Officers' Certificate Pursuant to Sections 2.3 and 11.5 of the Subordinated Indenture - HealthSouth Corp. and The Bank of Nova Scotia Trust Co. of New York


                             HEALTHSOUTH CORPORATION
                        OFFICERS' CERTIFICATE PURSUANT TO
               SECTIONS 2.3 AND 11.5 OF THE SUBORDINATED INDENTURE

     Michael D. Martin and William W. Horton do hereby certify that they are the
Executive Vice President,  Chief Financial Officer and Treasurer and Senior Vice
President,   Corporate  Counsel  and  Assistant  Secretary,   respectively,   of
HEALTHSOUTH  Corporation,  a Delaware corporation (the 'Company') and do further
certify,  pursuant  to  resolutions  of the Board of  Directors  of the  Company
adopted on March 6 and 17,  1998 (the  'Resolutions'),  and in  accordance  with
Sections 2.3 and 11.5 of the Subordinated  Indenture (the Subordinated Indenture
as amended and  supplemented  by the  Resolutions  is herein  referred to as the
'Subordinated Indenture') dated as of March 20, 1998 between the Company and The
Bank of Nova Scotia Trust  Company of New York, as trustee (the  'Trustee'),  as
follows:

     (1) A series of subordinated securities to be issued under the Subordinated
Indenture  and  designated  as  the  Company's  3.25%  Convertible  Subordinated
Debentures due 2003 (the 'Debentures') has been authorized.  The following terms
shall apply to the Debentures:

          (a) The  Debentures  shall be limited  to  $575,000,000  in  aggregate
     principal amount (including any over-allotment  option) and shall mature on
     April 1, 2003;

          (b) The Debentures  shall bear interest at the rate of 3.25% per annum
     from March 20, 1998,  payable  semiannually  on each April 1 and October 1,
     commencing October 1, 1998;

          (c) The  Debentures  shall  be  issued  initially  in  part as  global
     debentures in registered  form in the name of the  Depositary  (hereinafter
     defined)  or its  nominee in such  denominations  otherwise  as in the form
     attached  hereto as Annex A (the  'Form of  Debenture')  with such  changes
     thereto  as may be  required  in  the  process  of  printing  or  otherwise
     producing the Debentures not affecting the substance thereof;

          (d) The Depositary for the global  Debentures  shall be The Depository
     Trust Company;

          (e)  The  global  Debentures  shall  be  exchangeable  for  definitive
     Debentures  in  registered  form  substantially  the  same  as  the  global
     Debentures in denominations of $1,000 or any integral multiple thereof upon
     the  terms  and in  accordance  with  the  provisions  of the  Subordinated
     Indenture;






          (f)  The  Debentures  shall  be  payable  (as to  both  principal  and
     interest)  when and as the  same  shall  become  due at the  office  of the
     Trustee,  One Liberty Plaza,  New York,  New York 10006,  provided that, as
     long as any part of the  Debentures  are in the form of one or more  global
     Debentures,  payments of interest with respect  thereto may be made by wire
     transfer and provided  further,  that with respect to Debentures  issued in
     definitive form, the Company elects to exercise its option to have interest
     payable by check mailed to the registered owners' address as they appear on
     the Register, as kept by the Trustee on each Record Date;

          (g) The  Record  Dates  for  the  Debentures  shall  be  March  15 and
     September 15, as the case may be, preceding each interest payment date; and

          (h) The  Debentures  shall  rank pari passu  with the  Company's  9.5%
     Senior Subordinated Notes due 2001.

     (2) The Form of Debenture  sets forth  certain of the terms  required to be
set  forth in this  certificate  pursuant  to  Section  2.3 of the  Subordinated
Indenture,  and said terms are incorporated herein by reference.  The Debentures
were issued at the initial offering price of 100% of principal amount.

     (3) In addition to the covenants set forth in Article 3 of the Subordinated
Indenture, the Debentures shall include the following additional covenant:

     'SECTION  3.10  Limitations  on Certain  Other  Subordinated  Indebtedness.
   
          The  Company  shall not create,  incur,  assume or suffer to exist any
     Indebtedness  that  is  subordinate  in  right  of  payment  to any  Senior
     Indebtedness  unless  such  indebtedness  by its  terms or the terms of the
     instrument creating or evidencing such indebtedness is subordinate in right
     of payment to, or ranks pari passu with, the Debentures.'

     (4) In  addition  to the Events of Default  set forth in Section 5.1 of the
Subordinated Indenture,  the following additional Events of Default, shall apply
with respect to the Debentures  and shall be subject to the other  provisions of
Article 5 of the Subordinated Indenture:

          (i) failure to provide timely notice of a Repurchase Event as required
     by the Subordinated Indenture and

          (ii) default in the payment of the Repurchase  Price in respect of any
     Debentures on the Repurchase Date therefore.

     (5) In addition to the purposes for which a  supplemental  indenture may be
entered into without the consent of the Holders of the Debentures, the following
shall be considered a purpose:







          'to make any  provision  with  respect  to the  conversion  rights  of
     Holders of Debentures  pursuant to the  requirements of Paragraph 8 herein,
     in the event of a  consolidation,  merger or sale of assets  involving  the
     Company.'

     (6) In addition to the  limitations  on  supplemental  indentures  with the
consent of Holders set forth in Section 8.2 of the Subordinated  Indenture,  the
following  limitations,  shall apply with respect to the Debentures and shall be
subject to the other provisions of Article 8 of the Subordinated Indenture:

          (i) impair the right of Holders of  Debentures  to require the Company
     to repurchase Debentures upon the occurrence of a Repurchase Event.

          (ii) make any change that  adversely  affects the right to convert any
     security as  provided  in  Paragraph 8 herein or pursuant to Section 2.3 of
     the  Subordinated  Indenture  (except as  permitted  by Section  8.1 of the
     Subordinated Indenture).

     (7) The  Debentures  shall be  subordinated  in right of  payment to Senior
Indebtedness upon the following terms and conditions:

     (a) Debentures Subordinate to Senior Indebtedness.

