of revolving credit borrowings and $100.0 million in term
loan borrowings, including any related notes, Guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as
amended, modified, renewed, refunded, replaced or refinanced from time to time
with a credit facility with banks or other financial institutions.

            "CREDIT FACILITIES" means, (1) one or more debt facilities
(including, without limitation, the Credit Agreement) or commercial paper
facilities providing for revolving credit loans, term loans, receivables
financing (including through the sale of receivables to such lenders or to
special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, (2) Capital Lease Obligations, (3) mortgage
financings or (4) purchase money obligations, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time.

            "CUSTODIAN" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.

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

                                       8
<PAGE>

            "DEFINITIVE NOTE" means a certificated Note registered in the name
of the Holder thereof and issued in accordance with Section 2.07 hereof,
substantially in the form of Exhibit A hereto, and such Note shall not bear the
Global Note Legend and shall not have the "Schedule of Exchanges of Interests in
the Global Note" attached thereto.

            "DEPOSITARY" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.04 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.

            "DESIGNATED NONCASH CONSIDERATION" means the Fair Market Value of
noncash consideration received by the Company or any of its Restricted
Subsidiaries in connection with an Asset Sale that is so designated as
Designated Noncash Consideration pursuant to an Officers' Certificate, setting
forth the basis of such valuation, less the amount of cash or Cash Equivalents
received in connection with a subsequent sale of such Designated Noncash
Consideration.

            "DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is one year after the
date on which the Notes mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Company to repurchase such Capital
Stock upon the occurrence of a change of control or an asset sale shall not
constitute Disqualified Stock if the terms of such Capital Stock provide that
the Company may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with Section 4.07 of
this Indenture. The term "Disqualified Stock" shall also include any options,
warrants or other rights that are convertible into Disqualified Stock or that
are redeemable at the option of the holder, or required to be redeemed, prior to
the date that is one year after the date on which the Notes mature.

            "DOMESTIC SUBSIDIARY" means any Subsidiary of the Company other than
a Subsidiary that is a "controlled foreign corporation" under Section 957 of the
Internal Revenue Code.

            "EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

            "EQUITY OFFERING" means a public or private offer and sale of
Capital Stock (other than Disqualified Stock) of the Company.

            "EUROCLEAR" means Euroclear S.A./N.V., as operator of the Euroclear
System.

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

            "EXCHANGE NOTES" means the Notes issued in the Exchange Offer in
accordance with Section 2.07(f) hereof.

                                       9
<PAGE>

            "EXCHANGE OFFER" has the meaning set forth in the Registration
Rights Agreement.

            "EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth in
the Registration Rights Agreement.

            "EXISTING INDEBTEDNESS" means the aggregate principal amount of
Indebtedness of the Company and its Restricted Subsidiaries (other than
Indebtedness under the Credit Agreement) in existence on the date of this
Indenture after giving effect to the application of the proceeds of the Notes
and any Indebtedness under the Credit Agreement borrowed on the date of this
Indenture, until such amounts are repaid, plus up to a maximum of $22.0 million
in unfunded commitments in existence but not yet incurred on the date of this
Indenture, which are available for Texsan Heart Hospital and Heart Hospital of
Lafayette to fund equipment purchases.

            "FAIR MARKET VALUE" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy,
as determined in good faith by the Board of Directors of the Company whose
determination shall be conclusive if evidenced by a Board Resolution.

            "GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, the opinions and
pronouncements of the Public Company Accounting Oversight Board and in the
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a
significant segment of the accounting profession, which are in effect on the
Issue Date.

            "GLOBAL NOTE LEGEND" means the legend set forth in Section
2.07(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.

            "GLOBAL NOTES" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto, issued in accordance with Section 2.01, 2.07(b),
2.07(d) or 2.07(f) of this Indenture.

            "GOVERNMENT SECURITIES" means securities that are direct obligations
of the United States of America for the timely payment of which its full faith
and credit is pledged.

            "GUARANTEE" means a guarantee, other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.

            "GUARANTOR" means:

      (1)   the Parent, and

      (2)   the Subsidiary Guarantors.

                                       10
<PAGE>

            "HEDGING OBLIGATIONS" means, with respect to any specified Person,
the obligations of such Person under:

      (1)   interest rate swap agreements, interest rate cap agreements,
            interest rate collar agreements and other agreements or arrangements
            with respect to exposure to interest rates;

      (2)   commodity swap agreements, commodity option agreements, forward
            contracts and other agreements or arrangements with respect to
            exposure to commodity prices; and

      (3)   foreign exchange contracts, currency swap agreements and other
            agreements or arrangements with respect to exposure to foreign
            currency exchange rates.

            "HOLDER" means a Person in whose name a Note is registered.

            "INCUR" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become directly or indirectly liable for
or with respect to, or become responsible for, the payment of, contingently or
otherwise, such Indebtedness; provided that (1) any Indebtedness of a Person
existing at the time such Person becomes a Restricted Subsidiary shall be deemed
to be incurred by such Restricted Subsidiary at the time it becomes a Restricted
Subsidiary and (2) neither the accrual of interest nor the accretion of original
issue discount nor the payment of interest in the form of additional
Indebtedness (to the extent provided for when the Indebtedness on which such
interest is paid was originally issued) shall be considered an incurrence of
Indebtedness.

            "INDEBTEDNESS" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent (without duplication):

      (1)   in respect of borrowed money;

      (2)   evidenced by bonds, notes, debentures or similar instruments or
            letters of credit (or reimbursement agreements in respect thereof),
            but excluding obligations with respect to letters of credit
            (including trade letters of credit) securing obligations 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 third Business
            Day following receipt by such Person of a demand for reimbursement;

      (3)   in respect of banker's acceptances;

      (4)   representing Capital Lease Obligations;

      (5)   in respect of the balance deferred and unpaid of the purchase price
            of any property, except any such balance that constitutes an accrued
            expense or trade payable;

                                       11
<PAGE>

      (6)   representing Hedging Obligations, other than Hedging Obligations
            that are entered into for bona fide hedging purposes by the Company
            or its Restricted Subsidiaries with respect to interest rates,
            commodity prices or foreign currency exchange rates, and not for
            speculative purposes, and that do not increase the Indebtedness of
            the obligor outstanding at any time other than as a result of
            fluctuations in interest rates, commodity prices or foreign currency
            exchange rates or by reason of fees, indemnities and compensation
            payable thereunder; or

      (7)   representing Disqualified Stock valued at the greater of its
            voluntary or involuntary maximum fixed repurchase price plus accrued
            dividends.

            In addition, the term "Indebtedness" includes (x) all Indebtedness
of others secured by a Lien on any asset of the specified Person (whether or not
such Indebtedness is assumed by the specified 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, and
(y) to the extent not otherwise included, the Guarantee by the specified Person
of any Indebtedness of any other Person. For purposes hereof, the "maximum fixed
repurchase price" of any Disqualified Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Stock as if such Disqualified Stock were purchased on any date on
which Indebtedness shall be required to be determined pursuant to this
Indenture, and if such price is based upon, or measured by, the Fair Market
Value of such Disqualified Stock, such Fair Market Value shall be determined in
good faith by the Board of Directors of the issuer of such Disqualified Stock.

            The amount of any Indebtedness outstanding as of 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,
and shall be:

      (1)   the accreted value thereof, in the case of any Indebtedness issued
            with original issue discount; and

      (2)   the principal amount thereof, together with any interest thereon
            that is more than 30 days past due, in the case of any other
            Indebtedness;

provided that the obligation to repay 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 be deemed not to be "Indebtedness" so long
as such money is held to secure the payment of such interest and that
Indebtedness shall not include:

      (i)   any liability for federal, state, local or other taxes,

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

      (iii) 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 Restricted Subsidiaries

                                       12
<PAGE>

            pursuant to such agreements, in any case incurred in connection with
            the disposition of any business, assets or Restricted Subsidiary
            (other than Guarantees of Indebtedness incurred by any Person
            acquiring all or any portion of such business, assets or Restricted
            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 such Restricted Subsidiary in connection
            with such disposition.

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

            "INDIRECT PARTICIPANT" means a Person who holds a beneficial
interest in a Global Note through a Participant.

            "INITIAL PURCHASERS" means the initial purchasers listed on Schedule
A of the purchase agreement dated June 29, 2004, among the Company, the
Guarantors and the Initial Purchasers.

            "INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who is not also a QIB.

            "INVESTMENT GRADE" means (1) BBB- or above, in the case of S&P (or
its equivalent under any successor Rating Categories of S&P) and Baa3 or above,
in the case of Moody's (or its equivalent under any successor Rating Categories
of Moody's), or (2) the equivalent in respect of the Rating Categories of any
Rating Agencies.

            "INVESTMENTS" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans or other extensions of credit (including Guarantees but
excluding advances to customers or suppliers in the ordinary course of business
that are, in conformity with GAAP, recorded as accounts receivable, prepaid
expenses or deposits on the balance sheet of the Company or its Restricted
Subsidiaries and endorsements for collection or deposit arising in the ordinary
course of business), advances (excluding commission, travel and similar advances
to officers and employees made consistent with past practices), capital
contributions (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.

            If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company such that, immediately after giving effect to any such
sale or disposition, such Person (x) is no longer a Restricted Subsidiary of the
Company and (y) if such Restricted Subsidiary was a Subsidiary Guarantor
immediately prior to such sale or disposition, is no longer a Subsidiary
guarantor, the Company shall be deemed to have made an Investment on the date of
any such sale or disposition equal to the Fair Market Value (A) if such
Restricted Subsidiary was formed

                                       13
<PAGE>

prior to the date of this Indenture, any Investments in the Equity Interests of
such Person or (B) if such Restricted Subsidiary was formed on or after the date
of this Indenture, any Investments in such Person, in either case not sold or
disposed of in an amount determined as provided in the final paragraph of
Section 4.07 of this Indenture. The acquisition by the Company or any Restricted
Subsidiary of the Company of a Person that holds an Investment in a third Person
shall be deemed to be an Investment by the Company or such Restricted Subsidiary
in such third Person in an amount equal to the Fair Market Value of the
Investment held by the acquired Person in such third Person in an amount
determined as provided in the final paragraph of Section 4.07 of this Indenture.

            "ISSUE DATE" means the date of this Indenture.

            "LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed.

            "LEGENDED REGULATION S GLOBAL NOTE" means a global Note in the form
of Exhibit A hereto bearing the Global Note Legend, the Private Placement Legend
and the Regulation S Temporary Global Note Legend and deposited with or on
behalf of and registered in the name of the Depositary or its nominee, issued in
a denomination equal to the outstanding principal amount at maturity of the
Notes initially sold in reliance on Rule 903 of Regulation S.

            "LETTER OF TRANSMITTAL" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.

            "LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

            "LIQUIDATED DAMAGES" means all liquidated damages then owing
pursuant to the Registration Rights Agreement.

            "MOODY'S" means Moody's Investors Service, Inc.

            "NET INCOME" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:

      (1)   (a) any gain (but not loss), together with any related provision for
            taxes on such gain (but not loss), realized in connection with any
            sale of assets outside the ordinary course of business; and (b) any
            gain (or loss), together with related provision for taxes on such
            gain (or loss), realized in connection with the disposition of any
            securities by such Person or any of its Restricted Subsidiaries

                                       14
<PAGE>

            or the extinguishment of any Indebtedness of such Person or any of
            its Restricted Subsidiaries; and

      (2)   any extraordinary gain (but not loss), together with any related
            provision for taxes on such extraordinary gain (but not loss).

            "NET PROCEEDS" means the aggregate cash proceeds, including payments
in respect of deferred payment obligations (to the extent corresponding to the
principal, but not the interest component, thereof) received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of (1) the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result thereof, (2) taxes paid or payable as a result thereof, in
each case, after taking into account any available tax credits or deductions and
any tax sharing arrangements, (3) amounts required to be applied to the
repayment of Indebtedness (other than intercompany Indebtedness owing to and
held by the Company or any of its Restricted Subsidiaries) secured by a Lien on
the asset or assets that were the subject of such Asset Sale, or is required to
be paid as a result of such sale, (4) payments to holders of Equity Interests in
the Restricted Subsidiary in such capacity (other than such Equity Interests
held by the Company or any Restricted Subsidiary thereof) that has consummated
such Asset Sale to the extent that such payment is required to permit the
distribution of such proceeds in respect of the Equity Interests in such
Restricted Subsidiary held by the Company or any Restricted Subsidiary thereof,
and (5) any reserve for adjustment in respect of the sale price of such asset or
assets established in accordance with GAAP.

            "NET TANGIBLE ASSETS" means the total amount of assets of the
Company and its Restricted Subsidiaries (less applicable depreciation,
amortization and other valuation reserves), except to the extent resulting from
write-ups of capital assets (excluding write-ups in connection with accounting
for acquisitions in conformity with GAAP), after deducting therefrom (1) all
current liabilities of the Company and its Restricted Subsidiaries (excluding
intercompany items) and (2) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, all as set
forth on the most recent quarterly or annual consolidated balance sheet of the
Company and its Restricted Subsidiaries, prepared in conformity with GAAP.

            "NON-U.S. PERSON" means a Person who is not a U.S. Person.

            "NOTE GUARANTEE" means a Guarantee of the Notes pursuant to this
Indenture.

            "NOTES" means the 9-7/8% Senior Notes due 2012 of the Company issued
on the date hereof and any Additional Notes, including any Exchange Notes. The
Notes and the Additional Notes, if any, shall be treated as a single class for
all purposes under this Indenture.

            "OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

                                       15
<PAGE>

            "OFFICER" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.

            "OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Company by at least two Officers of the Company, one of whom must be the
principal executive officer, the principal financial officer, the treasurer or
the principal accounting officer of the Company, that meets the requirements of
this Indenture.

            "OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee (who may be counsel to or an employee of
the Company) that meets the requirements of this Indenture.

            "PARENT" means MedCath Corporation.

            "PARTICIPANT" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and with respect to DTC, shall include Euroclear and
Clearstream).

            "PERMITTED BUSINESS" means any business conducted or proposed to be
conducted (as described in the offering memorandum dated June 29, 2004) by the
Company and its Restricted Subsidiaries on the date of this Indenture and other
businesses reasonably related or ancillary thereto.

            "PERMITTED INVESTMENTS" means:

      (1)   any Investment in the Company or in a Subsidiary Guarantor;

      (2)   any Investment in Cash Equivalents;

      (3)   any Investment by the Company or any Restricted Subsidiary of the
            Company in a Person, if as a result of, or in connection with, such
            Investment:

            (a)   such Person becomes a Subsidiary Guarantor; or

            (b)   such Person is merged, consolidated or amalgamated with or
                  into, or transfers or conveys substantially all of its assets
                  to, or is liquidated into, the Company or a Subsidiary
                  Guarantor;

      (4)   any Investment made as a result of the receipt of non-cash
            consideration from an Asset Sale that was made pursuant to and in
            compliance with Section 4.10 of this Indenture;

      (5)   Investments acquired solely in exchange for the issuance of Equity
            Interests (other than Disqualified Stock) of the Company;

                                       16
<PAGE>

      (6)   Hedging Obligations that are incurred for bona fide hedging purposes
            by the Company or its Restricted Subsidiaries with respect to
            interest rates, commodity prices or foreign currency exchange rates,
            and not for speculative purposes, and that do not increase the
            Indebtedness of the obligor outstanding at any time other than as a
            result of fluctuations in interest rates, commodity prices or
            foreign currency exchange rates or by reason of fees, indemnities
            and compensation payable thereunder;

      (7)   stock, obligations or securities received in satisfaction of
            judgments;

      (8)   Physician Support Obligations made by the Company or a Subsidiary
            thereof;

      (9)   any Investment in a Restricted Subsidiary of the Company (other than
            a Subsidiary Guarantor) in the form of a promissory note payable by
            such Restricted Subsidiary to the Company or a Subsidiary Guarantor
            that bears cash interest, which note shall be unsubordinated, unless
            such note is used to finance a Restricted Subsidiary's working
            capital or other operating cash requirements consistent with the
            Company's past practice;

      (10)  Investments made by the Company in an Unrestricted Subsidiary
            pursuant to an obligation to make a capital contribution to such
            Unrestricted Subsidiary; provided that (i) such Investment ratably
            decreases such obligation and (ii) such obligation was, at the time
            it was created, a Restricted Investment that was permitted under the
            covenant described under Section 4.07 of this Indenture;

      (11)  other Investments in any Person that is not an Affiliate of the
            Company (other than a Restricted Subsidiary or any Person that is an
            Affiliate of the Company solely because the Company, directly or
            indirectly, owns Equity Interests in or controls such Person)
            engaged in a Permitted Business in an aggregate amount (measured on
            the date such Investments were made and without giving effect to
            subsequent changes in value), when taken together with all other
            Investments made pursuant to this clause (11) since the date of this
            Indenture (but, to the extent that any Investment made pursuant to
            this clause (11) since the date of this Indenture is sold or
            otherwise liquidated for cash, minus the lesser of (x) the cash
            return of capital with respect to such Investment (less the cost of
            disposition, if any) and (y) the initial amount of such Investment),
            not to exceed the greater of (A) $50.0 million and (B) 5% of the
            Company's Net Tangible Assets;

      (12)  only in the event that amounts available for Permitted Investments
            under the preceding clause (11) have been fully utilized and in
            addition to any amounts utilized under such clause, other
            Investments in any Person that is not an Affiliate of the Company
            (other than a Restricted Subsidiary or any Person that is an
            Affiliate of the Company solely because the Company, directly or
            indirectly, owns Equity Interests in or controls such Person)
            engaged in a Permitted Business; provided that (A) the Company's
            Consolidated Leverage Ratio at the time of such Investment is, and
            after giving pro forma effect thereto as if such Investment had been
            made at the beginning of the applicable four-quarter period

                                       17
<PAGE>

            would have been, less than 4.0 to 1 and (B) the rating assigned to
            the Notes by each of Moody's and S&P is no less favorable than that
            in existence on the date of this Indenture; and

      (13)  Investments in a Restricted Subsidiary of the Company that is not a
            Guarantor, to the extent received solely in consideration for any
            non-cash return on an Investment previously made by the Company in a
            Restricted Subsidiary that is not a Guarantor.

            "PERMITTED LIENS" means:

      (1)   Liens on the assets of the Company and any Restricted Subsidiary
            thereof securing Indebtedness in an amount not to exceed the greater
            of (A) the sum of (i) the amount of Indebtedness incurred and
            outstanding under Section 4.09(b)(i) hereof, immediately prior to
            the creation of such Lien plus (ii) the amount of Indebtedness
            available for incurrence under Section 4.09(b)(i) hereof,
            immediately prior to the creation of such Lien and (B) the product
            of (x) 3.5 and (y) the Company's Consolidated Cash Flow for the most
            recent four fiscal quarters for which internal financial statements
            are available immediately prior to the creation of such Lien;

      (2)   Liens in favor of the Company or any Restricted Subsidiary that is a
            Guarantor;

      (3)   Liens on property of a Person existing at the time such Person is
            merged with or into or consolidated with the Company or any
            Restricted Subsidiary of the Company or at the time such Person
            becomes a Restricted Subsidiary of the Company; provided that such
            Liens were in existence prior to the contemplation of such merger or
            consolidation and do not extend to any other assets of the Company
            or any Restricted Subsidiary;

      (4)   Liens on property existing at the time of acquisition thereof by the
            Company or any Restricted Subsidiary of the Company, provided that
            such Liens were in existence prior to the contemplation of such
            acquisition and do not extend to any property other than the
            property so acquired by the Company or the Restricted Subsidiary;

      (5)   Liens securing Existing Indebtedness;

      (6)   Liens on cash or letters of credit securing Hedging Obligations of
            the Company or any of its Restricted Subsidiaries that do not
            constitute Indebtedness;

      (7)   Liens for taxes, assessments and governmental charges not yet
            delinquent or being contested in good faith and for which adequate
            reserves have been established to the extent required by GAAP;

      (8)   carriers, warehousemen's, mechanics', worker's, materialmen's,
            operators', landlords' or similar Liens arising in the ordinary
            course of business;

                                       18
<PAGE>

      (9)   Liens incurred or deposits made in the ordinary course of business
            in connection with worker's compensation, unemployment insurance or
            other social security, old age pension or public liability
            obligations;

      (10)  Liens, deposits or pledges to secure the performance of bids,
            tenders, contracts (other than contracts for the payment of
            Indebtedness), leases, or other similar obligations arising in the
            ordinary course of business;

      (11)  survey exceptions, encumbrances, easements or reservations of, or
            rights of other for, rights of way, zoning or other restrictions as
            to the use of properties, and defects in title which, in the case of
            any of the foregoing, were not incurred or created to secure the
            payment of Indebtedness, and which in the aggregate do not
            materially adversely affect the value of such properties or
            materially impair the use for the purposes of which such properties
            are held by the Company or any Restricted Subsidiaries;

      (12)  Liens, deposits or pledges to secure public or statutory
            obligations, surety, stay, appeal, indemnity, performance or other
            similar bonds or obligations; and Liens, deposits or pledges in lieu
            of such bonds, or to secure such bonds, or to secure letters of
            credit in lieu of or supporting the payment of such bonds;

      (13)  any interest or title of a lessor in the property subject to any
            lease;

      (14)  Liens on the assets of the Company or any Restricted Subsidiary of
            the Company to secure Permitted Refinancing Indebtedness, in whole
            or in part, of any Indebtedness secured by Liens; provided however,
            that any such Lien shall not extend to any assets other than those
            that secured such original Indebtedness; and

      (15)  Liens (not otherwise permitted hereunder) with respect to
            obligations that do not exceed $5.0 million at any one time
            outstanding.

            "PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness that was not in existence on the date of
this Indenture); provided that:

      (1)   the principal amount (or accreted value, if applicable) of such
            Permitted Refinancing Indebtedness does not exceed the principal
            amount (or accreted value, if applicable) of the Indebtedness so
            extended, refinanced, renewed, replaced, defeased or refunded (plus
            all accrued interest thereon and the amount of any reasonably
            determined premium necessary to accomplish such refinancing and such
            reasonable expenses incurred in connection therewith);

      (2)   such Permitted Refinancing Indebtedness has a final maturity date
            later than the final maturity date of, and has a Weighted Average
            Life to Maturity equal to or greater than the Weighted Average Life
            to Maturity of, the Indebtedness being extended, refinanced,
            renewed, replaced, defeased or refunded;

                                       19
<PAGE>

      (3)   if the Indebtedness being extended, refinanced, renewed, replaced,
            defeased or refunded is subordinated in right of payment to the
            Notes or the Note Guarantees, such Permitted Refinancing
            Indebtedness has a final maturity date later than the final maturity
            date of, and is subordinated in right of payment to, the Notes on
            terms at least as favorable to the Holders of Notes as those
            contained in the documentation governing the Indebtedness being
            extended, refinanced, renewed, replaced, defeased or refunded;

      (4)   if the Indebtedness being extended, refinanced, renewed, replaced,
            defeased or refunded is pari passu in right of payment with the
            Notes or any Note Guarantees, such Permitted Refinancing
            Indebtedness is pari passu with, or subordinated in right of payment
            to, the Notes or such Note Guarantees; and

      (5)   such Indebtedness is incurred either by the Person who is the
            obligor on the Indebtedness being extended, refinanced, renewed,
            replaced, defeased or refunded, or by the Company.

            "PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.

            "PHYSICIAN SUPPORT OBLIGATIONS" means a loan to or on behalf of, or
a Guarantee of Indebtedness of (i) a physician or other healthcare professional
providing services to patients in the service area of a hospital or other
healthcare facility operated by the Company or any of its Restricted
Subsidiaries made or given by the Company or any Subsidiary of the Company, or
(ii) any independent practice association or other entity majority-owned by any
Person described in clause (i) above (other than any Person in which the Company
or any of its Affiliates owns any Equity Interests) in each case:

      (1)   in the ordinary course of business of the Company or such Restricted
            Subsidiary; and

      (6)   pursuant to a written agreement having a period not to exceed five
            years.

            "PRINCIPALS" means (i) MedCath 1998 LLC, (ii) Welsh, Carson,
Anderson & Stowe, VII, L.P., and (iii) any investment partnership under common
control with any of the foregoing.

            "PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.07(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.

            "QIB" means a "qualified institutional buyer" as defined in Rule
144A.

            "QUALIFIED EQUITY OFFERING" means (i) an offer and sale of common
stock (other than Disqualified Stock) of the Company or the Parent pursuant to a
registration statement that has been declared effective by the Commission
pursuant to the Securities Act (other than a registration statement on Form S-8
or otherwise relating to equity securities issuable under any

                                       20
<PAGE>

employee benefit plan of the Company or the Parent) or (ii) any private
placement of common stock (other than Disqualified Stock) of the Company or the
Parent to any Person other than the Principals and their Related Parties;
provided that, in either case, if such offer, sale or placement is of common
stock of the Parent, all of the net cash proceeds therefrom has been contributed
to the common equity of the Company.

            "RATING AGENCIES" means (1) S&P and Moody's or (2) if S&P or Moody's
or both of them are not making ratings publicly available, a nationally
recognized U.S. rating agency or agencies, as the case may be, selected by the
Company, which will be substituted for S&P or Moody's or both, as the case may
be.

            "RATING CATEGORY" means (1) with respect to S&P, any of the
following categories (any of which may include a "+" or "-"): AAA, AA, A, BBB,
BB, B, CCC, CC, C and D (or equivalent successor categories), (2) with respect
to Moody's, any of the following categories: Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C
and D (or equivalent successor categories), and (3) the equivalent of any such
categories of S&P or Moody's used by another Rating Agency, if applicable.

            "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, to be dated the date of this Indenture, among the Company, the
Guarantors, Banc of America Securities LLC, Wachovia Capital Markets, LLC,
Citigroup Global Markets Inc. and J.P. Morgan Securities Inc.

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

            "REGULATION S GLOBAL NOTE" means a Legended Regulation S Global Note
or an Unlegended Regulation S Global Note, as appropriate.

            "REGULATION S TEMPORARY GLOBAL NOTE LEGEND" means the legend set
forth in Section 2.07(h), which is required to be placed on Legended Regulation
S Global Notes under this Indenture.

            "RELATED PARTY" means:

      (1)   any controlling stockholder, partner, member, 80% (or more) owned
            Subsidiary, or immediate family member (in the case of an
            individual) of any Principal; or

      (2)   any trust, corporation, partnership or other entity, the
            beneficiaries, stockholders, partners, owners or Persons
            beneficially holding an 80% or more controlling interest of which
            consist of any one or more Principals and/or such other Persons
            referred to in the immediately preceding clause (1).

            "REPLACEMENT ASSETS" means (1) non-current tangible assets that will
be used or useful in a Permitted Business, or (2) substantially all the assets
of a Permitted Business or (3) a Permitted Investment otherwise permitted under
this Indenture in any Person engaged in a Permitted Business.

                                       21
<PAGE>

            "RESPONSIBLE OFFICER," when used with respect to the Trustee, means
any officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.

            "RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the
Private Placement Legend.

            "RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private
Placement Legend.

            "RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.

            "RESTRICTED PERIOD" means the 40-day restricted period as defined in
Regulation S.

            "RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.

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

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

            "RULE 903" means Rule 903 promulgated under the Securities Act.

            "RULE 904" means Rule 904 promulgated the Securities Act.

            "S&P" means Standard & Poor's Rating Services.

            "SALE AND LEASEBACK TRANSACTION" means, with respect to any Person,
any transaction involving any of the assets or properties of such Person whether
now owned or hereafter acquired, whereby such Person sells or transfers such
assets or properties and then or thereafter leases such assets or properties or
any part thereof or any other assets or properties which such Person intends to
use for substantially the same purpose or purposes as the assets or properties
sold or transferred.

            "SECURED INDEBTEDNESS" means any Indebtedness of the Company or any
of its Restricted Subsidiaries secured by a Lien upon any asset of the Company
or any of its Restricted Subsidiaries.

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

            "SHELF REGISTRATION STATEMENT" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.

                                       22
<PAGE>

            "SIGNIFICANT SUBSIDIARY" means any Subsidiary that would constitute
a "significant subsidiary" within the meaning of Article 1 of Regulation S-X of
the Securities Act.

            "STATED MATURITY" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

            "STRATEGIC INVESTOR" means (i) any physician and (ii) any Person at
least 90% of each class of outstanding Capital Stock or other ownership
interests of which is owned by physicians, in the case of each of the foregoing
clauses (i) and (ii), that owns Equity Interests in a Restricted Subsidiary of
the Company that owns and operates a hospital.

            "SUBSIDIARY" means, with respect to any specified Person:

      (1)   any corporation, association or other business entity of which more
            than 50% of the total voting power of shares of Capital Stock
            entitled (without regard to the occurrence of any contingency) to
            vote in the election of directors, managers or trustees thereof is
            at the time owned or controlled, directly or indirectly, by such
            Person or one or more of the other Subsidiaries of that Person (or a
            combination thereof); and

      (2)   any partnership (a) the sole general partner or the managing general
            partner of which is such Person or a Subsidiary of such Person or
            (b) the only general partners of which are such Person or one or
            more Subsidiaries of such Person (or any combination thereof).

            "SUBSIDIARY GUARANTORS" means:

      (1)   each direct or indirect Domestic Subsidiary of the Company other
            than any Domestic Subsidiary that is not a Substantially
            Wholly-Owned Restricted Subsidiary and has not provided a Guarantee
            in respect of any Indebtedness of the Company or any other
            Restricted Subsidiary thereof (other than any Indebtedness of the
            Company solely as a result of the Guarantee by the Company of such
            Restricted Subsidiary's Indebtedness); and

      (3)   any other subsidiary that executes a Note Guarantee in accordance
            with the provisions of this Indenture;

and their respective successors and assigns until released from their
obligations under their Note Guarantees and this Indenture in accordance with
the terms of this Indenture.

            "SUBSTANTIALLY WHOLLY-OWNED RESTRICTED SUBSIDIARY" of any specified
Person means a Restricted Subsidiary of such Person not less than 95% of each
class of outstanding Capital Stock or other ownership interests of which (other
than directors' qualifying shares or Investments by foreign nationals mandated
by applicable law) shall at the time be owned by such Person or by one or more
Wholly Owned Restricted Subsidiaries of such Person.

                                       23
<PAGE>

            "TIA" means the Trust Indenture Act of 1939, as in effect on the
date on which this Indenture is qualified under the TIA.

            "TREASURY REGULATIONS" means the Treasury regulations promulgated
under the Internal Revenue Code.

            "TRUSTEE" means U.S. Bank National Association, a national banking
corporation, until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.

            "UNLEGENDED REGULATION S GLOBAL NOTE" means a permanent global Note
in the form of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend, deposited with or on behalf of and registered in the name of
the Depositary or its nominee and issued upon expiration of the Restricted
Period.

            "UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes
that do not bear and are not required to bear the Private Placement Legend.

            "UNRESTRICTED GLOBAL NOTE" means a permanent Global Note
substantially in the form of Exhibit A attached hereto that bears the Global
Note Legend and that has the "Schedule of Exchanges of Interests in the Global
Note" attached thereto, and that is deposited with or on behalf of and
registered in the name of the Depositary, representing a series of Notes, and
that does not bear the Private Placement Legend.

            "UNRESTRICTED SUBSIDIARY" means;

      (1)   any Subsidiary of the Company that is designated by the Board of
            Directors of the Company as an Unrestricted Subsidiary pursuant to a
            Board Resolution in compliance with Section 4.16 of this Indenture;
            and

      (2)   any Subsidiary of any Subsidiary in the foregoing clause (1).

            "U.S. PERSON" means a U.S. person as defined in Rule 902(k) under
the Securities Act.

            "VOTING STOCK" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.

            "WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:

      (1)   the sum of the products obtained by multiplying (a) the amount of
            each then remaining installment, sinking fund, serial maturity or
            other required payments of principal, including payment at final
            maturity, in respect thereof, by (b) the number of years (calculated
            to the nearest one-twelfth) that will elapse between such date and
            the making of such payment; by

      (2)   the then outstanding principal amount of such Indebtedness.

                                       24
<PAGE>

            "WHOLLY-OWNED RESTRICTED SUBSIDIARY" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares or
Investments by foreign nationals mandated by applicable law) shall at the time
be owned by such Person or by one or more Wholly-Owned Restricted Subsidiaries
of such Person.

Section 1.02. Other Definitions.

