{"id":41191,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/officers-certificate-pursuant-to-sections-2-3-and-11-5-of-the.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"officers-certificate-pursuant-to-sections-2-3-and-11-5-of-the","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/officers-certificate-pursuant-to-sections-2-3-and-11-5-of-the.html","title":{"rendered":"Officers&#8217; Certificate Pursuant to Sections 2.3 and 11.5 of the Indenture &#8211; HealthSouth Corp. and PNC Bank NA"},"content":{"rendered":"<pre>\n                             HEALTHSOUTH CORPORATION\n                        OFFICERS' CERTIFICATE PURSUANT TO\n                     SECTIONS 2.3 AND 11.5 OF THE INDENTURE\n\n     Michael D. Martin and William W. Horton do hereby certify that they are the\nExecutive Vice President,  Chief Financial Officer and Treasurer and Senior Vice\nPresident,   Corporate  Counsel  and  Assistant  Secretary,   respectively,   of\nHEALTHSOUTH  Corporation,  a Delaware corporation (the 'Company') and do further\ncertify,  pursuant  to  resolutions  of the Board of  Directors  of the  Company\nadopted on May 21, 1998 and  resolutions of the Pricing  Committee of said Board\nof Directors adopted on June 17, 1998 (collectively, the 'Resolutions'),  and in\naccordance with Sections 2.3 and 11.5 of the Indenture (the Indenture as amended\nand  supplemented by the  Resolutions is herein referred to as the  'Indenture')\ndated  as  of  June  22,  1998  between  the  Company  and  PNC  Bank,  National\nAssociation, as trustee (the 'Trustee'), as follows:\n\n     1. Two series of securities to be issued under the Indenture and designated\nas the  Company's  6.875%  Senior  Notes due 2005 (the '2005  Notes'),  and 7.0%\nSenior Notes due 2008 (the '2008 Notes') have been authorized.  Each of the 2005\nNotes and the 2008 Notes are a separate series of securities under the Indenture\nand are referred to herein collectively as the 'Securities.'  Attached hereto as\nAnnex A is a true and  correct  copy of a specimen  2005 Note (the 'Form of 2005\nNote') and  attached  hereto as Annex B is a true and correct copy of a specimen\n2008 Note (the 'Form of 2008 Note').  The Form of 2005 Note and the Form of 2008\nNote are herein collectively referred to as the 'Forms of Securities.'\n\n     2. The 2005 Notes shall be limited to $250,000,000  in aggregate  principal\namount and shall mature on June 15, 2005.  The 2005 Notes shall bear interest at\nthe rate of 6.875% per annum from June 22, 1998,  payable  semiannually  on each\nJune 15 and December 15 commencing December 15, 1998. The 2005 Notes were issued\nat the initial  offering  price of 99.729% of principal  amount.  The 2005 Notes\nshall be  redeemable  as  provided in the Form of 2005 Note  attached  hereto as\nAnnex A.\n\n     3. The 2008 Notes shall be limited to $250,000,000  in aggregate  principal\namount and shall mature on June 15, 2008.  The 2008 Notes shall bear interest at\nthe rate of 7.0% per annum from June 22, 1998, payable semiannually on each June\n15 and December 15 commencing  December 15, 1998.  The 2008 Notes were issued at\nthe initial offering price of 99.050% of principal amount.  The 2008 Notes shall\nbe redeemable as provided in the Form of 2008 Note attached hereto as Annex B.\n\n     4. The following terms shall apply to each of the Securities:\n\n\n                                       1\n\n\n\n\n\n          (a) The Securities shall be issued initially in minimum  denominations\n     of $1,000 and integral multiples of $1,000;\n\n          (b) The  Securities  shall  be  issued  initially  in  part as  global\n     securities in registered  form in the name of the  Depositary  (hereinafter\n     defined) or its nominee in such  denominations  as shall be  specified in a\n     Company Order  delivered in accordance  with the Indenture and otherwise as\n     provided in the Forms of  Securities  with such  changes  thereto as may be\n     required in the process of printing or otherwise  producing the  Securities\n     and which will not affect the substance thereof;\n\n          (c) The Depositary for the global  Securities  shall be The Depository\n     Trust Company;\n\n          (d)  The  global  Securities  shall  be  exchangeable  for  definitive\n     Securities  in  registered  form  substantially  the  same  as  the  global\n     Securities in denominations of $1,000 or any integral multiple thereof upon\n     the terms and in accordance with the provisions of the Indenture;\n\n          (e)  The  Securities  shall  be  payable  (as to  both  principal  and\n     interest)  when and as the  same  shall  become  due at the  office  of the\n     Trustee, PNC Bank, National Association, provided that, as long as any part\n     of the  Securities  are in the  form  of  one or  more  global  Securities,\n     payments of interest with respect thereto may be made by wire transfer, and\n     provided  further  that,  with respect to  Securities  issued in definitive\n     form, the Company may elect to exercise its option to have interest paid by\n     check  mailed  to the  registered  owners'  address  as they  appear on the\n     Register, as kept by the Trustee on each Record Date; and\n\n          (f) The defeasance and covenant defeasance provisions of Article 10 of\n     the Indenture shall be applicable to the Securities.\n\n     5. The Forms of Securities  set forth  certain of the terms  required to be\nset forth in this certificate pursuant to Section 2.3 of the Indenture, and said\nterms are incorporated herein by reference.\n\n     6. In addition to the  covenants  set forth in Article 3 of the  Indenture,\nthe Securities shall include the following additional covenants:\n\n     'Section 3.10 Limitation on Liens.\n\n\n                                       2\n\n\n\n\n\n     The Company  shall not,  nor will it permit any  Subsidiary  to,  create or\nassume any  Indebtedness  for money  borrowed  which is  secured by a  mortgage,\nsecurity interest, pledge, charge, lien or other similar encumbrance of any kind\n(collectively,  a  'lien')  upon any  assets,  whether  now  owned or  hereafter\nacquired,  of the  Company or any such  Subsidiary  without  equally and ratably\nsecuring  the  Securities  by a lien  ranking  ratably  with and equally to such\nsecured  Indebtedness,  except that the foregoing restriction shall not apply to\n(i) liens on assets of any  corporation  existing  at the time such  corporation\nbecomes a Subsidiary;  (ii) liens on assets  existing at the time of acquisition\nthereof,  or to secure the payment of the purchase  price of such assets,  or to\nsecure  indebtedness  incurred or guaranteed by the Company or a Subsidiary  for\nthe purpose of financing the purchase  price of such assets or  improvements  or\nconstruction thereon,  which indebtedness is incurred or guaranteed prior to, at\nthe time of or within 360 days after  such  acquisition  (or in the case of real\nproperty, completion of such improvement or construction or commencement of full\noperation  of  such  property,   whichever  is  later);   (iii)  liens  securing\nindebtedness  owed by any  Subsidiary  to the  Company or  another  wholly-owned\nSubsidiary;  (iv) liens on any assets of a corporation existing at the time such\ncorporation is merged into or  consolidated  with the Company or a Subsidiary or\nat the time of a  purchase,  lease  or  other  acquisition  of the  assets  of a\ncorporation  or firm as an  entirety  or  substantially  as an  entirety  by the\nCompany or a Subsidiary;  (v) liens on any assets of the Company or a Subsidiary\nin favor of the United  States of America or any state  thereof,  or in favor of\nany  other  country,  or in favor  of any  political  subdivision  of any of the\nforegoing,  to secure certain payments pursuant to any contract or statute or to\nsecure any indebtedness  incurred or guaranteed for the purpose of financing all\nor any part of the purchase price (or, in the case of real property, the cost of\nconstruction) of the assets subject to such liens (including but not limited to,\nliens  incurred  in  connection  with  industrial  revenue or similar  financing\ninvolving  a  political  subdivision,  agency or  authority  thereof);  (vi) any\nextension,  renewal  or  replacement  (or  successive  extensions,  renewals  or\nreplacements)  in whole or in part,  of any lien  referred  to in the  foregoing\nclauses (i) to (v),  inclusive;  (vii) certain  statutory liens or other similar\nliens arising in the ordinary course of business of the Company or a Subsidiary,\nor certain liens arising out of government  contracts;  (viii) certain  pledges,\ndeposits  or  liens  made or  arising  under  workers  compensation  or  similar\nlegislation or in certain other circumstances;  (ix) certain liens in connection\nwith legal  proceedings,  including  certain  liens  arising out of judgments or\nawards;  (x) liens for certain taxes or assessments,  landlord's liens and liens\nand charges  incidental  to the conduct of the business or the  ownership of the\nassets of the Company or of a Subsidiary,  which were not incurred in connection\nwith the  borrowing  of money and which do not, in the  opinion of the  Company,\nmaterially impair the use of such assets in the operation of the business of the\nCompany or such Subsidiary or\n\n\n                                       3\n\n\n\n\n\nthe value of such  assets for the  purposes  thereof or (xi) liens  relating  to\naccounts  receivable of the Company or any of its  Subsidiaries  which have been\nsold,  assigned or  otherwise  transferred  to another  Person in a  transaction\nclassified  as a sale  of  accounts  receivable  in  accordance  with  generally\naccepted  accounting  principles  (to the extent the sale by the  Company or the\napplicable Subsidiary is deemed to give rise to a lien in favor of the purchaser\nthereof in such accounts  receivable or the proceeds  thereof).  