          The Company covenants and agrees,  and each Holder of a Debenture,  by
     his acceptance thereof,  likewise covenants and agrees, that, to the extent
     and in the manner hereinafter set forth in this Paragraph 7 (subject to the
     provisions of Article 10 of the Subordinated  Indenture),  the indebtedness
     represented  by the  Debentures  and the payment of the  principal  of (and
     premium, if any) and interest on each and all of the Debentures  (including
     any  repurchases  or payments  pursuant  to  Paragraph 9 herein) are hereby
     expressly  made  subordinate  and  subject in right of payment to the prior
     payment in full of all Senior Indebtedness.

     (b) Payment Over of Proceeds Upon Dissolution, Etc.

          In the event of (1) any  insolvency or bankruptcy  case or proceeding,
     or any receivership,  liquidation,  reorganization or other similar case or
     proceeding  in  connection  therewith,  relative  to the  Company or to its
     creditors,  as such,  or to a  substantial  part of its assets,  or (2) any
     liquidation,  dissolution  or  other  winding  up of the  Company,  whether
     voluntary  or  involuntary  and  whether  or not  involving  insolvency  or
     bankruptcy, or (3) any assignment for the benefit of creditors or any other
     marshalling of assets and liabilities of the Company,  then and in any such
     event  specified in (1), (2) or (3) above (each such event,  if any, herein
     sometimes referred to as a 'Proceeding') the holders of Senior Indebtedness
     shall be  entitled  to  receive  payment in full of all  amounts  due or to
     become due on or in respect of all Senior Indebtedness,  or provision shall
     be






     made for such payment in cash or cash  equivalents or otherwise in a manner
     satisfactory to the holders of Senior  Indebtedness,  before the Holders of
     the Debentures are entitled to receive any payment or  distribution  of any
     kind or character,  whether in cash, property or securities,  on account of
     principal  of (or  premium,  if any) or  interest on the  Debentures  or on
     account of any purchase  (including any repurchase  pursuant to Paragraph 9
     herein) or other acquisition of Debentures by the Company or any Subsidiary
     of  the  Company  (all  such   payments,   distributions,   purchases   and
     acquisitions  herein  referred  to,  individually  and  collectively,  as a
     'Debentures  Payment'),   and  to  that  end  the  holders  of  all  Senior
     Indebtedness  shall be entitled to receive,  for application to the payment
     thereof,  any  Debentures  Payment which may be payable or  deliverable  in
     respect of the Debentures in any such Proceeding.

          In the event that,  notwithstanding  the foregoing  provisions of this
     subparagraph  7.2,  the Trustee or the Holder of any  Debenture  shall have
     received any Debentures  Payment before all Senior  Indebtedness is paid in
     full or  payment  thereof  provided  for in cash  or  cash  equivalents  or
     otherwise in a manner  satisfactory to the holders of Senior  Indebtedness,
     and if such fact shall, at or prior to the time of such Debentures Payment,
     have been made known to the Trustee  pursuant to  subparagraph  7.10 or, as
     the case  may be,  such  Holder,  then and in such  event  such  Debentures
     Payment  shall  be paid  over or  delivered  forthwith  to the  trustee  in
     bankruptcy,  receiver,  liquidating trustee, custodian,  assignee, agent or
     other Person making  payment or  distribution  of assets of the Company for
     application to the payment of all Senior Indebtedness  remaining unpaid, to
     the extent  necessary to pay all Senior  Indebtedness in full, after giving
     effect to any concurrent  payment or  distribution to or for the holders of
     Senior Indebtedness.

          For  purposes  of this  Paragraph  7 only,  the words 'any  payment or
     distribution  of any  kind or  character,  whether  in  cash,  property  or
     securities'  shall not be deemed to  include a payment or  distribution  of
     stock or securities of the Company provided for by a plan of reorganization
     or  readjustment  authorized  by an order or decree of a court of competent
     jurisdiction in a reorganization proceeding under any applicable bankruptcy
     law or of any other corporation provided for by such plan of reorganization
     or  readjustment,  which stock or securities are  subordinated  in right of
     payment to all then outstanding  Senior  Indebtedness to substantially  the
     same  extent  as,  or to a  greater  extent  than,  the  Debentures  are so
     subordinated  as provided in this  Paragraph  7. The  consolidation  of the
     Company  with,  or the merger of the Company  into,  another  Person or the
     liquidation  or  dissolution  or the Company  following  the  conveyance or
     transfer of all or  substantially  all of its  properties  and assets as an
     entirety  to  another  Person  upon the terms and  conditions  set forth in
     Article 9 of the  Subordinated  Indenture  shall not be deemed a Proceeding
     for the  purposes  of this  subparagraph  7.2 if the Person  formed by such
     consolidation  or into  which the  Company  is merged or the  Person  which
     acquires by conveyance or transfer such properties and assets substantially
     as an entirety, as the case may






     be, shall, as a part of such consolidation, merger, conveyance or transfer,
     comply  with the  conditions  set forth in  Article  9 of the  Subordinated
     Indenture.

          (c)  Prior  Payment  to  Senior   Indebtedness  Upon  Acceleration  of
     Debentures.

          In the event that any  Debentures  are declared due and payable before
     their  Stated  Maturity,  then and in such event the  holders of the Senior
     Indebtedness  outstanding  at the time such  Debentures  so become  due and
     payable shall be entitled to receive  payment in full of all amounts due or
     to become due on or in respect of all  Senior  Indebtedness,  or  provision
     shall be made for such payment in cash or cash  equivalents or otherwise in
     a manner  satisfactory to the holders of such Senior  Indebtedness,  before
     the  Holders of the  Debentures  are  entitled  to receive  any  Debentures
     Payment  (including  any  payment  which  may be  payable  by reason of the
     payment of any other  indebtedness of the Company being subordinated to the
     payment of the Debentures).