<TABLE>
<CAPTION>
                                                                                                DEFINED IN
           TERM                                                                                  SECTION
           ----                                                                                  -------
<S>                                                                                             <C>
"AFFILIATE TRANSACTION".........................................................................  4.11
"ASSET SALE OFFER"..............................................................................  4.10
"AUTHENTICATION ORDER"..........................................................................  2.02
"CHANGE OF CONTROL OFFER".......................................................................  4.14
"CHANGE OF CONTROL PAYMENT".....................................................................  4.14
"CHANGE OF CONTROL PAYMENT DATE"................................................................  4.14
"COVENANT DEFEASANCE"...........................................................................  8.03
"DTC"...........................................................................................  2.01
"EVENT OF DEFAULT"..............................................................................  6.01
"EXCESS PROCEEDS"...............................................................................  4.10
"LEGAL DEFEASANCE"..............................................................................  8.02
"OFFER AMOUNT"..................................................................................  3.08
"OFFER PERIOD"..................................................................................  3.08
"OFFSHORE TRANSACTION"..........................................................................  2.07
"PAYING AGENT"..................................................................................  2.04
"PAYMENT DEFAULT"...............................................................................  6.01
"PERMITTED DEBT"................................................................................  4.09
"PURCHASE DATE".................................................................................  3.08
"REGISTRAR".....................................................................................  2.04
"RELATED PROCEEDINGS"........................................................................... 12.09
"REPURCHASE OFFER"..............................................................................  3.08
"RESTRICTED PAYMENTS"...........................................................................  4.07
"SPECIAL REDEMPTION"............................................................................  3.09
"SPECIFIED COURTS".............................................................................. 12.09
"SUSPENDED COVENANTS"...........................................................................  4.21
"SUSPENSION CONDITION"..........................................................................  4.21
</TABLE>

Section 1.03. Incorporation by Reference of Trust Indenture Act.

            Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.

            The following TIA terms used in this Indenture have the following
meanings:

            "INDENTURE SECURITIES" means the Notes;

                                       25
<PAGE>

            "INDENTURE SECURITY HOLDER" means a Holder of a Note;

            "INDENTURE TO BE QUALIFIED" means this Indenture;

            "INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
and

            "OBLIGOR" on the Notes means the Company and any successor obligor
upon the Notes.

            All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings so assigned to them.

Section 1.04. Rules of Construction.

            Unless the context otherwise requires:

            (a)   a term has the meaning assigned to it;

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

            (c)   "or" is not exclusive;

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

            (e)   provisions apply to successive events and transactions; and

            (f)   references to sections of or rules under the Securities Act
                  shall be deemed to include substitute, replacement of
                  successor sections or rules adopted by the Commission from
                  time to time.

                                  ARTICLE TWO
                                    THE NOTES

Section 2.01. Form and Dating.

            (a)   General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the date of its authentication. The Notes
shall be issued in registered, global form without interest coupons and only
shall be in minimum denominations of $1,000 and integral multiples of $1,000 in
excess thereof.

            The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and

                                       26
<PAGE>

to be bound thereby. However, to the extent any provision of any Note conflicts
with the express provisions of this Indenture, the provisions of this Indenture
shall govern and be controlling.

            (b)   Global Notes. Notes issued in global form shall be
substantially in the form of Exhibit A attached hereto (and shall include the
Global Note Legend thereon and the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Notes issued in definitive form shall be
substantially in the form of Exhibit A attached hereto (but without the Global
Note Legend thereon and without the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate principal amount of outstanding Notes from time to
time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee in accordance with instructions given by the Holder thereof as required
by Section 2.07 hereof.

            (c)   Regulation S Global Notes. Notes offered and sold in reliance
on Regulation S shall be issued initially in the form of the Legended Regulation
S Global Note, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, as custodian for The Depository Trust
Company ("DTC") in New York, New York, and registered in the name of the
Depositary or the nominee of the Depositary for the accounts of designated
agents holding on behalf of Euroclear or Clearstream, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. Following the
termination of the Restricted Period, beneficial interests in the Legended
Regulation S Global Note shall be exchanged for beneficial interests in
Unlegended Regulation S Global Notes pursuant to the Applicable Procedures.
Simultaneously with the authentication of Unlegended Regulation S Global Notes,
the Trustee shall cancel the Legended Regulation S Global Note. The aggregate
principal amount of the Regulation S Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee, as the case may be, in connection with transfers of
interest as hereinafter provided.

            (d)   Euroclear and Clearstream Procedures Applicable. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and Conditions of
Cedel Bank" and "Customer Handbook" of Clearstream shall be applicable to
transfers of beneficial interests in the Regulation S Global Notes that are held
by Participants through Euroclear or Clearstream.

Section 2.02. Execution and Authentication.

            Two Officers of the Company shall sign the Notes for the Company by
manual or facsimile signature.

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

                                       27
<PAGE>

            A Note shall not be valid until authenticated by the manual
signature of the Trustee. Such signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.

            The aggregate principal amount of Notes which may be authenticated
and delivered under this Indenture is unlimited.

            The Company may, subject to Article Four of this Indenture and
applicable law, issue Additional Notes under this Indenture, including Exchange
Notes. The Notes issued on the Closing Date and any Additional Notes
subsequently issued shall be treated as a single class for all purposes under
this Indenture.

            The Trustee shall, upon a written order of the Company signed by two
Officers of the Company (an "AUTHENTICATION ORDER"), authenticate Notes for
original issue in an aggregate principal amount specified in such Authentication
Order. The Authentication Order shall specify the amount of Notes to be
authenticated and the date on which the Notes are to be authenticated.

            The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.

Section 2.03. Methods of Receiving Payments on the Notes.

            If a Holder of Notes has given wire transfer instructions to the
Company, the Company shall pay all principal, interest and premium and
Liquidated Damages, if any, on that Holder's Notes in accordance with those
instructions. All other payments on Notes shall be made at the office or agency
of the Paying Agent and Registrar within the City and State of New York unless
the Company elects to make interest payments by check mailed to the Holders at
their addresses set forth in the register of Holders.

Section 2.04. Registrar and Paying Agent.

            (a)   The Company shall maintain an office or agency where Notes may
be presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Notes may be presented for payment ("PAYING AGENT"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without prior notice to any Holder. The Company shall
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.

            (b)   The Company initially appoints DTC to act as Depositary with
respect to the Global Notes.

                                       28
<PAGE>

            (c)   The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Custodian with respect to the Global
Notes.

Section 2.05. Paying Agent to Hold Money in Trust.

            The Company shall require each Paying Agent other than the Trustee
to agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
shall notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or one of its
Subsidiaries) shall have no further liability for the money. If the Company or
one of its Subsidiaries acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.

Section 2.06. Holder Lists.

            The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).

Section 2.07. Transfer and Exchange.

            (a)   Transfer and Exchange of Global Notes. A Global Note may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes
shall be exchanged by the Company for Definitive Notes if (i) the Company
delivers to the Trustee notice from the Depositary that it is unwilling or
unable to continue to act as Depositary or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 120 days after the date of
such notice from the Depositary; (ii) the Company in its sole discretion
determines that the Global Notes (in whole but not in part) should be exchanged
for Definitive Notes and delivers a written notice to such effect to the
Trustee; provided that in no event shall the Legended Regulation S Global Note
be exchanged by the Company for Definitive Notes prior to the expiration of the
Restricted Period; or (iii) there shall have occurred and be continuing a
Default or Event of Default with respect to the Notes. Upon the occurrence of
either of the preceding events in (i), (ii) or (iii) above, Definitive Notes
shall be issued in such names as the Depositary shall instruct the Trustee.
Global Notes also may be exchanged or replaced, in whole or in part, as provided
in Sections 2.08 and 2.11 hereof. Every Note authenticated and delivered

                                       29
<PAGE>

in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant
to this Section 2.07 or Section 2.08 or 2.11 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global Note may not be
exchanged for another Note other than as provided in this Section 2.07(a),
however, beneficial interests in a Global Note may be transferred and exchanged
as provided in Section 2.07(b), (c) or (f) hereof.

            (b)   Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:

            (i)   Transfer of Beneficial Interests in the Same Global Note.
      Beneficial interests in any Restricted Global Note may be transferred to
      Persons who take delivery thereof in the form of a beneficial interest in
      the same Restricted Global Note in accordance with the transfer
      restrictions set forth in the Private Placement Legend; provided, however,
      that prior to the expiration of the Restricted Period, transfers of
      beneficial interests in the Legended Regulation S Global Note may not be
      made to a U.S. Person or for the account or benefit of a U.S. Person
      (other than an Initial Purchaser). Beneficial interests in any
      Unrestricted Global Note may be transferred to Persons who take delivery
      thereof in the form of a beneficial interest in an Unrestricted Global
      Note. No written orders or instructions shall be required to be delivered
      to the Registrar to effect the transfers described in this Section
      2.07(b)(i).

            (ii)  All Other Transfers and Exchanges of Beneficial Interests in
      Global Notes. In connection with all transfers and exchanges of beneficial
      interests that are not subject to Section 2.07(b)(i) above, the transferor
      of such beneficial interest must deliver to the Registrar either (A) (1) a
      written order from a Participant or an Indirect Participant given to the
      Depositary in accordance with the Applicable Procedures directing the
      Depositary to credit or cause to be credited a beneficial interest in
      another Global Note in an amount equal to the beneficial interest to be
      transferred or exchanged and (2) instructions given in accordance with the
      Applicable Procedures containing information regarding the Participant
      account to be credited with such increase or (B) (1) a written order from
      a Participant or an Indirect Participant given to the Depositary in
      accordance with the Applicable Procedures directing the Depositary to
      cause to be issued a Definitive Note in an amount equal to the beneficial
      interest to be transferred or exchanged and (2) instructions given by the
      Depositary to the Registrar containing information regarding the Person in
      whose name such Definitive Note shall be registered to effect the transfer
      or exchange referred to in (1) above; provided that in no event shall
      Definitive Notes be issued upon the transfer or exchange of beneficial
      interests in the Legended Regulation S Global Note prior to the expiration
      of the Restricted Period. Upon consummation of an Exchange Offer by the
      Company in accordance with Section 2.07(f) hereof, the requirements of
      this Section 2.07(b)(ii) shall be deemed to have been satisfied upon
      receipt by the Registrar of the instructions contained in the Letter of
      Transmittal

                                       30
<PAGE>

      delivered by the Holder of such beneficial interests in the Restricted
      Global Notes. Upon satisfaction of all of the requirements for transfer or
      exchange of beneficial interests in Global Notes contained in this
      Indenture and the Notes or otherwise applicable under the Securities Act,
      the Trustee shall adjust the principal amount at maturity of the relevant
      Global Notes pursuant to Section 2.07(i) hereof.

            (iii) Transfer of Beneficial Interests to Another Restricted Global
      Note. A beneficial interest in any Restricted Global Note may be
      transferred to a Person who takes delivery thereof in the form of a
      beneficial interest in another Restricted Global Note if the transfer
      complies with the requirements of Section 2.07(b)(ii) above and the
      Registrar receives the following:

                  (A)   if the transferee shall take delivery in the form of a
            beneficial interest in the 144A Global Note, then the transferor
            must deliver a certificate in the form of Exhibit B hereto,
            including the certifications in item (1) thereof; and

                  (B)   if the transferee shall take delivery in the form of a
            beneficial interest in a Legended Regulation S Global Note, then the
            transferor must deliver a certificate in the form of Exhibit B
            hereto, including the certifications in item (2) thereof.

            (iv)  Transfer and Exchange of Beneficial Interests in a Restricted
      Global Note for Beneficial Interests in the Unrestricted Global Note. A
      beneficial interest in any Restricted Global Note may be exchanged by any
      Holder thereof for a beneficial interest in an Unrestricted Global Note or
      transferred to a Person who takes delivery thereof in the form of a
      beneficial interest in an Unrestricted Global Note if the exchange or
      transfer complies with the requirements of Section 2.07(b)(ii) above and:

                  (A)   such exchange or transfer is effected pursuant to the
            Exchange Offer in accordance with the Registration Rights Agreement
            and the Holder of the beneficial interest to be transferred, in the
            case of an exchange, or the transferee, in the case of a transfer,
            certifies in the applicable Letter of Transmittal that (1) it is not
            an affiliate (as defined in Rule 144) of the Company, (2) it is not
            engaged in, and does not intend to engage in, and has no arrangement
            or understanding with any Person to participate in, a distribution
            of the Exchange Notes to be issued in the Exchange Offer and (3) it
            is acquiring the Exchange Notes in its ordinary course of business;

                  (B)   such transfer is effected pursuant to the Shelf
            Registration Statement in accordance with the Registration Rights
            Agreement;

                  (C)   such transfer is effected by a Broker-Dealer pursuant to
            the Exchange Offer Registration Statement in accordance with the
            Registration Rights Agreement; or

                  (D)   the Registrar receives the following:

                                       31
<PAGE>

                        (1)   if the holder of such beneficial interest in a
                  Restricted Global Note proposes to exchange such beneficial
                  interest for a beneficial interest in an Unrestricted Global
                  Note, a certificate from such holder in the form of Exhibit C
                  hereto, including the certifications in item (1)(a) thereof;
                  or

                        (2)   if the holder of such beneficial interest in a
                  Restricted Global Note proposes to transfer such beneficial
                  interest to a Person who shall take delivery thereof in the
                  form of a beneficial interest in an Unrestricted Global Note,
                  a certificate from such holder in the form of Exhibit B
                  hereto, including the certifications in item (4) thereof;

            and, in each such case set forth in this subparagraph (D), if the
            Registrar or the Company so requests or if the Applicable Procedures
            so require, an Opinion of Counsel in form reasonably acceptable to
            the Registrar and the Company to the effect that such exchange or
            transfer is in compliance with the Securities Act and that the
            restrictions on transfer contained herein and in the Private
            Placement Legend are no longer required in order to maintain
            compliance with the Securities Act.

            If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.

            Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.

            (c)   Transfer or Exchange of Beneficial Interests for Definitive
      Notes.

            (i)   Beneficial Interests in Restricted Global Notes to Restricted
      Definitive Notes. If any holder of a beneficial interest in a Restricted
      Global Note proposes to exchange such beneficial interest for a Restricted
      Definitive Note or to transfer such beneficial interest to a Person who
      takes delivery thereof in the form of a Restricted Definitive Note, then,
      upon receipt by the Registrar of the following documentation:

                  (A)   if the holder of such beneficial interest in a
            Restricted Global Note proposes to exchange such beneficial interest
            for a Restricted Definitive Note, a certificate from such holder in
            the form of Exhibit C hereto, including the certifications in item
            (2)(a) thereof;

                  (B)   if such beneficial interest is being transferred to a
            QIB in accordance with Rule 144A under the Securities Act, a
            certificate to the effect set forth in Exhibit B hereto, including
            the certifications in item (1) thereof;

                                       32
<PAGE>

                  (C)   [INTENTIONALLY OMITTED];

                  (D)   [INTENTIONALLY OMITTED];

                  (E)   if such beneficial interest is being transferred to an
            Institutional Accredited Investor in reliance on an exemption from
            the registration requirements of the Securities Act other than that
            listed in subparagraph (B) above, a certificate to the effect set
            forth in Exhibit B hereto, including the certifications,
            certificates and Opinion of Counsel required by item (3) thereof, if
            applicable; or

                  (F)   if such beneficial interest is being transferred to the
            Company or any of its Subsidiaries, a certificate to the effect set
            forth in Exhibit B hereto, including the certifications in item
            (3)(a) thereof,

      the Trustee shall cause the aggregate principal amount of the applicable
      Global Note to be reduced accordingly pursuant to Section 2.07(i) hereof,
      and the Company shall execute and the Trustee shall authenticate and
      deliver to the Person designated in the instructions a Definitive Note in
      the appropriate principal amount. Any Definitive Note issued in exchange
      for a beneficial interest in a Restricted Global Note pursuant to this
      Section 2.07(c) shall be registered in such name or names and in such
      authorized denomination or denominations as the holder of such beneficial
      interest shall instruct the Registrar through instructions from the
      Depositary and the Participant or Indirect Participant. The Trustee shall
      deliver such Definitive Notes to the Persons in whose names such Notes are
      so registered. Any Definitive Note issued in exchange for a beneficial
      interest in a Restricted Global Note pursuant to this Section 2.07(c)(i)
      shall bear the Private Placement Legend and shall be subject to all
      restrictions on transfer contained therein.

            (ii)  Beneficial Interests in Legended Regulation S Global Note to
      Definitive Notes. A beneficial interest in the Legended Regulation S
      Global Note may not be exchanged for a Definitive Note or transferred to a
      Person who takes delivery thereof in the form of a Definitive Note prior
      to the expiration of the Restricted Period, except in the case of a
      transfer pursuant to an exemption from the registration requirements of
      the Securities Act other than Rule 903 or Rule 904.

            (iii) Beneficial Interests in Restricted Global Notes to
      Unrestricted Definitive Notes. A holder of a beneficial interest in a
      Restricted Global Note may exchange such beneficial interest for an
      Unrestricted Definitive Note or may transfer such beneficial interest to a
      Person who takes delivery thereof in the form of an Unrestricted
      Definitive Note only if:

                  (A)   such exchange or transfer is effected pursuant to the
            Exchange Offer in accordance with the Registration Rights Agreement
            and the holder of such beneficial interest, in the case of an
            exchange, or the transferee, in the case of a transfer, certifies in
            the applicable Letter of Transmittal that (1) it is not an affiliate
            (as defined in Rule 144) of the Company, (2) it is not engaged in,
            and

                                       33
<PAGE>

            does not intend to engage in, and has no arrangement or
            understanding with any Person to participate in, a distribution of
            the Exchange Notes to be issued in the Exchange Offer and (3) it is
            acquiring the Exchange Notes in its ordinary course of business;

                  (B)   such transfer is effected pursuant to the Shelf
            Registration Statement in accordance with the Registration Rights
            Agreement;

                  (C)   such transfer is effected by a Broker-Dealer pursuant to
            the Exchange Offer Registration Statement in accordance with the
            Registration Rights Agreement; or

                  (D)   the Registrar receives the following:

                        (1)   if the holder of such beneficial interest in a
                  Restricted Global Note proposes to exchange such beneficial
                  interest for a Definitive Note that does not bear the Private
                  Placement Legend, a certificate from such Holder in the form
                  of Exhibit C hereto, including the certifications in item
                  (1)(b) thereof; or

                        (2)   if the holder of such beneficial interest in a
                  Restricted Global Note proposes to transfer such beneficial
                  interest to a Person who shall take delivery thereof in the
                  form of a Definitive Note that does not bear the Private
                  Placement Legend, a certificate from such Holder in the form
                  of Exhibit B hereto, including the certifications in item (4)
                  thereof;

            and, in each such case set forth in this subparagraph (D), if the
            Registrar or the Company so requests or if the Applicable Procedures
            so require, an Opinion of Counsel in form reasonably acceptable to
            the Registrar and the Company to the effect that such exchange or
            transfer is in compliance with the Securities Act and that the
            restrictions on transfer contained herein and in the Private
            Placement Legend are no longer required in order to maintain
            compliance with the Securities Act.

            (iv)  Beneficial Interests in Unrestricted Global Notes to
      Unrestricted Definitive Notes. If any holder of a beneficial interest in
      an Unrestricted Global Note proposes to exchange such beneficial interest
      for a Definitive Note or to transfer such beneficial interest to a Person
      who takes delivery thereof in the form of a Definitive Note, then, upon
      satisfaction of the conditions set forth in Section 2.07(b)(ii) hereof,
      the Trustee shall cause the aggregate principal amount of the applicable
      Global Note to be reduced accordingly pursuant to Section 2.07(i) hereof,
      and the Company shall execute and the Trustee shall authenticate and
      deliver to the Person designated in the instructions a Definitive Note in
      the appropriate principal amount. Any Definitive Note issued in exchange
      for a beneficial interest pursuant to this Section 2.07(c)(iv) shall be
      registered in such name or names and in such authorized denomination or
      denominations as the holder of such beneficial interest shall instruct the
      Registrar through instructions from the Depositary and the Participant or
      Indirect Participant. The Trustee shall deliver such

                                       34
<PAGE>

      Definitive Notes to the Persons in whose names such Notes are so
      registered. Any Definitive Note issued in exchange for a beneficial
      interest pursuant to this Section 2.07(c)(iv) shall not bear the Private
      Placement Legend.

            (d)   Transfer and Exchange of Definitive Notes for Beneficial
      Interests.

            (i)   Restricted Definitive Notes to Beneficial Interests in
      Restricted Global Notes. If any Holder of a Restricted Definitive Note
      proposes to exchange such Note for a beneficial interest in a Restricted
      Global Note or to transfer such Restricted Definitive Notes to a Person
      who takes delivery thereof in the form of a beneficial interest in a
      Restricted Global Note, then, upon receipt by the Registrar of the
      following documentation:

                  (A)   if the Holder of such Restricted Definitive Note
            proposes to exchange such Note for a beneficial interest in a
            Restricted Global Note, a certificate from such Holder in the form
            of Exhibit C hereto, including the certifications in item (2)(b)
            thereof;

                  (B)   if such Restricted Definitive Note is being transferred
            to a QIB in accordance with Rule 144A under the Securities Act, a
            certificate to the effect set forth in Exhibit B hereto, including
            the certifications in item (1) thereof;

                  (C)   if such Restricted Definitive Note is being transferred
            to a Non-U.S. Person in an "OFFSHORE TRANSACTION" in accordance with
            Rule 903 or Rule 904 under the Securities Act, a certificate to the
            effect set forth in Exhibit B hereto, including the certifications
            in item (2) thereof; or

                  (D)   if such Restricted Definitive Note is being transferred
            to the Company or any of its Subsidiaries, a certificate to the
            effect set forth in Exhibit B, including the certifications in item
            (3)(a) thereof,

            the Trustee shall cancel the Restricted Definitive Note, increase or
            cause to be increased the aggregate principal amount of, in the case
            of clause (A) above, the appropriate Restricted Global Note, in the
            case of clause (B) above, the 144A Global Note, and in the case of
            clause (C) above, the Regulation S Global Note.

            (ii)  Restricted Definitive Notes to Beneficial Interests in
      Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
      exchange such Note for a beneficial interest in an Unrestricted Global
      Note or transfer such Restricted Definitive Note to a Person who takes
      delivery thereof in the form of a beneficial interest in an Unrestricted
      Global Note only if:

                  (A)   such exchange or transfer is effected pursuant to the
            Exchange Offer in accordance with the Registration Rights Agreement
            and the Holder, in the case of an exchange, or the transferee, in
            the case of a transfer, certifies in the applicable Letter of
            Transmittal that (1) it is not an affiliate (as defined in Rule 144)
            of the Company, (2) it is not engaged in, and does not intend to
            engage in, and has no arrangement or understanding with any Person
            to participate in, a

                                       35
<PAGE>

            distribution of the Exchange Notes to be issued in the Exchange
            Offer and (3) it is acquiring the Exchange Notes in its ordinary
            course of business;

                  (B)   such transfer is effected pursuant to the Shelf
            Registration Statement in accordance with the Registration Rights
            Agreement;

                  (C)   such transfer is effected by a Broker-Dealer pursuant to
            the Exchange Offer Registration Statement in accordance with the
            Registration Rights Agreement; or

                  (D)   the Registrar receives the following:

                        (1)   if the Holder of such Definitive Notes proposes to
                  exchange such Notes for a beneficial interest in the
                  Unrestricted Global Note, a certificate from such Holder in
                  the form of Exhibit C hereto, including the certifications in
                  item (1)(c) thereof; or

                        (2)   if the Holder of such Definitive Notes proposes to
                  transfer such Notes to a Person who shall take delivery
                  thereof in the form of a beneficial interest in the
                  Unrestricted Global Note, a certificate from such Holder in
                  the form of Exhibit B hereto, including the certifications in
                  item (4) thereof;

      and, in each such case set forth in this subparagraph (D), if the
      Registrar or the Company so requests or if the Applicable Procedures so
      require, an Opinion of Counsel in form reasonably acceptable to the
      Registrar and the Company to the effect that such exchange or transfer is
      in compliance with the Securities Act and that the restrictions on
      transfer contained herein and in the Private Placement Legend are no
      longer required in order to maintain compliance with the Securities Act.

            Upon satisfaction of the conditions of any of the subparagraphs in
      this Section 2.07(d)(ii), the Trustee shall cancel the Definitive Notes
      and increase or cause to be increased the aggregate principal amount of
      the Unrestricted Global Note.

            (iii) Unrestricted Definitive Notes to Beneficial Interests in
      Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
      exchange such Note for a beneficial interest in an Unrestricted Global
      Note or transfer such Definitive Notes to a Person who takes delivery
      thereof in the form of a beneficial interest in an Unrestricted Global
      Note at any time. Upon receipt of a request for such an exchange or
      transfer, the Trustee shall cancel the applicable Unrestricted Definitive
      Note and increase or cause to be increased the aggregate principal amount
      of one of the Unrestricted Global Notes.

            If any such exchange or transfer from a Definitive Note to a
      beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D)
      or (iii) above at a time when an Unrestricted Global Note has not yet been
      issued, the Company shall issue and, upon receipt of an Authentication
      Order in accordance with Section 2.02 hereof, the Trustee

                                       36
<PAGE>

      shall authenticate one or more Unrestricted Global Notes in an aggregate
      principal amount equal to the principal amount of Definitive Notes so
      transferred.

            (e)   Transfer and Exchange of Definitive Notes for Definitive
Notes. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.07(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.07(e).

            (i)   Restricted Definitive Notes to Restricted Definitive Notes.
      Any Restricted Definitive Note may be transferred to and registered in the
      name of Persons who take delivery thereof in the form of a Restricted
      Definitive Note if the Registrar receives the following:

                  (A)   if the transfer shall be made pursuant to Rule 144A
            under the Securities Act, then the transferor must deliver a
            certificate in the form of Exhibit B hereto, including the
            certifications in item (1) thereof;

                  (B)   [INTENTIONALLY OMITTED]; and

                  (C)   if the transfer shall be made pursuant to any other
            exemption from the registration requirements of the Securities Act,
            then the transferor must deliver a certificate in the form of
            Exhibit B hereto, including the certifications, certificates and
            Opinion of Counsel required by item (3) thereof, if applicable.

            (ii)  Restricted Definitive Notes to Unrestricted Definitive Notes.
      Any Restricted Definitive Note may be exchanged by the Holder thereof for
      an Unrestricted Definitive Note or transferred to a Person or Persons who
      take delivery thereof in the form of an Unrestricted Definitive Note if:

                  (A)   such exchange or transfer is effected pursuant to the
            Exchange Offer in accordance with the Registration Rights Agreement
            and the Holder, in the case of an exchange, or the transferee, in
            the case of a transfer, certifies in the applicable Letter of
            Transmittal that (1) it is not an affiliate (as defined in Rule 144)
            of the Company, (2) it is not engaged in, and does not intend to
            engage in, and has no arrangement or understanding with any Person
            to participate in, a distribution of the Exchange Notes to be issued
            in the Exchange Offer and (3) it is acquiring the Exchange Notes in
            its ordinary course of business;

                  (B)   any such transfer is effected pursuant to the Shelf
            Registration Statement in accordance with the Registration Rights
            Agreement;

                                       37
<PAGE>

                  (C)   any such transfer is effected by a Broker-Dealer
            pursuant to the Exchange Offer Registration Statement in accordance
            with the Registration Rights Agreement; or

                  (D)   the Registrar receives the following:

                        (1)   if the Holder of such Restricted Definitive Notes
                  proposes to exchange such Notes for an Unrestricted Definitive
                  Note, a certificate from such Holder in the form of Exhibit C
                  hereto, including the certifications in item (1)(d) thereof;
                  or

                        (2)   if the Holder of such Restricted Definitive Notes
                  proposes to transfer such Notes to a Person who shall take
                  delivery thereof in the form of an Unrestricted Definitive
                  Note, a certificate from such Holder in the form of Exhibit B
                  hereto, including the certifications in item (4) thereof;

      and, in each such case set forth in this subparagraph (D), if the
      Registrar so requests, an Opinion of Counsel in form reasonably acceptable
      to the Company to the effect that such exchange or transfer is in
      compliance with the Securities Act and that the restrictions on transfer
      contained herein and in the Private Placement Legend are no longer
      required in order to maintain compliance with the Securities Act.

            (iii) Unrestricted Definitive Notes to Unrestricted Definitive
      Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes
      to a Person who takes delivery thereof in the form of an Unrestricted
      Definitive Note. Upon receipt of a request to register such a transfer,
      the Registrar shall register the Unrestricted Definitive Notes pursuant to
      the instructions from the Holder thereof.

            (f)   Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
participating in a distribution of the Exchange Notes and (y) they are not
affiliates (as defined in Rule 144) of the Company, and accepted for exchange in
the Exchange Offer and (ii) Definitive Notes in an aggregate principal amount
equal to the principal amount of the Restricted Definitive Notes accepted for
exchange in the Exchange Offer. Concurrently with the issuance of such Notes,
the Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Notes to be reduced accordingly, and the Company shall execute
and the Trustee shall authenticate and deliver to the Persons designated by the
Holders of Restricted Global Notes so accepted Unrestricted Global Notes in the
appropriate principal amount.

            (g)   Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.

                                       38
<PAGE>

            (i)   Private Placement Legend. Except as permitted below, each
      Global Note and each Definitive Note (and all Notes issued in exchange
      therefor or substitution thereof) shall bear the legend in substantially
      the following form:

      THIS NOTE AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
      ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR THE GUARANTEES ENDORSED
      HEREON NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD,
      ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
      ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
      NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE
      HOLDER OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON BY ITS ACCEPTANCE
      HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO
      THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE
      HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
      COMPANY WAS THE OWNER OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON (OR
      ANY PREDECESSOR OF THIS NOTE AND THE GUARANTEES ENDORSED HEREON) (THE
      "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE COMPANY OR ANY
      SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
      UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR
      RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
      PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
      DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
      OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
      TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
      AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN
      THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO
      ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
      SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
      ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) PRIOR TO THE
      END OF THE 40 DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF
      REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO
      THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN
      OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
      EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
      CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS NOTE IS COMPLETED
      AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE
      REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION
      TERMINATION DATE.

                                       39
<PAGE>

            Notwithstanding the foregoing, any Global Note or Definitive Note
      issued pursuant to subparagraph (b)(iv), (c)(iii), (c)(iv), (d)(ii),
      (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.07 (and all Notes
      issued in exchange therefor or substitution thereof) shall not bear the
      Private Placement Legend.

            (ii)  Global Note Legend. Each Global Note shall bear a legend in
      substantially the following form:

            THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
            INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
            BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
            ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY
            MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION
            2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN
            WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE,
            (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
            CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS
            GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE
            PRIOR WRITTEN CONSENT OF THE COMPANY.

            (h)   Regulation S Temporary Global Note Legend. The Regulation S
Temporary Global Note shall bear a legend in substantially the following form:

            THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND
            THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR
            CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED
            HEREIN).

            (i)   Cancellation and/or Adjustment of Global Notes. At such time
as all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.12 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who shall take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who shall take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.

            (j)   General Provisions Relating to Transfers and Exchanges.

                                       40
<PAGE>

            (i)   To permit registrations of transfers and exchanges, the
      Company shall execute and the Trustee shall authenticate Global Notes and
      Definitive Notes upon the Company's order or at the Registrar's request.

            (ii)  No service charge shall be made to a Holder of a beneficial
      interest in a Global Note or to a Holder of a Definitive Note for any
      registration of transfer or exchange, but the Company may require payment
      of a sum sufficient to cover any transfer tax or similar governmental
      charge payable in connection therewith (other than any such transfer taxes
      or similar governmental charge payable upon exchange or transfer pursuant
      to Sections 2.11, 3.06, 3.08, 4.10, 4.14 and 9.05 hereof).

            (iii) The Registrar shall not be required to register the transfer
      of or exchange any Note selected for redemption in whole or in part,
      except the unredeemed portion of any Note being redeemed in part.

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

            (v)   The Company shall not be required (A) to issue, to register
      the transfer of or to exchange any Notes during a period beginning at the
      opening of business 15 days before the day of any selection of Notes for
      redemption under Section 3.02 hereof and ending at the close of business
      on the day of selection, (B) to register the transfer of or to exchange
      any Note so selected for redemption in whole or in part, except the
      unredeemed portion of any Note being redeemed in part, (C) to register the
      transfer of or to exchange a Note between a record date and the next
      succeeding interest payment date or (D) to register the transfer of or to
      exchange a Note tendered and not withdrawn in connection with a Change of
      Control Offer or an Asset Sale Offer.

            (vi)  Prior to due presentment for the registration of a transfer of
      any Note, the Trustee, any Agent and the Company may deem and treat the
      Person in whose name any Note is registered as the absolute owner of such
      Note for the purpose of receiving payment of principal of and interest on
      such Notes and for all other purposes, and none of the Trustee, any Agent
      or the Company shall be affected by notice to the contrary.

            (vii) The Trustee shall authenticate Global Notes and Definitive
      Notes in accordance with the provisions of Section 2.02 hereof.

            (viii) All certifications, certificates and Opinions of Counsel
      required to be submitted to the Registrar pursuant to this Section 2.07 to
      effect a registration of transfer or exchange may be submitted by
      facsimile with the original to follow by first class mail.