Notwithstanding\nthe above,  the Company or any Subsidiary may,  without securing the Securities,\ncreate or assume any Indebtedness which is foregoing restrictions, provided that\nafter giving effect thereto the Exempted Debt then  outstanding  does not exceed\n10%  of  the  total  Consolidated   Tangible  Assets  of  the  Company  and  its\nSubsidiaries at such time.\n\n     Section 3.11 Limitations on Sale and Lease-Back Transactions.\n\n     The  Company  shall not,  nor shall it permit any of its  Subsidiaries  to,\nenter  into  any sale  and  lease-back  transaction  (except  such  transactions\ninvolving leases for less than three years) for the sale and leasing back of any\nproperty or asset  unless (i) the Company or such  Subsidiary  would be entitled\npursuant to clauses (i) through (xi) of Section 3.10 to create,  incur or permit\nto exist a lien on the  assets to be  leased in an amount at least  equal to the\nAttributable  Debt in respect of such  transaction  without  equally and ratably\nsecuring  the  Securities,  or (ii) the proceeds of the sale of the assets to be\nleased  are at least  equal to their  fair  market  value and the  proceeds  are\napplied to the purchase or acquisition  (or, in the case of real  property,  the\nconstruction) of assets or to the retirement of indebtedness.'\n\n     7. In addition to the  definitions set forth in Article 1 of the Indenture,\nthe following additional  definitions shall apply with respect to the 2005 Notes\nand the 2008 Notes and, in the event of a conflict with the  definition of terms\nin the Indenture, such additional definitions shall control:\n\n     'Attributable  Debt'  means,  in  connection  with  a sale  and  lease-back\ntransaction,  the  lesser of (i) the fair  value of the  assets  subject to such\ntransaction  or (ii) the present value of the  obligations of the lessee for net\nrental payments during the term of any lease  discounted at the rate of interest\nset forth or  implicit  in the terms of such  lease  or, if not  practicable  to\ndetermine such rate, the weighted  average  interest rate per annum borne by the\nSecurities of each series outstanding  pursuant to this Indenture and subject to\nthe  limitation  on sale and  lease-back  transactions  provisions  contained in\nSection  3.11,  compounded  semiannually  in either  case as  determined  by the\nprincipal accounting or financial officer of the Company.\n\n     'Consolidated Tangible Assets' of any Person as of any date means the total\nassets of such Person and its  Subsidiaries \n\n\n                                       4\n\n\n\n\n\n(excluding  any assets that would be  classified  as  'intangible  assets' under\nGAAP) on a  consolidated  basis at such date, as  determined in accordance  with\nGAAP,  less all  write-ups  subsequent  to the date of initial  issuance  of the\nSecurities  in the book  value of any asset  owned by such  Person or any of its\nSubsidiaries.\n\n     'Exempted  Debt'  means  the  sum  of  the  following  as of  the  date  of\ndetermination:  (i)  Indebtedness of the Company and its  Subsidiaries  incurred\nafter the date of issuance of the  Securities and secured by liens not otherwise\npermitted by the  limitation  on liens  provisions  of the  Indenture,  and (ii)\nAttributable  Debt of the Company and its  Subsidiaries in respect of every sale\nand  lease-back  transaction  entered into after the date of the issuance of the\nSecurities, other than leases permitted by Section 3.11.\n\n     'GAAP' shall mean generally accepted accounting principles set forth in the\nopinions and  pronouncements of the Accounting  Principles Board of the American\nInstitute of Certified Public  Accountants and statements and  pronouncements of\nthe Financial  Accounting  Standards  Board or in such other  statements by such\nother  entity as may be  approved  by a  significant  segment of the  accounting\nprofession of the United States, as from time to time in effect.\n\n     'Indebtedness'  shall mean all items classified as indebtedness on the most\nrecently   available   consolidated   balance  sheet  of  the  Company  and  its\nSubsidiaries, in accordance with GAAP.\n\n     8. Each of the  undersigned  is authorized  to approve the form,  terms and\nconditions of the Securities pursuant to the Resolutions.\n\n     9.  Attached  hereto  as  Annex  D  is a  true  and  correct  copy  of  the\nResolutions.\n\n     10.  Attached  hereto as Annex E are true and correct  copies of the letter\naddressed to the Trustee entitling the Trustee to rely on the Opinion of Counsel\nattached  thereto,  which Opinion  relates to the  Securities  and complies with\nSection 11.5 of the Indenture.\n\n     11. Each of the  undersigned  has reviewed the provisions of the Indenture,\nincluding the covenants and conditions  precedent  pertaining to the issuance of\nthe Securities.\n\n     12.  In  connection  with  this  certificate  each of the  undersigned  has\nexamined documents, corporate records and certificates and has spoken with other\nofficers of the Company.\n\n     13. Each of the undersigned has made such examination and  investigation as\nis necessary  to enable him to express an\n\n\n                                       5\n\n\n\n\n\ninformed opinion as to whether or not the covenants and conditions  precedent of\nthe Indenture pertaining to the issuance of the Securities have been satisfied.\n\n     14. In our opinion all of the covenants and conditions  precedent  provided\nfor in the Indenture for the issuance of the Securities have been satisfied.\n\n     15. If and to the extent that any provision of this  certificate  qualifies\nor  conflicts  with any  provision  of the  Indenture,  the  provisions  of this\ncertificate shall control.\n\n     Capitalized terms used herein that are not otherwise defined shall have the\nmeanings  ascribed  thereto in the Indenture or the Securities,  as the case may\nbe.\n\n     IN WITNESS  WHEREOF,  each of the  undersigned  officers has executed  this\ncertificate this 22nd day of June 1998.\n\n\n                                                     \/s\/ MICHAEL D. MARTIN\n                                                     ---------------------------\n                                                     Michael D. Martin\n                                                     Executive Vice President,\n                                                     Chief Financial Officer and\n                                                     Treasurer\n\n\n                                                     \/s\/ WILLIAM W. HORTON\n                                                     ---------------------------\n                                                     William W. Horton\n                                                     Senior Vice President,\n                                                     Corporate Counsel and\n                                                     Assistant Secretary\n\n\n\n     THIS  NOTE  IS A  GLOBAL  SECURITY  WITHIN  THE  MEANING  OF THE  INDENTURE\nHEREINAFTER  REFERRED  TO AND IS  REGISTERED  IN THE NAME OF A  DEPOSITARY  OR A\nNOMINEE OF A DEPOSITARY.  THIS NOTE IS EXCHANGEABLE  FOR NOTES REGISTERED IN THE\nNAME OF A PERSON  OTHER THAN THE  DEPOSITARY  OR ITS NOMINEE ONLY IN THE LIMITED\nCIRCUMSTANCES  DESCRIBED IN THE  INDENTURE,  AND NO TRANSFER OF THIS NOTE (OTHER\nTHAN A TRANSFER  OF THIS NOTE AS A WHOLE BY THE  DEPOSITARY  TO A NOMINEE OF THE\nDEPOSITARY  OR BY A NOMINEE  OF THE  DEPOSITARY  TO THE  DEPOSITARY  OR  ANOTHER\nNOMINEE  OF  THE   DEPOSITARY)   MAY  BE  REGISTERED   EXCEPT  IN  SUCH  LIMITED\nCIRCUMSTANCES.\n\n     UNLESS  THIS  NOTE IS  PRESENTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF THE\nDEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE COMPANY OR\nITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED\nIS  REGISTERED  IN THE NAME OF CEDE &amp; CO. OR SUCH OTHER NAME AS  REQUESTED BY AN\nAUTHORIZED  REPRESENTATIVE  OF THE  DEPOSITORY  TRUST  COMPANY  AND ANY  PAYMENT\nTHEREON  IS MADE TO CEDE &amp; CO.,  ANY  TRANSFER,  PLEDGE OR OTHER USE  HEREOF FOR\nVALUE OR OTHERWISE BY A PERSON IS WRONGFUL  SINCE THE  REGISTERED  OWNER HEREOF,\nCEDE &amp; CO., HAS AN INTEREST HEREIN.\n\n                             HEALTHSOUTH CORPORATION\n\n                           6.875% SENIOR NOTE DUE 2005\n\nNo.______                                                  CUSIP NO. 421924-AG-6\n                                                               $________________\n\n\n\n                                        1\n\n\n\n\n\nTHE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.  SECURITIES\nACT OF 1933, AS AMENDED (THE 'SECURITIES  ACT'),  AND,  ACCORDINGLY,  MAY NOT BE\nOFFERED OR SOLD  WITHIN THE UNITED  STATES OR TO, OR FOR THE  ACCOUNT OR BENEFIT\nOF,  U.S.  PERSONS  EXCEPT  AS SET  FORTH  IN  THE  FOLLOWING  SENTENCE.  BY ITS\nACQUISITION  HEREOF,  THE  HOLDER  (1)  REPRESENTS  THAT (A) IT IS A  'QUALIFIED\nINSTITUTIONAL  BUYER' (AS DEFINED IN RULE 144A UNDER THE SECURITIES  ACT) OR (B)\nIT IS AN INSTITUTIONAL AACCREDITED INVESTOR' (AS DEFINED IN RULE 501(A)(1)(2)(3)\nOR (7) UNDER THE SECURITIES ACT) ('INSTITUTIONAL ACCREDITED INVESTOR') OR (C) IT\nIS NOT A U.S.  PERSON  AND IS  ACQUIRING  THE  SECURITY  EVIDENCED  HEREBY IN AN\nOFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE\nHOLDING PERIOD  APPLICABLE TO SALES OF THE SECURITY  EVIDENCED HEREBY UNDER RULE\n144(K)  UNDER  THE  SECURITIES  ACT  (OR ANY  SUCCESSOR  PROVISION),  RESELL  OR\nOTHERWISE  TRANSFER  THE SECURITY  EVIDENCED  HEREBY  EXCEPT (A) TO  HEALTHSOUTH\nCORPORATION  (THE  'COMPANY')  OR ANY  SUBSIDIARY  THEREOF,  (B)  PURSUANT TO AN\nEFFECTIVE  REGISTRATION  STATEMENT  UNDER THE SECURITIES ACT, (C) TO A QUALIFIED\nINSTITUTIONAL  BUYER IN COMPLIANCE  WITH RULE 144A UNDER THE SECURITIES ACT, (D)\nTO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,  FURNISHES\nTO THE TRUSTEE FOR THE NOTES A SIGNED LETTER CONTAINING CERTAIN  REPRESENTATIONS\nAND  AGREEMENTS  RELATING  TO THE  RESTRICTIONS  ON  TRANSFER  OF  THE  SECURITY\nEVIDENCED  HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH  TRUSTEE),\n(E) OUTSIDE THE UNITED STATES IN COMPLIANCE  WITH RULE 904 UNDER THE  SECURITIES\nACT OR (F)  PURSUANT TO THE  EXEMPTION  FROM  REGISTRATION  PROVIDED BY RULE 144\nUNDER THE  SECURITIES  ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO\nEACH  PERSON  TO WHOM THE  SECURITY  EVIDENCED  HEREBY IS  TRANSFERRED  A NOTICE\nSUBSTANTIALLY  TO THE EFFECT OF THIS LEGEND.  