          In the event that,  notwithstanding  the foregoing,  the Company shall
     make any  Debentures  Payment to the  Trustee  or any Holder of  Debentures
     prohibited  by the foregoing  provisions  of this  Paragraph 7, and if such
     fact shall, at or prior to the time of such Debentures  Payment,  have been
     made known to the Trustee pursuant to subparagraph 7.10 or, as the case may
     be, such Holder,  then and in such event such  Debentures  Payment shall be
     paid over and delivered forthwith to the Company.

          The  provisions  of this  subparagraph  7.3  shall  not  apply  to any
     Debentures  Payment  with  respect  to  which  subparagraph  7.2  would  be
     applicable.

     (d)  No Payment in Certain Circumstances.

          (a) No payment  or  distribution  of any assets of the  Company of any
     kind or character  shall be made on account of the Debentures or on account
     of the purchase, redemption or other acquisition of the Debentures upon the
     occurrence  of any  default in the  payment of any Senior  Indebtedness  in
     excess of  $5,000,000  beyond any  applicable  grace  period  with  respect
     thereto,  unless  and until  such  default  is cured or waived or ceases to
     exist or such Senior Indebtedness is discharged.

          (b) During the  continuation of any non-payment  event of default with
     respect  to any  Designated  Senior  Indebtedness  pursuant  to  which  the
     maturity  thereof may be  accelerated,  no payment or  distribution  of any
     assets of the Company of any kind or character shall be made by the Company
     on  account of  Subordinated  Obligations  or on  account of the  purchase,
     redemption or other  acquisition of the Debentures for the period specified
     below (the 'Payment  Blockage  Period').  The Payment Blockage Period shall
     commence  upon the receipt of notice by the Company or the Trustee from any
     representative of a






     holder of Designated  Senior  Indebtedness  and shall end on the earlier of
     (i) 179 days  thereafter,  (ii) the  date on which  such  event is cured or
     waived or ceases to exist or on which such Designated  Senior  Indebtedness
     is  discharged,  (iii) the date on which the  maturity of any  indebtedness
     (other than Senior  Indebtedness)  shall have been accelerated by virtue of
     such event,  or (iv) the date on which such Payment  Blockage  Period shall
     have been  terminated  by notice to the  Company  or the  Trustee  from the
     representative of holders of the Designated Senior Indebtedness  initiating
     such Payment Blockage  Period,  after which the Company shall resume making
     any and all required  payments in respect of the Debentures,  including any
     missed  payments.  Only one Payment Blockage Period may be commenced during
     any period of 365  consecutive  days.  No event of default  with respect to
     Designated  Senior  Indebtedness that existed or was continuing on the date
     of the  commencement  of any Payment  Blockage  Period with  respect to the
     Designated Senior Indebtedness initiating such Payment Blockage Period will
     be,  or can be,  made the basis for the  commencement  of a second  Payment
     Blockage  Period  whether or not within a period of 365  consecutive  days,
     unless  such event of default  has been cured or waived for a period of not
     less than 90 consecutive  days. In no event may a Payment  Blockage  Period
     extend beyond 179 days.

          In the event that,  notwithstanding  the foregoing,  the Company shall
     make any  Debentures  Payment to the  Trustee  or any Holder of  Debentures
     prohibited by the foregoing  provisions  of this  subparagraph  7.4, and if
     such fact shall, at or prior to the time of such Debentures  Payment,  have
     been made known to the Trustee or, as the case may be,  such  Holder,  then
     and in such event such Debentures  Payment shall be paid over and delivered
     forthwith to the Company.

          The  Trustee  shall give prompt  written  notice to the Company of any
     notice  from a  holder  of  Senior  Indebtedness  received  by the  Trustee
     pursuant  to  subparagraph  7.10  which  would  prohibit  the making of any
     payment to or by the Trustee with respect to any Debentures.

          The  provisions  of this  subparagraph  7.4  shall  not  apply  to any
     Debentures  Payment  with  respect  to  which  subparagraph  7.2  would  be
     applicable.

     (e)  Payment Permitted If No Default.

          Nothing contained in this Paragraph 7 or elsewhere in the Subordinated
     Indenture or in any of the Debentures shall prevent (1) the Company, at any
     time  except  during  the  pendency  of  any  Proceeding   referred  to  in
     subparagraph  7.2 or under the conditions  described in subparagraph 7.3 or
     7.4 from making Debentures Payments,  or (2) the application by the Trustee
     of any money  deposited  with it  hereunder to  Debentures  Payments or the
     retention of such Debentures  Payment by Holders of Debentures,  if, at the
     time of such






     application by the Trustee,  it did not have knowledge that such Debentures
     Payment would have been prohibited by the provisions of this Paragraph 7.

     (f)  Subrogation to Rights of Holders of Senior Indebtedness.

          Subject to the  payment in full of all amounts due or to become due on
     or in respect of Senior Indebtedness,  or the provision for such payment in
     cash or cash  equivalents  or  otherwise  in a manner  satisfactory  to the
     holders  of  Senior  Indebtedness,  the  Holders  of  Debentures  shall  be
     subrogated  to the  extent of the  payments  or  distributions  made to the
     holders of such  Senior  Indebtedness  pursuant to the  provisions  of this
     Paragraph 7 (equally  and ratably with the holders of all  indebtedness  of
     the Company which by its express terms is  subordinated  to indebtedness of
     the  Company  to  substantially  the  same  extent  as the  Debentures  are
     subordinated  and is entitled to like rights of  subrogation) to the rights
     of the  holders  of  such  Senior  Indebtedness  to  receive  payments  and
     distributions  of cash,  property and  securities  applicable to the Senior
     Indebtedness  until the principal of (and premium,  if any) and interest on
     the Debentures shall be paid in full. For purposes of such subrogation,  no
     payments or distributions to the holders of the Senior  Indebtedness of any
     cash,  property or  securities  to which the Holders of  Debentures  or the
     Trustee would be entitled  except for the  provisions of this  Paragraph 7,
     and no payments over pursuant to the  provisions of this Paragraph 7 to the
     holders of Senior  Indebtedness  by Holders of  Debentures  or the Trustee,
     shall,  as among the Company,  its  creditors  other than holders of Senior
     Indebtedness  and the Holders of the Debentures,  be deemed to be a payment
     or distribution by the Company to or on account of the Senior Indebtedness.