Section 2.08. Replacement Notes.

            (a)   If any mutilated Note is surrendered to the Trustee or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the

                                       41
<PAGE>

Company shall issue and the Trustee, upon receipt of an Authentication Order,
shall authenticate a replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company may
charge for its expenses in replacing a Note.

            (b)   Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.

Section 2.09. Outstanding Notes.

            (a)   The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Note effected
by the Trustee in accordance with the provisions hereof, and those described in
this Section as not outstanding. Except as set forth in Section 2.10 hereof, a
Note does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(b) hereof.

            (b)   If a Note is replaced pursuant to Section 2.08 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.

            (c)   If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.

            (d)   If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any of the foregoing) holds, on a redemption date or maturity
date, money sufficient to pay Notes payable on that date, then on and after that
date such Notes shall be deemed to be no longer outstanding and shall cease to
accrue interest.

Section 2.10. Treasury Notes.

            In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.

Section 2.11. Temporary Notes.

            (a)   Until certificates representing Notes are ready for delivery,
the Company may prepare and the Trustee, upon receipt of an Authentication
Order, shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be

                                       42
<PAGE>

reasonably acceptable to the Trustee. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Notes in exchange
for temporary Notes.

            (b)   Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.

Section 2.12. Cancellation.

            The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
canceled Notes in accordance with its procedures for the disposition of canceled
securities in effect as of the date of such disposition (subject to the record
retention requirement of the Exchange Act). Certification of the disposition of
all canceled Notes shall be delivered to the Company by the Trustee. The Company
may not issue new Notes to replace Notes that it has paid or that have been
delivered to the Trustee for cancellation.

Section 2.13. Defaulted Interest.

            If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.

Section 2.14. CUSIP Numbers.

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

                                       43
<PAGE>

                                 ARTICLE THREE
                            REDEMPTION AND OFFERS TO
                                    PURCHASE

Section 3.01. Notices to Trustee.

            If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.

Section 3.02. Selection of Notes to Be Redeemed.

            (a)   If less than all of the Notes are to be redeemed at any time,
the Trustee shall select the Notes to be redeemed among the Holders of the Notes
in compliance with the requirements of the principal national securities
exchange, if any, on which the Notes are listed or, if the Notes are not so
listed, on a pro rata basis, by lot or in accordance with any other method the
Trustee considers fair and appropriate. In the event of partial redemption by
lot, the particular Notes to be redeemed shall be selected, unless otherwise
provided herein, not less than 30 nor more than 60 days prior to the redemption
date by the Trustee from the outstanding Notes not previously called for
redemption.

            (b)   The Trustee shall promptly notify the Company in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount at maturity thereof to be redeemed. No
Notes in amounts of $1,000 or less shall be redeemed in part. Notes and portions
of Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.

Section 3.03. Notice of Redemption.

            (a)   At least 30 days but not more than 60 days before a redemption
date, the Company shall mail or cause to be mailed, by first class mail, a
notice of redemption to each Holder whose Notes are to be redeemed at its
registered address.

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

            (i)   the redemption date;

            (ii)  the redemption price;

            (iii) if any Note is being redeemed in part, the portion of the
      principal amount at maturity of such Note to be redeemed and that, after
      the redemption date upon surrender of such Note, a new Note or Notes in
      principal amount equal to the unredeemed

                                       44
<PAGE>

      portion of the original Note shall be issued in the name of the Holder
      thereof upon cancellation of the original Note;

            (iv)  the name and address of the Paying Agent;

            (v)   that Notes called for redemption must be surrendered to the
      Paying Agent to collect the redemption price and become due on the date
      fixed for redemption;

            (vi)  that, unless the Company defaults in making such redemption
      payment, interest, if any, on Notes called for redemption ceases to accrue
      on and after the redemption date;

            (vii) the paragraph of the Notes and/or Section of this Indenture
      pursuant to which the Notes called for redemption are being redeemed; and

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

            (b)   At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 30 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph. The notice, if mailed in the manner provided herein
shall be presumed to have been given, whether or not the Holder receives such
notice.

Section 3.04. Effect of Notice of Redemption.

            Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. Interest, if any, on Notes called for
redemption ceases to accrue on and after the redemption date, unless the Company
defaults in making the applicable redemption payment. A notice of redemption may
not be conditional.

Section 3.05. Deposit of Redemption Price.

            (a)   Not later than 11:00 am Eastern Time on the redemption date,
the Company shall deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption price of and accrued interest and Liquidated
Damages, if any, on all Notes to be redeemed on that date. The Trustee or the
Paying Agent shall promptly return to the Company any money deposited with the
Trustee or the Paying Agent by the Company in excess of the amounts necessary to
pay the redemption price of, and accrued interest on, all Notes to be redeemed.

            (b)   If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date.

                                       45
<PAGE>

If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.

Section 3.06. Notes Redeemed in Part.

            Upon surrender of a Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered. No Notes in denominations of $1,000 or less shall be redeemed
in part.

Section 3.07. Optional Redemption.

            (a)   Except as set forth in clause (b) of this Section 3.07, the
Company shall not have the option to redeem the Notes pursuant to this Section
3.07 prior to July 15, 2008. On July 15, 2008 and thereafter, the Company may
redeem all or a part of the Notes upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Liquidated Damages, if any,
thereon, to the applicable redemption date, if redeemed during the twelve-month
period beginning on July 15 of the years indicated below:

<TABLE>
<CAPTION>
YEAR                                                                       PERCENTAGE
----                                                                       ----------
<S>                                                                        <C>
2008.............................................................           104.938%

2009.............................................................           102.469%

2010 and thereafter..............................................           100.000%
</TABLE>

            (b)   At any time prior to July 15, 2007, the Company may redeem up
to 35% of the aggregate principal amount of Notes issued hereunder (including
any Additional Notes) at a redemption price of 109.875% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest on the relevant interest payment date), with the
net cash proceeds of one or more Qualified Equity Offerings; provided that (A)
at least 65% of the aggregate principal amount of the Notes issued under this
Indenture (including any Additional Notes) remains outstanding immediately after
the occurrence of such redemption, excluding Notes held by the Company and its
Subsidiaries; and (B) the redemption must occur within 60 days of the date of
the closing of such Qualified Equity Offering.

            (c)   Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.

                                       46
<PAGE>

Section 3.08. Repurchase Offers.

            In the event that, pursuant to Section 4.10 or 4.14 hereof, the
Company shall be required to commence an offer to all Holders to purchase all or
a portion of their respective Notes (a "REPURCHASE OFFER"), it shall follow the
procedures specified in such Sections and, to the extent not inconsistent
therewith, the procedures specified below.

            The Repurchase Offer shall remain open for a period of no less than
30 days and no more than 60 days following its commencement, except to the
extent that a longer period is required by applicable law (the "OFFER PERIOD").
No later than three Business Days after the termination of the Offer Period (the
"PURCHASE DATE"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.10 or 4.14 hereof (the "OFFER
AMOUNT") or, if less than the Offer Amount has been tendered, all Notes tendered
in response to the Repurchase Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.

            If the Purchase Date is on or after an interest record date and on
or before the related interest payment date, any accrued and unpaid interest
shall be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Repurchase Offer.

            Upon the commencement of a Repurchase Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Repurchase
Offer. The Repurchase Offer shall be made to all Holders. The notice, which
shall govern the terms of the Repurchase Offer, shall state:

            (i)   that the Repurchase Offer is being made pursuant to this
      Section 3.08 and Section 4.10 or Section 4.14 hereof, and the length of
      time the Repurchase Offer shall remain open;

            (ii)  the Offer Amount, the purchase price and the Purchase Date;

            (iii) that any Note not tendered or accepted for payment shall
      continue to accrue interest and Liquidated Damages, if any;

            (iv)  that, unless the Company defaults in making such payment, any
      Note (or portion thereof) accepted for payment pursuant to the Repurchase
      Offer shall cease to accrue interest and Liquidated Damages, if any, after
      the Purchase Date;

            (v)   that Holders electing to have a Note purchased pursuant to a
      Repurchase Offer may elect to have Notes purchased in integral multiples
      of $1,000 only;

            (vi)  that Holders electing to have a Note purchased pursuant to any
      Repurchase Offer shall be required to surrender the Note, with the form
      entitled "Option of Holder to Elect Purchase" on the reverse of the Note
      completed, or transfer by book-entry transfer, to the Company, a
      depositary, if appointed by the Company, or a Paying Agent at the address
      specified in the notice prior to the Purchase Date;

                                       47
<PAGE>

            (vii) that Holders shall be entitled to withdraw their election if
      the Company, the Depositary or the Paying Agent, as the case may be,
      receives, not later than the expiration of the Offer Period, a telegram,
      telex, facsimile transmission or letter setting forth the name of the
      Holder, the principal amount of the Note the Holder delivered for purchase
      and a statement that such Holder is withdrawing his election to have such
      Note purchased;

            (viii) that, if the aggregate amount of Notes surrendered by Holders
      exceeds the Offer Amount, the Trustee shall, subject in the case of a
      Repurchase Offer made pursuant to Section 4.10 to the provisions of
      Section 4.10, select the Notes to be purchased on a pro rata basis (with
      such adjustments as may be deemed appropriate by the Trustee so that only
      Notes in denominations of $1,000, or integral multiples thereof, shall be
      purchased); and

            (ix)  that Holders whose Notes were purchased only in part shall be
      issued new Notes equal in principal amount equal to the unpurchased
      portion of the Notes surrendered (or transferred by book-entry transfer).

            On the Purchase Date, the Company shall, to the extent lawful,
subject in the case of a Repurchase Offer made pursuant to Section 4.10 to the
provisions of Section 4.10, accept for payment in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not so listed, on a pro rata basis to the
extent necessary, the Offer Amount of Notes (or portions thereof) tendered
pursuant to the Repurchase Offer, or if less than the Offer Amount has been
tendered, all Notes tendered, and shall deliver to the Trustee an Officers'
Certificate stating that such Notes (or portions thereof) were accepted for
payment by the Company in accordance with the terms of this Section 3.08. The
Company, the Depositary or the Paying Agent, as the case may be, shall promptly
(but in any case not later than three days after the Purchase Date) mail or
deliver to each tendering Holder an amount equal to the purchase price of Notes
tendered by such Holder, as the case may be, and accepted by the Company for
purchase, and the Company, shall promptly issue a new Note. The Trustee, upon
written request from the Company shall authenticate and mail or deliver such new
Note to such Holder, in a principal amount at maturity equal to any unpurchased
portion of the Note surrendered. Any Note not so accepted shall be promptly
mailed or delivered by the Company to the respective Holder thereof. The Company
shall publicly announce the results of the Repurchase Offer on the Purchase
Date.

            The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act, and any other securities laws and regulations thereunder to
the extent such laws or regulations are applicable in connection with the
repurchase of the Notes pursuant to a Repurchase Offer and shall not be deemed
to have breached its obligations under Section 3.08, 4.10 or 4.14 by virtue of
such compliance.

Section 3.09. Mandatory Redemption.

            (a)   The Company is not required to make mandatory redemption or
sinking fund payments with respect to the Notes.

                                       48
<PAGE>

            (b)   Any Special Redemption pursuant to this Section 3.09 shall be
made pursuant to the provisions of Sections 3.02 through 3.06 hereof.

Section 3.10. Application of Trust Money.

            All money deposited with the Trustee pursuant to Section 11.02 shall
be held in trust and applied by it, in accordance with the provisions of the
Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.

                                  ARTICLE FOUR
                                    COVENANTS

Section 4.01. Payment of Notes.

            (a)   The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than the Company
or one of its Subsidiaries, holds as of 11:00 a.m. Eastern Time on the due date
money deposited by the Company in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest then due. The
Company shall pay all Liquidated Damages, if any, in the same manner on the
dates and in the amounts set forth in the Registration Rights Agreement.

            (b)   The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at the
rate equal to 1% per annum in excess of the then applicable interest rate on the
Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest, and Liquidated Damages (without regard to any applicable grace period)
at the same rate to the extent lawful.

Section 4.02. Maintenance of Office or Agency.

            (a)   The Company shall maintain in the Borough of Manhattan, The
City of New York, an office or agency (which may be an office of the Trustee or
an agent of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.

            (b)   The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes

                                       49
<PAGE>

and may from time to time rescind such designations; provided, however, that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, The City
of New York for such purposes. The Company shall give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.

            (c)   The Company hereby designates the Corporate Trust Office of
the Trustee as one such office or agency of the Company in accordance with
Section 2.04 of this Indenture.

Section 4.03. Reports.

            (a)   Whether or not required by the Commission, so long as any
Notes are outstanding, the Company will furnish to the Holders of Notes, within
the time periods specified in the Commission's rules and regulations:

            (i)   all quarterly and annual financial information that would be
      required to be contained in a filing with the Commission on Forms 10-Q and
      10-K if the Company were required to file such Forms, including a
      "Management's Discussion and Analysis of Financial Condition and Results
      of Operations" and, with respect to the annual information only, a report
      on the annual financial statements by the Company's certified independent
      accountants; and

            (ii)  all current reports that would be required to be filed with
      the Commission on Form 8-K if the Company were required to file such
      reports.

            In addition, whether or not required by the Commission, the Company
shall file a copy of all of the information and reports referred to in clauses
(1) and (2) above with the Commission for public availability within the time
periods specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing) and make such information available to
prospective investors upon request. In addition, the Company and the Guarantors,
for so long as any Notes remain outstanding, shall furnish to the Holders and to
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.

            (b)   If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by this Section 4.03 shall include a reasonably detailed presentation,
either on the face of the financial statements or in the footnotes thereto, and
in "Management's Discussion and Analysis of Financial Condition and Results of
Operations," of the financial condition and results of operations of the Company
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company with
substantially the same format and level of detail as is required by Rule 3-10 of
Regulation S-X, promulgated pursuant to the Securities Act (as such Regulation
may be amended), with respect to the Company and the Guarantors separate from
the Company's Subsidiaries that are not Guarantors.

            (c)   Notwithstanding the foregoing, so long as the Parent is a
Guarantor, the reports, information and other documents required to be filed and
provided as described above will be those of the Parent, rather than those of
the Company, so long as such filings would

                                       50
<PAGE>

satisfy the Commission's requirements. In such event, the presentation in the
footnotes to the financial statements and in "Management's Discussion and
Analysis of Financial Condition and Results of Operations" described in Section
4.03(b) hereof shall present the financial condition and results of operations
of the Parent, the Company and the Company's Restricted Subsidiaries separate
from the financial condition and results of operations of the Unrestricted
Subsidiaries of the Company.

Section 4.04. Compliance Certificate.

            (a)   The Company and each Guarantor (to the extent that such
Guarantor is so required under the TIA) shall deliver to the Trustee, within 90
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge, the Company has kept, observed, performed and fulfilled
its obligations under this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture (or,
if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Company is taking or proposes to take with respect thereto) and that
to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.

            (b)   So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (which shall
be a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article Four or Article Five hereof or, if any such violation
has occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.

            (c)   The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.

Section 4.05. Taxes.

            The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, any taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.

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<PAGE>

Section 4.06. Stay, Extension and Usury Laws.

            The Company and each of the Guarantors covenant (to the extent that
it may lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and the
Company and each of the Guarantors (to the extent that it may lawfully do so)
hereby expressly waive all benefit or advantage of any such law, and covenant
that they shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.

Section 4.07. Restricted Payments.

            (a)   The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly:

            (i)   declare or pay any dividend or make any other payment or
      distribution on account of the Company's or any of its Restricted
      Subsidiaries' Equity Interests (including, without limitation, any payment
      in connection with any merger or consolidation involving the Company or
      any of its Restricted Subsidiaries) or to the direct or indirect holders
      of the Company's or any of its Restricted Subsidiaries' Equity Interests
      in their capacity as such (other than dividends, payments or distributions
      payable in Equity Interests (other than Disqualified Stock) of the Company
      or to the Company or a Restricted Subsidiary of the Company);

            (ii)  purchase, redeem or otherwise acquire or retire for value
      (including, without limitation, in connection with any merger or
      consolidation involving the Company) any Equity Interests of the Company
      or of any Restricted Subsidiary of the Company held by Persons other than
      the Company or a Restricted Subsidiary of the Company;

            (iii) purchase, redeem, defease or otherwise acquire or retire for
      value any Indebtedness that is subordinated to the Notes or the Note
      Guarantees, except (A) a payment of interest or principal at the stated
      maturity thereof or (B) the purchase, repurchase or other acquisition of
      any such Indebtedness purchased in anticipation of satisfying a sinking
      fund obligation, principal installment or final maturity, in each case,
      due within one year of the date of such purchase, repurchase or other
      acquisition;

            (iv)  make any payment or distribution on account of the Guarantee
      by the Company or the Parent, existing on the date of this Indenture, of
      Indebtedness of the Heart Hospital of South Dakota LLC; or

            (v)   make any Restricted Investment (all such payments and other
      actions set forth in Section 4.07(a)(i) through (v) above being
      collectively referred to as "RESTRICTED PAYMENTS"),

unless, at the time of and after giving effect to such Restricted Payment:

                                       52
<PAGE>

                  (A)   no Default or Event of Default shall have occurred and
            be continuing or would occur as a consequence thereof; and

                  (B)   the Company would, at the time of such Restricted
            Payment and after giving pro forma effect thereto as if such
            Restricted Payment had been made at the beginning of the applicable
            four-quarter period, have been permitted to incur at least $1.00 of
            additional Indebtedness pursuant to the Consolidated Leverage Ratio
            test set forth in Section 4.09(a); and

                  (C)   such Restricted Payment, together with the aggregate
            amount of all other Restricted Payments made by the Company and its
            Restricted Subsidiaries after the date of this Indenture (excluding
            Restricted Payments permitted by Sections (ii), (iii), (iv) (to the
            extent such dividends on other distributions are payable to the
            Company or any Restricted Subsidiary thereof), (vi), (vii), (viii)
            and (xi) of Section 4.07(b) below), is less than the sum, without
            duplication, of:

                        (1)   50% of the Consolidated Net Income of the Company
                  for the period (taken as one accounting period) from the
                  beginning of the first fiscal quarter commencing after the
                  date of this Indenture to the end of the Company's most
                  recently ended fiscal quarter for which internal financial
                  statements are available at the time of such Restricted
                  Payment (or, if such Consolidated Net Income for such period
                  is a deficit, less 100% of such deficit), plus

                        (2)   100% of the aggregate net cash proceeds received
                  by the Company since the date of this Indenture as a
                  contribution to its common equity capital or from the issue or
                  sale of Equity Interests of the Company (other than
                  Disqualified Stock) or from the issue or sale of Disqualified
                  Stock or debt securities of the Company that have been
                  converted into or exchanged for such Equity Interests (other
                  than Equity Interests (or Disqualified Stock or debt
                  securities) sold to a Subsidiary of the Company); plus

                        (3)   with respect to Restricted Investments made by the
                  Company and its Restricted Subsidiaries after the date of this
                  Indenture, an amount equal to (x) the amount returned in cash
                  to the Company or any Restricted Subsidiary of the Company on
                  or with respect to such Restricted Investments, whether
                  resulting from payments of interest on Indebtedness, dividends
                  or distributions, repayments of loans or advances in cash or
                  other payments, from the release of any Guarantee (except to
                  the extent any amounts are paid under such Guarantee), from
                  the release of any obligation to make a capital contribution
                  to an Unrestricted Subsidiary (except to the extent any
                  amounts are paid under such obligation) or from the net cash
                  proceeds from the sale of any such Investment, or (y) upon the
                  designation of any Unrestricted Subsidiary to be a Restricted
                  Subsidiary, the Fair Market Value of the Company's or its
                  Restricted Subsidiary's equity interest in such Subsidiary at
                  the time of

                                       53
<PAGE>

                  such designation, in the case of each of (x) and (y), only if
                  and to the extent such amounts are not included in the
                  calculation of Consolidated Net Income and not to exceed the
                  amount of the Restricted Investment previously made by the
                  Company or any Restricted Subsidiary thereof in such Person or
                  Unrestricted Subsidiary.

            (b)   Section 4.07(a) shall not prohibit:

            (i)   the payment of any dividend within 60 days after the date of
      declaration thereof, if at said date of declaration such payment would
      have complied with the provisions of this Indenture;

            (ii)  the redemption, repurchase, retirement, defeasance or other
      acquisition of any subordinated Indebtedness of the Company or any
      Subsidiary Guarantor or of any Equity Interests of the Company in exchange
      for, or out of the net cash proceeds of a contribution to the common
      equity of the Company or a substantially concurrent sale (other than to a
      Subsidiary of the Company) of, Equity Interests of the Company (other than
      Disqualified Stock); provided that the amount of any such net cash
      proceeds that are utilized for any such redemption, repurchase,
      retirement, defeasance or other acquisition shall be excluded from Section
      4.07(a)(C)(2);

            (iii) the defeasance, redemption, repurchase or other acquisition of
      subordinated Indebtedness of the Company or any Subsidiary Guarantor with
      the net cash proceeds from an incurrence of Permitted Refinancing
      Indebtedness;

            (iv)  the payment of any dividend or other distribution by a
      Restricted Subsidiary of the Company to the holders of its common Equity
      Interests on a pro rata basis;

            (v)   the purchase, redemption or other acquisition or retirement
      for value of common Equity Interests of a Restricted Subsidiary of the
      Company owned by a Strategic Investor if such purchase, redemption or
      retirement for value is made for consideration not in excess of the Fair
      Market Value of such common Equity Interests (where such Fair Market Value
      is determined by an opinion from an independent accounting, appraisal or
      investment banking firm of national standing in the event that the
      aggregate consideration for such transaction or series of related
      transactions is in excess of $10.0 million); provided that at the time of
      such purchase, redemption or other acquisition or retirement for value,
      and after giving pro forma effect thereto as if such purchase, redemption
      or other acquisition or retirement for value had been made at the
      beginning of the applicable four-quarter period, the Company would be
      permitted to incur at least $1.00 of additional Indebtedness (A) pursuant
      to the Consolidated Leverage Ratio test set forth in Section 4.09(a) or
      (B) under Section 4.09(b)(i);

            (vi)  so long as no Default has occurred and is continuing or would
      be caused thereby, the purchase, redemption or other acquisition or
      retirement for value of common Equity Interests of a Restricted Subsidiary
      of the Company if such purchase, redemption or retirement for value is
      made for consideration not in excess of the Fair Market Value

                                       54
<PAGE>

      of such common Equity Interests (where such Fair Market Value is
      determined by an opinion from an independent accounting, appraisal or
      investment banking firm of national standing in the event that the
      aggregate consideration for such transaction or series of related
      transactions is in excess of $10.0 million); provided that at the time of
      such purchase, redemption or other acquisition or retirement for value,
      and after giving pro forma effect thereto as if such purchase, redemption
      or other acquisition or retirement for value had been made at the
      beginning of the applicable four-quarter period, the Company would be
      permitted to incur at least $1.00 of additional Indebtedness pursuant to
      the Consolidated Leverage Ratio test set forth in Section 4.09(a).

            (vii) so long as no Default has occurred and is continuing or would
      be caused thereby, the repurchase, redemption or other acquisition or
      retirement for value of any Equity Interests of the Parent, the Company or
      any Restricted Subsidiary of the Company held by any current or former
      employees of, or current or former members of, the Company's (or any of
      its Restricted Subsidiaries') management pursuant to any management equity
      subscription agreement, employment agreement or stock option agreement in
      effect as of the date of this Indenture; provided that the aggregate price
      paid for all such repurchased, redeemed, acquired or retired Equity
      Interests shall not exceed $1.0 million in any twelve-month period;
      provided further that, to the extent that such aggregate price paid under
      this clause (vii) in any twelve-month period is less than $1.0 million,
      any unused amount may be used to make such repurchases, redemptions or
      other acquisition or retirement only in the immediately succeeding
      twelve-month period;

            (viii) so long as no Default has occurred and is continuing or would
      be caused thereby, Investments acquired as a capital contribution to, or
      in exchange for, or out of the net cash proceeds of a substantially
      concurrent offering of, Capital Stock (other than Disqualified Stock) of
      the Company; provided that the amount of any such net cash proceeds that
      are utilized for any such acquisition or exchange shall be excluded from
      Section 4.07(a)(C)(2);

            (ix)  so long as no Default has occurred and is continuing or would
      be caused thereby, the making of payments by the Company in respect of,
      and pursuant to the terms of, the Guarantee by the Company or the Parent
      existing on the date of this Indenture of Indebtedness of Heart Hospital
      of South Dakota LLC; provided that such payments shall not, since the date
      of this Indenture, exceed an aggregate amount of $16.7 million and
      provided further that failure to make any such payments would result in a
      breach of the Company's or the Parent's obligations under such Guarantee;

            (x)   the repurchase of Capital Stock deemed to occur upon the
      exercise of options or warrants if such Capital Stock represents all or a
      portion of the exercise price thereof; or

            (xi)  so long as no Default has occurred and is continuing or would
      be caused thereby, other Restricted Payments in an amount when taken
      together with all other Restricted Payments made pursuant to this clause
      (xi) since the date of this Indenture, not to exceed $10.0 million.

                                       55
<PAGE>

            The amount of all Restricted Payments (other than cash) shall be the
Fair Market Value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued to or by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The
resolution of the Board of Directors determining the Fair Market Value of any
assets or securities that are required to be valued by this Section 4.07 shall
be delivered to the Trustee. The Board of Directors' determination of Fair
Market Value must be based upon an opinion or appraisal issued by an accounting,
appraisal or investment banking firm of national standing if the Fair Market
Value exceeds $10.0 million. Not later than the date of making any Restricted
Payment, the Company shall deliver to the Trustee an Officers' Certificate
stating that such Restricted Payment is permitted and setting forth the basis
upon which the calculations required by this Section 4.07 were computed,
together with a copy of any opinion or appraisal required by this Indenture.

Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.

            (a)   The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary of the Company to:

            (i)   pay dividends or make any other distributions on its Capital
      Stock to the Company or any of its Restricted Subsidiaries, or with
      respect to any other interest or participation in, or measured by, its
      profits, or pay any indebtedness owed to the Company or any of its
      Restricted Subsidiaries;

            (ii)  make loans or advances to the Company or any of its Restricted
      Subsidiaries; or

            (iii) transfer any of its properties to the Company or any of its
      Restricted Subsidiaries.

            (b)   However, the preceding restrictions shall not apply to
encumbrances or restrictions existing under, by reason of or with respect to:

            (i)   the Credit Facilities, Existing Indebtedness or any other
      agreements in effect on the date of this Indenture and any amendments,
      modifications, restatements, renewals, extensions, supplements,
      refundings, replacements or refinancings thereof, provided that the
      encumbrances and restrictions in any such amendments, modifications,
      restatements, renewals, extensions, supplements, refundings, replacement
      or refinancings are no more restrictive, taken as a whole, than those in
      effect on the date of this Indenture;

            (ii)  this Indenture, the Notes and the Note Guarantees;

            (iii) applicable law;

            (iv)  any Person or the property or assets of such Person acquired
      by the Company or any of its Restricted Subsidiaries, existing at the time
      of such acquisition

                                       56
<PAGE>

      and not incurred in connection with or in contemplation of such
      acquisition, which encumbrance or restriction is not applicable to any
      Person or the properties or assets of any Person, other than the Person,
      or the property or assets of such Person, so acquired and any amendments,
      modifications, restatements, renewals, extensions, supplements,
      refundings, replacements or refinancings thereof, provided that the
      encumbrances and restrictions in any such amendments, modifications,
      restatements, renewals, extensions, supplements, refundings, replacement
      or refinancings are no more restrictive, taken as a whole, than those in
      effect on the date of the acquisition;

            (v)   in the case of Section 4.08(a)(iii):

                  (A)   that restrict in a customary manner the subletting,
                        assignment or transfer of any property or asset that is
                        a lease, license, conveyance or contract or similar
                        property or asset,

                  (B)   existing by virtue of any transfer of, agreement to
                        transfer, option or right with respect to, or Lien on,
                        any property or assets of the Company or its Restricted
                        Subsidiaries not otherwise prohibited by this Indenture
                        or

                  (C)   arising or agreed to in the ordinary course of business,
                        not relating to any Indebtedness, and that do not,
                        individually or in the aggregate, detract from the value
                        of property or assets of the Company or any of its
                        Restricted Subsidiaries in any manner material to the
                        Company or any of its Restricted Subsidiaries;

            (vi)  any agreement for the sale or other disposition of all or
      substantially all of the capital stock of, or property and assets of, a
      Restricted Subsidiary of the Company;

            (vii) Permitted Refinancing Indebtedness, provided that the
      restrictions contained in the agreements governing such Permitted
      Refinancing Indebtedness are no more restrictive, taken as a whole, than
      those contained in the agreements governing the Indebtedness being
      refinanced;

            (viii) any Credit Facility permitted under this Indenture; provided
      that the applicable encumbrances and restrictions contained in the
      agreement or agreements governing such Credit Facility are not materially
      more restrictive, taken as a whole, than those contained in agreements in
      effect on the date of this Indenture; and

            (ix)  provisions with respect to distributions or the disposition of
      assets or property in a joint venture, limited liability company,
      operating, partnership, shareholder and other similar agreements entered
      into in the ordinary course of business to develop, own, operate or manage
      Permitted Businesses with other equity investors in such entities that are
      no more restrictive, taken as a whole, than any such agreements in effect
      on the date of this Indenture.

                                       57
<PAGE>

Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.

            (a)   The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, incur any Indebtedness
(including Acquired Debt), and the Company shall not permit any of its
Restricted Subsidiaries to issue any preferred stock; provided, however, that
the Company or any Subsidiary Guarantor may incur Indebtedness, if the Company's
Consolidated Leverage Ratio at the time of incurrence of such Indebtedness is
less than 5.0 to 1.0.

            (b)   So long as no default would be caused thereby, Section 4.09(a)
will not prohibit the incurrence of any of the following items of Indebtedness
(collectively, "PERMITTED DEBT"):

            (i)   the incurrence by the Company or any of its Restricted
      Subsidiaries of Indebtedness under Credit Facilities in an aggregate
      principal amount at any one time outstanding (with letters of credit being
      deemed to have a principal amount equal to the maximum potential liability
      of the Company and its Restricted Subsidiaries thereunder) not to exceed
      $200.0 million less the aggregate amount of all Net Proceeds of Asset
      Sales applied by the Company or any of its Restricted Subsidiaries to
      permanently repay any Indebtedness incurred pursuant to this clause (1)
      (and, in the case of any revolving credit Indebtedness, to effect a
      corresponding commitment reduction thereunder) pursuant to Section 4.10;
      provided that the aggregate principal amount of Indebtedness of all
      Restricted Subsidiaries of the Company that are not Guarantors incurred
      pursuant to this clause (i) shall not at any one time exceed $50.0
      million;

            (ii)  the incurrence of Existing Indebtedness;

            (iii) the incurrence by the Company and the Guarantors of
      Indebtedness represented by the Notes and the related Note Guarantees to
      be issued on the date of this Indenture and the Exchange Notes and the
      related Note Guarantees to be issued pursuant to the Registration Rights
      Agreement;

            (iv)  the incurrence by the Company or any of its Restricted
      Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
      net proceeds of which are used to refund, refinance or replace
      Indebtedness (other than intercompany Indebtedness that was not in
      existence on the date of this Indenture) that was permitted by this
      Indenture to be incurred under Section 4.09(a) or Section 4.09(b)(ii),
      (iii), (iv) or (viii);

            (v)   the incurrence by the Company or any of its Restricted
      Subsidiaries of intercompany Indebtedness owing to and held by the Company
      or any of its Restricted Subsidiaries; provided, however, that:

                  (a)   if the Company or any Subsidiary Guarantor is the
            obligor on such Indebtedness that is owed to a Restricted Subsidiary
            other than a Subsidiary Guarantor, such Indebtedness must be
            unsecured and, if such Indebtedness did not result from treasury
            transactions in the ordinary course of business consistent with the
            Company's past practice, such Indebtedness must be expressly
            subordinated to the prior payment in full in cash of all Obligations
            with respect to the Notes, in

                                       58
<PAGE>

            the case of the Company, or the Note Guarantee, in the case of a
            Subsidiary Guarantor;

                  (b)   (i) any subsequent issuance or transfer of Equity
            Interests in a Restricted Subsidiary formed after the date of this
            Indenture that results in any such Indebtedness being held by a
            Person other than the Company or a Restricted Subsidiary thereof and
            (ii) any sale or other transfer of any such Indebtedness to a Person
            that is not the Company or a Restricted Subsidiary thereof, shall be
            deemed, in each case, to constitute an incurrence of such
            Indebtedness by the Company or such Restricted Subsidiary, as the
            case may be, that was not permitted by this Section 4.09(b)(v); and

                  (c)   Indebtedness owed to the Company or any Subsidiary
            Guarantor must be evidenced by an unsubordinated promissory note,
            unless (i) the obligor under such Indebtedness is the Company or a
            Guarantor or (ii) such intercompany note is used to finance a
            Restricted Subsidiary's working capital or other operating cash
            requirements, consistent with the Company's past practice;

            (vi)  the Guarantee by the Company or any of the Guarantors of
      Indebtedness of the Company or a Restricted Subsidiary of the Company that
      was permitted to be incurred by another provision of this Section 4.09;

            (vii) the incurrence by the Company or any of its Restricted
      Subsidiaries of Physician Support Obligations; and

            (viii) the incurrence by the Company or any Subsidiary Guarantor of
      additional Indebtedness in an aggregate principal amount (or accreted
      value, as applicable) at any time outstanding, including all Permitted
      Refinancing Indebtedness incurred to refund, refinance or replace any
      Indebtedness incurred pursuant to this Section 4.09(b)(viii), not to
      exceed $25.0 million.