IN CONNECTION WITH ANY TRANSFER OF\nTHE SECURITY  EVIDENCED  HEREBY PRIOR TO THE  EXPIRATION  OF THE HOLDING  PERIOD\nAPPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE\nSECURITIES  ACT  (OR  ANY  SUCCESSOR  PROVISION),  THE  HOLDER  MUST  CHECK  THE\nAPPROPRIATE  BOX SET FORTH ON THE REVERSE HEREOF  RELATING TO THE MANNER OF SUCH\nTRANSFER  AND SUBMIT  THIS  CERTIFICATE  TO THE  TRUSTEE  FOR THE NOTES.  IF THE\nPROPOSED  TRANSFEREE IS AN INSTITUTIONAL  ACCREDITED INVESTOR OR A PURCHASER WHO\nIS NOT A U.S. PERSON,  THE HOLDER MUST,  PRIOR TO SUCH TRANSFER,  FURNISH TO THE\nTRUSTEE FOR THE NOTES SUCH  CERTIFICATIONS,  LEGAL OPINIONS OR OTHER INFORMATION\nAS THE COMPANY OR THE  TRUSTEE  MAY  REASONABLY  REQUIRE,  TO CONFIRM  THAT SUCH\nTRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION  FROM,  OR IN A TRANSACTION  NOT\nSUBJECT TO, THE  REGISTRATION  REQUIREMENTS  OF THE SECURITIES  ACT. THIS LEGEND\nWILL BE REMOVED AFTER THE EXPIRATION OF THE HOLDING  PERIOD  APPLICABLE TO SALES\nOF THE SECURITY  EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS\nUSED HEREIN, THE TERMS 'OFFSHORE TRANSACTION,' 'UNITED STATES' AND 'U.S. PERSON'\nHAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.\n\n\n                                        2\n\n\n\n\n\nTHE HOLDER  HEREOF,  BY ITS  ACCEPTANCE  HEREOF,  IS DEEMED TO HAVE AGREED TO BE\nBOUND BY THE PROVISIONS OF THE REGISTRATION  RIGHTS AGREEMENT,  DATED AS OF JUNE\n22, 1998, BY AND AMONG THE COMPANY,  SALOMON BROTHERS INC, GOLDMAN, SACHS &amp; CO.,\nJ.P. MORGAN SECURITIES INC., MERRILL LYNCH, PIERCE, FENNER &amp; SMITH INCORPORATED,\nMORGAN STANLEY &amp; CO. INCORPORATED,  NATIONSBANC MONTGOMERY SECURITIES LLC, BEAR,\nSTEARNS &amp; CO.  INC.,  CREDIT  SUISSE  FIRST BOSTON  CORPORATION,  DEUTSCHE  BANK\nSECURITIES INC., PAINEWEBBER INCORPORATED AND SCOTIA CAPITAL MARKETS (USA) INC.\n\n     HEALTHSOUTH CORPORATION,  a Delaware corporation (the 'Company,' which term\nincludes any successor corporation under the Indenture hereinafter referred to),\nfor value  received,  hereby promises to pay to Cede &amp; Co., the principal sum of\n________________  on June 15, 2005,  and to pay interest on said  principal  sum\nfrom June 22,  1998,  or from the most  recent  interest  payment  date to which\ninterest has been paid or duly provided for,  semiannually in arrears on June 15\nand  December  15 (each  such date,  an  'Interest  Payment  Date') of each year\ncommencing  on  December  15,  1998,  at the rate of 6.875% per annum  until the\nprincipal hereof shall have become due and payable.\n\n     The  amount of  interest  payable  on any  Interest  Payment  Date shall be\ncomputed on the basis of a 360 day year  comprised of twelve 30 day months.  The\ninterest  installment so payable,  and punctually  paid or duly provided for, on\nany Interest  Payment Date will, as provided in the Indenture (as defined below)\nbe paid to the person in whose name this Note (or one or more predecessor Notes)\nis  registered  at the close of business  on the record  date for such  interest\ninstallment,  which shall be the close of business on the immediately  preceding\nJune 1 and December 1 prior to such Interest  Payment Date, as  applicable.  The\nprincipal of, premium,  if any, and the interest on this Note will be payable at\nthe office or agency of the Company  maintained  for that purpose in the Borough\nof Manhattan,  The City of New York in any coin or currency of the United States\nof America that at the time of payment is legal tender for payment of public and\nprivate debts;  provided,  however,  that payment of interest may be made at the\noption of the  Company by check  mailed to the person  entitled  thereto at such\naddress as shall appear in the registry books of the Company;  provided, further\nthat for so long as this Note is  represented by a Registered  Global  Security,\npayment of principal,  premium,  if any, or interest on this Note may be made by\nwire transfer to the account of the Depositary or its nominee. In the event that\nany date on which the  principal,  premium,  if any, or interest on this Note is\npayable is not a Business Day, then payment of  principal,  premium,  if any, or\ninterest  payable on such date will be made on the next succeeding day that is a\nBusiness  Day (and  without  any  interest  or other  payment in respect of such\ndelay).\n\n     Unless the certificate of authentication  hereon has been executed by or on\nbehalf of the Trustee (as defined below) under the Indenture (as defined below),\nby the manual signature of one of its authorized  officers,  this Note shall not\nbe entitled to any benefit under the Indenture or be valid or obligatory for any\npurpose.\n\n     Capitalized  terms  used in this Note which are  defined  in the  Indenture\nshall have the respective meanings assigned to them in the Indenture.\n\n     Reference is hereby made to the further provisions of this Note hereinafter\nset forth,  which further provisions shall for all purposes have the same effect\nas if set forth at this place.\n\n\n                                        3\n\n\n\n\n\n     IN WITNESS  WHEREOF,  the  Company has caused  this  instrument  to be duly\nexecuted, manually or in facsimile, and an imprint or facsimile of its corporate\nseal to be imprinted hereon.\n\n                                                   HEALTHSOUTH Corporation\n\n                                                   By\n                                                     ---------------------------\n                                                          Michael D. Martin\n                                                      Executive Vice President,\n                                                       Chief Financial Officer\n                                                            and Treasurer\n\nATTEST:\n       -----------------------------------------\n                   William W. Horton\n                Senior Vice President,\n       Corporate Counsel and Assistant Secretary\n\n\nCERTIFICATE  OF  AUTHENTICATION  This is\none of the Securities referred to in the\nwithin-mentioned Indenture.\n\nPNC BANK, NATIONAL ASSOCIATION,\nas Trustee\n\nBy\n  -----------------------------\n        Authorized Officer\n\nDated:\n      ------------------------\n\n\n\n\n                                        4\n\n\n\n\n                              REVERSE SIDE OF NOTE\n\n     This  Note  is  one  of  a  duly  authorized   series  of  securities  (the\nASecurities')  of the Company  designated  as its 6.875%  Senior  Notes due 2005\nlimited  in  aggregate  principal  amount to  $250,000,000  (the  'Notes').  The\nSecurities  are all issued or to be issued under and  pursuant to an  Indenture,\ndated as of June 22, 1998, as supplemented by that certain Officers' Certificate\ndated June 22, 1998 (the Indenture as supplemented by the Officers'  Certificate\nbeing herein  collectively  referred to as the  'Indenture'),  duly executed and\ndelivered between the Company and PNC Bank, National Association (the 'Trustee,'\nwhich term  includes any  successor  Trustee with respect to the Notes under the\nIndenture), to which Indenture and all indentures supplemental thereto reference\nis hereby  made for a  statement  of the  respective  rights  thereunder  of the\nCompany,  the Trustee and the holders of the Securities and the terms upon which\nthe Notes are to be authenticated and delivered.  The terms of individual series\nof Securities  may vary with respect to interest rate or interest rate formulas,\nissue dates, maturity, redemption, repayment, currency of payment and otherwise.\n\n     Reference is hereby made to the Indenture for a description of the terms of\nthe Notes,  to all of the provisions of which Indenture the holder of this Note,\nby acceptance hereof, assents and agrees.\n\n     Except as set forth below,  this Note is not redeemable and is not entitled\nto the benefit of a sinking fund or any analogous provision.\n\n     This  Note is  redeemable  as a whole  or in  part,  at the  option  of the\nCompany,  at any time at a redemption  price equal to the greater of (i) 100% of\nits  principal  amount and (ii) the sum of the present  values of the  remaining\nscheduled  payments of principal and interest thereon  discounted to the date of\nredemption on a semi-annual  basis (assuming a 360-day year consisting of twelve\n30-day months) at the Treasury  Yield plus 15 basis points,  plus, in each case,\naccrued  interest to the date of redemption.  On and after the redemption  date,\ninterest  will cease to accrue on the Notes or any  portion  thereof  called for\nredemption.  On or before the redemption  date, the Company shall deposit with a\npaying agent (or the Trustee) money  sufficient to pay the  redemption  price of\nand accrued  interest on the Notes to be redeemed on such date. If less than all\nof the Notes are to be redeemed,  the Notes to be redeemed  shall be selected by\nthe Trustee by such method as the Trustee shall deem fair and  appropriate.  The\nHolder of this Note will receive notice thereof by first-class  mail at least 30\nand not more than 60 days prior to the date fixed for redemption.