     (g)  Provisions Solely to Define Relative Rights.

          The provisions of this Paragraph 7 are and are intended solely for the
     purpose of defining the relative rights of the Holders of the Debentures on
     the one hand and the  holders  of Senior  Indebtedness  on the other  hand.
     Nothing  contained in this  Paragraph 7 or  elsewhere in this  Subordinated
     Indenture or in the Debentures is intended to or shall (1) impair, as among
     the Company,  its creditors other than holders of Senior  Indebtedness  and
     the Holders of Debentures, the obligation of the Company, which is absolute
     and  unconditional,  to pay to the Holders of  Debentures  the principal of
     (and  premium,  if any) and  interest  on the  Debentures,  and to make any
     repurchases of the Debentures  required by Paragraph 9 hereof,  as and when
     the same shall become due and payable in accordance  with the terms hereof;
     or (2) affect the  relative  rights  against  the Company of the Holders of
     Debentures  and  creditors of the Company  other than the holders of Senior
     Indebtedness;  or (3) prevent  the  Trustee or the Holder of any  Debenture
     from  exercising  all remedies  otherwise  permitted by applicable law upon
     default under the Subordinated  Indenture,  subject to the rights,  if any,
     under this Paragraph 7 of the holders of Senior






     Indebtedness to receive cash, property and securities  otherwise payable or
     deliverable to the Trustee or such Holder.

     (h)  Trustee to Effectuate Subordination and Payment Provisions.

          Each Holder of a Debenture by his  acceptance  thereof  authorizes and
     directs the  Trustee on his behalf to take such action as may be  necessary
     or  appropriate  to effectuate  the  subordination  and payment  provisions
     provided in this Paragraph 7 and appoints the Trustee his  attorney-in-fact
     for any and all such purposes.

     (i)  No Waiver of Subordination Provisions.

          No right of any present or future holder of any Senior Indebtedness to
     enforce  subordination  as herein  provided shall at any time in any way be
     prejudiced  or  impaired  by any act or  failure  to act on the part of the
     Company or by any act or failure to act, in good faith, by any such holder,
     or by any  noncompliance  by the  Company  with the terms,  provisions  and
     covenants  of the  Subordinated  Indenture,  regardless  of  any  knowledge
     thereof any such holder may have or be otherwise charged with.

          Without in any way limiting the generality of the foregoing paragraph,
     the holders of Senior  Indebtedness may, at any time and from time to time,
     without  the  consent  of or notice to the  Trustee  or the  Holders of the
     Debentures,   without  incurring  responsibility  to  the  Holders  of  the
     Debentures and without impairing or releasing the subordination provided in
     this Paragraph 7 or the obligations  hereunder of the Holders of Debentures
     to the holders of Senior Indebtedness, do any one or more of the following:
     (i)  change  the  manner,  place or terms of  payment or extend the time of
     payment of, or renew or alter, Senior  Indebtedness,  or otherwise amend or
     supplement in any manner Senior  Indebtedness or any instrument  evidencing
     the same or any agreement  under which Senior  Indebtedness is outstanding;
     (ii) sell,  exchange,  release or otherwise deal with any property pledged,
     mortgaged or otherwise  securing  Senior  Indebtedness;  (iii)  release any
     Person liable in any manner for the collection of Senior Indebtedness;  and
     (iv) exercise or refrain from exercising any rights against the Company and
     any other Person.

     (j)  Notice to Trustee.

          The  Company  shall give prompt  written  notice to the Trustee of any
     fact known to the Company which would prohibit the making of any payment to
     or by the  Trustee  in  respect  of  the  Debentures.  Notwithstanding  the
     provisions of this Paragraph 7 or any other  provision of the  Subordinated
     Indenture, the Trustee shall not be charged with knowledge of the existence
     of any facts  which would  prohibit  the making of any payment to or by the
     Trustee in respect of the  Debentures,  unless and until the Trustee  shall
     have received written notice






     thereof  from the  Company or a holder of Senior  Indebtedness  or from any
     trustee therefor; and, prior to the receipt of any such written notice, the
     Trustee,  subject  to the  provisions  of Section  6.1 of the  Subordinated
     Indenture,  shall be entitled in all  respects to assume that no such facts
     exist;  provided,  however, that if the Trustee shall not have received the
     notice provided for in this  subparagraph 7.10 at least three Business Days
     prior to the date upon  which by the  terms  hereof  any  money may  become
     payable for any purpose (including,  without limitation, the payment of the
     principal of (and premium,  if any) or interest on, or amounts payable upon
     redemption  or  repurchase  of,  any  Debenture),   then,  anything  herein
     contained  to the  contrary  notwithstanding,  the Trustee  shall have full
     power and  authority  to  receive  such  money and to apply the same to the
     purpose for which such money was  received and shall not be affected by any
     notice to the contrary  which may be received by it within  three  Business
     Days prior to such date.

          Subject  to  the  provisions  of  Section  6.1  of  the   Subordinated
     Indenture, the Trustee shall be entitled to rely on the delivery to it of a
     written  notice by a Person  representing  himself to be a holder of Senior
     Indebtedness (or a trustee therefor) to establish that such notice has been
     given by a holder of Senior  Indebtedness (or a trustee  therefor).  In the
     event that the Trustee  determines  in good faith that further  evidence is
     required  with  respect  to the  right of any  Person as a holder of Senior
     Indebtedness to participate in any payment or distribution pursuant to this
     Paragraph 7, the Trustee may request such Person to furnish evidence to the
     reasonable  satisfaction  of  the  Trustee  as  to  the  amount  of  Senior
     Indebtedness  held by such  Person,  the  extent  to which  such  person is
     entitled to participate in such payment or distribution and any other facts
     pertinent to the rights of such Person under this  Paragraph 7, and if such
     evidence is not furnished, the Trustee may defer any payment to such Person
     pending  judicial  determination  as to the right of such Person to receive
     such payment.

     (k)  Reliance on Judicial Order or Certificate of Liquidating Agent.