            For purposes of determining compliance with this Section 4.09 in the
event that any proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in Sections 4.09(b)(i) through (viii)
above, or is entitled to be incurred pursuant to Section 4.09(a), the Company
shall be permitted to classify on the date of its incurrence such item of
Indebtedness in any manner that complies with this Section 4.09. Indebtedness
under the Credit Agreement outstanding on the date on which Notes are first
issued under this Indenture shall be deemed to have been incurred in reliance on
the exception provided by Section 4.09(b)(i). In addition, any Indebtedness
originally classified as incurred pursuant to Sections 4.09(b)(ii) through
(viii) above may later be reclassified by the Company such that it will be
deemed as having been incurred pursuant to another of such clauses to the extent
that such reclassified Indebtedness could be incurred pursuant to such new
clause of Sections 4.09(b)(ii) through (viii) at the time of such
reclassification.

            (c)   Notwithstanding any other provision of this Section 4.09, the
maximum amount of Indebtedness that may be incurred pursuant to this Section
4.09 shall not be deemed to

                                       59
<PAGE>

be exceeded, with respect to any outstanding Indebtedness due solely to the
result of fluctuations in the exchange rates of currencies.

            (d)   The Company shall not incur any Indebtedness that is
subordinate or junior in right of payment to any other Indebtedness of the
Company unless it is subordinate or junior in right of payment to the Notes to
the same extent. No Subsidiary Guarantor shall incur any Indebtedness that is
subordinate or junior in right of payment to any other Indebtedness of such
Subsidiary Guarantor unless it is subordinate or junior in right of payment to
such Subsidiary Guarantor's Note Guarantee to the same extent.

Section 4.10. Asset Sales.

            (a)   The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless:

            (i)   the Company (or the Restricted Subsidiary, as the case may be)
      receives consideration at the time of such Asset Sale at least equal to
      the Fair Market Value of the assets or Equity Interests issued or sold or
      otherwise disposed of;

            (ii)  such Fair Market Value is determined by the Company's Board of
      Directors and evidenced by a resolution of the Board of Directors set
      forth in an Officers' Certificate delivered to the Trustee; and

            (iii) at least 75% of the consideration therefor received by the
      Company or such Restricted Subsidiary is in the form of Cash Equivalents
      or Replacement Assets or a combination of the foregoing. For purposes of
      this Section 4.10(a)(iii), each of the following shall be deemed to be
      Cash Equivalents:

                  (A)   any liabilities (as shown on the Company's or such
            Restricted Subsidiary's most recent balance sheet) of the Company or
            any Restricted Subsidiary (other than contingent liabilities,
            liabilities that are by their terms subordinated to the Notes or any
            Note Guarantee and liabilities that are owed to the Company or any
            Affiliate of the Company) that are assumed by the transferee of any
            such assets pursuant to a customary written novation agreement that
            releases the Company or such Restricted Subsidiary from further
            liability;

                  (B)   any securities, notes or other obligations received by
            the Company or any such Restricted Subsidiary from such transferee
            that are contemporaneously (subject to ordinary settlement periods)
            converted by the Company or such Restricted Subsidiary into cash (to
            the extent of the cash received in that conversion); and

                  (C)   any Designated Noncash Consideration received by the
            Company or any Restricted Subsidiary thereof in such Asset Sale
            having a Fair Market Value, taken together with all other Designated
            Noncash Consideration received pursuant to this clause (C) that is
            at that time outstanding, not to exceed $10.0 million at the time of
            receipt of such Designated Noncash Consideration, with the Fair
            Market Value of each item of Designated Noncash Consideration being

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<PAGE>

            measured at the time received without giving effect to subsequent
            changes in value.

            (b)   Within 360 days after the receipt of any Net Proceeds from an
Asset Sale, the Company or any of its Restricted Subsidiaries may apply such Net
Proceeds at its option:

            (i)   to repay unsubordinated Secured Indebtedness and, if the
      Secured Indebtedness repaid is revolving credit Indebtedness, to
      correspondingly reduce commitments with respect thereto; or

            (ii)  to purchase Replacement Assets or make a capital expenditure
      (or enter into a binding agreement to purchase such assets or make such
      capital expenditure, so long as such purchase is consummated, or such
      capital expenditure is made, within 360 days of the date of such binding
      agreement) in or that is used or useful in a Permitted Business.

      Pending the final application of any such Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by this Indenture.

            (c)   Any Net Proceeds from Asset Sales that are not applied or
invested as provided in Section 4.10(b) above shall constitute "EXCESS
PROCEEDS." Within 30 days after the aggregate amount of Excess Proceeds exceeds
$15.0 million, the Company shall make an offer (an "ASSET SALE OFFER") to all
Holders of Notes and all holders of other Indebtedness that is pari passu with
the Notes or any Note Guarantee containing provisions similar to those set forth
in this Indenture with respect to offers to purchase with the proceeds of sales
of assets, to purchase the maximum principal amount of Notes and such other pari
passu Indebtedness that may be purchased out of the Excess Proceeds. The offer
price in any Asset Sale Offer will be equal to 100% of the principal amount (or
100% of the accreted value thereof, in the case of Indebtedness sold at a
discount) of the Notes and such other pari passu Indebtedness plus accrued and
unpaid interest and Liquidated Damages, if any, to the date of purchase, and
will be payable in cash. If any Excess Proceeds remain after consummation of an
Asset Sale Offer, the Company or any of its Restricted Subsidiaries may use such
Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If
the aggregate principal amount of Notes and such other pari passu Indebtedness
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes and such other pari passu Indebtedness shall be
purchased on a pro rata basis based on the principal amount of Notes and such
other pari passu Indebtedness tendered. Upon completion of each Asset Sale
Offer, the amount of Excess Proceeds shall be reset at zero.

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

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Section 4.11. Transactions with Affiliates.

            (a)   The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into, make, amend, renew or extend any
transaction, contract, agreement, understanding, loan, advance or Guarantee
with, or for the benefit of, any Affiliate (each, an "AFFILIATE TRANSACTION"),
unless:

            (i)   such Affiliate Transaction is on terms that are not materially
      less favorable to the Company or the relevant Restricted Subsidiary than
      those that would have been obtained in a comparable arm's-length
      transaction by the Company or such Restricted Subsidiary with a Person
      that is not an Affiliate of the Company; and

            (ii)  the Company delivers to the Trustee:

                  (A)   with respect to any Affiliate Transaction or series of
            related Affiliate Transactions involving aggregate consideration in
            excess of $2.0 million, a resolution of the Board of Directors set
            forth in an Officers' Certificate certifying that such Affiliate
            Transaction or series of related Affiliate Transactions complies
            with this Section 4.11 and that such Affiliate Transaction or series
            of related Affiliate Transactions has been approved by a majority of
            the disinterested members of the Board of Directors; and

                  (B)   with respect to any Affiliate Transaction or series of
            related Affiliate Transactions involving aggregate consideration in
            excess of $10.0 million, an opinion as to the fairness to the
            Company or such Restricted Subsidiary of such Affiliate Transaction
            or series of related Affiliate Transactions from a financial point
            of view issued by an independent accounting, appraisal or investment
            banking firm of national standing.

            (b)   The following items shall not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of Section
4.11(a):

            (i)   transactions between or among the Company and/or its
      Restricted Subsidiaries;

            (ii)  payment of reasonable and customary fees, compensation or
      employment benefits to, and reasonable and customary indemnification and
      similar arrangements for the benefit of directors, officers and employees
      of the Parent, the Company or any Restricted Subsidiary thereof in the
      ordinary course of business;

            (iii) Restricted Payments that are permitted by the provisions of
      Section 4.07;

            (iv)  any issuance or sale of Equity Interests (other than
      Disqualified Stock) of the Company;

            (v)   Investments that are permitted by clauses (xi) or (xii) of the
      definition of Permitted Investments in Section 1.07; and

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<PAGE>

            (vi)  transactions provided for in Approved Affiliate Agreements.

Section 4.12. Liens.

            The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind (other than Permitted Liens) upon any of
their property or assets, now owned or hereafter acquired, unless all payments
due under this Indenture and the Notes are secured on an equal and ratable basis
with the obligations so secured (or, in the case of subordinated Indebtedness,
prior or senior thereto, with the same relative priority as the Notes shall have
with respect to such subordinated Indebtedness) until such time as such
obligations are no longer secured by a Lien.

Section 4.13. Business Activities.

            The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any business other than Permitted Businesses, except
to such extent as would not be material to the Company and its Restricted
Subsidiaries taken as a whole.

Section 4.14. Offer to Repurchase upon a Change of Control.

            (a)   If a Change of Control occurs, each Holder of Notes shall have
the right to require the Company to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of that Holder's Notes pursuant to an offer by
the Company (a "CHANGE OF CONTROL OFFER") at an offer price (a "CHANGE OF
CONTROL PAYMENT") in cash equal to 101% of the aggregate principal amount of
Notes repurchased plus accrued and unpaid interest and Liquidated Damages, if
any, thereon, to the date of purchase. Within 30 days following any Change of
Control, the Company shall mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on a date (the "CHANGE OF CONTROL PAYMENT DATE") specified
in such notice, which date shall be no earlier than 30 days and no later than 60
days from the date such notice is mailed, pursuant to the procedures described
in Section 3.08 (including the notice required thereby). The Company will comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control provisions of
this Indenture, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under the
Change of Control provisions of this Indenture by virtue of such compliance.

            (b)   On the Change of Control Payment Date, the Company shall, to
the extent lawful:

            (i)   accept for payment all Notes or portions thereof properly
      tendered pursuant to the Change of Control Offer;

            (ii)  deposit with the Paying Agent an amount equal to the Change of
      Control Payment in respect of all Notes or portions thereof so tendered;
      and

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<PAGE>

            (iii) deliver or cause to be delivered to the Trustee the Notes so
      accepted together with an Officers' Certificate stating the aggregate
      principal amount of Notes or portions thereof being purchased by the
      Company.

            (c)   The Paying Agent shall promptly mail or wire transfer to each
Holder of Notes so tendered the Change of Control Payment for such Notes, and
the Trustee shall promptly authenticate and mail (or cause to be transferred by
book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided that each such
new Note shall be in a principal amount of $1,000 or an integral multiple
thereof.

            (d)   The Company shall publicly announce the results of the Change
of Control Offer on or as soon as practicable after the Change of Control
Payment Date.

            (e)   Notwithstanding anything to the contrary in this Section 4.14,
the Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 4.14 and all other provisions of this Indenture applicable to a
Change of Control Offer made by the Company and purchases all Notes validly
tendered and not withdrawn under such Change of Control Offer.

Section 4.15. [INTENTIONALLY LEFT BLANK].

Section 4.16. Designation of Restricted and Unrestricted Subsidiaries.

            (a)   The Board of Directors of the Company may designate any
Restricted Subsidiary to be an Unrestricted Subsidiary, provided that:

            (i)   any Guarantee by the Company or any Restricted Subsidiary of
      any Indebtedness of the Subsidiary being so designated shall be deemed to
      be an incurrence of Indebtedness by the Company or such Restricted
      Subsidiary (or by each, if applicable) at the time of such designation,
      and such incurrence of Indebtedness would be permitted under Section 4.09;

            (ii)  the aggregate Fair Market Value of all outstanding Investments
      owned by the Company and its Restricted Subsidiaries in the Subsidiary
      being so designated (including any Guarantee by the Company or any
      Restricted Subsidiary thereof of any Indebtedness of such Subsidiary) and
      the maximum obligation of the Company or any Restricted Subsidiary thereof
      to make capital contributions to such Subsidiary will be deemed to be a
      Restricted Investment made as of the time of such designation and that
      such Investment would be permitted under Section 4.07;

            (iii) such Subsidiary does not own any Equity Interests of, or hold
      any Liens on any Property of, the Company or any Restricted Subsidiary;

            (iv)  the Subsidiary being so designated:

                  (A)   is not party to any agreement, contract, arrangement or
            understanding with the Company or any Restricted Subsidiary of the
            Company

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<PAGE>

            unless the terms of any such agreement, contract, arrangement or
            understanding are no less favorable to the Company or such
            Restricted Subsidiary than those that might be obtained at the time
            from Persons who are not Affiliates of the Company;

                  (B)   is a Person with respect to which neither the Company
            nor any of its Restricted Subsidiaries has any direct or indirect
            obligation (a) to subscribe for additional Equity Interests (other
            than any other obligation to make capital contributions to such
            Person as set forth in the operating or partnership agreement of
            such Person) or (b) to maintain or preserve such Person's financial
            condition or to cause such Person to achieve any specified levels of
            operating results;

                  (C)   has not Guaranteed or otherwise directly or indirectly
            provided credit support for any Indebtedness of the Company or any
            of its Restricted Subsidiaries; and

                  (D)   has at least one director on its Board of Directors that
            is not a director or officer of the Company or any of its Restricted
            Subsidiaries and has at least one executive officer that is not a
            director or officer of the Company or any of its Restricted
            Subsidiaries; and

            (v)   no Default or Event of Default would be in existence following
      such designation.

            (b)   Any designation of a Restricted Subsidiary of the Company as
an Unrestricted Subsidiary shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the Board Resolution of the Company giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the preceding conditions and was permitted by this Indenture. If,
at any time, any Unrestricted Subsidiary would (x) fail to meet any of the
requirements described in subclauses (A), (B) and (C) of Section 4.16(a)(iv), or
(y) fails to meet the requirement described in subclause (D) of Section
4.16(a)(iv) and such failure continues for a period of 30 days, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture
and any Indebtedness, Investments, or Liens on the property, of such Subsidiary
shall be deemed to be incurred by a Restricted Subsidiary of the Company as of
such date and, if such Indebtedness, Investments or Liens are not permitted to
be incurred as of such date under this Indenture, the Company shall be in
default under this Indenture.

            (c)   The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary, provided
that:

            (i)   such designation shall be deemed to be an incurrence of
      Indebtedness by a Restricted Subsidiary of the Company of any outstanding
      Indebtedness of such Unrestricted Subsidiary and such designation shall
      only be permitted if such Indebtedness is permitted under Section 4.09(a)
      calculated on a pro forma basis as if such designation had occurred at the
      beginning of the four-quarter reference period;

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<PAGE>

            (ii)  all outstanding Investments owned by such Unrestricted
      Subsidiary shall be deemed to be made as of the time of such designation
      and such Investments shall only be permitted if such Investments would be
      permitted under Section 4.07;

            (iii) all Liens of such Unrestricted Subsidiary existing at the time
      of such designation would be permitted under Section 4.12; and

            (iv)  no Default or Event of Default would be in existence following
      such designation.

Section 4.17. Payments for Consent.

            The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.

Section 4.18. Guarantees.

            (a)   If, on or after the date of this Indenture, (a) the Company or
any of its Restricted Subsidiaries acquires or creates another Domestic
Subsidiary that either (x) is a Substantially Wholly-Owned Restricted Subsidiary
or (y) provides a Guarantee of any Indebtedness of the Company or of any other
Restricted Subsidiary thereof (other than any Indebtedness of the Company solely
as a result of the Guarantee by the Company of such Restricted Subsidiary's
Indebtedness) or (b) any Domestic Subsidiary that is not a Subsidiary Guarantor
(i) becomes a Substantially Wholly-Owned Restricted Subsidiary or (ii) provides
a Guarantee of any Indebtedness of the Company or of any other Restricted
Subsidiary thereof (other than any Indebtedness of the Company solely as a
result of the Guarantee by the Company of such Domestic Subsidiary's
Indebtedness), then, in any such event, that Domestic Subsidiary must become a
Guarantor and execute a supplemental indenture (A) within 30 days in the case of
clause (a)(x) and (B) otherwise simultaneously with such event. In the event of
a Guarantee as a result of clauses (a)(x) or (b)(ii) of the preceding sentence,
such Guarantee shall be senior to or pari passu with such Restricted
Subsidiary's Guarantee of or pledge to secure such other Indebtedness.

            (b)   Notwithstanding Section 4.18(a), any Note Guarantee may
provide by its terms that it will be automatically and unconditionally released
and discharged under the circumstances described under Section 10.05 hereof.

Section 4.19. Sale and Leaseback Transactions.

            The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction, provided that
the Company or any Restricted Subsidiary may enter into a sale and leaseback
transaction if:

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<PAGE>

            (i)   the gross cash proceeds of that sale and leaseback transaction
      are at least equal to the Fair Market Value of the property that is the
      subject of that sale and leaseback transaction and the resolution of the
      Board of Directors of the Company with respect to the determination
      thereof is set forth in an Officers' Certificate delivered to the Trustee;
      and

            (ii)  the transfer of assets in that sale and leaseback transaction
      is permitted by, and the Company or such Restricted Subsidiary applies the
      proceeds of such transaction in compliance with Section 4.10.

Section 4.20. Limitation on Issuances and Sales of Equity Interests in
Restricted Subsidiaries.

            The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, issue, transfer, convey, sell, lease or otherwise dispose of
any Equity Interests in any Restricted Subsidiary of the Company to any Person
(other than the Company or a Restricted Subsidiary thereof), unless:

            (i)   if, immediately after giving effect to such issuance,
      transfer, conveyance, sale, lease or other disposition, (x) such
      Restricted Subsidiary would no longer constitute a Restricted Subsidiary
      and (y) if such Restricted Subsidiary was a Subsidiary Guarantor
      immediately prior to such issuance, transfer, conveyance, sale, lease or
      other disposition, would no longer constitute a Subsidiary Guarantor, (A)
      if such Restricted Subsidiary was formed prior to the date of this
      Indenture, any Investment in Equity Interests of such Person and (B) if
      such Restricted Subsidiary was formed on or after the date of this
      Indenture, any Investment in such Person, in either case, remaining after
      giving effect to such issuance, transfer, conveyance, sale, lease or other
      disposition would have been permitted to be made under Section 4.07 if
      made on the date of such issuance, transfer, conveyance, sale, lease or
      other disposition; and

            (ii)  the Company or such Restricted Subsidiary complies with
      Section 4.10 including the application of the Net Proceeds from such
      issuance, transfer, conveyance, sale, lease or other disposition.

Section 4.21. Use of Net Proceeds from the Issuance of the Notes.

            (a)   The Company shall not, directly or indirectly, apply the Net
Proceeds from any issuance and sale of the Notes to make an Investment in any
Restricted Subsidiary of the Company that is not a Guarantor unless:

            (i)   such Investment is in the form of an unsubordinated promissory
      note payable by such Restricted Subsidiary to the Company or a Subsidiary
      Guarantor; and

            (ii)  such unsubordinated promissory note bears cash interest.

            (b)   Any forgiveness or cancellation of any unsubordinated
promissory note referred to in clause (i) above prior to full payment in cash of
all principal, interest and any premiums thereunder will be deemed to be a
Restricted Investment by the Company on the date of such forgiveness or
cancellation equal to the principal amount of such unsubordinated

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<PAGE>

promissory note forgiven or cancelled, together with any accrued and unpaid
interest and premium, if any, and if such Restricted Investment would not be
permitted to be made as of such date under Section 4.07, the Company shall be in
default under this Indenture.

                                  ARTICLE FIVE
                                   SUCCESSORS

Section 5.01. Merger, Consolidation or Sale of Assets.

            (a)   The Company shall not, directly or indirectly: (1) consolidate
or merge with or into another Person (whether or not the Company is the
surviving corporation) or (2) sell, assign, transfer, convey or otherwise
dispose of all or substantially all of the properties and assets of the Company
and its Restricted Subsidiaries, taken as a whole, in one or more related
transactions, to another Person or Persons, unless:

            (i)   either: (a) the Company is the surviving corporation; or (b)
      the Person formed by or surviving any such consolidation or merger (if
      other than the Company) or to which such sale, assignment, transfer,
      conveyance or other disposition shall have been made (i) is a corporation
      organized or existing under the laws of the United States, any state
      thereof or the District of Columbia and (ii) assumes all the obligations
      of the Company under the Notes, this Indenture and the Registration Rights
      Agreement pursuant to agreements reasonably satisfactory to the Trustee;

            (ii)  immediately after giving effect to such transaction, no
      Default or Event of Default exists;

            (iii) immediately after giving effect to such transaction on a pro
      forma basis, the Company or the Person formed by or surviving any such
      consolidation or merger (if other than the Company), or to which such
      sale, assignment, transfer, conveyance or other disposition shall have
      been made will, on the date of such transaction after giving pro forma
      effect thereto and any related financing transactions as if the same had
      occurred at the beginning of the applicable four-quarter period, be
      permitted to incur at least $1.00 of additional Indebtedness pursuant to
      the Consolidated Leverage Coverage Ratio test set forth in Section
      4.09(a);

            (iv)  each Guarantor, unless such Guarantor is the Person with which
      the Company has entered into a transaction under this Section 5.01, shall
      have by amendment to its Note Guarantee confirmed that its Note Guarantee
      shall apply to the obligations of the Company or the surviving Person in
      accordance with the Notes and this Indenture; and

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<PAGE>

            (v)   the Company delivers to the Trustee an Officers' Certificate
      (attaching the arithmetic computation to demonstrate compliance with
      clause (3) above) and Opinion of Counsel, in each case stating that such
      transaction and such agreement complies with this Section 5.01 and that
      all conditions precedent provided for herein relating to such transaction
      have been complied with.

            (b)   In addition, neither the Company nor any of its Restricted
Subsidiaries may, directly or indirectly, lease all or substantially all of its
properties or assets in one or more related transactions, to any other Person.
Section 5.01(a)(iii) shall not apply to any merger, consolidation or sale,
assignment, transfer, conveyance or other disposition of assets between or among
the Company and any of its Restricted Subsidiaries.

Section 5.02. Successor Corporation Substituted.

            Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, conveyance or other disposition is made
shall succeed to, and be substituted for (so that from and after the date of
such consolidation, merger, sale, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of, the Company under this Indenture and the Notes with the same
effect as if such successor Person had been named as the Company herein and the
Company shall be discharged from all obligations and covenants under this
Indenture and the Notes; provided, however, that the predecessor Company shall
not be relieved from the obligation to pay the principal of and interest and
Liquidated Damages, if any, on the Notes except in the case of a sale,
assignment, transfer, conveyance or other disposition of all of the Company's
assets that meets the requirements of Section 5.01 hereof.

                                  ARTICLE SIX
                              DEFAULTS AND REMEDIES

Section 6.01. Events of Default.

            (a)   Each of the following is an "EVENT OF DEFAULT":

            (i)   default for 30 days in the payment when due of interest on, or
      Liquidated Damages with respect to, the Notes;

            (ii)  default in payment when due (whether at maturity, upon
      acceleration, redemption or otherwise) of the principal of, or premium, if
      any, on the Notes;

            (iii) failure by the Company or any of its Restricted Subsidiaries
      to comply with Sections 4.10, 4.14 or 5.01;

            (iv)  failure by the Company or any of its Restricted Subsidiaries
      for 60 days after written notice by the Trustee or Holders representing
      25% or more of the aggregate

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<PAGE>

      principal amount of Notes outstanding to comply with any of the other
      agreements in this Indenture;

            (v)   default under any mortgage, indenture or instrument under
      which there may be issued or by which there may be secured or evidenced
      any Indebtedness for money borrowed by the Company or any of its
      Restricted Subsidiaries (or the payment of which is Guaranteed by the
      Company or any of its Restricted Subsidiaries) whether such Indebtedness
      or Guarantee now exists, or is created after the date of this Indenture,
      if that default:

                  (A)   is caused by a failure to make any payment on such
            Indebtedness when due at the final maturity prior to the expiration
            of any grace period provided in such Indebtedness on the date of
            such default (a "PAYMENT DEFAULT"); or

                  (B)   results in the acceleration of such Indebtedness prior
            to its express maturity,

      and, in each case, the principal amount of any such Indebtedness, together
      with the principal amount of any other such Indebtedness under which there
      has been a Payment Default or the maturity of which has been so
      accelerated, aggregates $10.0 million or more;

            (vi)  failure by the Company or any of its Restricted Subsidiaries
      to pay final judgments (to the extent such judgments are not covered by
      insurance provided by a reputable carrier that has acknowledged coverage
      in writing and has the ability to perform) aggregating in excess of $10.0
      million, which judgments are not paid, discharged or stayed for a period
      of 60 days;

            (vii) except as permitted by this Indenture, any Note Guarantee
      shall be held in any judicial proceeding to be unenforceable or invalid or
      shall cease for any reason to be in full force and effect or any
      Guarantor, or any Person acting on behalf of any Guarantor, shall deny or
      disaffirm its obligations under its Note Guarantee;

            (viii) the Company, any Guarantor or any Significant Subsidiary of
      the Company (or any Subsidiaries that together would constitute a
      Significant Subsidiary) pursuant to or within the meaning of Bankruptcy
      Law:

                  (A)   commences a voluntary case,

                  (B)   consents to the entry of an order for relief against it
            in an involuntary case,

                  (C)   makes a general assignment for the benefit of its
            creditors, or

                  (D)   generally is not paying its debts as they become due;
            and

            (ix)  a court of competent jurisdiction enters an order or decree
      under any Bankruptcy Law that:

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<PAGE>

                  (A)   is for relief against the Company, any Guarantor or any
            of its Restricted Subsidiaries that is a Significant Subsidiary (or
            Subsidiaries that together would constitute a Significant
            Subsidiary), in an involuntary case; or

                  (B)   appoints a custodian of the Company, any Guarantor or
            any of its Restricted Subsidiaries that is a Significant Subsidiary
            (or Subsidiaries that together would constitute a Significant
            Subsidiary) or for all or substantially all of the property of the
            Company, any Guarantor or any of its Restricted Subsidiaries that is
            a Significant Subsidiary (or Subsidiaries that together would
            constitute a Significant Subsidiary), or

                  (C)   orders the liquidation of the Company, any Guarantor or
            any of its Restricted Subsidiaries that is a Significant Subsidiary
            (or Subsidiaries that together would constitute a Significant
            Subsidiary);

and the order or decree remains unstayed and in effect for 60 consecutive days.

Section 6.02. Acceleration.

            (a)   In the case of an Event of Default specified in clause (viii)
or (ix) of Section 6.01 hereof, with respect to the Company, any Guarantor or
any Significant Subsidiary of the Company (or any Subsidiaries that together
would constitute a Significant Subsidiary), all outstanding Notes will become
due and payable immediately without further action or notice. If any other Event
of Default occurs and is continuing, the Trustee or the Holders of at least 25%
in principal amount of the then outstanding Notes may declare all the Notes to
be due and payable immediately by notice in writing to the Company specifying
the Event of Default.

            (b)   In the case of any Event of Default occurring by reason of any
willful action or inaction taken or not taken by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Notes pursuant to
Section 3.07 hereof, an equivalent premium shall also become and be immediately
due and payable to the extent permitted by law upon the acceleration of the
Notes. If an Event of Default occurs during any time that the Notes are
outstanding, by reason of any willful action (or inaction) taken (or not taken)
by or on behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes, then the premium specified in Section 3.07(b) shall
also become immediately due and payable to the extent permitted by law upon the
acceleration of the Notes.

Section 6.03. Other Remedies.

            (a)   If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium, if
any, interest, and Liquidated Damages, if any, with respect to, the Notes or to
enforce the performance of any provision of the Notes or this Indenture.

            (b)   The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Note in exercising any right
or remedy accruing upon an Event of Default

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shall not impair the right or remedy or constitute a waiver of or acquiescence
in the Event of Default. All remedies are cumulative to the extent permitted by
law.

Section 6.04. Waiver of Past Defaults.

            Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee, may on behalf of the Holders of all
of the Notes waive any existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the payment of
interest or Liquidated Damages on, or the principal of, the Notes. In the event
of a declaration of acceleration of the Notes solely because an Event of Default
described in Section 6.01(a)(v) has occurred and is continuing, the declaration
of acceleration of the Notes shall be automatically rescinded and annulled if
the event of default or payment default triggering such Event of Default
pursuant to Section 6.01(a)(v) shall be remedied or cured by the Company or a
Restricted Subsidiary of the Company or waived by the holders of the relevant
Indebtedness within 20 days after the declaration of acceleration with respect
thereto and if the rescission and annulment of the acceleration of the Notes
would not conflict with any judgment or decree of a court of competent
jurisdiction obtained by the Trustee for the payment of amounts due on the
Notes.

            The Company shall deliver to the Trustee an Officers' Certificate
stating that the requisite percentage of Holders have consented to such waiver
and attaching copies of such consents. In case of any such waiver, the Company,
the Trustee and the Holders shall be restored to their former positions and
rights hereunder and under the Notes, respectively. This Section 6.04 shall be
in lieu of Section 316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) of the
TIA is hereby expressly excluded from this Indenture and the Notes, as permitted
by the TIA. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.

Section 6.05. Control by Majority.

            The Holders of a majority in principal amount of the then
outstanding Notes will have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy available to the Trustee.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture, that may involve the Trustee in personal liability, or that
the Trustee determines in good faith may be unduly prejudicial to the rights of
Holders of Notes not joining in the giving of such direction and may take any
other action it deems proper that is not inconsistent with any such direction
received from Holders of Notes.

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Section 6.06. Limitation on Suits.

            (a)   A Holder may not pursue any remedy with respect to this
Indenture or the Notes unless:

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

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

            (iii) such Holder or Holders offer the Trustee indemnity
      satisfactory to the Trustee against any costs, liability or expense;

            (iv)  the Trustee does not comply with the request within 60 days
      after receipt of the request and the offer of indemnity; and

            (v)   during such 60-day period, the Holders of a majority in
      aggregate principal amount of the outstanding Notes do not give the
      Trustee a direction that is inconsistent with the request.

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

Section 6.07. Rights of Holders of Notes to Receive Payment.

            Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of the principal of, premium or
Liquidated Damages, if any, or interest on, such Note or to bring suit for the
enforcement of any such payment, on or after the due date expressed in the
Notes, shall not be impaired or affected without the consent of the Holder.

Section 6.08. Collection Suit by Trustee.

            If an Event of Default specified in Section 6.01(a)(i) or (a)(ii)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium, if any, interest, and Liquidated Damages, if
any, remaining unpaid on the Notes and interest on overdue principal and
premium, if any, and, to the extent lawful, interest and Liquidated Damages, if
any, and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

Section 6.09. Trustee May File Proofs of Claim.

            The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
or any Guarantor (or any other obligor upon the Notes), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other securities or property payable or deliverable on any such
claims and any custodian in any such judicial proceeding

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<PAGE>

is hereby authorized by each Holder to make such payments to the Trustee, and in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To
the extent that the payment of any such compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.07 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.

Section 6.10. Priorities.

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

            First: to the Trustee, its agents and attorneys for amounts due
      under Section 7.07 hereof, including payment of all compensation, expense
      and liabilities incurred, and all advances made, by the Trustee and the
      costs and expenses of collection;

            Second: to Holders of Notes for amounts due and unpaid on the Notes
      for principal, premium, if any, interest and Liquidated Damages, if any,
      ratably, without preference or priority of any kind, according to the
      amounts due and payable on the Notes for principal, premium, if any,
      interest, and Liquidated Damages, if any, respectively; and

            Third: to the Company or to such party as a court of competent
      jurisdiction shall direct.

            (b)   The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.

Section 6.11. Undertaking for Costs.

            In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit

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by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or
a suit by Holders of more than ten percent in principal amount of the then
outstanding Notes.

                                 ARTICLE SEVEN
                                     TRUSTEE

Section 7.01. Duties of Trustee.

            Except to the extent, if any, provided otherwise in the Trust
Indenture Act of 1939 (as from time to time in effect):

            (a)   If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.

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

            (i)   the duties of the Trustee shall be determined solely by the
      express provisions of this Indenture and the Trustee need perform only
      those duties that are specifically set forth in this Indenture and no
      others, and no implied covenants or obligations shall be read into this
      Indenture against the Trustee; and

            (ii)  in the absence of bad faith on its part, the Trustee may
      conclusively rely, as to the truth of the statements and the correctness
      of the opinions expressed therein, upon certificates or opinions furnished
      to the Trustee and conforming to the requirements of this Indenture.
      However, the Trustee shall examine the certificates and opinions to
      determine whether or not they conform to the requirements of this
      Indenture.