\n\n\n                                       5\n\n\n\n\n\n     'Treasury  Yield' means,  with respect to any redemption date, the rate per\nannum equal to the  semi-annual  equivalent  yield to maturity of the Comparable\nTreasury Issue, assuming a price for the Comparable Treasury Issue (expressed as\na percentage of its principal amount) equal to the Comparable Treasury Price for\nsuch  redemption  date.  'Comparable  Treasury  Issue'  means the United  States\nTreasury  security  selected  by an  Independent  Investment  Banker as having a\nmaturity comparable to the remaining term of the Note that would be utilized, at\nthe time of selection and in accordance with customary  financial  practice,  in\npricing new issues of corporate  debt  securities of comparable  maturity to the\nremaining  term of the  Note.  'Independent  Investment  Banker'  means  Salomon\nBrothers Inc and its successor or, if such firm is unwilling or unable to select\nthe Comparable Treasury Issue, an independent  investment banking institution of\nnational standing appointed by the Trustee.  'Comparable  Treasury Price' means,\nwith respect to any redemption date, (i) the average of the bid and asked prices\nfor the Comparable Treasury Issue (expressed in each case as a percentage of its\nprincipal  amount) on the third business day preceding such redemption  date, as\nset forth in the daily statistical  release (or any successor release) published\nby the Federal  Reserve  Bank of New York and  designated  'Composite  3:30 p.m.\nQuotations  for U.S.  Government  Securities'  or (ii) if such  release  (or any\nsuccessor  release) is not  published  or does not  contain  such prices on such\nbusiness day, (A) the average of the Reference  Treasury  Dealer  Quotations for\nsuch  redemption  date,  after  excluding the highest and lowest such  Reference\nTreasury Dealer  Quotations,  or (B) if the Trustee obtains fewer than four such\nReference  Treasury  Dealer  Quotations,  the  average  of all such  quotations.\n'Reference  Treasury Dealer  Quotations'  means,  with respect to each Reference\nTreasury  Dealer and any  redemption  date,  the average,  as  determined by the\nTrustee, of the bid and asked prices of the Comparable Treasury Issue (expressed\nin each case as a percentage of its principal  amount)  quoted in writing to the\nTrustee by such Reference Treasury Dealer at 5:00 p.m. on the third business day\npreceding such redemption date. 'Reference Treasury Dealer' means a primary U.S.\nGovernment  Securities  dealer in New York City  selected by the  Trustee  after\nconsultation with the Company.\n\n     If an Event of  Default  with  respect  to the  Notes  shall  occur  and be\ncontinuing,  the  principal  of all the Notes may be declared due and payable in\nthe manner and with the effect provided in the Indenture.\n\n\n\n                                       6\n\n\n\n\n\n     The Indenture contains  provisions  permitting the Company and the Trustee,\nwith the  consent  of the  holders  of not less  than a  majority  in  aggregate\nprincipal  amount of the  Securities of all series  issued under such  Indenture\nthen outstanding and affected (voting as one class) to add any provisions to, or\nchange in any manner or eliminate any of the  provisions  of, such  Indenture or\nmodify in any manner the rights of the holders of the  Securities of each series\nor Coupons so  affected;  provided  that the  Company  and the  Trustee may not,\nwithout the consent of the holder of each Outstanding Note affected thereby, (i)\nextend the final  maturity of the principal of any Note, or reduce the principal\namount  thereof,  or premium  thereon,  if any, or reduce the rate or extend the\ntime of payment of interest thereon,  or reduce any amount payable on redemption\nthereof  or make the  principal  thereof  (including  any  amount in  respect of\noriginal issue  discount),  or interest  thereon payable in any coin or currency\nother than that provided in the Securities or Coupons or in accordance  with the\nterms  thereof,  or reduce the amount of principal of an Original Issue Discount\nSecurity  that would be due and payable  upon an  acceleration  of the  maturity\nthereof or the amount thereof provable in bankruptcy or alter certain provisions\nof the  Indenture  relating  to  Securities  not  denominated  in Dollars or the\nJudgment  Currency  of such  Securities  or impair  or  affect  the right of any\nSecurityholder to institute suit for the enforcement of any payment thereof when\ndue or, if the Securities provide therefor, any right of repayment at the option\nof the  Securityholder  or (ii) reduce the  aforesaid  percentage  in  principal\namount of Securities of any series issued under such  Indenture,  the consent of\nthe holders of which is required for any such modification.  It is also provided\nin the  Indenture  that,  with respect to certain  defaults or Events of Default\nregarding the  Securities of any series,  the holders of a majority in aggregate\nprincipal  amount  Outstanding of the Securities of each such series,  each such\nseries voting as a separate  class (or, of all  Securities,  as the case may be,\nvoting as a single  class) may under  certain  circumstances  waive all defaults\nwith respect to each such series (or with respect to all the Securities,  as the\ncase  may  be)  and  rescind  and  annul  a  declaration   of  default  and  its\nconsequences,  but no such waiver or rescission and annulment shall extend to or\naffect any subsequent default or shall impair any right  consequent\/hereto.  The\npreceding sentence shall not, however,  apply to a default in the payment of the\nprincipal of or interest on any of the Securities.\n\n     No reference  herein to the  Indenture  and no provision of this Note or of\nthe  Indenture  shall alter or impair the  obligation  of the Company,  which is\nabsolute and unconditional, to pay the principal of and interest on this Note at\nthe time, place and rate, and in the coin or currency, herein prescribed.\n\n     As provided in the Indenture and subject to certain limitations therein set\nforth,  the transfer of this Note may be registered on the registry books of the\nCompany,  upon surrender of this Note for registration of transfer at the office\nor agency of the  Company  maintained  by the  Company  for such  purpose in the\nBorough of Manhattan,  The City of New York, duly endorsed by, or accompanied by\na written  instrument  of transfer in form  satisfactory  to the Company and the\nTrustee duly executed by, the holder  hereof or by its attorney duly  authorized\nin writing, and thereupon one or more new Notes of authorized  denominations and\nfor the  same  aggregate  principal  amount  will be  issued  to the  designated\ntransferee or transferees.\n\n     The Notes are issuable only in registered form in minimum  denominations of\n$1,000 and integral  multiples of $1,000 in excess  thereof.  As provided in the\nIndenture and subject to certain  limitations  therein set forth,  the Notes are\nexchangeable for a like aggregate  principal amount of Notes as requested by the\nholder surrendering the same.\n\n     No service  charge shall be made for any such  registration  of transfer or\nexchange,  but the Company may require  payment of a sum sufficient to cover any\ntax or other governmental charge that may be imposed in connection therewith.\n\n     Prior to due  presentment of this Note for  registration  of transfer,  the\nCompany,  the  Trustee and any agent of the Company or the Trustee may treat the\nperson in whose  name  this  Note is  registered  as the  owner  hereof  for all\npurposes,  whether or not this Note be overdue,  and neither  the  Company,  the\nTrustee nor any such agent shall be affected by notice to the contrary.\n\n     The  Indenture  contains  provisions  for  defeasance  of  (i)  the  entire\nindebtedness  of the Notes or (ii) certain  covenants and Events of Default with\nrespect to the Notes, in each case upon  compliance with certain  conditions set\nforth therein.\n\n\n                                       7\n\n\n\n     The Indenture  contains  covenants which impose certain  limitations on the\nCompany's and its Subsidiaries'  ability to create or incur certain liens on any\nof their  respective  properties  or assets and to enter into  certain  sale and\nlease-back  transactions  and on the  Company's  ability to engage in mergers or\nconsolidations or the conveyance,  transfer or lease of all or substantially all\nof its  properties  and  assets.  These  limitations  are subject to a number of\nimportant  qualifications  and exceptions and reference is made to the Indenture\nfor a description thereof.\n\n     If (i) a  registration  statement  with  respect to an  exchange  offer (an\n'Exchange Offer') for the Notes (an 'Exchange Offer Registration  Statement') is\nnot filed with the  Commission  by August 21, 1998;  or (ii) neither an Exchange\nOffer  Registration  Statement is declared  effective by the  Commission,  nor a\nshelf registration statement under the Securities Act with respect to resales of\nthe Notes (a 'Shelf Registration Statement') is filed with the Commission, on or\nbefore  November  19,  1998;  or (iii) an Exchange  Offer  registered  under the\nSecurities  Act  is  not  consummated  and  the  applicable  Shelf  Registration\nStatement  with respect to resales of the Notes is not declared  effective on or\nbefore December 19, 1998, then in accordance with the terms of the  Registration\nRights Agreement,  the Company has agreed to pay Holders of the Notes liquidated\ndamages  over and  above  the  interest  rate set forth on the face of this Note\naccruing from and  including the next day following  each of the periods in each\nof clauses (i) through  (iii)  above,  in each case at a rate equal to 0.25% per\nannum. The aggregate amount of liquidated  damages payable pursuant to the above\nprovisions  will in no event exceed 0.25% per annum.  