          Upon any payment or distribution of assets of the Company  referred to
     in this Paragraph 7, the Trustee,  subject to the provisions of Section 6.1
     of the  Subordinated  Indenture,  and the  Holders of  Debentures  shall be
     entitled to rely upon any order or decree entered by any court of competent
     jurisdiction in which such  Proceeding is pending,  or a certificate of the
     trustee in bankruptcy,  receiver,  liquidating trustee, custodian, assignee
     for the benefit of creditors,  agent or other Person making such payment or
     distribution, delivered to the Trustee or to the Holders of Debentures, for
     the purpose of  ascertaining  the Persons  entitled to  participate in such
     payment or distribution,  the holders of the Senior  Indebtedness and other
     indebtedness  of the Company,  the amount thereof or payable  thereon,  the
     amount or amounts paid or distributed thereon and all other facts pertinent
     thereto or to this Paragraph 7.






     (l)  Trustee Not Fiduciary for Holders of Senior Indebtedness.

          The  Trustee  shall  not be deemed  to owe any  fiduciary  duty to the
     holders of Senior  Indebtedness and shall not be liable to any such holders
     if it shall in good faith  mistakenly  pay over or distribute to Holders of
     Debentures  or to the  Company or to any other  Person  cash,  property  or
     securities to which any holders of Senior Indebtedness shall be entitled by
     virtue of this Paragraph 7 or otherwise.

     (m)  Rights of Trustee as Holder of Senior  Indebtedness;  Preservation  of
          Trustee's Rights.

          The Trustee in its  individual  capacity  shall be entitled to all the
     rights  set  forth  in  this   Paragraph  7  with  respect  to  any  Senior
     Indebtedness which may at any time be held by it, to the same extent as any
     other  holder of  Senior  Indebtedness,  and  nothing  in the  Subordinated
     Indenture shall deprive the Trustee of any of its rights as such holder.

          Nothing in this  Paragraph 7 shall apply to claims of, or payments to,
     the Trustee under or pursuant to Section 6.7 of the Subordinated Indenture.

     (n)  Paragraph Applicable to Paying Agents.

          In case at any time any Paying Agent other than the Trustee shall have
     been  appointed  by the  Company  and be then  acting  hereunder,  the term
     'Trustee'  as used in this  Paragraph  7 shall  in such  case  (unless  the
     context otherwise requires) be construed as extending to and including such
     Paying Agent within its meaning as fully for all intents and purposes as if
     such Paying Agent were named in this Paragraph 7 in addition to or in place
     of the Trustee;  provided,  however, that subparagraph 7.13 shall not apply
     to the Company or any Affiliate of the Company if it or such Affiliate acts
     as Paying Agent.

     (8) The Debentures  shall be convertible into shares of Common Stock of the
Company upon the following terms and conditions:

     (a)  Conversion Privilege and Conversion Price.

          Subject to and upon  compliance  with the provisions of this Paragraph
     8, at the option of the Holder  thereof,  any  Debentures or any portion of
     the principal  amount  thereof  which is $1,000 or an integral  multiple of
     $1,000 may be converted at the principal amount thereof, or of such portion
     thereof,  into fully paid and nonassessable  shares  (calculated as to each
     conversion  to the nearest 1/100 of a share) of Common Stock of the Company
     at the conversion price,  determined as hereinafter  provided, in effect at
     the time of conversion.  Such conversion right shall expire at the close of
     business  on April 1, 2003.  In case a  Debentures  or  portion  thereof is
     called for redemption at the election of






     the  Company,  such  conversion  right in respect of the  Debentures  shall
     expire at the close of business on the second  business day  preceding  the
     Redemption Date.

          The price at which  shares of Common  Stock  shall be  delivered  upon
     conversion  (herein  called  the  'conversion  price')  shall be  initially
     $36.625 per share of Common Stock.  The conversion  price shall be adjusted
     in certain instances as provided in this Paragraph 8.

     (b)  Exercise of Conversion Privilege.

          In order to  exercise  the  conversion  privilege,  the  Holder of any
     Debenture to be converted shall surrender such Debenture,  duly endorsed or
     assigned to the Company or in blank, at any office or agency of the Company
     maintained  for that  purpose  pursuant to Section 3.2 of the  Subordinated
     Indenture, accompanied by written notice of conversion in the form provided
     on the  Debenture (or such other notice as is acceptable to the Company) at
     such office or agency that the Holder elects to convert such  Debenture or,
     if less than the entire  principal  amount thereof is to be converted,  the
     portion  thereof to be converted.  Debentures  issued as global  Debentures
     will  be  converted  in  accordance  with  the  standing  instructions  and
     procedures of the Depositary and its participants.  Debentures  surrendered
     for conversion  during the period from the close of business on any Regular
     Record Date  through and  including  the next  Interest  Payment Date shall
     (except  in the case of  Debentures  or  portions  thereof  which have been
     called for  redemption  on a  Redemption  Date  occurring on or before such
     Interest Payment Date) be accompanied by payment in New York Clearing House
     funds or other funds  acceptable  to the Company of an amount  equal to the
     interest  payable on such Interest  Payment Date on the principal amount of
     Debentures being  surrendered for conversion.  Subject to the provisions of
     Section  2.7 of the  Subordinated  Indenture  relating  to the  payment  of
     Defaulted  Interest by the Company,  the interest payment with respect to a
     Debenture called for redemption on a Redemption Date during the period from
     the close of business on any Regular  Record Date through and including the
     next Interest  Payment Date shall be payable on such Interest  Payment Date
     to the Holder of such  Debenture  at the close of business on such  Regular
     Record Date  notwithstanding  the conversion of such  Debenture  after such
     Regular Record Date and on or prior to such Interest  Payment Date, and the
     Holder  converting  such  Debenture  need not  include  a  payment  of such
     interest  payment amount upon  surrender of such Debenture for  conversion.
     Except as  provided  in the  preceding  sentence  and  subject to the final
     paragraph  of  Section  2.7 of the  Subordinated  Indenture,  no payment or
     adjustment  shall be made upon any  conversion  on account of any  interest
     accrued on the Debentures  surrendered  for conversion or on account of any
     dividends on the Common Stock issued upon conversion.