            (c)   The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

            (i)   this paragraph does not limit the effect of paragraph (b) of
      this Section;

            (ii)  the Trustee shall not be liable for any error of judgment made
      in good faith by a Responsible Officer, unless it is proved that the
      Trustee was negligent in ascertaining the pertinent facts; and

            (iii) the Trustee shall not be liable with respect to any action it
      takes or omits to take in good faith in accordance with a direction
      received by it pursuant to Section 6.05 hereof.

            (d)   Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.01.

            (e)   No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of

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<PAGE>

its rights and powers under this Indenture at the request of any Holders, unless
such Holder shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, costs, liability or expense that might be
incurred by it in connection with the request or direction.

            (f)   Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.

Section 7.02. Certain Rights of Trustee.

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

            (b)   Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.

            (c)   The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.

            (d)   The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.

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

            (f)   The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders unless such Holders shall have offered to the Trustee
security or indemnity reasonably satisfactory to it against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction.

            (g)   Except with respect to Section 4.01, the Trustee shall have no
duty to inquire as to the performance of the Company with respect to the
covenants contained in Article 4. In addition, the Trustee shall not be deemed
to have knowledge of an Event of Default except (i) any Default or Event of
Default pursuant to Section 6.01(a)(i), 6.01(a)(ii) and 6.01(a)(iii), or (ii)
any Default or Event of Default of which the Trustee shall have received written
notification or obtained actual knowledge.

            (h)   Delivery of reports, information and documents to the Trustee
under Section 4.03 is for informational purposes only and the Trustee's receipt
of the foregoing shall not constitute constructive notice of any information
contained therein or determinable from

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information contained therein, including the Company's compliance with any of
the covenants hereunder (as to which the Trustee is entitled to rely exclusively
on Officer's Certificates).

Section 7.03. Individual Rights of Trustee.

            The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may become a creditor of, or otherwise deal with,
the Company or any of its Affiliates with the same rights it would have if it
were not Trustee. However, in the event that the Trustee acquires any
conflicting interest as described in the Trust Indenture Act of 1939 (as in
effect at such time), it must eliminate such conflict within 90 days, apply to
the SEC for permission to continue as trustee or resign. Any Agent may do the
same with like rights and duties. The Trustee is also subject to Sections 7.10
and 7.11 hereof.

Section 7.04. Trustee's Disclaimer.

            The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, it shall not be accountable
for the Company's use of the proceeds from the Notes or any money paid to the
Company or upon the Company's direction under any provision of this Indenture,
it shall not be responsible for the use or application of any money received by
any Paying Agent other than the Trustee, and it shall not be responsible for any
statement or recital herein or any statement in the Notes or any other document
in connection with the sale of the Notes or pursuant to this Indenture other
than its certificate of authentication.

Section 7.05. Notice of Defaults.

            If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Holders of Notes a notice of
the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal, premium, interest
or Liquidated Damages on any Note, the Trustee may withhold the notice if and so
long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.

Section 7.06. Reports by Trustee to Holders of the Notes.

            (a)   Within 60 days after each May 15 beginning with the May 15
following the date hereof, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports
as required by TIA Section 313(c).

            (b)   A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Company and filed with the SEC and each
stock exchange on which the Notes are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee when the Notes are listed
on any stock exchange or any delisting thereof.

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Section 7.07. Compensation and Indemnity.

            (a)   The Company shall pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and services
hereunder in accordance with a written schedule provided by the Trustee to the
Company. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel.

            (b)   The Company shall indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture against the Company
(including this Section 7.07) and defending itself against any claim (whether
asserted by either of the Company or any Holder or any other person) or
liability in connection with the exercise or performance of any of its powers or
duties hereunder, except to the extent any such loss, liability or expense may
be attributable to its negligence, bad faith or willful misconduct. The Trustee
shall notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder unless the failure to notify the Company impairs the
Company's ability to defend such claim. The Company shall defend the claim and
the Trustee shall cooperate in the defense. The Company need not pay for any
settlement made without its consent.

            (c)   The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture and resignation or
removal of the Trustee.

            (d)   To secure the Company's payment obligations in this Section,
the Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture and resignation or removal of the Trustee.

            (e)   When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(a)(viii) and (ix) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.

            (f)   The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.

Section 7.08. Replacement of Trustee.

            (a)   A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.

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<PAGE>

            (b)   The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in writing. The
Company may remove the Trustee if:

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

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

            (iii) a custodian or public officer takes charge of the Trustee or
      its property; or

            (iv)  the Trustee becomes incapable of acting.

            (c)   If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.

            (d)   If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of Notes of at least 10% in principal amount of the then
outstanding Notes may petition at the expense of the Company any court of
competent jurisdiction for the appointment of a successor Trustee.

            (e)   If the Trustee, after written request by any Holder who has
been a Holder for at least six months, fails to comply with Section 7.10, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.

            (f)   A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.

Section 7.09. Successor Trustee by Merger, Etc.

            If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another Person, the
successor Person without any further act shall be the successor Trustee.

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Section 7.10. Eligibility; Disqualification.

            There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $50.0 million as set forth in its most recent published annual report of
condition.

            This Indenture shall always have a Trustee who satisfies the
            requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is
subject to TIA Section 310(b).

Section 7.11. Preferential Collection of Claims Against Company.

            The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
The Trustee hereby waives any right to set-off any claim that it may have
against the Company in any capacity (other than as Trustee and Paying Agent)
against any of the assets of the Company held by the Trustee; provided, however,
that if the Trustee is or becomes a lender of any other Indebtedness permitted
hereunder to be pari passu with the Notes, then such waiver shall not apply to
the extent of such Indebtedness.

                                 ARTICLE EIGHT
                       DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.

            The Company may, at the option of the Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, elect to
have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article Eight.

Section 8.02. Legal Defeasance and Discharge.

            Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes and all
obligations of the Guarantors shall be deemed to have been discharged with
respect to their obligations under the Note Guarantees on the date the
conditions set forth below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For
this purpose, Legal Defeasance means that the Company and the Guarantors shall
be deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes and Note Guarantees, respectively, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the
other Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Notes and this Indenture (and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder: (a) the rights
of Holders of outstanding Notes to receive solely from the trust fund described
in Section 8.04 hereof, and as more fully set forth in such Section, payments

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in respect of the principal of, premium, if any, interest and Liquidated
Damages, if any, on such Notes when such payments are due, (b) the Company's
obligations with respect to such Notes under Article 2 concerning issuing
temporary Notes, registration of Notes and mutilated, destroyed, lost or stolen
Notes and the Company's obligations under Section 4.02 hereof, (c) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (d) this Article 8. Subject to
compliance with this Article 8, the Company may exercise its option under this
Section 8.02 notwithstanding the prior exercise of its option under Section 8.03
hereof.

Section 8.03. Covenant Defeasance.

            Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.14, 4.16, 4.17, 4.18 and 4.19 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company and the Guarantors may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. In addition, upon the Company's exercise
under Section 8.01 hereof of the option applicable to this Section 8.03, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(a)(iii) through (vii) shall not constitute Events of Default.

Section 8.04. Conditions to Legal or Covenant Defeasance.

            (a)   The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Notes:

            (i)   the Company must irrevocably deposit with the Trustee, in
      trust, for the benefit of the Holders of the Notes, cash in U.S. dollars,
      non-callable Government Securities, or a combination thereof, in such
      amounts as will be sufficient, in the opinion of a nationally recognized
      firm of independent public accountants, to pay the principal of, or
      interest and premium and Liquidated Damages, if any, on the outstanding
      Notes on the Stated Maturity or on the applicable redemption date, as the
      case may be, and the Company must specify whether the Notes are being
      defeased to maturity or to a particular redemption date;

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<PAGE>

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

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

            (iv)  no Default or Event of Default shall have occurred and be
      continuing either: (a) on the date of such deposit; or (b) or insofar as
      Events of Default from bankruptcy or insolvency events are concerned, at
      any time in the period ending on the 123rd day after the date of deposit;

            (v)   such Legal Defeasance or Covenant Defeasance will not result
      in a breach or violation of, or constitute a default under any material
      agreement or instrument to which the Company or any of its Subsidiaries is
      a party or by which the Company or any of its Subsidiaries is bound;

            (vi)  the Company must have delivered to the Trustee an Opinion of
      Counsel to the effect that, (1) assuming no intervening bankruptcy of the
      Company or any Guarantor between the date of deposit and the 123rd day
      following the deposit and assuming that no Holder is an "insider" of the
      Company under applicable bankruptcy law, after the 123rd day following the
      deposit, the trust funds will not be subject to the effect of any
      applicable bankruptcy, insolvency, reorganization or similar laws
      affecting creditors' rights generally, including Section 547 of the United
      States Bankruptcy Code or Section 15 of the New York Debtor and Creditor
      Law, and (2) the creation of the defeasance trust does not violate the
      Investment Company Act of 1940;

            (vii) the Company must deliver to the Trustee an Officers'
      Certificate stating that the deposit was not made by the Company with the
      intent of preferring the Holders of Notes over the other creditors of the
      Company with the intent of defeating, hindering, delaying or defrauding
      creditors of the Company or others;

            (viii) if the Notes are to be redeemed prior to their Stated
      Maturity, the Company must deliver to the Trustee irrevocable instructions
      to redeem all of the Notes on the specified redemption date; and

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            (ix)  the Company must deliver to the Trustee an Officers'
      Certificate and an Opinion of Counsel, each stating that all conditions
      precedent relating to the Legal Defeasance or the Covenant Defeasance have
      been complied with.

Section 8.05. Deposited Money and Government Securities to Be Held in Trust;
Other Miscellaneous Provisions.

            (a)   Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Liquidated Damages, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.

            (b)   The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.

            (c)   Anything in this Article Eight to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon the request of the Company any money or non-callable Government
Securities held by it as provided in Section 8.04 hereof which, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.

Section 8.06. Repayment to the Company.

            Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, interest, or Liquidated Damages, if any, on any Note and remaining
unclaimed for two years after such principal, and premium, if any, interest, or
Liquidated Damages, if any, has become due and payable shall be paid to the
Company on its request or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Note shall thereafter look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining shall be repaid to the Company.

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Section 8.07. Reinstatement.

            If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof and, in the case of a Legal Defeasance, the
Guarantors' obligations under their respective Note Guarantees shall be revised
and reinstated as though no deposit had occurred pursuant to Section 8.02
hereof, in each case until such time as the Trustee or Paying Agent is permitted
to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the
case may be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.

                                  ARTICLE NINE
                        AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01. Without Consent of Holders of Notes.

            (a)   Notwithstanding Section 9.02 of this Indenture, the Company,
the Guarantors, and the Trustee may amend or supplement this Indenture or the
Notes without the consent of any Holder of a Note:

            (i)   to cure any ambiguity, defect or inconsistency;

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

            (iii) to provide for the assumption of the Company's or any
      Guarantor's obligations to Holders of Notes in the case of a merger or
      consolidation or sale of all or substantially all of the Company's or such
      Guarantor's assets;

            (iv)  to make any change that would provide any additional rights or
      benefits to the Holders of Notes or that does not adversely affect the
      legal rights under this Indenture of any such Holder;

            (v)   to comply with requirements of the Commission in order to
      effect or maintain the qualification of this Indenture under the Trust
      Indenture Act;

            (vi)  to allow any Guarantor to execute a supplemental Indenture and
      a Note Guarantee with respect to the Notes;

            (vii) to evidence and provide for the acceptance of appointment of a
      successor Trustee;

            (viii) to add any Lien to secure the Notes; or

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            (ix)  to evidence the release of a Subsidiary Guarantor pursuant to
      and in accordance with the terms of this Indenture.

            (b)   Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of any documents
requested under Section 7.02(b) hereof, the Trustee shall join with the Company
in the execution of any amended or supplemental Indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee shall
not be obligated to enter into such amended or supplemental Indenture that
affects its own rights, duties or immunities under this Indenture or otherwise.

Section 9.02. With Consent of Holders of Notes.

            (a)   Except as otherwise provided in this Section 9.02, the
Company, the Guarantors and the Trustee may amend or supplement this Indenture,
or the Notes with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default
or Event of Default or compliance with any provision of this Indenture or the
Notes may be waived with the consent of the Holders of a majority in principal
amount of the then outstanding Notes (including Additional Notes, if any)
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes).

            (b)   The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Persons entitled to consent to any
indenture supplemental hereto. If a record date is fixed, the Holders on such
record date, or its duly designated proxies, and only such Persons, shall be
entitled to consent to such supplemental indenture, whether or not such Holders
remain Holders after such record date; provided that unless such consent shall
have become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.

            (c)   Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amendment or
supplement to this Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Company in the execution of such
amendment or supplement unless such amendment or supplement directly affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion, but shall not be obligated to,
enter into such amendment or supplement.

            (d)   It shall not be necessary for the consent of the Holders of
Notes under this Section 9.02 to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof.

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            (e)   After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amendment,
supplement or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the then outstanding Notes (including
Additional Notes, if any) may waive compliance in a particular instance by the
Company with any provision of this Indenture, or the Notes. However, without the
consent of each Holder affected, an amendment or waiver under this Section 9.02
may not (with respect to any Notes held by a non-consenting Holder):

            (i)   reduce the principal amount of Notes whose Holders must
      consent to an amendment, supplement or waiver;

            (ii)  reduce the principal of or change the fixed maturity of any
      Note or alter the provisions, or waive any payment, with respect to the
      redemption of the Notes;

            (iii) reduce the rate of or change the time for payment of interest
      on any Note;

            (iv)  waive a Default or Event of Default in the payment of
      principal of, or interest or premium, or Liquidated Damages, if any, on
      the Notes (except a rescission of acceleration of the Notes by the Holders
      of at least a majority in aggregate principal amount of the Notes and a
      waiver of the payment default that resulted from such acceleration);

            (v)   make any Note payable in money other than U.S. dollars;

            (vi)  make any change in the provisions of this Indenture relating
      to waivers of past Defaults or the rights of Holders of Notes to receive
      payments of principal of, or interest or premium or Liquidated Damages, if
      any, on the Notes;

            (vii) release any Guarantor from any of its obligations under its
      Note Guarantee or this Indenture, except in accordance with the terms of
      this Indenture;

            (viii) impair the right to institute suit for the enforcement of any
      payment on or with respect to the Notes or the Note Guarantees;

            (ix)  amend, change or modify the obligation of the Company to make
      and consummate an Asset Sale Offer with respect to any Asset Sale in
      accordance with Section 4.10 after the obligation to make such Asset Sale
      Offer has arisen or the obligation of the Company to make and consummate a
      Change of Control Offer in the event of a Change of Control in accordance
      with Section 4.14 after such Change of Control has occurred, including, in
      each case, amending, changing or modifying any definition relating
      thereto;

            (x)   except as otherwise permitted under Section 5.01, consent to
      the assignment or transfer by the Company or any Guarantor of any of their
      rights or obligations under this Indenture;

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<PAGE>

            (xi)  amend or modify any of the provisions of this Indenture or the
      related definitions affecting ranking of the Notes or any Note Guarantee
      in any manner adverse to the holders of the Notes or any Note Guarantee;
      or

            (xii) make any change in the preceding amendment and waiver
      provisions.

Section 9.03. Compliance with Trust Indenture Act.

            Every amendment or supplement to this Indenture or the Notes shall
be set forth in a document that complies with the TIA as then in effect.

Section 9.04. Revocation and Effect of Consents.

            Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.

Section 9.05. Notation on or Exchange of Notes.

            (a)   The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall, upon receipt
of an Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.

            (b)   Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.

Section 9.06. Trustee to Sign Amendments, Etc.

            The Trustee shall sign any amendment or supplement to this Indenture
or any Note authorized pursuant to this Article Nine if the amendment or
supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. The Company may not sign an amendment or supplemental
Indenture or Note until its Board of Directors approves it. In executing any
amendment or supplement or Note, the Trustee shall be entitled to receive and
(subject to Section 7.01 hereof) shall be fully protected in relying upon an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such amendment or supplement is authorized or permitted by this Indenture.

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                                  ARTICLE TEN
                                 NOTE GUARANTEES

Section 10.01. Guarantee.

            (a)   Subject to this Article Ten, each of the Guarantors hereby,
jointly and severally, and fully and unconditionally, guarantees to each Holder
of a Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of, this
Indenture, the Notes or the obligations of the Company hereunder or thereunder,
that: (a) the principal of, premium, if any, and interest and Liquidated
Damages, if any, on the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the overdue
principal of, premium, if any, and interest and Liquidated Damages, if any, on
the Notes, if lawful (subject in all cases to any applicable grace period
provided herein), and all other obligations of the Company to the Holders or the
Trustee hereunder or thereunder will be promptly paid in full or performed, all
in accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same immediately.
Each Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.

            (b)   The Guarantors hereby agree that, to the maximum extent
permitted under applicable law, their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Guarantor. Subject to Section 6.06
hereof, each Guarantor hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest,
notice and all demands whatsoever and covenants that this Note Guarantee shall
not be discharged except by complete performance of the obligations contained in
the Notes and this Indenture.

            (c)   If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to any of the Company or
the Guarantors, any amount paid by any of them to the Trustee or such Holder,
this Note Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.

            (d)   Each Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Six

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hereof for the purposes of this Note Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article Six hereof, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Note Guarantee. The Guarantors
shall have the right to seek contribution from any non-paying Guarantor so long
as the exercise of such right does not impair the rights of the Holders under
the Note Guarantee.

Section 10.02. Limitation on Guarantor Liability.

            Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantee of
such Guarantor not constitute (i) a fraudulent transfer or conveyance for
purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal or state law to the extent
applicable to its Note Guarantee or (ii) an unlawful distribution under any
applicable state law prohibiting shareholder distributions by an insolvent
subsidiary to the extent applicable to its Note Guarantee. To effectuate the
foregoing intention, the Trustee, the Holders and the Guarantors hereby
irrevocably agree that the obligations of such Guarantor will be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article Ten, result in the
obligations of such Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance or such an unlawful distribution.

Section 10.03. Execution and Delivery of Note Guarantee.

            (a)   To evidence its Note Guarantee set forth in Section 10.01,
each Guarantor hereby agrees that a notation of such Note Guarantee
substantially in the form included in Exhibit E shall be endorsed by an Officer
of such Guarantor by manual or facsimile signature on each Note authenticated
and delivered by the Trustee and that this Indenture shall be executed on behalf
of such Guarantor by its President or one of its Vice Presidents.

            (b)   Each Guarantor hereby agrees that its Note Guarantee set forth
in Section 10.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.

            (c)   If an Officer whose signature is on this Indenture or on the
Note Guarantee no longer holds that office at the time the Trustee authenticates
the Note on which a Note Guarantee is endorsed, the Note Guarantee shall be
valid nevertheless.

            (d)   The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Note
Guarantee set forth in this Indenture on behalf of the Guarantors.

            (e)   If required by Section 4.18 hereof, the Company shall cause
such Subsidiaries to execute supplemental indentures to this Indenture and Note
Guarantees in accordance with Section 4.18 hereof and this Article Ten, to the
extent applicable.

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Section 10.04. Guarantors May Consolidate, Etc., on Certain Terms.

            (a)   A Guarantor may not sell or otherwise dispose of all or
substantially all of its assets to, or consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person), another Person, other
than the Company or another Guarantor, unless:

            (i)   immediately after giving effect to that transaction, no
      Default or Event of Default exists; and

            (ii)  either:

                  (A)   the Person acquiring the property in any such sale or
            disposition or the Person formed by or surviving any such
            consolidation or merger (if other than the Guarantor) is a
            corporation or limited liability company organized or existing under
            the laws of the United States, any state thereof or the District of
            Columbia and assumes all the obligations of that Guarantor under
            this Indenture, its Note Guarantee and the Registration Rights
            Agreement pursuant to a supplemental indenture reasonably
            satisfactory to the Trustee; or

                  (B)   such sale or other disposition or consolidation or
            merger complies with Section 4.10 hereof.

            (b)   In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor Person, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the Note Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by a Guarantor, such successor Person shall succeed to and be
substituted for a Guarantor with the same effect as if it had been named herein
as a Guarantor. Such successor Person thereupon may cause to be signed any or
all of the Note Guarantees to be endorsed upon all of the Notes issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee. All the Note Guarantees so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Note
Guarantees theretofore and thereafter issued in accordance with the terms of
this Indenture as though all of such Note Guarantees had been issued at the date
of the execution hereof.

            (c)   Except as set forth in Articles Four and Five of this
Indenture, and notwithstanding clauses (i) and (ii) of Section 10.04(a) above,
nothing contained in this Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guarantor with or into the Company or another
Guarantor, or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety to the Company or
another Guarantor.

Section 10.05. Release of Guarantor.

            (a)   Any Guarantor will be released and relieved of any obligations
under its Note Guarantee, (i) in connection with any sale or other disposition
of all of the Capital Stock of that Guarantor to a Person that is not (either
before or after giving effect to such transaction) a Restricted Subsidiary of
the Company, if the sale of all such Capital Stock of that Guarantor complies
with Section 4.10 hereof; (ii) if the Company properly designates that Guarantor
as an

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Unrestricted Subsidiary under this Indenture (iii) if such Subsidiary Guarantor
ceases to be a Substantially Wholly-Owned Restricted Subsidiary; provided that
if such Subsidiary subsequently becomes a Substantially Wholly-Owned Restricted
Subsidiary, such Subsidiary shall again become a Subsidiary Guarantor and
execute a supplemental indenture; (iv) simultaneously with the liquidation or
dissolution of any Subsidiary Guarantor that, on such date of liquidation or
dissolution, has assets with an aggregate Fair Market Value of less than
$10,000; or (v) upon the legal defeasance of the Notes in accordance with
Section 8.02. Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that one of the foregoing
requirements has been satisfied and the conditions to the release of a Guarantor
under this Section 10.05 have been met, the Trustee shall execute any documents
reasonably required in order to evidence the release of such Guarantor from its
obligations under its Note Guarantee.

            (b)   Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
and Liquidated Damages, if any, on the Notes and for the other obligations of
any Guarantor under this Indenture as provided in this Article Ten.

                                 ARTICLE ELEVEN
                           SATISFACTION AND DISCHARGE

Section 11.01. Satisfaction and Discharge.

            (a)   This Indenture shall be discharged and shall cease to be of
further effect as to all Notes issued thereunder, when:

            (i)   either:

                  (A)   all Notes that have been authenticated (except lost,
            stolen or destroyed Notes that have been replaced or paid and Notes
            for whose payment money has theretofore been deposited in trust and
            thereafter repaid to the Company) have been delivered to the Trustee
            for cancellation; or

                  (B)   all Notes that have not been delivered to the Trustee
            for cancellation have become due and payable by reason of the making
            of a notice of redemption or otherwise or will become due and
            payable within one year and the Company or any Guarantor has
            irrevocably deposited or caused to be deposited with the Trustee as
            trust funds in trust solely for the benefit of the Holders, cash in
            U.S. dollars, non-callable Government Securities, or a combination
            thereof, in such amounts as will be sufficient without consideration
            of any reinvestment of interest, to pay and discharge the entire
            indebtedness on the Notes not delivered to the Trustee for
            cancellation for principal, premium and Liquidated Damages, if any,
            and accrued interest to the date of maturity or redemption;

            (ii)  no Default or Event of Default shall have occurred and be
      continuing on the date of such deposit or shall occur as a result of such
      deposit and such deposit will not result in a breach or violation of, or
      constitute a default under, any other instrument to

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      which the Company or any Guarantor is a party or by which the Company or
      any Guarantor is bound;

            (iii) the Company or any Guarantor has paid or caused to be paid all
      sums payable by it under this Indenture; and

            (iv)  the Company has delivered irrevocable instructions to the
      Trustee under this Indenture to apply the deposited money toward the
      payment of the Notes at maturity or the redemption date, as the case may
      be.

            (b)   In addition, the Company must deliver an Officers' Certificate
and an Opinion of Counsel to the Trustee stating that all conditions precedent
to satisfaction and discharge have been satisfied.

            (c)   Notwithstanding the above, the Trustee shall pay to the
Company from time to time upon its request any cash or Government Securities
held by it as provided in this section which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification delivered to the Trustee, are in excess of the amount thereof that
would then be required to be deposited to effect a satisfaction and discharge
under this Article Eleven.

            (d)   After the conditions to discharge contained in this Article
Eleven have been satisfied, and the Company has paid or caused to be paid all
other sums payable hereunder by the Company, and delivered to the Trustee an
Officers' Certificate and Opinion of Counsel, each stating that all conditions
precedent to satisfaction and discharge have been satisfied, the Trustee upon
written request shall acknowledge in writing the discharge of the obligations of
the Company and the Guarantors under this Indenture (except for those surviving
obligations specified in this Indenture).

Section 11.02. Deposited Money and Government Securities to Be Held in Trust;
Other Miscellaneous Provisions.

            Subject to Section 11.03 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee pursuant to Section 11.01 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Liquidated Damages, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.

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Section 11.03. Repayment to the Company.

            Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium and
Liquidated Damages, if any, or interest on any Note and remaining unclaimed for
two years after such principal, and premium or Liquidated Damages, if any, or
interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company) shall be discharged from such trust; and the
Holder of such Note shall thereafter look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the New York Times or The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining shall be repaid to the Company.

                                 ARTICLE TWELVE
                                  MISCELLANEOUS

Section 12.01. Trust Indenture Act Controls.

            If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA Section 318(c), the imposed duties shall control.

Section 12.02. Notices.

            (a)   Any notice or communication by the Company or any Guarantor,
on the one hand, or the Trustee on the other hand, to the other is duly given if
in writing and delivered in Person or mailed by first class mail (registered or
certified, return receipt requested), telecopier or overnight air courier
guaranteeing next day delivery, to the others' address:

                  If to the Company and/or any Guarantor:

                  MedCath Corporation
                  10720 Sikes Place
                  Suite 300
                  Charlotte, NC 28277
                  Facsimile: (704) 708-5035
                  Attention: J. Arthur Parker

                  With a copy to:

                  Moore & Van Allen PLLC
                  100 N. Tryon, Suite 4700
                  Charlotte, NC 28202
                  Facsimile: (704) 331-1159
                  Attention: Hal A. Levinson, Esq.

                                       93
<PAGE>

                  If to the Trustee:

                  U.S. Bank National Association
                  60 Livingston Avenue
                  EP-MN-WS3C
                  St. Paul, MN 55107-2292
                  Facsimile: (651) 495-8097
                  Attention: Rick Prokosch

            (b)   The Company, the Guarantors or the Trustee, by notice to the
others may designate additional or different addresses for subsequent notices or
communications.

            (c)   All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; three Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.

            (d)   Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA Section 313(c), to the extent required by
the TIA. Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.

            (e)   If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.

            (f)   If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.

            (g)   If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.

            (h)   If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.

Section 12.03. Communication by Holders of Notes with Other Holders of Notes.

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

Section 12.04. Certificate and Opinion as to Conditions Precedent.

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

                                       94
<PAGE>

            (i)   an Officers' Certificate in form and substance reasonably
      satisfactory to the Trustee (which shall include the statements set forth
      in Section 12.05 hereof) stating that, in the opinion of the signers, all
      conditions precedent and covenants, if any, provided for in this Indenture
      relating to the proposed action have been satisfied; and

            (ii)  an Opinion of Counsel in form and substance reasonably
      satisfactory to the Trustee (which shall include the statements set forth
      in Section 12.05 hereof) stating that, in the opinion of such counsel (who
      may rely upon and Officers' Certificate as to matters of fact), all such
      conditions precedent and covenants have been satisfied.

Section 12.05. Statements Required in Certificate or Opinion.

            (a)   Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:

            (i)   a statement that the Person making such certificate or opinion
      has read such covenant or condition;

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

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

            (iv)  a statement as to whether or not, in the opinion of such
      Person, such condition or covenant has been complied with.

Section 12.06. Rules by Trustee and Agents.

            The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.

Section 12.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.

            No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or the Guarantors under the Notes, this Indenture, the Note
Guarantees or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. This waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.

                                       95
<PAGE>

Section 12.08. Governing Law.

            THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES.

Section 12.09. Consent to Jurisdiction.

            Any legal suit, action or proceeding arising out of or based upon
this Indenture or the transactions contemplated hereby ("RELATED PROCEEDINGS")
may be instituted in the federal courts of the United States of America located
in the City of New York or the courts of the State of New York in each case
located in the City of New York (collectively, the "SPECIFIED COURTS"), and each
party irrevocably submits to the non-exclusive jurisdiction of such courts in
any such suit, action or proceeding. Service of any process, summons, notice or
document by mail (to the extent allowed under any applicable statute or rule of
court) to such party's address set forth above shall be effective service of
process for any suit, action or other proceeding brought in any such court. The
parties irrevocably and unconditionally waive any objection to the laying of
venue of any suit, action or other proceeding in the Specified Courts and
irrevocably and unconditionally waive and agree not to plead or claim in any
such court has been brought in an inconvenient forum.

Section 12.10. No Adverse Interpretation of Other Agreements.

            This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or any of its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.

Section 12.11. Successors.

            All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors. All agreements of each Guarantor in this Indenture shall bind
its successors, except as otherwise provided in Section 10.04.

Section 12.12. Severability.

            In case any provision in this Indenture or the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

Section 12.13. Counterpart Originals.

            The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.

Section 12.14. Acts of Holders.

            (a)   Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by the Holders may be embodied in

                                       96
<PAGE>

and evidenced by one or more instruments of substantially similar tenor signed
by such Holders in person or by agents duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "ACT" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company if made in the manner provided in this Section 12.14.

            (b)   The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such witness, notary or officer the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of authority. The fact and date of the execution of
any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.

            (c)   Notwithstanding anything to the contrary contained in this
Section 12.14, the principal amount and serial numbers of Notes held by any
Holder, and the date of holding the same, shall be proved by the register of the
Notes maintained by the Registrar as provided in Section 2.04 hereof.

            (d)   If the Company shall solicit from the Holders of the Notes any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to a resolution of its Board of
Directors, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding TIA Section 316(c), such record date shall be the record date
specified in or pursuant to such resolution, which shall be a date not earlier
than the date 30 days prior to the first solicitation of Holders generally in
connection therewith or the date of the most recent list of Holders forwarded to
the Trustee prior to such solicitation pursuant to Section 2.06 hereof and not
later than the date such solicitation is completed. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the Holders
of record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of the then outstanding Notes have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other Act, and for that purpose the then outstanding Notes shall be computed as
of such record date; provided that no such authorization, agreement or consent
by the Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than
eleven months after the record date.

            (e)   Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Note shall bind every future
Holder of the same Note and the

                                       97
<PAGE>

Holder of every Note issued upon the registration or transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon, whether
or not notation of such action is made upon such Note.

            (f)   Without limiting the foregoing, a Holder entitled hereunder to
take any action hereunder with regard to any particular Note may do so itself
with regard to all or any part of the principal amount of such Note or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.

Section 12.15. Benefit of Indenture.

            Nothing, in this Indenture or in the Notes, express or implied,
shall give to any Person, other than the parties hereto, any Paying Agent, any
Registrar and its successors hereunder, and the Holders, any benefit or any
legal or equitable right, remedy or claim under this Indenture.

Section 12.16. Table of Contents, Headings, Etc.

            The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.

                            [SIGNATURE PAGES FOLLOW]

                                       98
<PAGE>

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

                                               MEDCATH HOLDINGS CORP.
                                               MEDCATH CORPORATION

                                               By: /s/ John T. Casey
                                                   -----------------------------
                                                   Name: John T. Casey
                                                   Title: President

Indenture
<PAGE>

                               AHH MANAGEMENT, INC
                               AUSTIN MOB, INC.
                               DTO MANAGEMENT, INC.
                               HHBF, INC.
                               HARLINGEN HOSPITAL MANAGEMENT, INC.
                               HARLINGEN PARTNERSHIP HOLDINGS, INC.
                               HOSPITAL MANAGEMENT IV, INC.
                               LAFAYETTE HOSPITAL MANAGEMENT, INC.
                               LOUISIANA HOSPITAL MANAGEMENT, INC.
                               MEDCATH OF ARKANSAS, INC.
                               MEDCATH CARDIOLOGY CONSULTING & MANAGEMENT, INC.
                               MEDCATH INCORPORATED
                               MEDCATH OF TEXAS, INC.
                               MILWAUKEE HOSPITAL MANAGEMENT, INC.
                               NM HOSPITAL MANAGEMENT, INC.
                               SAN ANTONIO HOLDINGS, INC.
                               SAN ANTONIO HOSPITAL MANAGEMENT, INC.
                               SIOUX FALLS HOSPITAL MANAGEMENT, INC.
                               SOUTHERN ARIZONA HEART, INC.
                               VENTURE HOLDINGS, INC.