Once the Exchange Offer is\nconsummated  or a  Shelf  Registration  Statement  is  declared  effective,  the\nliquidated  damages will cease to accrue. In the event that a Shelf Registration\nStatement is declared effective,  if, due to certain circumstances,  the Company\nfails to keep such Shelf  Registration  Statement  continuously (x) effective or\n(y)  useable for resales  for the period  required  by the  Registration  Rights\nAgreement  and such  failure  continues  for more than 60 days  (whether  or not\nconsecutive)  in any  12-month  period  (the 61st day being  referred  to as the\n'Default Day'), then from the Default Day until the earlier of (i) the date that\nthe Shelf Registration  Statement is again deemed effective or is useable,  (ii)\nJune 22, 2000 (or,  if Rule  144(k) is amended to provide a shorter  restrictive\nperiod,  the last day of such shorter  period) or (iii) the date as of which all\nof the applicable Notes are sold pursuant to such Shelf Registration  Statement,\nthe Company,  in accordance with the terms of the Registration Rights Agreement,\nhas agreed to pay  holders of the Notes  liquidated  damages  accruing at a rate\nequal to 0.25% per annum. The Holder of this Note is entitled to the benefits of\nthe Registration Rights Agreement.\n\n     No  recourse  shall  be had  for the  payment  of the  principal  of or the\ninterest on this Note or for any claim based  hereon,  or  otherwise  in respect\nhereof, or based on or in respect of the Indenture or any indenture supplemental\nthereto against any  incorporator,  stockholder,  officer or director,  as such,\npast or present or future of the Company or of any successor thereof, whether by\nvirtue of any constitution, statute or rule of law, or by the enforcement of any\nassessment or penalty or otherwise,  all such liability being, by the acceptance\nhereof and as part of the consideration  for the issue hereof,  expressly waived\nand released.\n\n\n                                       8\n\n\n\n\n\n     THE INDENTURE AND THIS NOTE SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS\nOF THE STATE OF NEW YORK,  AND FOR ALL PURPOSES SMALL BE CONSTRUED IN ACCORDANCE\nWITH THE LAWS OF SUCH STATE,  WITHOUT  REGARD TO THE CONFLICTS OF LAW PRINCIPLES\nTHEREOF.\n\n                                  ABBREVIATIONS\n\n     The following  abbreviations,  when used in the  inscription on the face of\nthis Note,  shall be construed as though they were written out in full according\nto applicable laws or regulations:\n\n\n\n                                          \nTEN COM - as tenants in common               UNIF GIFT MIN ACT - ______  CUSTODIAN  ______\nTEN ENT - as tenants by the entireties       \nJT TEN - as joint tenants with right         \n         of  survivorship  and  not  as      (Cust)                                           \n         tenants in common                   under Uniform Gifts to Minors Act _______________\n                                             (State)                                          \n                                                                                              \n\n\n\n\n     Additional abbreviations may also be used though not in the above list.\n\n\n\n                                       9\n\n\n\n\n\n                                   ASSIGNMENT\n\n     FOR  VALUE  RECEIVED,   the  undersigned  hereby  sell(s),   assign(s)  and\ntransfer(s) unto\n\nPLEASE INSERT SOCIAL SECURITY OR OTHER\nIDENTIFYING NUMBER OF ASSIGNEE\n\n\n\n--------------------------------------------------------------------------------\n              (Please print or typewrite name and address including\n                          postal zip code of assignee)\n\n\n\n--------------------------------------------------------------------------------\nthis  Note  and  all  rights  thereunder  hereby  irrevocably  constituting  and\nappointing\n\n_____________________________________________,   Attorney,   to  transfer   this\nsecurity on the books of the  Trustee,  with full power of  substitution  in the\npremises.\n\n     In connection  with any transfer of this Note  occurring  prior to the date\nwhich is the  earlier  of (i) the  date  the  Shelf  Registration  Statement  is\ndeclared  effective  or (ii) the end of the period  referred  to in Rule  144(k)\nunder the Securities  Act, the undersigned  confirms that without  utilizing any\ngeneral solicitation or general advertising that:\n\n                                   [Check One]\n\n[ ]  (a)  this Note is being  transferred in compliance  with the exemption from\n          registration   under  the   Securities   Act  provided  by  Rule  144A\n          thereunder.\n\n                                       or\n\n[ ]  (b)  this Note is being transferred other than in accordance with (a) above\n          and documents are being  furnished which comply with the conditions of\n          transfer set forth in this Note and the Indenture.\n\n\n\n                                       10\n\n\n\n\n\nIf neither of the  foregoing  boxes is checked,  the Trustee or other  Registrar\nshall not be  obligated  to register  this Note in the name of any Person  other\nthan the Holder hereof  unless and until the  conditions to any such transfer of\nregistration  set forth herein and in Section 2.08 of the  Indenture  shall have\nbeen satisfied.\n\nDated:\n      ----------------               -------------------------------------------\n\n                                        ----------------------------------------\n                                        Notice:   The   signature(s)   on   this\n                                        Assignment   must  correspond  with  the\n                                        name(s) as written upon the face of this\n                                        Note  in   every   particular,   without\n                                        alteration or  enlargement or any change\n                                        whatsoever.\n\nTO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.\n\n     The undersigned represents and warrants that it is purchasing this Note for\nits own account or an account with respect to which it exercises sole investment\ndiscretion and that it and any such account is a Aqualified institutional buyer'\nwithin the meaning of Rule 144A under the  Securities  Act and is aware that the\nsale to it is being made in reliance on Rule 144A and  acknowledges  that it has\nreceived such information regarding the Company as the undersigned has requested\npursuant to Rule 144A or has determined not to request such information and that\nit is aware that the  transferor  is relying  upon the  undersigned's  foregoing\nrepresentations  in order to claim the exemption from  registration  provided by\nRule 144A.\n\nDated:\n      ----------------               -------------------------------------------\n                                     Notice:  To be executed by an  executive\n                                     officer\n\n\n                                       11\n\n\n\n\n\n                 SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITIES\n                     TO REFLECT CHANGES IN PRINCIPAL AMOUNT\n\n                                   Schedule A\n                Changes to Principal Amount of Global Securities\n\n\n\n\n--------- ------------------------------------------- -------------------------------- -------------------------------\n  Date                 Principal Amount                          Remaining                    Notation Made By\n                           of Notes                              Principal\n                     by which this Global                     Amount of this\n                      Security is to be                      Global Security\n                    Reduced or Increased,\n                        and Reason for\n                    Reduction or Increase\n--------- ------------------------------------------- -------------------------------- -------------------------------\n--------- ------------------------------------------- -------------------------------- -------------------------------\n                                                                              \n\n\n--------- ------------------------------------------- -------------------------------- -------------------------------\n--------- ------------------------------------------- -------------------------------- -------------------------------\n\n\n--------- ------------------------------------------- -------------------------------- -------------------------------\n\n\n\n\n\n\n     THIS  NOTE  IS A  GLOBAL  SECURITY  WITHIN  THE  MEANING  OF THE  INDENTURE\nHEREINAFTER  REFERRED  TO AND IS  REGISTERED  IN THE NAME OF A  DEPOSITARY  OR A\nNOMINEE OF A DEPOSITARY.  THIS NOTE IS EXCHANGEABLE  FOR NOTES REGISTERED IN THE\nNAME OF A PERSON  OTHER THAN THE  DEPOSITARY  OR ITS NOMINEE ONLY IN THE LIMITED\nCIRCUMSTANCES  DESCRIBED IN THE  INDENTURE,  AND NO TRANSFER OF THIS NOTE (OTHER\nTHAN A TRANSFER  OF THIS NOTE AS A WHOLE BY THE  DEPOSITARY  TO A NOMINEE OF THE\nDEPOSITARY  OR BY A NOMINEE  OF THE  DEPOSITARY  TO THE  DEPOSITARY  OR  ANOTHER\nNOMINEE  OF  THE   DEPOSITARY)   MAY  BE  REGISTERED   EXCEPT  IN  SUCH  LIMITED\nCIRCUMSTANCES.\n\n     UNLESS  THIS  NOTE IS  PRESENTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF THE\nDEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE COMPANY OR\nITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED\nIS  REGISTERED  IN THE NAME OF CEDE &amp; CO. OR SUCH OTHER NAME AS  REQUESTED BY AN\nAUTHORIZED  REPRESENTATIVE  OF THE  DEPOSITORY  TRUST  COMPANY  AND ANY  PAYMENT\nTHEREON  IS MADE TO CEDE &amp; CO.,  ANY  TRANSFER,  PLEDGE OR OTHER USE  HEREOF FOR\nVALUE OR OTHERWISE BY A PERSON IS WRONGFUL  SINCE THE  REGISTERED  OWNER HEREOF,\nCEDE &amp; CO., HAS AN INTEREST HEREIN.\n\n                             HEALTHSOUTH CORPORATION\n\n                            7.0% SENIOR NOTE DUE 2008\n\nNo.