          Debentures shall be deemed to have been converted immediately prior to
     the  close of  business  on the day of  surrender  of such  Debentures  for
     conversion in accordance  with the foregoing  provisions,  and at such time
     the rights of the Holders of such  Debentures as Holders  shall cease,  and
     the Person or Persons  entitled to receive the Common Stock  issuable  upon
     conversion  shall be  treated  for all  purposes  as the  record  holder or
     holders of such Common Stock at such time. As promptly as practicable on or
     after the  conversion  date,  the Company  shall issue and shall deliver at
     such office or agency a certificate or certificates  for the number of full
     shares of Common Stock issuable upon  conversion,  together with payment in
     lieu of any fraction of a share, as provided in subparagraph 8.3.

          In the case of any  Debenture  which is converted  in part only,  upon
     such   conversion   the  Company   shall  execute  and  the  Trustee  shall
     authenticate  and  deliver to the  Holder  thereof,  at the  expense of the
     Company,  a new  Debenture or Debentures  of  authorized  denominations  in
     aggregate  principal  amount  equal  to  the  unconverted  portion  of  the
     principal amount of such Subordinated Security.

     (c)  Fractions of Shares.

          No fractional  shares of Common Stock shall be issued upon  conversion
     of  Debentures.  If more  than  one  Debenture  shall  be  surrendered  for
     conversion at one time by the same Holder,  the number of full shares which
     shall be issuable upon conversion thereof shall be computed on the basis of
     the aggregate  principal  amount of the Debentures  (or specified  portions
     thereof) so  surrendered.  Instead of any fractional  share of Common Stock
     which would  otherwise  be issuable  upon  conversion  of any  Debenture or
     Debentures (or specified  portions  thereof),  the Company shall pay a cash
     adjustment  in respect of such fraction in an amount equal to such fraction
     multiplied by the Closing Price per share of Common Stock  (consistent with
     subparagraph  8.4(h)  below)  at  the  close  of  business  on  the  day of
     conversion  (or,  if such day is not a  Trading  Day,  on the  Trading  Day
     immediately preceding such day).

     (d)  Adjustment of Conversion Price.

          (a) In  case  the  Company  shall  pay or  make a  dividend  or  other
     distribution  on any class of capital stock of the Company in Common Stock,
     the  conversion  price in  effect at the  opening  of  business  on the day
     following the date fixed for the determination of stockholders  entitled to
     receive such dividend or other distribution shall be reduced by multiplying
     such  conversion  price by a fraction of which the  numerator  shall be the
     number of shares of Common  Stock  outstanding  at the close of business on
     the date fixed for such  determination and the denominator shall be the sum
     of such number of shares and the total number of shares  constituting  such
     dividend  or  other  distribution,   such  reduction  to  become  effective
     immediately after the opening of business on






     the day following the date fixed for such  determination.  For the purposes
     of this  clause  (a),  the  number of  shares  of Common  Stock at any time
     outstanding  shall not include  shares held in the  treasury of the Company
     but shall include shares issuable in respect of scrip  certificates  issued
     in lieu of  fractions of shares of Common  Stock.  The Company will not pay
     any dividend or make any distribution on shares of Common Stock held in the
     treasury of the Company.

          (b) In case the Company shall issue rights, options or warrants to all
     holders of its Common Stock (not being available on an equivalent  basis to
     Holders of the Debentures upon conversion)  entitling them to subscribe for
     or  purchase  shares  of Common  Stock at a price  per share  less than the
     Current  Market  Price  on  the  date  fixed  for  the   determination   of
     stockholders  entitled to receive  such rights,  options or  warrants,  the
     conversion  price in effect at the opening of business on the day following
     the date fixed for such determination  shall be reduced by multiplying such
     conversion  price by a fraction of which the numerator  shall be the number
     of shares of Common Stock  outstanding at the close of business on the date
     fixed for such  determination  plus the  number  of shares of Common  Stock
     which the aggregate of the offering  price of the total number of shares of
     Common Stock so offered for subscription or purchase would purchase at such
     Current Market Price and the  denominator  shall be the number of shares of
     Common  Stock  outstanding  at the close of  business on the date fixed for
     such determination plus the number of shares of Common Stock so offered for
     subscription or purchase,  such reduction to become  effective  immediately
     after the opening of business on the day  following the date fixed for such
     determination. For the purposes of this clause (b), the number of shares of
     Common Stock at any time  outstanding  shall not include shares held in the
     treasury  of the Company but shall  include  shares  issuable in respect of
     scrip  certificates  issued in lieu of fractions of shares of Common Stock.
     The Company  will not issue any  rights,  options or warrants in respect of
     shares of Common Stock held in the treasury of the Company.

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

          (d) In case the Company shall, by dividend or otherwise, distribute to
     all holders of its Common Stock  evidences of its  indebtedness,  shares of
     any class of its capital stock or other assets (including  securities,  but
     excluding any






     rights,  options or warrants referred to in clause (b) of this subparagraph
     8.4, any dividend or distribution  paid  exclusively in cash referred to in
     clause (e) of this subparagraph 8.4, any dividend or distribution  referred
     to in clause (a) of this  subparagraph  8.4 and any merger or consolidation
     to which subparagraph 8.11 applies), the conversion price shall be adjusted
     so that the same  shall  equal  the price  determined  by  multiplying  the
     conversion  price in effect  immediately  prior to the close of business on
     the date fixed for the  determination  of stockholders  entitled to receive
     such distribution by a fraction of which the numerator shall be the Current
     Market  Price on the date fixed for such  determination  less the then fair
     market value (as determined by the Board of Directors,  whose determination
     shall be  conclusive  and  described in a Board  Resolution  filed with the
     Trustee) of the portion of the assets,  shares or evidences of indebtedness
     so distributed  applicable to one share of Common Stock and the denominator
     shall be such Current  Market Price,  such  adjustment to become  effective
     immediately  prior to the opening of business on the day following the date
     fixed for the  determination  of  stockholders  entitled  to  receive  such
     distribution.