                                      By: /s/ John T. Casey
                                          ---------------------------------
                                          Name: John T. Casey
                                          Title: President

Indenture
<PAGE>

                               INTERIM DIAGNOSTICS SOLUTIONS, LLC
                               MEDCATH DIAGNOSTICS, LLC
                               MEDCATH FINANCE COMPANY, LLC
                               MEDCATH NUCLEAR SERVICES, LLC
                               METUCHEN NUCLEAR MANAGEMENT, LLC

                               By: /s/ John T. Casey
                                   ----------------------------------------
                                   Name: John T. Casey
                                   Title: Manager

                               By: /s/ James E. Harris
                                   ----------------------------------------
                                   Name: James E. Harris
                                   Title: Manager

                                   HEART RESEARCH CENTERS INTERNATIONAL, LLC

                                   BY: MEDCATH DIAGNOSTICS, LLC

                                   By: /s/ John T. Casey
                                       ------------------------------------
                                       Name: John T. Casey
                                       Title: Manager

                                   By: /s/ James E. Harris
                                       ------------------------------------
                                       Name: James E. Harris
                                       Title: Manager

Indenture
<PAGE>

                                   U.S. BANK NATIONAL ASSOCIATION, as Trustee

                                   By: /s/ Richard H. Prokosch
                                       ------------------------------------
                                       Name: Richard H. Prokosch
                                       Title: Vice President

Indenture<PAGE>

                                                                     EXHIBIT 4.3

                                                                  EXECUTION COPY

                               MedCath Corporation

                                       and

                             MedCath Holdings Corp.

                                       and

                   the guarantors listed on Schedule B hereto

                    $150 Million 9 7/8% Senior Notes due 2012

                               Purchase Agreement

                               dated June 29, 2004

                         Banc of America Securities LLC

                          Wachovia Capital Markets, LLC

                          Citigroup Global Markets Inc.

                           J.P. Morgan Securities Inc.

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                     PAGE
                                                                                                     ----
<S>                                                                                                  <C>
SECTION 1.  REPRESENTATIONS AND WARRANTIES........................................................     3
   (a)   No Registration Required.................................................................     3
   (b)   No Integration of Offerings or General Solicitation......................................     3
   (c)   Eligibility for Resale under Rule 144A...................................................     3
   (d)   The Offering Memorandum..................................................................     4
   (e)   Incorporated Documents...................................................................     4
   (f)   The Purchase Agreement...................................................................     4
   (g)   The Registration Rights Agreement........................................................     4
   (h)   The DTC Agreement........................................................................     4
   (i)   Authorization of the Securities and the Exchange Securities..............................     5
   (j)   Authorization of the Indenture...........................................................     5
   (k)   Description of the Securities and the Indenture..........................................     6
   (l)   No Material Adverse Change...............................................................     6
   (m)   Independent Accountants..................................................................     6
   (n)   Preparation of the Financial Statements..................................................     6
   (o)   Compliance with Sarbanes-Oxley Act of 2002...............................................     6
   (p)   Incorporation and Good Standing of the Company and its Subsidiaries......................     7
   (q)   Capitalization and Other Capital Stock Matters...........................................     7
   (r)   Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
         Required.................................................................................     7
   (s)   No Material Actions or Proceedings.......................................................     8
   (t)   Intellectual Property Rights.............................................................     9
   (u)   All Necessary Permits, etc...............................................................     9
   (v)   Title to Properties......................................................................     9
   (w)   Tax Law Compliance.......................................................................    10
   (x)   Company Not an "Investment Company"......................................................    10
   (y)   Insurance................................................................................    10
   (z)   No Price Stabilization or Manipulation...................................................    10
   (aa)  Solvency.................................................................................    11
   (bb)  No Unlawful Contributions or Other Payments..............................................    11
   (cc)  Company's Accounting System..............................................................    11
   (dd)  Compliance with Environmental Laws.......................................................    11
   (ee)  Periodic Review of Costs of Environmental Compliance.....................................    12
   (ff)  New Senior Secured Credit Facility.......................................................    12
   (gg)  ERISA Compliance.........................................................................    12
   (hh)  Regulations..............................................................................    13
   (ii)  Temporary Global Security................................................................    13
   (jj)  Compliance with Laws.....................................................................    13
SECTION 2.  PURCHASE, SALE AND DELIVERY OF THE SECURITIES.........................................    15
   (a)   The Securities...........................................................................    15
   (b)   The Closing Date.........................................................................    15
   (c)   Delivery of the Securities...............................................................    15
   (d)   Delivery of Offering Memorandum to the Initial Purchasers................................    15
   (e)   Initial Purchasers as Qualified Institutional Buyers.....................................    16
SECTION 3.  ADDITIONAL COVENANTS..................................................................    16
   (a)   Initial Purchasers' Review of Proposed Amendments and Supplements........................    16
   (b)   Amendments and Supplements to the Offering Memorandum and Other Securities Act Matters...    16
   (c)   Copies of the Offering Memorandum........................................................    17
   (d)   Blue Sky Compliance......................................................................    17
   (e)   Use of Proceeds..........................................................................    17
   (f)   No Reportable Transaction................................................................    17
   (g)   The Depositary...........................................................................    18
   (h)   Additional Issuer Information............................................................    18
</TABLE>

                                       i
<PAGE>

<TABLE>
<CAPTION>
                                                                                                     PAGE
                                                                                                     ----
<S>                                                                                                  <C>
   (i)   Future Reports to the Initial Purchasers.................................................    18
   (j)   No Integration...........................................................................    18
   (k)   Legended Securities......................................................................    18
   (l)   PORTAL...................................................................................    18
   (m)   Future Agreement Not to Offer or Sell Additional Securities..............................    19
   (n)   Rating of Securities.....................................................................    19
SECTION 4.  PAYMENT OF EXPENSES...................................................................    19
SECTION 5.  CONDITIONS OF THE OBLIGATIONS OF THE INITIAL PURCHASERS...............................    20
   (a)   Accountants' Comfort Letter..............................................................    20
   (b)   No Material Adverse Change or Ratings Agency Change......................................    20
   (c)   Opinions of Counsel for the Company and the Guarantors...................................    20
   (d)   Opinion of Counsel for the Initial Purchasers............................................    21
   (e)   Officers' and Managers' Certificates.....................................................    21
   (f)   Bring-down Comfort Letter................................................................    21
   (g)   PORTAL Listing...........................................................................    21
   (h)   Registration Rights Agreement............................................................    22
   (i)   Concurrent Transactions..................................................................    22
   (j)   Additional Documents.....................................................................    22
SECTION 6.  REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES.........................................    22
SECTION 7.  OFFER, SALE AND RESALE PROCEDURES.....................................................    22
SECTION 8.  INDEMNIFICATION.......................................................................    23
   (a)   Indemnification of the Initial Purchasers................................................    23
   (b)   Indemnification of the Company, its Directors and Officers...............................    24
   (c)   Notifications and Other Indemnification Procedures.......................................    25
   (d)   Settlements..............................................................................    25
SECTION 9.  CONTRIBUTION..........................................................................    26
SECTION 10.  TERMINATION OF THIS AGREEMENT........................................................    27
SECTION 11.  REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY..................................    27
SECTION 12.  NOTICES..............................................................................    28
SECTION 13.  SUCCESSORS...........................................................................    28
SECTION 14.  PARTIAL UNENFORCEABILITY.............................................................    29
SECTION 15.  GOVERNING LAW PROVISIONS.............................................................    29
         (a)      Governing Law...................................................................    29
         (b)      Consent to Jurisdiction.........................................................    29
SECTION 16.  DEFAULT OF ONE OR MORE OF THE SEVERAL INITIAL PURCHASERS.............................    29
SECTION 17.  GENERAL PROVISIONS...................................................................    30
</TABLE>

SCHEDULES, EXHIBITS AND ANNEX

   SCHEDULE A   -    Initial Purchasers

   SCHEDULE B   -    List of Guarantors

   SCHEDULE C   -    List of Subsidiaries

   EXHIBIT A    -    Form of Opinion of Moore & Van Allen, PLLC Regarding the
                     Company and the Parent

   EXHIBIT B    -    Form of Opinion of Moore & Van Allen, PLLC Regarding
                     Guarantors Organized under the Laws of North Carolina and
                     Delaware

   EXHIBIT C    -    Form of Opinion of Snell & Wilmer LLP Regarding Guarantors
                     Organized under the Laws of Arizona

   EXHIBIT D    -    Form of Opinion of Vice President and General Counsel

   EXHIBIT E    -    Form of Opinion of Special New York counsel to the Company
                     and the Guarantors

   EXHIBIT F    -    Form of Opinion of Company's Special Regulatory Counsel

   EXHIBIT G    -    Form of Registration Rights Agreement

   ANNEX I      -    Resale Procedures

                                       ii
<PAGE>

                               PURCHASE AGREEMENT

                                                                    June 29 2004

Banc of America Securities LLC
Wachovia Capital Markets, LLC
Citigroup Global Markets Inc.
J.P. Morgan Securities Inc.
   As Initial Purchasers
c/o BANC OF AMERICA SECURITIES LLC
9 West 57th Street
New York, NY 10019

Ladies and Gentlemen:

            Introductory. MedCath Holdings Corp., a Delaware corporation (the
"Company"), proposes to issue and sell to the several Initial Purchasers named
in Schedule A (the "Initial Purchasers"), acting severally and not jointly, the
respective amounts set forth in such Schedule A of $150 million aggregate
principal amount of the Company's 9 7/8% Senior Notes due 2012 (the "Notes").
Banc of America Securities LLC, Wachovia Capital Markets, LLC, Citigroup Global
Markets Inc. and J.P. Morgan Securities Inc. have agreed to act as the several
Initial Purchasers in connection with the offering and sale of the Notes.

            The Notes will be issued pursuant to an indenture dated as of July
7, 2004 (the "Indenture"), among the Company, the Guarantors (as defined below)
and U.S. Bank National Association, as trustee (the "Trustee"). Notes issued on
book-entry form will be issued in the name of Cede & Co., as nominee of The
Depository Trust Company (the "Depositary") pursuant to a DTC letter agreement,
to be dated as of the Closing Date (as defined in Section 2 hereof) (the "DTC
Agreement"), among the Company, the Trustee and the Depositary.

            The holders of the Notes will be entitled to the benefits of a
registration rights agreement, dated as of July 7, 2004 (the "Registration
Rights Agreement"), among the Company, the Guarantors and the Initial
Purchasers, substantially in the form of Exhibit G attached hereto pursuant to
which the Company and the Guarantors will agree to file a registration statement
with the Securities and Exchange Commission (the "Commission") relating to
another series of debt securities of the Company with terms substantially
identical to the Notes (the "Exchange Notes") under the Securities Act of 1933,
as amended (the "Securities Act," which term, as used herein, includes the rules
and regulations of the Commission promulgated thereunder).

            The payment of principal, of premium and Liquidated Damages (as
defined in the Indenture), if any, and interest on the Notes and the Exchange
Notes (as defined below) will be fully and unconditionally guaranteed on a
senior basis, joint and severally, by MedCath Corporation (the "Parent"), the
direct parent company of the Company, and by all of the Company's existing and
future substantially wholly owned domestic subsidiaries (collectively, the
"Guarantors"), pursuant to their guarantees (the "Guarantees"). Each of the
Guarantors as of the date of this Agreement is listed in Schedule B attached
hereto. The Notes and the Guarantees attached thereto are herein collectively
referred to as the "Securities"; and the Exchange Notes

                                        1
<PAGE>

and the Guarantees attached thereto are herein collectively referred to as the
"Exchange Securities".

            The Company understands that the Initial Purchasers propose to make
an offering of the Securities on the terms and in the manner set forth herein
and in the Offering Memorandum (as defined below) and agrees that the Initial
Purchasers may resell, subject to the conditions set forth herein, all or a
portion of the Securities to purchasers (the "Subsequent Purchasers") at any
time after the date of this Agreement. The Securities are to be offered and sold
to or through the Initial Purchasers without being registered with the
Commission under the Securities Act in reliance upon exemptions therefrom. The
terms of the Securities and the Indenture will require that investors that
acquire Securities expressly agree that Securities may only be resold or
otherwise transferred, after the date hereof, if such Securities are registered
for sale under the Securities Act or if an exemption from the registration
requirements of the Securities Act is available (including the exemptions
afforded by Rule 144A ("Rule 144A") or Regulation S ("Regulation S") under the
Securities Act thereunder.

            The Company has prepared and delivered to each Initial Purchaser
copies of a Preliminary Offering Memorandum dated June 17, 2004 (the
"Preliminary Offering Memorandum"), and has prepared and will deliver to each
Initial Purchaser, copies of the Offering Memorandum, dated June 29, 2004
describing the terms of the Securities, each for use by such Initial Purchaser
in connection with its solicitation of offers to purchase the Securities. As
used herein, the "Offering Memorandum" shall mean, with respect to any date or
time referred to in this Agreement, the Company's Offering Memorandum, dated
June 29, 2004, including amendments or supplements thereto and any exhibits
thereto and the Incorporated Documents (as defined by Section 1 below), in the
most recent form that has been prepared and delivered by the Company to the
Initial Purchasers in connection with their solicitation of offers to purchase
Securities. Further, any reference to the Preliminary Offering Memorandum or the
Offering Memorandum shall be deemed to refer to and include any Additional
Issuer Information (as defined in Section 3) furnished by the Company to each
Initial Purchaser prior to the completion of the distribution of the Securities
by the Initial Purchasers.

            All references in this Agreement to financial statements and
schedules and other information which is "contained", "included" or "stated" in
the Offering Memorandum (or other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information which are incorporated by reference in the Offering Memorandum; and
all references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934 (as amended, the "Exchange Act", which term,
as used herein, includes the rules and regulations of the Commission promulgated
thereunder) which is incorporated or deemed to be incorporated by reference in
the Offering Memorandum.

            As described in the Offering Memorandum, the net proceeds from the
offering of the Notes will be used, together with borrowings under the New
Senior Secured Credit Facility (as defined in Section 1(ff) hereof) and cash on
hand, to repay outstanding indebtedness and to pay related fees and expenses.

                                        2
<PAGE>

            The Company and the Guarantors hereby confirm their agreement with
the Initial Purchasers as follows:

SECTION 1. Representations and Warranties.

            The Company, and each of the Guarantors, jointly and severally,
hereby represent, warrant and covenant to each Initial Purchaser as follows:

      (a)   No Registration Required.

            Subject to compliance by the Initial Purchasers with the
      representations and warranties set forth in Section 2 hereof and with the
      procedures set forth in Section 7 hereof, it is not necessary in
      connection with the offer, sale and delivery of the Securities to the
      Initial Purchasers and to each Subsequent Purchaser in the manner
      contemplated by this Agreement and the Offering Memorandum to register the
      Securities under the Securities Act or, until such time as the
      registration statement registering the Exchange Securities is declared
      effective by the Commission, to qualify the Indenture under the Trust
      Indenture Act of 1939, as amended (the "Trust Indenture Act," which term,
      as used herein, includes the rules and regulations of the Commission
      promulgated thereunder).

      (b)   No Integration of Offerings or General Solicitation.

            Neither the Company nor any Guarantor has, directly or indirectly,
      solicited any offer to buy or offered to sell, and will not, directly or
      indirectly, solicit any offer to buy or offer to sell, in the United
      States or to any United States citizen or resident, any security which is
      or would be integrated with the sale of the Securities in a manner that
      would require the Securities to be registered under the Securities Act.

            None of the Company, the Guarantors, their respective affiliates (as
      such term is defined in Rule 501 under the Securities Act (each, an
      "Affiliate"), or any person acting on their behalf (other than the Initial
      Purchasers, as to whom neither the Company nor any Guarantor makes any
      representation or warranty) has engaged or will engage, in connection with
      the offering of the Securities, in any form of general solicitation or
      general advertising within the meaning of Rule 502 under the Securities
      Act.

            With respect to those Securities sold in reliance upon Regulation S:
      (i) none of the Company, the Guarantors, their respective Affiliates, or
      any person acting on their behalf (other than the Initial Purchasers, as
      to whom neither the Company nor any Guarantor makes any representation or
      warranty) has engaged or will engage in any directed selling efforts
      within the meaning of Regulation S; and (ii) each of the Company, the
      Guarantors, and their respective Affiliates and any person acting on their
      behalf (other than the Initial Purchasers, as to whom neither the Company
      nor any Guarantor makes any representation or warranty) has complied and
      will comply with the offering restrictions set forth in Regulation S.

      (c)   Eligibility for Resale under Rule 144A.

            The Securities are eligible for resale pursuant to Rule 144A and
      will not be, at the Closing Date, of the same class as securities listed
      on a national securities exchange registered under Section 6 of the
      Exchange Act or quoted in a U.S. automated interdealer quotation system.

                                        3
<PAGE>

      (d)   The Offering Memorandum.

            The Offering Memorandum does not and at the Closing Date will not,
      include an untrue statement of a material fact or omit to state a material
      fact necessary in order to make the statements therein, in the light of
      the circumstances under which they were made, not misleading; provided
      that this representation, warranty and agreement shall not apply to
      statements in or omissions from the Offering Memorandum made in reliance
      upon and in conformity with information furnished to the Company in
      writing by any Initial Purchaser expressly for use in the Offering
      Memorandum.

            Each of the Preliminary Offering Memorandum and the Offering
      Memorandum, as of its date, contains all the information specified in, and
      meeting the requirements of, Rule 144A. Neither the Company nor any
      Guarantor has distributed or will distribute, prior to the later of the
      Closing Date and the completion of the Initial Purchasers' distribution of
      the Securities, any offering material in connection with the offering and
      sale of the Securities other than a preliminary Offering Memorandum or the
      Offering Memorandum.

      (e)   Incorporated Documents.

            The Offering Memorandum as delivered from time to time shall
      incorporate by reference the sections entitled "Securities Ownership of
      Certain Beneficial Owners and Management," "Executive Compensation" and
      "Certain Transactions" in the Parent's definitive proxy statement on
      Schedule 14A filed with the Commission on January 28, 2004. The documents
      incorporated or deemed to be incorporated by reference in the Offering
      Memorandum at the time they were or hereafter are filed with the
      Commission (collectively, the "Incorporated Documents") complied and will
      comply in all material respects with the requirements of the Exchange Act.

      (f)   The Purchase Agreement.

            This Agreement has been duly authorized, executed and delivered by,
      and is a valid and binding agreement of, the Company and each Guarantor,
      enforceable in accordance with its terms, except as rights to
      indemnification hereunder may be limited by applicable law and except as
      the enforcement hereof may be limited by bankruptcy, insolvency,
      reorganization, moratorium or other similar laws relating to or affecting
      the rights and remedies of creditors or by general equitable principles
      thereunder.

      (g)   The Registration Rights Agreement.

            At the Closing Date, the Registration Rights Agreement will be duly
      authorized, executed and delivered by, and will be a valid and binding
      agreement of, the Company and each Guarantor, enforceable in accordance
      with its terms, except as the enforcement thereof may be limited by
      bankruptcy, insolvency, reorganization, moratorium or other similar laws
      relating to or affecting the rights and remedies of creditors or by
      general equitable principles and except as rights to indemnification under
      the Registration Rights Agreement may be limited by applicable law.

      (h)   The DTC Agreement.

            At the Closing Date, the DTC Agreement will have been duly
      authorized, executed and delivered by, and (assuming the due
      authorization, execution and delivery

                                        4
<PAGE>

      thereof by the other parties thereto) will be a valid and binding
      agreement of the Company, enforceable in accordance with its terms except
      as the enforcement thereof may be limited by bankruptcy, insolvency,
      reorganization, moratorium or other similar laws relating to or affecting
      the rights and remedies of creditors or by general equitable principles.

      (i)   Authorization of the Securities and the Exchange Securities.

            (i)   The Notes to be purchased by the Initial Purchasers from the
      Company are in the form contemplated by the Indenture, have been duly
      authorized for issuance and sale pursuant to this Agreement and the
      Indenture and, at the Closing Date, will have been duly executed by the
      Company and, when authenticated in the manner provided for in the
      Indenture and delivered against payment of the purchase price therefor,
      will constitute valid and binding agreements of the Company, enforceable
      in accordance with their terms, except as the enforcement thereof may be
      limited by bankruptcy, insolvency, reorganization, moratorium or other
      similar laws relating to or affecting the rights and remedies of creditors
      or by general equitable principles and will be entitled to the benefits of
      the Indenture; (ii) the Exchange Notes have been duly and validly
      authorized for issuance by the Company, and when issued and authenticated
      in accordance with the terms of the Indenture, the Registration Rights
      Agreement and the Exchange Offer (as defined in the Registration Rights
      Agreement), will constitute valid and binding obligations of the Company,
      enforceable against the Company in accordance with their terms, except as
      the enforcement thereof may be limited by bankruptcy, insolvency,
      reorganization, moratorium, or similar laws relating to or affecting
      enforcement of the rights and remedies of creditors or by general
      principles of equity and will be entitled to the benefits of the
      Indenture; and (iii) the Guarantees of the Notes and the Exchange Notes
      will, on the Closing Date, be in the respective forms contemplated by the
      Indenture, have been duly authorized for issuance and sale pursuant to
      this Agreement and the Indenture (x) when the Notes have been issued,
      executed and authenticated in accordance with the Indenture and delivered
      to and paid for by the Initial Purchasers in accordance with the terms of
      this Agreement, the Guarantees of the Notes will constitute valid and
      binding obligations of the Guarantors, enforceable in accordance with
      their terms, and (y) when the Exchange Notes have been issued, executed
      and authenticated in accordance with the terms of the Exchange Offer and
      the Indenture, the Guarantees of the Exchange Notes will constitute valid
      and binding obligations of the Guarantors, enforceable in accordance with
      their terms, except in each of (x) and (y) above, as the enforcement
      thereof may be limited by bankruptcy, insolvency, reorganization,
      moratorium or other similar laws relating to or affecting the rights and
      remedies of creditors or by general equitable principles and will be
      entitled to the benefits of the Indenture.

      (j)   Authorization of the Indenture.

            The Indenture has been duly authorized by the Company and each
      Guarantor and, at the Closing Date, will have been duly executed and
      delivered by the Company and each Guarantor and will constitute a valid
      and binding agreement of the Company and each Guarantor enforceable
      against the Company and each Guarantor in accordance with its terms,
      except as the enforcement thereof may be limited by bankruptcy,
      insolvency, reorganization, moratorium or other similar laws relating to
      or affecting the rights and remedies of creditors or by general equitable
      principles.

                                        5
<PAGE>

      (k)   Description of the Securities and the Indenture.

            The Notes, the Guarantees of the Notes, the Exchange Notes, the
      Guarantees of the Exchange Notes and the Indenture conform or will conform
      in all material respects to the respective statements relating thereto
      contained in the Offering Memorandum.

      (l)   No Material Adverse Change.

            Except as otherwise disclosed in the Offering Memorandum, subsequent
      to the respective dates as of which information is given in the Offering
      Memorandum: (i) there has been no material adverse change, or any
      development that could reasonably be expected to result in a material
      adverse change, in the condition, financial or otherwise, or in the
      earnings, business, operations or prospects, whether or not arising from
      transactions in the ordinary course of business, of the Company and its
      subsidiaries, considered as one entity (any such change is called a
      "Material Adverse Change"); (ii) the Company and its subsidiaries,
      considered as one entity, have not incurred any material liability or
      obligation, indirect, direct or contingent, not in the ordinary course of
      business nor entered into any material transaction or agreement not in the
      ordinary course of business; and (iii) there has been no dividend or
      distribution of any kind declared, paid or made by the Company or, except
      for dividends paid to the Company or other subsidiaries, any of its
      subsidiaries on any class of capital stock or repurchase or redemption by
      the Company or any of its subsidiaries of any class of capital stock.

      (m)   Independent Accountants.

            Deloitte & Touche LLP (the "Independent Accountants"), who has
      expressed its opinion with respect to the financial statements (which term
      as used in this Agreement includes the related notes thereto) and
      supporting schedules included in the Offering Memorandum are independent
      public or certified public accountants within the meaning of Regulation
      S-X under the Securities Act and the Exchange Act.

      (n)   Preparation of the Financial Statements.

            The financial statements, together with the related schedules and
      notes, included in the Offering Memorandum present fairly the consolidated
      financial position of the Parent and its subsidiaries as of and at the
      dates indicated and the results of their operations and cash flows for the
      periods specified. Such financial statements have been prepared in
      conformity with accounting principles generally accepted in the United
      States applied on a consistent basis throughout the periods involved,
      except as may be expressly stated in the related notes thereto. The
      financial data set forth in the Offering Memorandum under the captions
      "Offering Memorandum Summary - Summary Consolidated Financial and Other
      Data" and "Selected Consolidated Financial and Other Data" fairly present
      the information set forth therein on a basis consistent with that of the
      audited financial statements contained in the Offering Memorandum.

      (o)   Compliance with Sarbanes-Oxley Act of 2002.

            The Company and its officers and directors are in compliance in all
      material respects with applicable provisions of the Sarbanes-Oxley Act of
      2002 and the rules and regulations promulgated in connection therewith
      that, with respect to the Company, are effective as of the date hereof.

                                        6
<PAGE>

      (p)   Incorporation and Good Standing of the Company and its Subsidiaries.

            Each of the Parent, the Company and its subsidiaries has been duly
      incorporated, formed or organized and is validly existing as a
      corporation, limited liability company or other organization in good
      standing under the laws of the jurisdiction of its incorporation,
      formation or organization and has corporate, limited liability company or
      other organization power and authority to own, lease and operate its
      properties and to conduct its business as described in the Offering
      Memorandum and, in the case of the Company and the Guarantors, to enter
      into and perform their respective obligations under each of this
      Agreement, the Registration Rights Agreement, the Guarantees, the DTC
      Agreement (in the case of the Company only), the Securities, the Exchange
      Securities, the New Senior Secured Credit Facility (as defined in Section
      1(ff) hereof) and the Indenture. Each of the Parent, the Company and each
      subsidiary is duly qualified as a foreign corporation, limited liability
      company or other organization to transact business and is in good standing
      in each jurisdiction in which such qualification is required, whether by
      reason of the ownership or leasing of property or the conduct of business,
      except for such jurisdictions where the failure to so qualify or to be in
      good standing would not, individually or in the aggregate, result in a
      Material Adverse Change. Except as otherwise disclosed in the Offering
      Memorandum, all of the issued and outstanding capital stock or membership
      interests of each subsidiary of the Company has been duly authorized and
      validly issued, is fully paid and nonassessable and is owned by the
      Company, directly or through subsidiaries, and the capital stock or
      membership interests of each subsidiary held directly or indirectly by the
      Company are owned free and clear of any security interest, mortgage,
      pledge, lien, encumbrance or claim. The Parent does not own or control,
      directly or indirectly, any corporation, association or other entity other
      than the subsidiaries listed in Schedule C hereto.

      (q)   Capitalization and Other Capital Stock Matters.

            At March 31, 2004, on a consolidated basis, after giving pro forma
      effect to (i) the issuance and sale of the Securities pursuant hereto,
      (ii) entry into the New Senior Secured Credit Facility and (iii) the
      application of the net proceeds from the sale of the Securities in the
      manner described under the caption "Use of Proceeds" in the Offering
      Memorandum, the Company would have an authorized and outstanding
      capitalization as set forth under the "As Adjusted" column of the table in
      the Offering Memorandum under the caption "Capitalization".

      (r)   Non-Contravention of Existing Instruments; No Further Authorizations
            or Approvals Required.

            None of the Parent, the Company or any of its subsidiaries is in
      violation of its charter, by-laws or comparable organizational documents,
      or is in default (or, with the giving of notice or lapse of time, would be
      in default) ("Default") under any indenture, mortgage, loan or credit
      agreement, note, contract, franchise, lease or other instrument to which
      the Parent, the Company or any of its subsidiaries is a party or by which
      it or any of them may be bound, or to which any of the property or assets
      of the Parent, the Company or any of its subsidiaries is subject (each, an
      "Existing Instrument"), except for such Defaults as would not,
      individually or in the aggregate, result in a Material Adverse Change.

                                        7
<PAGE>

            On the Closing Date neither the Company nor any Guarantor will be in
      default under the Registration Rights Agreement, the DTC Agreement (in the
      case of the Company only), the Indenture or the New Senior Secured Credit
      Facility.

            The Company's and each Guarantor's execution, delivery and
      performance of this Agreement, the Registration Rights Agreement, the DTC
      Agreement (in the case of the Company only), the New Senior Secured Credit
      Facility and the Indenture and any other agreements or documents relating
      to any of the foregoing, and the issuance and delivery of the Securities
      or the Exchange Securities, and consummation of the transactions
      contemplated hereby and thereby and by the Offering Memorandum: (i) have
      been duly authorized by all necessary corporate action and will not result
      in any violation of the provisions of the charter, by-laws or comparable
      organizational documents of the Parent, the Company or any subsidiary of
      the Company, (ii) will not conflict with or constitute a breach of, or
      Default or a Debt Repayment Triggering Event (as defined below) under, or
      result in the creation or imposition of any lien, charge or encumbrance
      upon any property or assets of the Parent, the Company or any of its
      subsidiaries pursuant to, or require the consent of any other party to,
      any Existing Instrument, except for such conflicts, breaches, Defaults,
      liens, charges or encumbrances as would not, individually or in the
      aggregate, result in a Material Adverse Change and (iii) will not result
      in any violation of any law, administrative regulation or administrative
      or court decree applicable to the Parent, the Company or any subsidiary
      (including, without limitation, the laws and regulations set forth in
      Section 1(jj) hereof). No consent, approval, authorization or other order
      of, or registration or filing with, any court or other governmental or
      regulatory authority or agency, is required for the Company's or each
      Guarantor's execution, delivery and performance of this Agreement, the
      Registration Rights Agreement, the DTC Agreement (in the case of the
      Company only), the New Senior Secured Credit Facility or the Indenture and
      any other agreements or documents relating to any of the foregoing, or the
      issuance and delivery of the Securities or the Exchange Securities, or
      consummation of the transactions contemplated hereby and thereby and by
      the Offering Memorandum, except such as have been obtained or made by the
      Company or the Guarantors and are in full force and effect under the
      Securities Act, applicable state securities or blue sky laws and except
      such as may be required by federal and state securities laws with respect
      to the Company's or each Guarantor's obligations under the Registration
      Rights Agreement, and subject to compliance by the Initial Purchasers with
      the representations and warranties set forth in Section 2(e) hereof and
      with the procedures set forth in Section 7 hereof. As used herein, a "Debt
      Repayment Triggering Event" means any event or condition which gives, or
      with the giving of notice or lapse of time would give, the holder of any
      note, debenture or other evidence of indebtedness (or any person acting on
      such holder's behalf) the right to require the repurchase, redemption or
      repayment of all or a portion of such indebtedness by the Company or any
      of its subsidiaries.

      (s)   No Material Actions or Proceedings.

            Except as otherwise disclosed in the Offering Memorandum, there are
      no legal or governmental actions, suits or proceedings pending or, to the
      best of the Company's and each Guarantor's knowledge; (i) threatened
      against or affecting the Parent, the Company or any of its subsidiaries;
      or (ii) which have as the subject thereof any property owned or leased by,
      the Parent, the Company or any of its subsidiaries, where in any such case
      it is reasonably expected that such action, suit or proceeding might be
      determined adversely to the Parent, the Company or such subsidiary and any
      such action, suit or proceeding, if so determined adversely, would
      reasonably be expected to

                                        8
<PAGE>

      result in a Material Adverse Change or adversely affect the consummation
      of the transactions contemplated by this Agreement and by the Offering
      Memorandum in the "Use of Proceeds" section. No labor dispute with the
      employees of the Parent, the Company or any of its subsidiaries, or to the
      best of the Company's knowledge without having made any inquiry or
      investigation, with the employees of any principal supplier of the Parent,
      the Company or any of its subsidiaries that may reasonably be expected to
      result in a Material Adverse Change, exists or, to the best of the
      Company's and each Guarantor's knowledge, is threatened or imminent.

      (t)   Intellectual Property Rights.

            Except as would not, individually, or in the aggregate result in a
      Material Adverse Change, the Parent, the Company and each of its
      subsidiaries own or possess sufficient trademarks, trade names, patent
      rights, copyrights, licenses, approvals, trade secrets and other similar
      rights (collectively, "Intellectual Property Rights") reasonably necessary
      to conduct their businesses as now conducted; and the expected expiration
      of any of such Intellectual Property Rights would not result in a Material
      Adverse Change. None of the Parent, the Company or any of its subsidiaries
      has received any notice of infringement or conflict with asserted
      Intellectual Property Rights of others, which infringement or conflict, if
      the subject of an unfavorable decision, ruling or finding would result in
      a Material Adverse Change.

      (u)   All Necessary Permits, etc.