______                                                  CUSIP NO. 421924-AK-7\n                                                               $________________\n\n\n\n                                        1\n\n\n\n\n\nTHE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.  SECURITIES\nACT OF 1933, AS AMENDED (THE 'SECURITIES  ACT'),  AND,  ACCORDINGLY,  MAY NOT BE\nOFFERED OR SOLD  WITHIN THE UNITED  STATES OR TO, OR FOR THE  ACCOUNT OR BENEFIT\nOF,  U.S.  PERSONS  EXCEPT  AS SET  FORTH  IN  THE  FOLLOWING  SENTENCE.  BY ITS\nACQUISITION  HEREOF,  THE  HOLDER  (1)  REPRESENTS  THAT (A) IT IS A  'QUALIFIED\nINSTITUTIONAL  BUYER' (AS DEFINED IN RULE 144A UNDER THE SECURITIES  ACT) OR (B)\nIT IS AN INSTITUTIONAL AACCREDITED INVESTOR' (AS DEFINED IN RULE 501(A)(1)(2)(3)\nOR (7) UNDER THE SECURITIES ACT) ('INSTITUTIONAL ACCREDITED INVESTOR') OR (C) IT\nIS NOT A U.S.  PERSON  AND IS  ACQUIRING  THE  SECURITY  EVIDENCED  HEREBY IN AN\nOFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE\nHOLDING PERIOD  APPLICABLE TO SALES OF THE SECURITY  EVIDENCED HEREBY UNDER RULE\n144(K)  UNDER  THE  SECURITIES  ACT  (OR ANY  SUCCESSOR  PROVISION),  RESELL  OR\nOTHERWISE  TRANSFER  THE SECURITY  EVIDENCED  HEREBY  EXCEPT (A) TO  HEALTHSOUTH\nCORPORATION  (THE  'COMPANY')  OR ANY  SUBSIDIARY  THEREOF,  (B)  PURSUANT TO AN\nEFFECTIVE  REGISTRATION  STATEMENT  UNDER THE SECURITIES ACT, (C) TO A QUALIFIED\nINSTITUTIONAL  BUYER IN COMPLIANCE  WITH RULE 144A UNDER THE SECURITIES ACT, (D)\nTO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,  FURNISHES\nTO THE TRUSTEE FOR THE NOTES A SIGNED LETTER CONTAINING CERTAIN  REPRESENTATIONS\nAND  AGREEMENTS  RELATING  TO THE  RESTRICTIONS  ON  TRANSFER  OF  THE  SECURITY\nEVIDENCED  HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH  TRUSTEE),\n(E) OUTSIDE THE UNITED STATES IN COMPLIANCE  WITH RULE 904 UNDER THE  SECURITIES\nACT OR (F)  PURSUANT TO THE  EXEMPTION  FROM  REGISTRATION  PROVIDED BY RULE 144\nUNDER THE  SECURITIES  ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO\nEACH  PERSON  TO WHOM THE  SECURITY  EVIDENCED  HEREBY IS  TRANSFERRED  A NOTICE\nSUBSTANTIALLY  TO THE EFFECT OF THIS LEGEND.  IN CONNECTION WITH ANY TRANSFER OF\nTHE SECURITY  EVIDENCED  HEREBY PRIOR TO THE  EXPIRATION  OF THE HOLDING  PERIOD\nAPPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE\nSECURITIES  ACT  (OR  ANY  SUCCESSOR  PROVISION),  THE  HOLDER  MUST  CHECK  THE\nAPPROPRIATE  BOX SET FORTH ON THE REVERSE HEREOF  RELATING TO THE MANNER OF SUCH\nTRANSFER  AND SUBMIT  THIS  CERTIFICATE  TO THE  TRUSTEE  FOR THE NOTES.  IF THE\nPROPOSED  TRANSFEREE IS AN INSTITUTIONAL  ACCREDITED INVESTOR OR A PURCHASER WHO\nIS NOT A U.S. PERSON,  THE HOLDER MUST,  PRIOR TO SUCH TRANSFER,  FURNISH TO THE\nTRUSTEE FOR THE NOTES SUCH  CERTIFICATIONS,  LEGAL OPINIONS OR OTHER INFORMATION\nAS THE COMPANY OR THE  TRUSTEE  MAY  REASONABLY  REQUIRE,  TO CONFIRM  THAT SUCH\nTRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION  FROM,  OR IN A TRANSACTION  NOT\nSUBJECT TO, THE  REGISTRATION  REQUIREMENTS  OF THE SECURITIES  ACT. THIS LEGEND\nWILL BE REMOVED AFTER THE EXPIRATION OF THE HOLDING  PERIOD  APPLICABLE TO SALES\nOF THE SECURITY  EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS\nUSED HEREIN, THE TERMS 'OFFSHORE TRANSACTION,' 'UNITED STATES' AND 'U.S. PERSON'\nHAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.\n\n\n                                        2\n\n\n\n\n\nTHE HOLDER  HEREOF,  BY ITS  ACCEPTANCE  HEREOF,  IS DEEMED TO HAVE AGREED TO BE\nBOUND BY THE PROVISIONS OF THE REGISTRATION  RIGHTS AGREEMENT,  DATED AS OF JUNE\n22, 1998, BY AND AMONG THE COMPANY,  SALOMON BROTHERS INC, GOLDMAN, SACHS &amp; CO.,\nJ.P. MORGAN SECURITIES INC., MERRILL LYNCH, PIERCE, FENNER &amp; SMITH INCORPORATED,\nMORGAN STANLEY &amp; CO. INCORPORATED,  NATIONSBANC MONTGOMERY SECURITIES LLC, BEAR,\nSTEARNS &amp; CO.  INC.,  CREDIT  SUISSE  FIRST BOSTON  CORPORATION,  DEUTSCHE  BANK\nSECURITIES INC., PAINEWEBBER INCORPORATED AND SCOTIA CAPITAL MARKETS (USA) INC.\n\n     HEALTHSOUTH CORPORATION,  a Delaware corporation (the 'Company,' which term\nincludes any successor corporation under the Indenture hereinafter referred to),\nfor value  received,  hereby promises to pay to Cede &amp; Co., the principal sum of\n________________  on June 15, 2005,  and to pay interest on said  principal  sum\nfrom June 22,  1998,  or from the most  recent  interest  payment  date to which\ninterest has been paid or duly provided for,  semiannually in arrears on June 15\nand  December  15 (each  such date,  an  'Interest  Payment  Date') of each year\ncommencing  on  December  15,  1998,  at the rate of 7.0% per  annum  until  the\nprincipal hereof shall have become due and payable.\n\n     The  amount of  interest  payable  on any  Interest  Payment  Date shall be\ncomputed on the basis of a 360 day year  comprised of twelve 30 day months.  The\ninterest  installment so payable,  and punctually  paid or duly provided for, on\nany Interest  Payment Date will, as provided in the Indenture (as defined below)\nbe paid to the person in whose name this Note (or one or more predecessor Notes)\nis  registered  at the close of business  on the record  date for such  interest\ninstallment,  which shall be the close of business on the immediately  preceding\nJune 1 and December 1 prior to such Interest  Payment Date, as  applicable.  The\nprincipal of, premium,  if any, and the interest on this Note will be payable at\nthe office or agency of the Company  maintained  for that purpose in the Borough\nof Manhattan,  The City of New York in any coin or currency of the United States\nof America that at the time of payment is legal tender for payment of public and\nprivate debts;  provided,  however,  that payment of interest may be made at the\noption of the  Company by check  mailed to the person  entitled  thereto at such\naddress as shall appear in the registry books of the Company;  provided, further\nthat for so long as this Note is  represented by a Registered  Global  Security,\npayment of principal,  premium,  if any, or interest on this Note may be made by\nwire transfer to the account of the Depositary or its nominee. In the event that\nany date on which the  principal,  premium,  if any, or interest on this Note is\npayable is not a Business Day, then payment of  principal,  premium,  if any, or\ninterest  payable on such date will be made on the next succeeding day that is a\nBusiness  Day (and  without  any  interest  or other  payment in respect of such\ndelay).\n\n     Unless the certificate of authentication  hereon has been executed by or on\nbehalf of the Trustee (as defined below) under the Indenture (as defined below),\nby the manual signature of one of its authorized  officers,  this Note shall not\nbe entitled to any benefit under the Indenture or be valid or obligatory for any\npurpose.\n\n     Capitalized  terms  used in this Note which are  defined  in the  Indenture\nshall have the respective meanings assigned to them in the Indenture.\n\n     Reference is hereby made to the further provisions of this Note hereinafter\nset forth,  which further provisions shall for all purposes have the same effect\nas if set forth at this place.\n\n\n                                        3\n\n\n\n\n\n     IN WITNESS  WHEREOF,  the  Company has caused  this  instrument  to be duly\nexecuted, manually or in facsimile, and an imprint or facsimile of its corporate\nseal to be imprinted hereon.\n\n                                                   HEALTHSOUTH Corporation\n\n                                                   By\n                                                     ---------------------------\n                                                          Michael D. Martin\n                                                      Executive Vice President,\n                                                       Chief Financial Officer\n                                                            and Treasurer\n\nATTEST:\n       -----------------------------------------\n                   William W. Horton\n                Senior Vice President,\n       Corporate Counsel and Assistant Secretary\n\n\nCERTIFICATE  OF  AUTHENTICATION  This is\none of the Securities referred to in the\nwithin-mentioned Indenture.\n\nPNC BANK, NATIONAL ASSOCIATION,\nas Trustee\n\nBy\n  -----------------------------\n        Authorized Officer\n\nDated:\n      ------------------------\n\n\n\n\n                                        4\n\n\n\n\n                              REVERSE SIDE OF NOTE\n\n     This  Note  is  one  of  a  duly  authorized   series  of  securities  (the\nASecurities')  of the  Company  designated  as its 7.0%  Senior  Notes  due 2008\nlimited  in  aggregate  principal  amount to  $250,000,000  (the  'Notes').  The\nSecurities  are all issued or to be issued under and  pursuant to an  Indenture,\ndated as of June 22, 1998, as supplemented by that certain Officers' Certificate\ndated June 22, 1998 (the Indenture as supplemented by the Officers'  Certificate\nbeing herein  collectively  referred to as the  'Indenture'),  duly executed and\ndelivered between the Company and PNC Bank, National Association (the 'Trustee,'\nwhich term  includes any  successor  Trustee with respect to the Notes under the\nIndenture), to which Indenture and all indentures supplemental thereto reference\nis hereby  made for a  statement  of the  respective  rights  thereunder  of the\nCompany,  the Trustee and the holders of the Securities and the terms upon which\nthe Notes are to be authenticated and delivered.  The terms of individual series\nof Securities  may vary with respect to interest rate or interest rate formulas,\nissue dates, maturity, redemption, repayment, currency of payment and otherwise.\n\n     Reference is hereby made to the Indenture for a description of the terms of\nthe Notes,  to all of the provisions of which Indenture the holder of this Note,\nby acceptance hereof, assents and agrees.