          (e) In case the Company shall, by dividend or otherwise, distribute to
     all  holders  of  its  Common  Stock  cash  (excluding  any  cash  that  is
     distributed  upon a merger or consolidation to which Paragraph 9 applies or
     as part of a  distribution  referred to in clause (d) of this  subparagraph
     8.4) in an aggregate amount that,  combined together with (1) the aggregate
     amount of any other  distributions  to all holders of its Common Stock made
     exclusively  in cash within the 12 months  preceding the date of payment of
     such  distribution  and in respect of which no adjustment  pursuant to this
     clause (e) has been made,  and (2) the  aggregate of any cash plus the fair
     market value (as determined by the Board of Directors,  whose determination
     shall be conclusive and described in a Board  Resolution) of  consideration
     payable  in  respect  of any  tender  offer  by the  Company  or any of its
     Subsidiaries  for all or any portion of the Common Stock  concluded  within
     the 12 months  preceding  the date of payment of such  distribution  and in
     respect of which no adjustment  pursuant to clause (f) of this subparagraph
     8.4 has been made, exceeds 12.5% of the product of the Current Market Price
     on the date for the  determination  of  holders  of shares of Common  Stock
     entitled to receive such distribution  times the number of shares of Common
     Stock  outstanding on such date,  then, and in each such case,  immediately
     after the close of business on such date for determination,  the conversion
     price shall be reduced so that the same shall equal the price determined by
     multiplying the conversion price in effect  immediately  prior to the close
     of  business  on the  date  fixed  for  determination  of the  stockholders
     entitled to receive such  distribution  by a fraction (i) the  numerator of
     which shall be equal to the Current Market Price on the date fixed for such
     determination  less an amount  equal to the  quotient  of (x) the excess of
     such combined amount over such 12.5% and (y) the number of shares of Common
     Stock  outstanding on such date for  determination and (ii) the denominator
     of






     which  shall  be  equal  to the  Current  Market  Price  on such  date  for
     determination.

          (f) In case a tender offer made by the Company or any  Subsidiary  for
     all or any portion of the Common  Stock shall  expire and such tender offer
     (as  amended  upon the  expiration  thereof)  shall  require the payment to
     stockholders  (based on the acceptance (up to any maximum  specified in the
     terms of the tender  offer) of Purchased  Shares (as defined  below)) of an
     aggregate  consideration  having a fair market value (as  determined by the
     Board of Directors,  whose  determination shall be conclusive and described
     in a Board Resolution) that combined together with (1) the aggregate of the
     cash plus the fair market value (as  determined  by the Board of Directors,
     whose   determination   shall  be  conclusive  and  described  in  a  Board
     Resolution),  as of the expiration of such tender offer,  of  consideration
     payable  in  respect  of any other  tender  offer,  by the  Company  or any
     Subsidiary for all or any portion of the Common Stock  expiring  within the
     12 months  preceding the  expiration of such tender offer and in respect of
     which no  adjustment  pursuant to this clause (f) has been made and (2) the
     aggregate  amount of any  distributions  to all  holders  of the  Company's
     Common  Stock  made  exclusively  in cash  within 12 months  preceding  the
     expiration  of such  tender  offer and in  respect  of which no  adjustment
     pursuant to clause (e) of this Section has been made,  exceeds 12.5% of the
     product of the Current  Market  Price as of the last time (the  'Expiration
     Time')  tenders  could have been made  pursuant to such tender offer (as it
     may be  amended)  times the  number of shares of Common  Stock  outstanding
     (including any tendered  shares) on the Expiration  Time, then, and in each
     such case,  immediately  prior to the  opening of business on the day after
     the date of the Expiration  Time, the conversion price shall be adjusted so
     that  the  same  shall  equal  the  price  determined  by  multiplying  the
     conversion  price in effect  immediately  prior to close of business on the
     date of the Expiration  Time by a fraction (i) the numerator of which shall
     be equal to (A) the  product of (I) the current  market  price per share of
     the Common Stock (determined as provided in clause (h) of this subparagraph
     8.4) on the date of the  Expiration  Time and (II) the  number of shares of
     Common Stock outstanding  (including any tendered shares) on the Expiration
     Time less (B) the amount of cash plus the fair market value  (determined as
     aforesaid) of the aggregate  consideration payable to stockholders based on
     the  acceptance  (up to any  maximum  specified  in the terms of the tender
     offer) of  Purchased  Shares,  and (ii) the  denominator  of which shall be
     equal to the  product  of (A) the  current  market  price  per share of the
     Common  Stock  (determined  as provided in clause (h) of this  subparagraph
     8.4) as of the Expiration Time and (B) the number of shares of Common Stock
     outstanding  (including any tendered shares) as of the Expiration Time less
     the number of all  shares  validly  tendered  and not  withdrawn  as of the
     Expiration  Time (the shares  deemed so  accepted  up to any such  maximum,
     being referred to as the 'Purchased Shares').






          (g) The  reclassification  of Common Stock into  securities  including
     securities other than Common Stock (other than any reclassification  upon a
     consolidation or merger to which subparagraph 8.11 applies) shall be deemed
     to involve (i) a distribution of such securities other than Common Stock to
     all   holders   of  Common   Stock   (and  the   effective   date  of  such
     reclassification   shall  be  deemed   to  be  'the  date   fixed  for  the
     determination of stockholders  entitled to receive such  distribution'  and
     the 'date fixed for such determination' within the meaning of clause (d) of
     this subparagraph 8.4), and (ii) a subdivision or combination,  as the case
     may be, of the  number of shares of Common  Stock  outstanding  immediately
     prior to such  reclassification  into the number of shares of Common  Stock
     outstanding   immediately  thereafter  (and  the  effective  date  of  such
     reclassification shall be deemed to be 'the day upon which such subdivision
     becomes  effective'  or  'the  day  upon  which  such  combination  becomes
     effective', as the case may be, and 'the day upon which such subdivision or
     combination  becomes  effective'  within the  meaning of clause (c) of this
     subparagraph 8.4).