            The Parent, the Company and each of its subsidiaries possess such
      valid and current certificates, authorizations or permits issued by the
      appropriate state, federal or foreign regulatory agencies or bodies
      necessary for and material to the conduct of their respective businesses
      (including, without limitation, under the laws and regulations set forth
      in Section 1(jj) hereof), and none of the Parent, the Company nor any
      subsidiary has received any notice of proceedings relating to the
      revocation or modification of, or noncompliance with, any such
      certificate, authorization or permit which, singly or in the aggregate, if
      the subject of an unfavorable decision, ruling or finding, could result in
      a Material Adverse Change.

      (v)   Title to Properties.

            The Parent, the Company and each of its subsidiaries has good and
      marketable title to all the properties and assets reflected as owned in
      the financial statements referred to in Section 1(n) above (or elsewhere
      in the Offering Memorandum) that are material to the ordinary conduct of
      the business of each of the Parent, the Company and such subsidiaries, in
      each case, except as otherwise disclosed in the Offering Memorandum, free
      and clear of any security interests, mortgages, liens, encumbrances,
      equities, claims and other defects, except such as do not affect the value
      of such property, do not interfere with the use made or proposed to be
      made of such property by the Parent, the Company or such subsidiary, and
      would not otherwise, individually, or in the aggregate, result in a
      Material Adverse Change. The real property, improvements, equipment and
      personal property held under lease by the Parent, the Company or any
      subsidiary are held under valid and enforceable leases, with such
      exceptions as do not interfere with the use made or proposed to be made of
      such real property, improvements, equipment or personal property by the
      Parent, the Company or such subsidiary and would not otherwise,
      individually, or in the aggregate, result in a Material Adverse Change.

                                        9
<PAGE>

      (w)   Tax Law Compliance.

            (i) The Parent, the Company and its subsidiaries have each filed
      (taking into account extensions granted by applicable taxing authority)
      all necessary federal, state and foreign income and franchise tax returns
      and have paid all taxes required to be paid by any of them and, if due and
      payable, any related or similar assessment, fine or penalty levied against
      any of them except as may be being contested in good faith and by
      appropriate proceedings.

            (ii) The Parent, the Company and each of its subsidiaries have made
      adequate charges, accruals and reserves in the applicable financial
      statements referred to in Section 1(n) above in respect of all federal,
      state and foreign income and franchise taxes for all periods as to which
      the tax liability of the Parent, the Company or any of its subsidiaries
      has not been finally determined.

            (iii) None of the Parent, the Company or its subsidiaries intends to
      treat the Securities and the transactions related thereto, including the
      application of the proceeds therefrom, as a "reportable transaction"
      (within the meaning of Treasury Regulation Section 1.6001-4).

      (x)   Company Not an "Investment Company".

            The Company has been advised of the rules and requirements under the
      Investment Company Act of 1940, as amended (the "Investment Company Act").
      The Company is not, and after receipt of payment for the Securities will
      not be, an "investment company" within the meaning of Investment Company
      Act and will conduct its business in a manner so that it will not become
      subject to the Investment Company Act.

      (y)   Insurance.

            Except as otherwise disclosed in the Offering Memorandum, each of
      the Parent, the Company and its subsidiaries are insured by recognized,
      financially sound institutions with policies in such amounts and with such
      deductibles and covering such risks as are generally deemed adequate and
      customary for their businesses including, but not limited to, policies
      covering real and personal property owned or leased by the Parent, the
      Company and its subsidiaries against theft, damage, destruction, acts of
      vandalism, floods and earthquakes. The Company has no reason to believe
      that (i) the Parent, it or any of its subsidiaries will not be able to
      renew its existing insurance coverage as and when such policies expire; or
      (ii) the Parent, it or any of its subsidiaries will not be able to obtain
      comparable coverage from similar institutions as may be necessary or
      appropriate to conduct its business as now conducted and at a cost that
      would not result in a Material Adverse Change.

      (z)   No Price Stabilization or Manipulation.

            Neither the Company nor any Guarantor has taken nor will take,
      directly or indirectly, any action designed to or that might be reasonably
      expected to cause or result in stabilization or manipulation of the price
      of any security of the Company to facilitate the sale or resale of the
      Securities.

                                       10

<PAGE>

      (aa)  Solvency.

            The Company and each Guarantor is, and after giving effect to (i)
      the sale of the Securities and application of the proceeds therefrom; and
      (ii) any borrowings under the New Senior Secured Credit Facility, will be,
      Solvent. As used herein, the term `Solvent" means, with respect to the
      Company and each Guarantor on a particular date, that on such date: (i)
      the fair market value of its assets is greater than the total amount of
      its liabilities (including contingent liabilities); (ii) the present fair
      salable value of its assets is greater than the amount that will be
      required to pay the probable liabilities on its debts as they become
      absolute and mature; (iii) it is able to realize upon its assets and pay
      its debts and other liabilities, including contingent obligations, as they
      mature; and (iv) it does not have unreasonably small capital to carry on
      its business as conducted and as proposed to be conducted.

      (bb)  No Unlawful Contributions or Other Payments.

            None of the Parent, the Company or any of its subsidiaries nor, to
      the best of the Company's or any Guarantor's knowledge, any employee or
      agent of the Parent, the Company or any subsidiary, has made any
      contribution or other payment to any official of, or candidate for, any
      federal state or foreign office in violation of any law or of the
      character necessary to be disclosed in the Offering Memorandum in order to
      make the statements therein not misleading in any material respect.

      (cc)  Company's Accounting System.

            Each of the Parent and the Company maintains a system of accounting
      controls sufficient to provide reasonable assurances that (i) transactions
      are executed in accordance with management's general or specific
      authorization; (ii) transactions are recorded as necessary to permit
      preparation of financial statements in conformity with generally accepted
      accounting principles as applied in the United States and to maintain
      accountability for assets; (iii) access to assets is permitted only in
      accordance with management's general or specific authorization; and (iv)
      the recorded accountability for assets is compared with existing assets at
      reasonable intervals and appropriate action is taken with respect to any
      differences.

      (dd)  Compliance with Environmental Laws.

            Except as would not, individually or in the aggregate, result in a
      Material Adverse Change, (i) none of the Parent, the Company or any of its
      subsidiaries is in violation of any federal, state, local or foreign law
      or regulation relating to pollution or protection of human health or the
      environment (including, without limitation, ambient air, surface water,
      groundwater, land surface or subsurface strata) or wildlife, including
      without limitation, laws and regulations relating to emissions,
      discharges, releases or threatened releases of chemicals, pollutants,
      contaminants, wastes, toxic substances, hazardous substances, petroleum
      and petroleum products (collectively, "Materials of Environmental
      Concern"), or otherwise relating to the manufacture, processing,
      distribution, use, treatment, storage, disposal, transport or handling of
      Materials of Environmental Concern (collectively, "Environmental Laws"),
      which violation includes, but is not limited to, noncompliance with any
      permits or other governmental authorizations required for the operation of
      the business of the Parent, the Company or its subsidiaries under
      applicable Environmental Laws, or noncompliance with the terms and
      conditions thereof, nor has the Parent, the Company or any of its
      subsidiaries

                                       11

<PAGE>

      received any written communication, whether from a governmental authority,
      citizens group, employee or otherwise, that alleges that the Parent, the
      Company or any of its subsidiaries is in violation of any Environmental
      Law; (ii) there is no claim, action or cause of action filed with a court
      or governmental authority, no investigation with respect to which the
      Company or any Guarantor has received written notice, and no written
      notice by any person or entity alleging potential liability for
      investigatory costs, cleanup costs, governmental responses costs, natural
      resources damages, property damages, personal injuries, attorneys' fees or
      penalties arising out of, based on or resulting from the presence, or
      release into the environment, of any Material of Environmental Concern at
      any location owned, leased or operated by the Parent, the Company or any
      of its subsidiaries, now or in the past (collectively, "Environmental
      Claims"), pending or, to the best of the Company's or any Guarantor's
      knowledge, threatened against the Parent, the Company or any of its
      subsidiaries or any person or entity whose liability for any Environmental
      Claim the Parent, the Company or any of its subsidiaries has retained or
      assumed either contractually or by operation of law; and (iii) to the best
      of the Company's or any Guarantor's knowledge, there are no past or
      present actions, activities, circumstances, conditions, events or
      incidents, including, without limitation, the release, emission,
      discharge, presence or disposal of any Material of Environmental Concern,
      that reasonably could result in a violation of any Environmental Law or
      form the basis of a potential Environmental Claim against the Parent, the
      Company or any of its subsidiaries or against any person or entity whose
      liability for any Environmental Claim the Company or any of its
      subsidiaries has retained or assumed either contractually or by operation
      of law.

      (ee)  Periodic Review of Costs of Environmental Compliance.

            In the ordinary course of its business, the Company and/or the
      Parent conducts a periodic review of the effect of Environmental Laws on
      the business, operations and properties of the Company and its
      subsidiaries, in the course of which it identifies and evaluates
      associated costs and liabilities (including, without limitation, any
      capital or operating expenditures required for clean-up, closure of
      properties or compliance with Environmental Laws or any permit, license or
      approval, any related constraints on operating activities and any
      potential liabilities to third parties). On the basis of such review and
      the amount of its established reserves, the Company has reasonably
      concluded that such associated costs and liabilities would not,
      individually or in the aggregate, result in a Material Adverse Change.

      (ff)  New Senior Secured Credit Facility.

            The New Senior Secured Credit Facility (as defined in the Offering
      Memorandum) has been duly and validly authorized by the Company and each
      of the guarantors thereunder and, when duly executed and delivered by the
      Company and each of the guarantors thereunder, will be the valid and
      legally binding obligation of the Company, enforceable in accordance with
      its terms, except as the enforcement thereof may be limited by bankruptcy,
      insolvency, reorganization, moratorium or other similar laws relating to
      or affecting the rights and remedies of creditors or by general equitable
      principles.

      (gg)  ERISA Compliance.

            The Parent, the Company and its subsidiaries and any "employee
      benefit plan" (as defined under the Employee Retirement Income Security
      Act of 1974, as amended,

                                       12

<PAGE>

      and the regulations and published interpretations thereunder
      (collectively, "ERISA")) established or maintained by the Parent, the
      Company, its subsidiaries or their "ERISA Affiliates" (as defined below)
      are in compliance in all material respects with ERISA. "ERISA Affiliate"
      means, with respect to the Parent, the Company or a subsidiary, any member
      of any group of organizations described in Section 414, of the Internal
      Revenue Code of 1986, as amended, and the regulations and published
      interpretations thereunder (the "Code") of which the Parent, the Company
      or such subsidiary is a member. No "reportable event" (as defined under
      ERISA) has occurred or is reasonably expected to occur with respect to any
      "employee benefit plan" established or maintained by the Parent, the
      Company, its subsidiaries or any of their ERISA Affiliates. No "employee
      benefit plan" established or maintained by the Parent, the Company, its
      subsidiaries or any of their ERISA Affiliates, if such "employee benefit
      plan" were terminated, would have any "amount of unfunded benefit
      liabilities" (as defined under ERISA). None of the Parent, the Company,
      its subsidiaries nor any of their ERISA Affiliates has incurred or
      reasonably expects to incur (i) any liability under Title IV of ERISA with
      respect to the termination of, or withdrawal from, any "employee benefit
      plan"; or (ii) any liability under Sections 412, 4971 or 4975 of the Code;
      or (iii) any material liability under Section 490B of the Code. Each
      "employee benefit plan" established or maintained by the Parent, the
      Company, its subsidiaries or any of their ERISA Affiliates that is
      intended to be qualified under Section 401 of the Code is so qualified and
      nothing has occurred, whether by action or failure to act, which would
      cause the loss of such qualification.

      (hh)  Regulations.

            The Company, the Guarantors and their respective affiliates and all
      persons acting on their behalf (other than the Initial Purchasers, as to
      whom the Company and the Guarantors make no representation) have complied
      with and will comply with the offering restrictions requirements of
      Regulation S in connection with the offering of the Securities outside the
      United States and, in connection therewith, the Offering Memorandum will
      contain the disclosure required by Rule 902 of the Securities Act.

      (ii)  Temporary Global Security.

            The Securities sold in reliance on Regulation S will be represented
      upon issuance by a temporary global security that may not be exchanged for
      definitive securities until the expiration of the 40-day restricted period
      referred to in Rule 903 of the Securities Act and only upon certification
      of beneficial ownership of such Securities by non-U.S. persons or U.S.
      persons who purchased such Securities in transactions that were exempt
      from the registration requirements of the Securities Act.

      (jj)  Compliance with Laws.

            (i) Each of the Parent, the Company and its subsidiaries is in
      compliance in all material respects with all international, foreign,
      federal, state and local statutes, treaties, rules, guidelines,
      regulations, ordinances, codes and administrative or judicial precedents
      or authorities, including the interpretation or administration thereof by
      any governmental authority charged with the enforcement, interpretation or
      administration thereof, and all applicable administrative orders, directed
      duties, requests, licenses, authorizations and permits of, and agreements
      with, any governmental authority, in each case whether or not having the
      force of law.

                                       13

<PAGE>

            (ii) Each of the Parent, the Company and its subsidiaries possesses
      such permits, licenses, provider numbers, certificates, approvals
      (including, without limitation, certificate of need approvals), consents,
      orders, certifications (including, without limitation, certification under
      the Medicare and Medicaid programs), accreditations (including, without
      limitation, accreditation by the Joint Commission on Accreditation of
      Healthcare Organizations) and other authorizations (collectively,
      "Licenses") issued by, and have made all declarations and filings with,
      the appropriate federal, state, local or foreign regulatory agencies or
      bodies necessary to conduct its business as now being conducted and as
      described in the Offering Memorandum (including, without limitation,
      Licenses as are required (i) under such federal and state healthcare laws
      as are applicable to the Parent, the Company and its subsidiaries and (ii)
      with respect to those facilities operated by the Parent, the Company and
      its subsidiaries that participate in the Medicare and/or Medicaid
      programs, to receive reimbursement thereunder), except where the failure
      to possess such Licenses or to make such declarations and filings would
      not, individually or in the aggregate, result in a Material Adverse
      Change; the Parent, the Company and its subsidiaries are in compliance
      with the terms and conditions of all such Licenses, except where the
      failure so to comply would not, individually or in the aggregate, result
      in a Material Adverse Change; all of the Licenses are valid and in full
      force and effect, except when the invalidity of such Licenses or the
      failure of such Licenses to be in full force and effect would not result
      in a Material Adverse Change; and none of the Parent, the Company, or its
      subsidiaries has received any notice of proceedings relating to the
      revocation or modification of any such Licenses which, singly or in the
      aggregate, if the subject of an unfavorable decision, ruling or finding,
      would result in a Material Adverse Change. All of the hospitals and other
      facilities operated by the Parent, the Company and its subsidiaries are
      "providers of services" as defined in the Social Security Act and the
      regulations promulgated thereunder and are eligible to participate in the
      Medicare and Medicaid programs.

            (iii) None of the Parent, the Company, or its subsidiaries has
      engaged in, nor, to the knowledge of the Parent, the Company, or its
      subsidiaries, have any officers, directors, stockholders or employees of
      the Parent, the Company, or its subsidiaries (during the course of their
      employment or agency) or the hospitals or other facilities operated by the
      Parent, the Company, or its subsidiaries engaged in, any activities that
      are prohibited by (1) any federal, state or local statute, rule, or
      regulation applicable to individuals or entities operating in the
      healthcare industry, and (2) other statutes, rules, or regulations
      governing federal or state government healthcare programs, except for any
      such activities which are specifically described in the Offering
      Memorandum or which would not, individually or in the aggregate, result in
      a Material Adverse Change. Further, none of the Parent, the Company, or
      its subsidiaries nor, to their knowledge, any of their officers,
      directors, stockholders or employees, or the hospitals or other facilities
      operated by them, is excluded, suspended, debarred or otherwise prohibited
      from participating in any federal, state or other government healthcare,
      procurement, or non-procurement program or activity.

            (iv) To the knowledge of the Parent, the Company, or its
      subsidiaries, none of the hospitals or other facilities operated by either
      the Parent, the Company, or its subsidiaries has failed to file with
      applicable regulatory authorities any statement, report, information or
      form required by any applicable law, regulation or order, except where the
      failure to file would not, individually or in the aggregate, result in a
      Material Adverse Change. All such filings or submissions were in
      compliance with applicable laws when filed and no deficiencies have been
      asserted by any regulatory commission, agency or authority with respect to
      any such filings or submissions, except for any such failures to

                                       14

<PAGE>

      be in compliance or deficiencies which would not, individually or in the
      aggregate, result in a Material Adverse Change.

            Any certificate signed by an officer of the Company or any Guarantor
and delivered to the Initial Purchasers or to counsel for the Initial Purchasers
pursuant hereto shall be deemed to be a representation and warranty by the
Company or such Guarantor to the Initial Purchasers as to the matters set forth
therein.

SECTION 2.  Purchase, Sale and Delivery of the Securities.

      (a)   The Securities.

            The Company agrees to issue and sell to the Initial Purchasers,
      severally and not jointly, all of the Securities upon the terms set forth
      herein. On the basis of the representations, warranties and agreements
      herein contained, and upon the terms but subject to the conditions herein
      set forth, each of the Initial Purchasers agrees, severally and not
      jointly, to purchase from the Company the aggregate principal amount of
      Securities set forth opposite its name in Schedule A, at a purchase price
      of 97.00% of the principal amount thereof, payable on the Closing Date.

      (b)   The Closing Date.

            Delivery of certificates for the Securities in definitive form to be
      purchased by the Initial Purchasers and payment therefor shall be made at
      the offices of Moore & Van Allen PLLC, 100 N. Tryon, Suite 4700,
      Charlotte, NC 28202 (or such other place as may be agreed to by the
      Company and the Initial Purchasers) at 9:00 a.m. New York City time, on
      July 7, 2004 or such other time and date as the Initial Purchasers shall
      designate by notice to the Company (the time and date of such closing are
      called the "Closing Date"). The Company hereby acknowledges that
      circumstances under which the Initial Purchasers may provide notice to
      postpone the Closing Date as originally scheduled include, but are in no
      way limited to, any determination by the Company or the Initial Purchasers
      to recirculate to investors copies of an amended or supplemented Offering
      Memorandum or a delay as contemplated by the provisions of Section 16
      hereof.

      (c)   Delivery of the Securities.

            The Company shall deliver, or cause to be delivered, to Banc of
      America Securities LLC for the accounts of the several Initial Purchasers
      certificates for the Securities at the Closing Date against the
      irrevocable release of a wire transfer of immediately available funds for
      the amount of the purchase price therefor. The certificates for the
      Securities shall be in such denominations and registered in the name of
      Cede & Co., as nominee of the Depository, pursuant to the DTC Agreement,
      and shall be made available for inspection on the business day preceding
      the Closing Date at a location in New York City, as the Initial Purchasers
      may designate. Time shall be of the essence, and delivery at the time and
      place specified in this Agreement is a further condition to the
      obligations of the Initial Purchasers.

      (d)   Delivery of Offering Memorandum to the Initial Purchasers.

            Not later than 12:00 p.m. on the second business day following the
      date of this Agreement, the Company shall deliver or cause to be delivered
      copies of the Offering

                                       15

<PAGE>

      Memorandum in such quantities and at such places as the Initial Purchasers
      shall reasonably request.

      (e)   Initial Purchasers as Qualified Institutional Buyers.

            Each Initial Purchaser severally and not jointly represents and
      warrants to, and agrees with, the Company that it is a "qualified
      institutional buyer" within the meaning of Rule 144A (a "Qualified
      Institutional Buyer") and an "accredited investor" within the meaning of
      Rule 501 under the Securities Act (an "Accredited Investor").

SECTION 3.  Additional Covenants.

            The Company and, as applicable, each of the Guarantors, jointly and
severally, further covenant and agree with each Initial Purchaser as follows:

      (a)   Initial Purchasers' Review of Proposed Amendments and Supplements.

            Prior to amending or supplementing the Offering Memorandum
      (including any amendment or supplement through incorporation by reference
      of any report filed under the Exchange Act), the Company shall furnish to
      the Initial Purchasers for review a copy of each such proposed amendment
      or supplement, and the Company shall not use any such proposed amendment
      or supplement to which the Initial Purchasers reasonably object.

      (b)   Amendments and Supplements to the Offering Memorandum and Other
            Securities Act Matters.

            If, prior to the completion of the placement of the Securities by
      the Initial Purchasers with the Subsequent Purchasers, any event shall
      occur or condition exist as a result of which it is necessary to amend or
      supplement the Offering Memorandum in order to make the statements
      therein, in the light of the circumstances when the Offering Memorandum is
      delivered to a purchaser, not misleading, or if in the opinion of the
      Initial Purchasers or counsel for the Initial Purchasers it is otherwise
      necessary to amend or supplement the Offering Memorandum to comply with
      law, the Company agrees to promptly prepare (subject to Section 3 hereof),
      file with the Commission, if necessary and proper, and furnish at its own
      expense to the Initial Purchasers, amendments or supplements to the
      Offering Memorandum so that the statements in the Offering Memorandum as
      so amended or supplemented will not, in the light of the circumstances
      when the Offering Memorandum is delivered to a purchaser, be misleading or
      so that the Offering Memorandum, as amended or supplemented, will comply
      with law.

            Following the consummation of the Exchange Offer or the
      effectiveness of an applicable shelf registration statement and for so
      long as the Securities are outstanding if, in the reasonable judgment of
      the Initial Purchasers, the Initial Purchasers or any of their affiliates
      (as such term is defined in the rules and regulations under the Securities
      Act) are required to deliver a prospectus in connection with sales of, or
      market-making activities with respect to, such securities, (A) to
      periodically amend the applicable registration statement so that the
      information contained therein complies with the requirements of Section
      10(a) of the Securities Act, (B) to amend the applicable registration
      statement or supplement the related prospectus or the documents

                                       16

<PAGE>

      incorporated therein when necessary to reflect any material changes in the
      information provided therein so that the registration statement and the
      prospectus will not contain any untrue statement of a material fact or
      omit to state any material fact necessary in order to make the statements
      therein, in the light of the circumstances existing as of the date the
      prospectus is so delivered, not misleading and (C) to provide the Initial
      Purchasers with copies of each amendment or supplement filed and such
      other documents as the Initial Purchasers may reasonably request.

            The Company and each Guarantor hereby expressly acknowledges that
      the indemnification and contribution provisions of Sections 8 and 9 hereof
      are specifically applicable and relate to each offering memorandum,
      registration statement, prospectus, amendment or supplement referred to in
      this Section 3(b).

      (c)   Copies of the Offering Memorandum.

            The Company agrees to furnish the Initial Purchasers, without
      charge, as many copies of the Offering Memorandum and any amendments and
      supplements thereto as they shall have reasonably requested.

      (d)   Blue Sky Compliance.

            The Company and each Guarantor shall cooperate with the Initial
      Purchasers and counsel for the Initial Purchasers to qualify or register
      the Securities for sale under (or obtain exemptions from the application
      of) the Blue Sky or state securities laws of those jurisdictions
      designated by the Initial Purchasers, shall comply with such laws and
      shall continue such qualifications, registrations and exemptions in effect
      so long as required for the distribution of the Securities. Neither the
      Company nor any Guarantor shall be required to qualify as a foreign
      corporation or to take any action that would subject it to general service
      of process in any such jurisdiction where it is not presently qualified or
      where it would be subject to taxation as a foreign corporation. The
      Company will advise the Initial Purchasers promptly of the suspension of
      the qualification or registration of (or any such exemption relating to)
      the Securities for offering, sale or trading in any jurisdiction or any
      initiation or threat of any proceeding for any such purpose, and in the
      event of the issuance of any order suspending such qualification,
      registration or exemption, the Company shall use its best efforts to
      obtain the withdrawal thereof at the earliest possible moment.

      (e)   Use of Proceeds.

            The Company shall apply the net proceeds from the sale of the
      Securities sold by it in the manner described under the caption "Use of
      Proceeds" in the Offering Memorandum.

      (f)   No Reportable Transaction

            In the event that any of the Parent, the Company or its subsidiaries
      determines to take any action inconsistent with Section 1(w)(iii) of this
      Agreement, the Company shall promptly notify the Initial Purchasers.

                                       17

<PAGE>

      (g)   The Depositary.

            The Company will cooperate with the Initial Purchasers and use its
      best efforts to permit the Securities to be eligible for clearance and
      settlement through the facilities of the Depositary.

      (h)   Additional Issuer Information.

            If at any time neither the Company nor the Parent is subject to
      Section 13 or 15 of the Exchange Act, for the benefit of holders and
      beneficial owners from time to time of Securities, the Company shall
      furnish, at its expense, upon request, to holders and beneficial owners of
      Securities and prospective purchasers of Securities, information
      ("Additional Issuer Information") satisfying the requirements of
      subsection (d)(4) of Rule 144A. At any time when the Company or the Parent
      is subject to the reporting requirements of Section 13 or 15 of the
      Exchange Act, the Company covenants that it, or if the Parent is a
      Guarantor, the Parent will file the reports required to be filed by it
      under the Securities Act and Section 13(a) and 15(d) of the Exchange Act
      and the rules and regulations adopted by the Commission thereunder.

      (i)   Future Reports to the Initial Purchasers.

            For so long as any Securities or Exchange Securities remain
      outstanding, the Company will furnish to Banc of America Securities LLC:
      (i) as soon as practicable after the end of each fiscal year, copies of
      the Annual Report of the Company, or if the Parent is a Guarantor, the
      Parent, containing the balance sheet of the Company or the Parent, as
      applicable, as of the close of such fiscal year and statements of income,
      stockholders' equity and cash flows for the year then ended and the
      opinion thereon of the Company's, or the Parent's, as applicable,
      independent public or certified public accountants; (ii) as soon as
      practicable after the filing thereof, copies of each proxy statement,
      Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report
      on Form 8-K or other report filed by the Company, or the Parent, as
      applicable, with the Commission, the Nasdaq Stock Market ("NASD") or any
      securities exchange, if any; and (iii) as soon as available, copies of any
      report or communication of the Company, or the Parent, as applicable,
      mailed generally to holders of its capital stock or debt securities
      (including the holders of the Securities).

      (j)   No Integration.

            The Company agrees that it will not and will cause its Affiliates
      not to make any offer or sale of securities of the Company of any class
      if, as a result of the doctrine of "integration" referred to in Rule 502
      under the Securities Act, such offer or sale would render invalid (for the
      purpose of (i) the sale of the Securities by the Company to the Initial
      Purchasers, (ii) the resale of the Securities by the Initial Purchasers to
      Subsequent Purchasers or (iii) the resale of the Securities by such
      Subsequent Purchasers to others) the exemption from the registration
      requirements of the Securities Act provided by Section 4(2) thereof or by
      Rule 144A or by Regulation S thereunder or otherwise.

      (k)   Legended Securities.

            Each certificate for a Note will bear the legend contained in
      "Notice to Investors" in the Offering Memorandum for the time period and
      upon the other terms stated in the Offering Memorandum.

                                       18
<PAGE>
      (l) PORTAL.

            The Company will use its best efforts to cause the Notes to be
      eligible for the National Association of Securities Dealers, Inc. PORTAL
      market (the "PORTAL market").

      (m) Future Agreement Not to Offer or Sell Additional Securities.

            During the period of 180 days following the date of the Offering
      Memorandum, none of the Company or any Guarantor will, without the prior
      written consent of Banc of America Securities LLC (which consent may be
      withheld at the sole discretion of Banc of America Securities LLC),
      directly or indirectly, sell, offer, contract or grant any option to sell,
      pledge, transfer or establish an open "put equivalent position" within the
      meaning of Rule 16a-1 under the Exchange Act, or otherwise dispose of or
      transfer, or announce the offering of, or file any registration statement
      under the Securities Act in respect of, any debt securities of the Company
      or any Guarantor substantially similar to the Securities or securities
      exchangeable for or convertible into debt securities of the Company or any
      Guarantor substantially similar to the Securities (other than as
      contemplated by this Agreement and to register the Exchange Securities).

      (n) Rating of Securities.

            The Company and the Guarantors shall take all reasonable action
      necessary to enable Standard & Poor's Rating Services, a division of The
      McGraw-Hill, Inc. Companies ("S&P"), and Moody's Investor Services, Inc.
      ("Moody's") to provide their respective credit ratings to the Securities
      at or prior to the time of their initial issuance.

SECTION 4. Payment of Expenses.

            The Company and the Guarantors jointly and severally agree to pay
all costs, fees and expenses incurred in connection with the performance of
their obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation; (i) all expenses incident to the issuance
and delivery of the Securities (including all printing and engraving costs);
(ii) all necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Securities to the Initial Purchasers; (iii) all fees
and expenses of the Company's and the Guarantors' counsel, independent public or
certified public accountants and other advisors; (iv) all costs and expenses
incurred in connection with the preparation, printing. filing, shipping and
distribution of each preliminary Offering Memorandum and the Offering Memorandum
(including financial statements and exhibits), and all amendments and
supplements thereto, this Agreement, the Registration Rights Agreement, the
Indenture, the DTC Agreement, the New Senior Secured Credit Facility and the
Notes and the Guarantees; (v) all filing fees, attorneys' fees and expenses
incurred by the Company, the Guarantors or the Initial Purchasers in connection
with qualifying or registering (or obtaining exemptions from the qualification
or registration of all or any part of the Securities for offer and sale under
the Blue Sky laws and, if requested by the Initial Purchasers, preparing and
printing a "Blue Sky Survey" or memorandum, and any supplements thereto,
advising the Initial Purchasers of such qualifications, registrations and
exemptions, (vi) the fees and expenses of the Trustee, including the fees and
disbursements of counsel for the Trustee in connection with the Indenture, the
Securities and the Exchange Securities, (vii) any fees payable in connection
with the rating of the Securities or the Exchange Securities with the ratings
agencies and the listing of the Securities with the PORTAL market; (viii) any
filing fees incident to, and any reasonable fees and disbursements of counsel to
the Initial Purchasers in connection with the review by the National Association
of Securities Dealers, Inc., if any, of the terms of the sale of the Securities
or the

                                      19
<PAGE>

Exchange Securities, (ix) all fees and expenses (including reasonable fees and
expenses of counsel) of the Company and the Guarantors in connection with
approval of the Securities by DTC for "book-entry" transfer; and (x) the
performance by the Company and the Guarantors of their respective other
obligations under this Agreement. Except as provided in this Section 4, Section
6, Section 8 and Section 9 hereof, the Initial Purchasers shall pay their own
expenses, including the fees and disbursements of their counsel.

SECTION 5.  Conditions of the Obligations of the Initial Purchasers.

            The obligations of the several Initial Purchasers to purchase and
pay for the Securities as provided herein on the Closing Date shall be subject
to the accuracy of the representations and warranties on the part of the Company
and the Guarantors set forth in Section 1 hereof as of the date hereof and as of
the Closing Date as though then made and to the timely performance by the
Company and the Guarantors of their covenants and other obligations hereunder,
and to each of the following additional conditions:

      (a)   Accountants' Comfort Letter.

            On the date hereof, the Initial Purchasers shall have received from
      the Independent Accountants a letter dated the date hereof addressed to
      the Initial Purchasers, in form and substance satisfactory to the Initial
      Purchasers, containing statements and information of the type ordinarily
      included in accountant's "comfort letters" to the Initial Purchasers,
      delivered according to Statement of Auditing Standards Nos. 72 and 76 (or
      any successor bulletins), with respect to the audited and unaudited
      financial statements and certain financial information contained in the
      Offering Memorandum.

      (b)   No Material Adverse Change or Ratings Agency Change.

            For the period from and after the date of this Agreement and prior
      to the Closing Date:

            (i) in the judgment of the Initial Purchasers there shall not have
      occurred any Material Adverse Change; and

            (ii) there shall not have occurred any downgrading, nor shall any
      notice have been given of any intended or potential downgrading or of any
      review for a possible change that does not indicate the direction of the
      possible change, in the rating accorded any securities of the Company or
      any of its subsidiaries by any "nationally recognized statistical rating
      organization" as such term is defined for purposes of Rule 436 under the
      Securities Act.

      (c)   Opinions of Counsel for the Company and the Guarantors.

            On the Closing Date, the Initial Purchasers shall have received the
      favorable opinion of each of (i) Moore & Van Allen PLLC, counsel for the
      Company dated as of such Closing Date, the form of which is attached as
      Exhibit A, (ii) Moore & Van Allen, PLLC, counsel for the Guarantors
      organized under the laws of North Carolina and Delaware dated as of such
      Closing Date, the form of which is attached as Exhibit B, (iii) Snell &
      Wilmer, LLP, counsel for the Guarantors organized under the laws of
      Arizona dated as of such Closing Date, the form of which is attached as
      Exhibit C, (iv) Phillip D. Song, Vice President and General Counsel for
      the Company and the Guarantors dated as

                                      20

<PAGE>

      of the such Closing Date, the form of which is attached as Exhibit D, (v)
      Winston & Strawn LLP, special New York counsel for the Company and the
      Guarantors dated as of such Closing Date, the form of which is attached as
      Exhibit E, and (vi) Reed Smith LLP, special regulatory counsel to the
      Company dated as of such Closing Date, the form of which is attached as
      Exhibit F.