\n\n     Except as set forth below,  this Note is not redeemable and is not entitled\nto the benefit of a sinking fund or any analogous provision.\n\n     This  Note is  redeemable  as a whole  or in  part,  at the  option  of the\nCompany,  at any time at a redemption  price equal to the greater of (i) 100% of\nits  principal  amount and (ii) the sum of the present  values of the  remaining\nscheduled  payments of principal and interest thereon  discounted to the date of\nredemption on a semi-annual  basis (assuming a 360-day year consisting of twelve\n30-day months) at the Treasury  Yield plus 20 basis points,  plus, in each case,\naccrued  interest to the date of redemption.  On and after the redemption  date,\ninterest  will cease to accrue on the Notes or any  portion  thereof  called for\nredemption.  On or before the redemption  date, the Company shall deposit with a\npaying agent (or the Trustee) money  sufficient to pay the  redemption  price of\nand accrued  interest on the Notes to be redeemed on such date. If less than all\nof the Notes are to be redeemed,  the Notes to be redeemed  shall be selected by\nthe Trustee by such method as the Trustee shall deem fair and  appropriate.  The\nHolder of this Note will receive notice thereof by first-class  mail at least 30\nand not more than 60 days prior to the date fixed for redemption.\n\n\n                                       5\n\n\n\n\n\n     'Treasury  Yield' means,  with respect to any redemption date, the rate per\nannum equal to the  semi-annual  equivalent  yield to maturity of the Comparable\nTreasury Issue, assuming a price for the Comparable Treasury Issue (expressed as\na percentage of its principal amount) equal to the Comparable Treasury Price for\nsuch  redemption  date.  'Comparable  Treasury  Issue'  means the United  States\nTreasury  security  selected  by an  Independent  Investment  Banker as having a\nmaturity comparable to the remaining term of the Note that would be utilized, at\nthe time of selection and in accordance with customary  financial  practice,  in\npricing new issues of corporate  debt  securities of comparable  maturity to the\nremaining  term of the  Note.  'Independent  Investment  Banker'  means  Salomon\nBrothers Inc and its successor or, if such firm is unwilling or unable to select\nthe Comparable Treasury Issue, an independent  investment banking institution of\nnational standing appointed by the Trustee.  'Comparable  Treasury Price' means,\nwith respect to any redemption date, (i) the average of the bid and asked prices\nfor the Comparable Treasury Issue (expressed in each case as a percentage of its\nprincipal  amount) on the third business day preceding such redemption  date, as\nset forth in the daily statistical  release (or any successor release) published\nby the Federal  Reserve  Bank of New York and  designated  'Composite  3:30 p.m.\nQuotations  for U.S.  Government  Securities'  or (ii) if such  release  (or any\nsuccessor  release) is not  published  or does not  contain  such prices on such\nbusiness day, (A) the average of the Reference  Treasury  Dealer  Quotations for\nsuch  redemption  date,  after  excluding the highest and lowest such  Reference\nTreasury Dealer  Quotations,  or (B) if the Trustee obtains fewer than four such\nReference  Treasury  Dealer  Quotations,  the  average  of all such  quotations.\n'Reference  Treasury Dealer  Quotations'  means,  with respect to each Reference\nTreasury  Dealer and any  redemption  date,  the average,  as  determined by the\nTrustee, of the bid and asked prices of the Comparable Treasury Issue (expressed\nin each case as a percentage of its principal  amount)  quoted in writing to the\nTrustee by such Reference Treasury Dealer at 5:00 p.m. on the third business day\npreceding such redemption date. 'Reference Treasury Dealer' means a primary U.S.\nGovernment  Securities  dealer in New York City  selected by the  Trustee  after\nconsultation with the Company.\n\n     If an Event of  Default  with  respect  to the  Notes  shall  occur  and be\ncontinuing,  the  principal  of all the Notes may be declared due and payable in\nthe manner and with the effect provided in the Indenture.\n\n\n\n                                       6\n\n\n\n\n\n     The Indenture contains  provisions  permitting the Company and the Trustee,\nwith the  consent  of the  holders  of not less  than a  majority  in  aggregate\nprincipal  amount of the  Securities of all series  issued under such  Indenture\nthen outstanding and affected (voting as one class) to add any provisions to, or\nchange in any manner or eliminate any of the  provisions  of, such  Indenture or\nmodify in any manner the rights of the holders of the  Securities of each series\nor Coupons so  affected;  provided  that the  Company  and the  Trustee may not,\nwithout the consent of the holder of each Outstanding Note affected thereby, (i)\nextend the final  maturity of the principal of any Note, or reduce the principal\namount  thereof,  or premium  thereon,  if any, or reduce the rate or extend the\ntime of payment of interest thereon,  or reduce any amount payable on redemption\nthereof  or make the  principal  thereof  (including  any  amount in  respect of\noriginal issue  discount),  or interest  thereon payable in any coin or currency\nother than that provided in the Securities or Coupons or in accordance  with the\nterms  thereof,  or reduce the amount of principal of an Original Issue Discount\nSecurity  that would be due and payable  upon an  acceleration  of the  maturity\nthereof or the amount thereof provable in bankruptcy or alter certain provisions\nof the  Indenture  relating  to  Securities  not  denominated  in Dollars or the\nJudgment  Currency  of such  Securities  or impair  or  affect  the right of any\nSecurityholder to institute suit for the enforcement of any payment thereof when\ndue or, if the Securities provide therefor, any right of repayment at the option\nof the  Securityholder  or (ii) reduce the  aforesaid  percentage  in  principal\namount of Securities of any series issued under such  Indenture,  the consent of\nthe holders of which is required for any such modification.  It is also provided\nin the  Indenture  that,  with respect to certain  defaults or Events of Default\nregarding the  Securities of any series,  the holders of a majority in aggregate\nprincipal  amount  Outstanding of the Securities of each such series,  each such\nseries voting as a separate  class (or, of all  Securities,  as the case may be,\nvoting as a single  class) may under  certain  circumstances  waive all defaults\nwith respect to each such series (or with respect to all the Securities,  as the\ncase  may  be)  and  rescind  and  annul  a  declaration   of  default  and  its\nconsequences,  but no such waiver or rescission and annulment shall extend to or\naffect any subsequent default or shall impair any right  consequent\/hereto.  The\npreceding sentence shall not, however,  apply to a default in the payment of the\nprincipal of or interest on any of the Securities.\n\n     No reference  herein to the  Indenture  and no provision of this Note or of\nthe  Indenture  shall alter or impair the  obligation  of the Company,  which is\nabsolute and unconditional, to pay the principal of and interest on this Note at\nthe time, place and rate, and in the coin or currency, herein prescribed.\n\n     As provided in the Indenture and subject to certain limitations therein set\nforth,  the transfer of this Note may be registered on the registry books of the\nCompany,  upon surrender of this Note for registration of transfer at the office\nor agency of the  Company  maintained  by the  Company  for such  purpose in the\nBorough of Manhattan,  The City of New York, duly endorsed by, or accompanied by\na written  instrument  of transfer in form  satisfactory  to the Company and the\nTrustee duly executed by, the holder  hereof or by its attorney duly  authorized\nin writing, and thereupon one or more new Notes of authorized  denominations and\nfor the  same  aggregate  principal  amount  will be  issued  to the  designated\ntransferee or transferees.\n\n     The Notes are issuable only in registered form in minimum  denominations of\n$1,000 and integral  multiples of $1,000 in excess  thereof.  As provided in the\nIndenture and subject to certain  limitations  therein set forth,  the Notes are\nexchangeable for a like aggregate  principal amount of Notes as requested by the\nholder surrendering the same.\n\n     No service  charge shall be made for any such  registration  of transfer or\nexchange,  but the Company may require  payment of a sum sufficient to cover any\ntax or other governmental charge that may be imposed in connection therewith.\n\n     Prior to due  presentment of this Note for  registration  of transfer,  the\nCompany,  the  Trustee and any agent of the Company or the Trustee may treat the\nperson in whose  name  this  Note is  registered  as the  owner  hereof  for all\npurposes,  whether or not this Note be overdue,  and neither  the  Company,  the\nTrustee nor any such agent shall be affected by notice to the contrary.\n\n     The  Indenture  contains  provisions  for  defeasance  of  (i)  the  entire\nindebtedness  of the Notes or (ii) certain  covenants and Events of Default with\nrespect to the Notes, in each case upon  compliance with certain  conditions set\nforth therein.\n\n\n                                       7\n\n\n\n     The Indenture  contains  covenants which impose certain  limitations on the\nCompany's and its Subsidiaries'  ability to create or incur certain liens on any\nof their  respective  properties  or assets and to enter into  certain  sale and\nlease-back  transactions  and on the  Company's  ability to engage in mergers or\nconsolidations or the conveyance,  transfer or lease of all or substantially all\nof its  properties  and  assets.  These  limitations  are subject to a number of\nimportant  qualifications  and exceptions and reference is made to the Indenture\nfor a description thereof.