      (d)   Opinion of Counsel for the Initial Purchasers.

            On the Closing Date, the Initial Purchasers shall have received the
      favorable opinion of Shearman & Sterling LLP, counsel for the Initial
      Purchasers, dated as of such Closing Date, with respect to such matters as
      may be reasonably requested by the Initial Purchasers.

      (e)   Officers' and Managers' Certificates.

            On the Closing Date, the Initial Purchasers shall have received a
      written certificate executed by (A) the Chairman of the Board, Chief
      Executive Officer or President and the Chief Financial Officer or Chief
      Accounting Officer of each of the Parent, the Company and MedCath
      Incorporated; (B) the President and Vice President of each Guarantor
      organized as a corporation (other than the Parent and MedCath
      Incorporated); and (C) all of the managers of each Guarantor organized as
      a limited liability company, in each of (A), (B) and (C) above, dated as
      of the Closing Date, to the effect set forth in subsection (b)(ii) of this
      Section 5, and further to the effect that:

            (i) for the period from and after the date of this Agreement and
      prior to the Closing Date there has not occurred any Material Adverse
      Change;

            (ii) the representations, warranties and covenants of the Company
      and the Guarantors set forth in Section 1 of this Agreement are true and
      correct with the same force and effect as though expressly made on and as
      of the Closing Date; and

            (iii) the Company and the Guarantors have each complied with all the
      agreements and satisfied all the conditions on its part to be performed or
      satisfied at or prior to the Closing Date.

      (f)   Bring-down Comfort Letter.

            On the Closing Date, the Initial Purchasers shall have received from
      each of the Independent Accountants, a letter dated such date, in form and
      substance satisfactory to the Initial Purchasers, to the effect that they
      reaffirm the statements made in the letter furnished by them pursuant to
      subsection (a) of this Section 5, except that the specified date referred
      to therein for the carrying out of procedures shall be no more than three
      business days prior to the Closing Date.

      (g)   PORTAL Listing.

            At the Closing Date, the Notes shall have been designated for
      trading on the PORTAL market.

                                      21

<PAGE>

      (h)   Registration Rights Agreement.

            The Company and each of the Guarantors shall have entered into the
      Registration Rights Agreement and the Initial Purchasers shall have
      received executed counterparts thereof.

      (i)   Concurrent Transactions.

            On or before the closing of the transaction contemplated by this
      Agreement, the Company shall have executed the agreement for the New
      Senior Secured Credit Facility in the form described in the Offering
      Memorandum and all of the conditions to borrowing thereunder shall have
      been satisfied in accordance with the terms thereunder.

      (j)   Additional Documents.

            On or before the Closing Date, the Initial Purchasers and counsel
      for the Initial Purchasers shall have received such information, documents
      and opinions as they may reasonably require for the purposes of enabling
      them to pass upon the issuance and sale of the Securities as contemplated
      herein, or in order to evidence the accuracy of any of the representations
      and warranties, or the satisfaction of any of the conditions or
      agreements, herein contained.

            If any condition specified in this Section 5 is not satisfied when
and as required to be satisfied, this Agreement may be terminated by the Initial
Purchasers by notice to the Company at any time on or prior to the Closing Date,
which termination shall be without liability on the part of any party to any
other party, except that Section 4, Section 6, Section 8 and Section 9 shall at
all times be effective and shall survive such termination.

SECTION 6.  Reimbursement of Initial Purchasers' Expenses.

            If this Agreement is terminated by the Initial Purchasers pursuant
to Section 5, or if the sale to the Initial Purchasers of the Securities on the
Closing Date is not consummated because of any refusal, inability or failure on
the part of the Company or any Guarantor to perform any agreement herein or to
comply with any provision hereof, the Company and the Guarantors jointly and
severally agree to reimburse the Initial Purchasers upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by the Initial
Purchasers in connection with the proposed purchase and the offering and sale of
the Securities, including but not limited to fees and disbursements of counsel,
printing expenses, travel expenses, postage, facsimile and telephone charges.

SECTION 7.  Offer, Sale and Resale Procedures.

            The Initial Purchasers, on the one hand, and the Company and each of
the Guarantors, on the other hand, hereby establish and agree to observe the
following procedures in connection with the offer and sale of the Securities:

            (i) Offers and sales of the Securities will be made only by the
      Initial Purchasers or their Affiliates qualified to do so in the
      jurisdictions in which such offers or sales are made and only upon the
      terms and conditions set forth in this Agreement and in the Offering
      Memorandum. Each such offer or sale shall only be made to (A) persons whom
      the offeror or seller reasonably believes to be qualified institutional
      buyers (as defined in Rule 144A under the Securities Act), or (B) non-U.S.
      persons outside the

                                      22
<PAGE>

      United States to whom the offeror or seller reasonably believes offers and
      sales of Securities may be made in reliance upon regulations under the
      Securities Act, upon the terms and conditions set forth in Annex I hereto,
      which Annex I is hereby expressly made a part hereof.

            (ii) The Securities will be offered by approaching prospective
      Subsequent Purchasers on an individual basis. No general solicitation or
      general advertising (within the meaning of Rule 502 under the Securities
      Act) will be used in the United States in connection with the offering of
      the Securities.

            (iii) Upon original issuance by the Company, and until such time as
      the same is no longer required under the applicable requirements of the
      Securities Act, the Securities (and all securities issued in exchange
      therefor or in substitution thereof, other than the Exchange Securities)
      shall bear the legend set forth in the Offering Memorandum under the
      caption "Notice to Investors":

Following the sale of the Securities by the Initial Purchasers to Subsequent
Purchasers pursuant to the terms hereof, the Initial Purchasers shall not be
liable or responsible to the Company for any losses, damages or liabilities
suffered or incurred by the Company, including any losses, damages or
liabilities under the Securities Act, arising from or relating to any resale or
transfer of any Security.

SECTION 8.  Indemnification.

      (a)   Indemnification of the Initial Purchasers.

            Each of the Company and the Guarantors, jointly and severally,
      agrees to indemnify and hold harmless each Initial Purchaser, its
      directors, officers and employees, and each person, if any, who controls
      any Initial Purchaser within the meaning of Section 15 of the Securities
      Act or Section 20 of the Exchange Act against any loss, claim, damage,
      liability or expense, as incurred, to which such Initial Purchaser or such
      controlling person may become subject, under the Securities Act, the
      Exchange Act or other federal or state statutory law or regulation, or at
      common law or otherwise (including in settlement of any litigation, if
      such settlement is effected with the written consent of the Company),
      insofar as such loss, claim, damage, liability or expense (or actions in
      respect thereof as contemplated below) arises out of or is based: (i) upon
      any untrue statement or alleged untrue statement of a material fact
      contained in the Preliminary Offering Memorandum or the Offering
      Memorandum (or any amendment or supplement thereto), or the omission or
      alleged omission therefrom of a material fact necessary in order to make
      the statements therein, in the light of the circumstances under which they
      were made, not misleading; or (ii) in whole or in part upon any inaccuracy
      in the representations and warranties of the Company or any Guarantor
      contained herein; or (iii) in whole or in part upon any failure of the
      Company or any Guarantor to perform its obligations hereunder or under
      law; or (iv) upon any act or failure to act or any alleged Act or failure
      to act by any Initial Purchaser in connection with, or relating in any
      manner to, the offering contemplated hereby, and which is included as part
      of or referred to in any loss, claim, damage, liability or action arising
      out of or based upon any matter covered by clauses (i), (ii) or (iii)
      above, provided that the Company shall not be liable under this clause
      (iv) to the extent that a court of competent jurisdiction shall have
      determined by a final judgment that such loss, claim, damage, liability or
      action resulted directly from any such acts or failures to act undertaken
      or omitted to be taken by such Initial Purchaser through its gross
      negligence or willful misconduct and to reimburse

                                      23
<PAGE>

      each Initial Purchaser and each such controlling person for any and all
      expenses (including the fees and disbursements of counsel chosen by Banc
      of America Securities LLC) as such expenses are reasonably incurred by
      such Initial Purchaser or such controlling person in connection with
      investigating, defending, settling, compromising or paying any such loss,
      claim, damage, liability, expense or action; provided, however, that the
      foregoing indemnity agreement shall not apply to any loss, claim, damage,
      liability or expense to the extent, but only to the extent, arising out of
      or based upon any untrue statement or alleged untrue statement or omission
      or alleged omission made in reliance upon and in conformity with written
      information furnished to the Company by the Initial Purchasers expressly
      for use in any Preliminary Offering Memorandum or the Offering Memorandum
      (or any amendment or supplement thereto). The indemnity agreement set
      forth in this Section 8 shall be in addition to any liabilities that the
      Company or the Guarantors may otherwise have.

      (b)   Indemnification of the Company, its Directors and Officers.

            Each Initial Purchaser agrees, severally and not jointly, to
      indemnify and hold harmless the Company, the Guarantors and each of their
      directors and each person, if any, who controls the Company within the
      meaning of the Securities Act or the Exchange Act, against any loss,
      claim, damage, liability or expense, as incurred, to which the Company or
      the Guarantors or any such director, or controlling person may become
      subject under the Securities Act, the Exchange Act, or other federal or
      state statutory law or regulation, or at common law or otherwise
      (including in settlement of any litigation, if such settlement is effected
      with the written consent of such Initial Purchaser), insofar as such loss,
      claim, damage, liability or expense (or actions in respect thereof as
      contemplated below) arises out of or is based upon any untrue or alleged
      untrue statement of a material fact contained in any Preliminary Offering
      Memorandum or the Offering Memorandum (or any amendment or supplement
      thereto), or arises out of or is based upon the omission or alleged
      omission to state therein a material fact required to be stated therein or
      necessary to make the statements therein not misleading, in each case to
      the extent, but only to the extent, that such untrue statement or alleged
      untrue statement or omission or alleged omission was made in any
      Preliminary Offering Memorandum or the Offering Memorandum (or any
      amendment or supplement thereto), in reliance upon and in conformity with
      written information furnished to the Company by the Initial Purchasers
      expressly for use therein; and to reimburse the Company, the Guarantors or
      any such director or controlling person for any legal and other expenses
      reasonably incurred by the Company, the Guarantors, or any such director
      or controlling person in connection with investigating, defending,
      settling, compromising or paying any such loss, claim, damage, liability,
      expense or action. The Company and the Guarantors hereby acknowledge that
      the only information that the Initial Purchasers have furnished to the
      Company expressly for use in any Preliminary Offering Memorandum or the
      Offering Memorandum (or any amendment or supplement thereto) are the
      statements set forth in the third paragraph on page ii of the Offering
      Memorandum concerning stabilization by the Initial Purchasers and in the
      third sentence of the seventh paragraph and the ninth paragraph under the
      caption "Plan of Distribution" in the Offering Memorandum; and the Initial
      Purchasers confirm that such statements are correct. The indemnity
      agreement set forth in this Section 8 shall be in addition to any
      liabilities that each Initial Purchaser may otherwise have.

                                      24
<PAGE>

      (c)   Notifications and Other Indemnification Procedures.

            Promptly after receipt by an indemnified party under this Section 8
      of notice of the commencement of any action, such indemnified party will,
      if a claim in respect thereof is to be made against an indemnifying party
      under this Section 8, notify the indemnifying party in writing of the
      commencement thereof, but the omission so to notify the indemnifying party
      will not relieve it from any liability which it may have to any
      indemnified party for contribution or otherwise than under the indemnity
      agreement contained in this Section 8 or to the extent it is not
      prejudiced as a proximate result of such failure. In case any such action
      is brought against any indemnified party and such indemnified party seeks
      or intends to seek indemnity from an indemnifying party, the indemnifying
      party will be entitled to participate in and, to the extent that it shall
      elect, jointly with all other indemnifying parties similarly notified, by
      written notice delivered to the indemnified party promptly after receiving
      the aforesaid notice from such indemnified party, to assume the defense
      thereof with counsel reasonably satisfactory to such indemnified party;
      provided, however, if the defendants in any such action include both the
      indemnified party and the indemnifying party and the indemnified party
      shall have reasonably concluded that a conflict may arise between the
      positions of the indemnifying party and the indemnified party in
      conducting the defense of any such action or that there may be legal
      defenses available to it and/or other indemnified parties which are
      different from or additional to those available to the indemnifying party,
      the indemnified party or parties shall have the right to select separate
      counsel to assume such legal defenses and to otherwise participate in the
      defense of such action on behalf of such indemnified party or parties.
      Upon receipt of notice from the indemnifying party to such indemnified
      party of such indemnifying party's election so to assume the defense of
      such action and approval by the indemnified party of counsel, the
      indemnifying party will not be liable to such indemnified party under this
      Section 8 for any legal or other expenses subsequently incurred by such
      indemnified party in connection with the defense thereof unless (i) the
      indemnified party shall have employed separate counsel in accordance with
      the proviso to the next preceding sentence (it being understood, however,
      that the indemnifying party shall not be liable for the expenses of more
      than one separate counsel (together with local counsel), approved by the
      indemnifying party (Banc of America Securities LLC in the case of Section
      8 and Section 9), representing the indemnified parties who are parties to
      such action) or (ii) the indemnifying party shall not have employed
      counsel satisfactory to the indemnified party to represent the indemnified
      party within a reasonable time after notice of commencement of the action,
      in each of which cases the fees and expenses of counsel shall be at the
      expense of the indemnifying party.

      (d)   Settlements.

            The indemnifying party under this Section 8 shall not be liable for
      any settlement of any proceeding effected without its written consent, but
      if settled with such consent or if there be a final judgment for the
      plaintiff, the indemnifying party agrees to indemnify the indemnified
      party against any loss, claim, damage, liability or expense by reason of
      such settlement or judgment. Notwithstanding the foregoing sentence, if at
      any time an indemnified party shall have requested an indemnifying party
      to reimburse the indemnified party for fees and expenses of counsel as
      contemplated by Section 8 hereof, the indemnifying party agrees that (i)
      it shall be liable for any settlement of any proceeding effected without
      its written consent if such settlement is entered into more than 30 days
      after receipt by such indemnifying party of the aforesaid request; and
      (ii) such indemnifying party shall not have reimbursed the indemnified
      party in

                                      25
<PAGE>

      accordance with such request prior to the date of such settlement. No
      indemnifying party shall, without the prior written consent of the
      indemnified party, effect any settlement, compromise or consent to the
      entry of judgment in any pending or threatened action, suitor proceeding
      in respect of which any indemnified party is or could have been a party
      and indemnity was or could have been sought hereunder by such indemnified
      party, unless such settlement, compromise or consent includes an
      unconditional release of such indemnified party from all liability on
      claims that are the subject matter of such action, suitor proceeding.

SECTION 9.  Contribution.

            If the indemnification provided for in Section 8 is for any reason
held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (1) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors on the one hand, and the
Initial Purchasers, on the other hand, from the offering of the Securities
pursuant to this Agreement; or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Guarantors, on the one hand, and
the Initial Purchasers, on the other hand, in connection with the statements or
omissions or inaccuracies in the representations and warranties herein which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Guarantors, on the one hand, and the Initial Purchasers, on
the other hand, in connection with the offering of the Securities pursuant to
this Agreement shall be deemed to be in the same respective proportions as the
total net proceeds from the offering of the Securities pursuant to this
Agreement (before deducting expenses) received by the Company or the Guarantors,
and the total discount received by the Initial Purchasers bear to the aggregate
initial offering price of the Securities. The relative fault of the Company and
the Guarantors, on the one hand, and the Initial Purchasers, on the other hand,
shall be determined by reference to, among other things, whether any such untrue
or alleged untrue statement of a material factor omission or alleged omission to
state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Company or the
Guarantors, on the one hand, or the Initial Purchasers, on the other hand, and
the parties' relative intent, knowledge, access to information and opportunity
to corrector prevent such statement or omission.

            The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.

            The Company, the Guarantors and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in this Section 9.

                                      26
<PAGE>

            Notwithstanding the provisions of this Section 9, no Initial
Purchaser shall be required to contribute any amount in excess of the discount
received by such Initial Purchaser's in connection with the Securities
distributed by it. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers' obligations to contribute pursuant to
this Section 9 are several, and not joint, in proportion to their respective
commitments as set forth opposite their names in Schedule A.

            For purposes of this Section 9, each director, officer and employee
of an Initial Purchaser and each person, if any, who controls an Initial
Purchaser within the meaning of the Securities Act and the Exchange Act shall
have the same rights to contribution as such Initial Purchaser, and each
director of the Company or any Guarantor, and each person, if any, who controls
the Company or any Guarantor within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as the Company or any
Guarantor.

SECTION 10.  Termination of this Agreement.

            Prior to the Closing Date, this Agreement may be terminated by the
Initial Purchasers by notice given to the Company if at any time: (i) trading or
quotation in any of the Company's or any Guarantor's securities shall have been
suspended or limited by the Commission or by the Nasdaq Stock Market, or trading
in securities generally on either the Nasdaq Stock Market or the New York Stock
Exchange shall have been suspended or limited, or minimum or maximum prices
shall have been generally established on any of such stock exchanges by the
Commission or the NASD; (ii) a general banking moratorium shall have been
declared by any of federal, New York, North Carolina or Delaware authorities;
(iii) there shall have occurred any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any change in the United
States or international financial markets, or any substantial change or
development involving a prospective substantial change in United States' or
international political, financial or economic conditions, as in the judgment of
the Initial Purchasers is material and adverse and makes it impracticable to
market the Securities in the manner and on the terms described in the Offering
Memorandum or to enforce contracts for the sale of securities; (iv) in the
judgment of the Initial Purchasers there shall have occurred any Material
Adverse Change; or (v) the Company or any Guarantor shall have sustained a loss
by strike, the, flood, earthquake, accident or other calamity of such character
as in the judgment of the Initial Purchasers may interfere materially with the
conduct of the business and operations of the Company regardless of whether or
not such loss shall have been insured.

            Any termination pursuant to this Section 10 shall be without
liability on the part of (a) the Company or any Guarantor to any Initial
Purchaser except that the Company and the Guarantors shall be obligated to
reimburse the expenses of the Initial Purchasers pursuant to Sections 4 and 6
hereof, (b) any Initial Purchaser to the Company or any Guarantor, or (c) any
party hereto to any other party except that the provisions of Section 8 and
Section 9 shall at all times be effective and shall survive such termination.

SECTION 11.  Representations and Indemnities to Survive Delivery.

            The respective indemnities, agreements, representations, warranties
and other statements of the Company and the Guarantors, of their respective
officers and of the several Initial Purchasers set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Initial Purchaser or the Company or
the Guarantors or any of its or their partners, officers or directors or any
controlling

                                      27
<PAGE>

person, as the case may be, and will survive delivery of and payment
for the Securities sold hereunder and any termination of this Agreement.

SECTION 12.  Notices.

            All communications hereunder shall be in writing and shall be
mailed, hand delivered or telecopied and confirmed to the parties hereto as
follows:

If to the Initial Purchasers:

         Banc of America Securities LLC
         9 West 57th Street, 6th Floor
         New York, NY 10019
         Facsimile:    (212) 847-6441
         Attention:    High Yield Capital Markets

with a copy to:

         Shearman & Sterling LLP
         599 Lexington Avenue
         New York, NY 10022
         Facsimile:    (212) 848-7179
         Attention:    Marwan Elaraby, Esq.

If to the Company or the Guarantors:

         MedCath Corporation
         10720 Sikes Place
         Suite 300
         Charlotte, NC  28277
         Facsimile:    (704) 705-5035
         Attention:    J. Arthur Parker

with a copy to:

         Moore & Van Allen PLLC
         100 N. Tryon, Suite 4700
         Charlotte, NC  28202
         Facsimile:    (704) 331-1159
         Attention:    Hal A. Levinson, Esq.

Any party hereto may change the address for receipt of communications by giving
written notice to the others.

SECTION 13.  Successors.

            This Agreement will inure to the benefit of and be binding upon the
parties hereto, including any substitute Initial Purchasers pursuant to Section
16 hereof, and to the benefit of the employees, officers and directors and
controlling persons referred to in Section 8 and Section 9, and in each case
their respective successors, and no other person will have any

                                      28
<PAGE>

right or obligation hereunder. The term "successors" shall not include any
purchaser of the Securities as such from any of the Initial Purchasers merely by
reason of such purchase.

SECTION 14.  Partial Unenforceability.

            The invalidity or unenforceability of any Section, paragraph or
provision of this Agreement shall not affect the validity or enforceability of
any other Section, paragraph or provision hereof. If any Section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.

SECTION 15.  Governing Law Provisions.

      (a)   Governing Law.

            THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
      THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
      AND TO BE PERFORMED IN SUCH STATE.

      (b)   Consent to Jurisdiction.

            Any legal suit, action or proceeding arising out of or based upon
      this Agreement or the transactions contemplated hereby ("Related
      Proceedings") may be instituted in the federal courts of the United States
      of America located in the City and County of New York or the courts of the
      State of New York in each case located in the City and County of New York
      (collectively, the "Specified Courts"), and each party irrevocably submits
      to the non-exclusive jurisdiction (except for proceedings instituted in
      regard to the enforcement of a judgment of any such court (a "Related
      Judgment"), as to which such jurisdiction is non-exclusive) of such courts
      in any such suit, action or proceeding. Service of any process, summons,
      notice or document by mail to such party's address set forth above shall
      be effective service of process for any suit, action or other proceeding
      brought in any such court. The parties irrevocably and unconditionally
      waive any objection to the laying of venue of any suit, action or other
      proceeding in the Specified Courts and irrevocably and unconditionally
      waive and agree not to plead or claim in any such court that any such
      suit, action or other proceeding brought in any such court has been
      brought in an inconvenient forum.

SECTION 16.  Default of One or More of the Several Initial Purchasers.

            If any one or more of the several Initial Purchasers shall fail or
refuse to purchase Securities that it or they have agreed to purchase hereunder
on the Closing Date, and the aggregate number of Securities which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused
to purchase does not exceed 10% of the aggregate number of the Securities to be
purchased on such date, the other Initial Purchasers shall be obligated,
severally, in the proportions that the number of Securities set forth opposite
their respective names on Schedule A bears to the aggregate number of Securities
set forth opposite the names of all such non-defaulting Initial Purchasers, or
in such other proportions as may be specified by the Initial Purchasers with the
consent of the non-defaulting Initial Purchasers, to purchase the Securities
which such defaulting Initial Purchaser or Initial Purchasers agreed but failed
or refused to purchase on such date. If any one or more of the Initial
Purchasers shall fail or refuse to purchase Securities and the aggregate number
of Securities with respect to which such default occurs exceeds 10% of the
aggregate number of Securities to be purchased on the Closing Date, and

                                      29
<PAGE>

arrangements satisfactory to the Initial Purchasers and the Company for the
purchase of such Securities are not made within 48 hours after such default,
this Agreement shall terminate without liability of any party to any other party
except that the provisions of Section 4, Section 6, Section 8 and Section 9
shall at all times be effective and shall survive such termination. In any such
case either the Initial Purchasers or the Company shall have the right to
postpone the Closing Date, as the case may be, but in no event for longer than
seven days in order that the required changes, if any, to the Offering
Memorandum or any other documents or arrangements may be effected.

            As used in this Agreement, the term "Initial Purchaser" shall be
deemed to include any person substituted for a defaulting Initial Purchaser
under this Section 16. Any action taken under this Section 16 shall not relieve
any defaulting Initial Purchaser from liability in respect of any default of
such Initial Purchaser under this Agreement.

SECTION 17.  General Provisions.

            This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. This Agreement may be executed in two or more counterparts, each
one of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement may not be
amended or modified unless in writing by all of the parties hereto, and no
condition herein (express or implied) may be waived unless waived in writing by
each party whom the condition is meant to benefit. The Table of Contents and the
section headings herein are for the convenience of the parties only and shall
not affect the construction or interpretation of this Agreement.

            If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.

                                      30
<PAGE>
                                  Very truly yours,

                                  MEDCATH CORPORATION
                                  MEDCATH HOLDINGS CORP.

                                  By: /s/ John T. Casey
                                     -----------------------------------------
                                     Name: John T. Casey
                                     Title: President

Purchase Agreement MedCath
<PAGE>

                                  AHH MANAGEMENT, INC.
                                  AUSTIN MOB, INC.
                                  DTO MANAGEMENT, INC.
                                  HHBF, INC.
                                  HARLINGEN HOSPITAL MANAGEMENT, INC.
                                  HARLINGEN PARTNERSHIP HOLDINGS, INC.
                                  HOSPITAL MANAGEMENT IV, INC.
                                  LAFAYETTE HOSPITAL MANAGEMENT, INC.
                                  LOUISIANA HOSPITAL MANAGEMENT, INC.
                                  MEDCATH OF ARKANSAS, INC.
                                  MEDCATH CARDIOLOGY CONSULTING &
                                   MANAGEMENT, INC.
                                  MEDCATH INCORPORATED
                                  MEDCATH OF TEXAS, INC.
                                  MILWAUKEE HOSPITAL MANAGEMENT, INC.
                                  NM HOSPITAL MANAGEMENT, INC.
                                  SAN ANTONIO HOLDINGS, INC.
                                  SAN ANTONIO HOSPITAL MANAGEMENT, INC.
                                  SIOUX FALLS HOSPITAL MANAGEMENT, INC.
                                  SOUTHERN ARIZONA HEART, INC.
                                  VENTURE HOLDINGS, INC.

                                  By: /s/ John T. Casey
                                     ---------------------------------
                                           Name:    John T. Casey
                                           Title:   President

Purchase Agreement MedCath

<PAGE>

                                  INTERIM DIAGNOSTICS SOLUTIONS, LLC
                                  MEDCATH DIAGNOSTICS, LLC
                                  MEDCATH FINANCE COMPANY, LLC
                                  MEDCATH NUCLEAR SERVICES, LLC
                                  METUCHEN NUCLEAR MANAGEMENT, LLC

                                  By:/s/ John T. Casey
                                     -----------------------------------------
                                     Name: John T. Casey
                                     Title: Manager

                                  By: /s/ James E. Harris
                                     -----------------------------------------
                                     Name: James E. Harris
                                     Title: Manager

                                  HEART RESEARCH CENTERS
                                  INTERNATIONAL, LLC

                                  By: MEDCATH DIAGNOSTICS, LLC

                                  By: /s/ John T. Casey
                                     ------------------------------------------
                                     Name: John T. Casey
                                     Title: Manager

                                  By: /s/ James E. Harris
                                     -------------------------------------------
                                     Name: James E. Harris
                                     Title: Manager

Purchase Agreement MedCath
<PAGE>

            The foregoing Purchase Agreement is hereby confirmed and accepted by
      the Initial Purchasers as of the date first above written.

BANC OF AMERICA SECURITIES LLC
WACHOVIA CAPITAL MARKETS, LLC
CITIGROUP GLOBAL MARKETS INC.
J.P. MORGAN SECURITIES INC.

By: Banc of America Securities LLC

By: /s/ Bruce Thompson
    -----------------------------
    Name: Bruce Thompson
    Title: Managing Director

Purchase Agreement
<PAGE>

                                   SCHEDULE A

<TABLE>
<CAPTION>
                                                                   Aggregate Principal
Initial Purchasers                                                  Amount of Notes to
------------------                                                     be Purchased
                                                                   --------------------
<S>                                                                <C>
Banc of America Securities LLC................................         $ 57,000,000
Wachovia Capital Markets, LLC.................................           43,500,000
Citigroup Global Markets Inc..................................           30,000,000
J.F. Morgan Securities Inc....................................           19,500,000

                    Total.....................................         $150,000,000
</TABLE>

<PAGE>

                                   SCHEDULE B

                               List of Guarantors

<TABLE>
<CAPTION>

       GUARANTOR                                  JURISDICTION OF INCORPORATION         LOCAL COUNSEL
       ---------                                  -----------------------------         -------------
<S>                                               <C>                                <C>
AHH Management, Inc.                                      North Carolina             Moore & Van Allen PLLC
Austin MOB, Inc.                                          North Carolina             Moore & Van Allen PLLC
DTO Management, Inc.                                      North Carolina             Moore & Van Allen PLLC
HHBF, Inc.                                                North Carolina             Moore & Van Allen PLLC
Harlingen Hospital Management, Inc.                       North Carolina             Moore & Van Allen PLLC
Harlingen Partnership Holdings, Inc.                        Arizona                    Snell & Wilmer LLP
Heart Research Centers International, LLC                 North Carolina             Moore & Van Allen PLLC
Hospital Management IV, Inc.                              North Carolina             Moore & Van Allen PLLC
Interim Diagnostic Solutions, LLC                         Delaware                   Moore & Van Allen PLLC
Lafayette Hospital Management, Inc.                       North Carolina             Moore & Van Allen PLLC
Louisiana Hospital Management, Inc.                       North Carolina             Moore & Van Allen PLLC
MedCath of Arkansas, Inc.                                 North Carolina             Moore & Van Allen PLLC
MedCath Cardiology Consulting & Management, Inc.            Arizona                    Snell & Wilmer LLP
MedCath Corporation                                         Delaware                 Moore & Van Allen PLLC
MedCath Diagnostics, LLC                                  North Carolina             Moore & Van Allen PLLC
MedCath Finance Company LLC                               North Carolina             Moore & Van Allen PLLC
MedCath Incorporated                                      North Carolina             Moore & Van Allen PLLC
MedCath Nuclear Services, LLC                             North Carolina             Moore & Van Allen PLLC
MedCath of Texas, Inc.                                    North Carolina             Moore & Van Allen PLLC
Metuchen Nuclear Management, LLC                            Delaware                 Moore & Van Allen PLLC
Milwaukee Hospital Management, Inc.                       North Carolina             Moore & Van Allen PLLC
NM Hospital Management, Inc.                              North Carolina             Moore & Van Allen PLLC
San Antonio Holdings, Inc.                                  Arizona                    Snell & Wilmer LLP
San Antonio Hospital Management, Inc.                     North Carolina             Moore & Van Allen PLLC
Sioux Falls Hospital Management, Inc.                     North Carolina             Moore & Van Allen PLLC
Southern Arizona Heart, Inc.                              North Carolina             Moore & Van Allen PLLC
Venture Holdings, Inc.                                      Arizona                    Snell & Wilmer LLP
</TABLE>

<PAGE>

                                   SCHEDULE C

                              List of Subsidiaries

MHI, Inc.
MedCath Intermediate Holdings, Inc.
MedCath Incorporated
ANN Management, Inc.
Arizona Heart Hospital, LLC
Austin MOB, Inc.
Blue Ridge Cardiology Services, LLC
Caldwell Cardiology Services, LLC
Cape Cod Cardiology Services, LLC
Center for Cardiac Sleep Medicine, LLC
Central Park Medical Office Building, L.P.
Colorado Springs Cardiology Services, LLC
DTO Management, Inc.
Gaston Cardiology Services, LLC
Greensboro Heart Center, LLC
Harlingen Hospital Management, Inc.
Harlingen Medical Center, L.P.
Harlingen Partnership Holdings, Inc.
Heart Hospital IV, L.P.
Heart Hospital of BK, LLC
Heart Hospital of DTO, LLC
Heart Hospital of Lafayette, LLC
Heart Hospital of New Mexico, LLC
Heart Hospital of San Antonio, LP
Heart Hospital of South Dakota, LLC
Heart Research Centers International, LLC
Heart South Imaging II, LLC
HHBF,Inc.
H&S Land Company, LLC
Hospital Management IV, Inc.
Hospital Pharmacy of Bakersfield, Inc.
Interim Diagnostic Solutions, LLC
Lafayette Hospital Management, Inc.
Louisiana Hospital Management, Inc.
Louisiana Heart Hospital, LLC
MedCath Cardiology Consulting & Management, Inc.
MedCath Diagnostics, LLC
MedCath Finance Company, Inc.
MedCath Management of Ohio, Inc.
MedCath of Arkansas, Inc.
MedCath of Little Rock, LLC
MedCath of McAllen, L.P.
MedCath of New Jersey Cardiac Testing Centers, LP
MedCath of Texas, Inc.
MedCath of Tucson, LLC
MedCath Nuclear Services, LLC
Metuchen Nuclear Management, LLC

<PAGE>

Milwaukee Hospital Management, Inc.
NM Hospital Management, Inc.
San Antonio Holdings, Inc.
San Antonio Hospital Management, Inc.
Sioux Falls Hospital Management, Inc.
Slidell-Covington Heart Center, LLC
Southern Arizona Heart, Inc.
Sun City Cardiac Center Associates
The Heart Hospital of Milwaukee, LLC
Venture Holdings, Inc.
Wilmington Heart Center, LLC
WMS Management Inc.

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