\n\n     If (i) a  registration  statement  with  respect to an  exchange  offer (an\n'Exchange Offer') for the Notes (an 'Exchange Offer Registration  Statement') is\nnot filed with the  Commission  by August 21, 1998;  or (ii) neither an Exchange\nOffer  Registration  Statement is declared  effective by the  Commission,  nor a\nshelf registration statement under the Securities Act with respect to resales of\nthe Notes (a 'Shelf Registration Statement') is filed with the Commission, on or\nbefore  November  19,  1998;  or (iii) an Exchange  Offer  registered  under the\nSecurities  Act  is  not  consummated  and  the  applicable  Shelf  Registration\nStatement  with respect to resales of the Notes is not declared  effective on or\nbefore December 19, 1998, then in accordance with the terms of the  Registration\nRights Agreement,  the Company has agreed to pay Holders of the Notes liquidated\ndamages  over and  above  the  interest  rate set forth on the face of this Note\naccruing from and  including the next day following  each of the periods in each\nof clauses (i) through  (iii)  above,  in each case at a rate equal to 0.25% per\nannum. The aggregate amount of liquidated  damages payable pursuant to the above\nprovisions  will in no event exceed 0.25% per annum.  Once the Exchange Offer is\nconsummated  or a  Shelf  Registration  Statement  is  declared  effective,  the\nliquidated  damages will cease to accrue. In the event that a Shelf Registration\nStatement is declared effective,  if, due to certain circumstances,  the Company\nfails to keep such Shelf  Registration  Statement  continuously (x) effective or\n(y)  useable for resales  for the period  required  by the  Registration  Rights\nAgreement  and such  failure  continues  for more than 60 days  (whether  or not\nconsecutive)  in any  12-month  period  (the 61st day being  referred  to as the\n'Default Day'), then from the Default Day until the earlier of (i) the date that\nthe Shelf Registration  Statement is again deemed effective or is useable,  (ii)\nJune 22, 2000 (or,  if Rule  144(k) is amended to provide a shorter  restrictive\nperiod,  the last day of such shorter  period) or (iii) the date as of which all\nof the applicable Notes are sold pursuant to such Shelf Registration  Statement,\nthe Company,  in accordance with the terms of the Registration Rights Agreement,\nhas agreed to pay  holders of the Notes  liquidated  damages  accruing at a rate\nequal to 0.25% per annum. The Holder of this Note is entitled to the benefits of\nthe Registration Rights Agreement.\n\n     No  recourse  shall  be had  for the  payment  of the  principal  of or the\ninterest on this Note or for any claim based  hereon,  or  otherwise  in respect\nhereof, or based on or in respect of the Indenture or any indenture supplemental\nthereto against any  incorporator,  stockholder,  officer or director,  as such,\npast or present or future of the Company or of any successor thereof, whether by\nvirtue of any constitution, statute or rule of law, or by the enforcement of any\nassessment or penalty or otherwise,  all such liability being, by the acceptance\nhereof and as part of the consideration  for the issue hereof,  expressly waived\nand released.\n\n\n                                       8\n\n\n\n\n\n     THE INDENTURE AND THIS NOTE SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS\nOF THE STATE OF NEW YORK,  AND FOR ALL PURPOSES SMALL BE CONSTRUED IN ACCORDANCE\nWITH THE LAWS OF SUCH STATE,  WITHOUT  REGARD TO THE CONFLICTS OF LAW PRINCIPLES\nTHEREOF.\n\n                                  ABBREVIATIONS\n\n     The following  abbreviations,  when used in the  inscription on the face of\nthis Note,  shall be construed as though they were written out in full according\nto applicable laws or regulations:\n\n\n\n                                          \nTEN COM - as tenants in common               UNIF GIFT MIN ACT - ______  CUSTODIAN  ______\nTEN ENT - as tenants by the entireties       \nJT TEN - as joint tenants with right         \n         of  survivorship  and  not  as      (Cust)                                           \n         tenants in common                   under Uniform Gifts to Minors Act _______________\n                                             (State)                                          \n                                                                                              \n\n\n\n\n     Additional abbreviations may also be used though not in the above list.\n\n\n\n                                       9\n\n\n\n\n\n                                   ASSIGNMENT\n\n     FOR  VALUE  RECEIVED,   the  undersigned  hereby  sell(s),   assign(s)  and\ntransfer(s) unto\n\nPLEASE INSERT SOCIAL SECURITY OR OTHER\nIDENTIFYING NUMBER OF ASSIGNEE\n\n\n\n--------------------------------------------------------------------------------\n              (Please print or typewrite name and address including\n                          postal zip code of assignee)\n\n\n\n--------------------------------------------------------------------------------\nthis  Note  and  all  rights  thereunder  hereby  irrevocably  constituting  and\nappointing\n\n_____________________________________________,   Attorney,   to  transfer   this\nsecurity on the books of the  Trustee,  with full power of  substitution  in the\npremises.\n\n     In connection  with any transfer of this Note  occurring  prior to the date\nwhich is the  earlier  of (i) the  date  the  Shelf  Registration  Statement  is\ndeclared  effective  or (ii) the end of the period  referred  to in Rule  144(k)\nunder the Securities  Act, the undersigned  confirms that without  utilizing any\ngeneral solicitation or general advertising that:\n\n                                   [Check One]\n\n[ ]  (a)  this Note is being  transferred in compliance  with the exemption from\n          registration   under  the   Securities   Act  provided  by  Rule  144A\n          thereunder.\n\n                                       or\n\n[ ]  (b)  this Note is being transferred other than in accordance with (a) above\n          and documents are being  furnished which comply with the conditions of\n          transfer set forth in this Note and the Indenture.\n\n\n\n                                       10\n\n\n\n\n\nIf neither of the  foregoing  boxes is checked,  the Trustee or other  Registrar\nshall not be  obligated  to register  this Note in the name of any Person  other\nthan the Holder hereof  unless and until the  conditions to any such transfer of\nregistration  set forth herein and in Section 2.08 of the  Indenture  shall have\nbeen satisfied.\n\nDated:\n      ----------------               -------------------------------------------\n\n                                        ----------------------------------------\n                                        Notice:   The   signature(s)   on   this\n                                        Assignment   must  correspond  with  the\n                                        name(s) as written upon the face of this\n                                        Note  in   every   particular,   without\n                                        alteration or  enlargement or any change\n                                        whatsoever.\n\nTO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.\n\n     The undersigned represents and warrants that it is purchasing this Note for\nits own account or an account with respect to which it exercises sole investment\ndiscretion and that it and any such account is a Aqualified institutional buyer'\nwithin the meaning of Rule 144A under the  Securities  Act and is aware that the\nsale to it is being made in reliance on Rule 144A and  acknowledges  that it has\nreceived such information regarding the Company as the undersigned has requested\npursuant to Rule 144A or has determined not to request such information and that\nit is aware that the  transferor  is relying  upon the  undersigned's  foregoing\nrepresentations  in order to claim the exemption from  registration  provided by\nRule 144A.\n\nDated:\n      ----------------               -------------------------------------------\n                                     Notice:  To be executed by an  executive\n                                     officer\n\n\n                                       11\n\n\n\n\n\n                 SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITIES\n                     TO REFLECT CHANGES IN PRINCIPAL AMOUNT\n\n                                   Schedule A\n                Changes to Principal Amount of Global Securities\n\n\n\n\n--------- ------------------------------------------- -------------------------------- -------------------------------\n  Date                 Principal Amount                          Remaining                    Notation Made By\n                           of Notes                              Principal\n                     by which this Global                     Amount of this\n                      Security is to be                      Global Security\n                    Reduced or Increased,\n                        and Reason for\n                    Reduction or Increase\n--------- ------------------------------------------- -------------------------------- -------------------------------\n--------- ------------------------------------------- -------------------------------- -------------------------------\n                                                                              \n\n\n--------- ------------------------------------------- -------------------------------- -------------------------------\n--------- ------------------------------------------- -------------------------------- -------------------------------\n\n\n--------- ------------------------------------------- -------------------------------- 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