          (h) For the purpose of any computation under clauses (b), (d), (e) and
     (f) of this  subparagraph 8.4, the current market price per share of Common
     Stock (the  'Current  Market  Price') on any date shall be deemed to be the
     average of the daily  Closing  Prices for the 5  consecutive  Trading  Days
     selected by the Company  commencing  not more than 20 Trading  Days before,
     and ending not later than,  the earlier of the day in question  and the day
     before the 'ex' date with respect to the issuance or distribution requiring
     such  computation.  The  'Closing  Price' for each Trading Day shall be the
     reported  last sale price  regular  way or, in case no such  reported  sale
     takes place on such day, the average of the reported  closing bid and asked
     prices  regular  way, in either case on the New York Stock  Exchange or, if
     the Common Stock is not listed or admitted to trading on such Exchange,  on
     the  principal  national  securities  exchange on which the Common Stock is
     listed or  admitted  to trading or, if not listed or admitted to trading on
     any national securities exchange, on the National Association of Securities
     Dealers  Automated  Quotations  system  ('NASDAQ')  National  Market System
     ('NASDAQ/NMS')  or, if not listed or admitted to trading on NASDAQ/NMS,  on
     NASDAQ, or, if the Common Stock is not listed or admitted to trading on any
     national securities exchange or NASDAQ/NMS or quoted on NASDAQ, the average
     of the  closing  bid and  asked  prices in the  over-the-counter  market as
     furnished by any New York Stock Exchange  member firm selected from time to
     time by the Company for that purpose.  For purposes of this paragraph,  the
     term ''ex' date',  when used with respect to any issuance or  distribution,
     shall mean the first date on which the Common Stock  trades  regular way on
     such exchange or in such market  without the right to receive such issuance
     or distribution.

          (i) No adjustment in the conversion price shall be required to be made
     until cumulative  adjustments  (plus any adjustments not previously made by
     reason  of this  paragraph  (i))  amount  to at least 1% of the  conversion
     price,






     as last adjusted;  provided,  however, that any adjustments which by reason
     of this  subparagraph  (i) are not  required  to be made  shall be  carried
     forward  and  taken  into  account  in  any  subsequent   adjustment.   All
     calculations under this subparagraph (i) shall be made to the nearest cent.

          (j) In addition to those  required by clauses (a),  (b), (c), (d), (e)
     and (f) of this  subparagraph  8.4,  the Company from time to time may make
     such  reductions in the conversion  price by any amount,  (i) to the extent
     permitted  by law for any  period  of at least 20 days,  in which  case the
     Company  shall give 15 days notice of such decrease and (ii) to such extent
     as it considers to be advisable in order that any event treated for federal
     income tax  purposes  as a dividend  of stock or stock  rights  will not be
     taxable  to the  holders  of  shares  of  Common  Stock  or, if that is not
     possible,  to diminish any income taxes that are otherwise  payable because
     of such event. The Company shall have the power to resolve any ambiguity or
     correct  any error in this  clause (j) and its actions in so doing shall be
     final and conclusive.

     (e)  Notice of Adjustments of Conversion Price.

          Whenever the conversion price is adjusted as herein provided:

               (a) the Company  shall compute the adjusted  conversion  price in
          accordance  with  subparagraph  8.4 and shall  prepare  a  certificate
          signed by the  Treasurer  of the Company  setting  forth the  adjusted
          conversion price and showing in reasonable detail the facts upon which
          such  adjustment is based,  and such  certificate  shall  forthwith be
          filed  at  each  office  or  agency  maintained  for  the  purpose  of
          conversion of Debentures  pursuant to Section 3.2 of the  Subordinated
          Indenture; and

               (b) a notice stating that the conversion  price has been adjusted
          and setting  forth the adjusted  conversion  price shall  forthwith be
          required, and as soon as practicable after it is required, such notice
          shall be mailed by the Company to all Holders of  Debentures  at their
          last addresses as they shall appear in the Security Register.

     (f)  Notice of Certain Corporate Action.

          In case:

               (a)  the  Company   shall   declare  a  dividend  (or  any  other
          distribution)  on its Common Stock payable  otherwise than in cash out
          of its earned surplus; or

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







               (c) of any  reclassification  of the Common  Stock of the Company
          (other than a subdivision or combination of its outstanding  shares of
          Common Stock),  or of any  consolidation,  merger or share exchange to
          which  the  Company  is  a  party  and  for  which   approval  of  any
          stockholders of the Company is required, or of the sale or transfer of
          all or substantially all of the assets of the Company; or

               (d) of the voluntary or involuntary  dissolution,  liquidation or
          winding up of the Company; or

               (e) the Company or any  Subsidiary  shall commence a tender offer
          for all or a portion of the  Company's  outstanding  Common  Stock (or
          shall amend any such tender offer);

     then  the  Company  shall  cause  to be  filed  at each  office  or  agency
     maintained for the purpose of conversion of Debentures  pursuant to Section
     3.2 of the  Subordinated  Indenture,  and  shall  cause to be mailed to all
     Holders  at their  last  addresses  as they  shall  appear in the  Security
     Register,  at least 20 days (or 10 days in any case specified in clause (a)
     or (b) above) prior to the applicable  record or effective date hereinafter
     specified,  a notice  stating (x) the date on which a record is to be taken
     for the purpose of such dividend, distribution,  rights or warrants, or, if
     a record is not to be taken,  the date as of which  the  holders  of Common
     Stock of record to be entitled to such  dividend,  distribution,  rights or
     warrants   are  to  be   determined,   or  (y)  the  date  on  which   such
     reclassification,  consolidation,  merger, share exchange,  sale, transfer,
     dissolution,  liquidation, winding up or tender offer is expected to become
     effective, and the date or dates as of which it is expected that holders of
     Common Stock of record shall be entitled to exchange their shares of Common
     Stock  for  securities,  cash  or  other  property  deliverable  upon  such
     reclassification,  consolidation,  merger, share exchange,  sale, transfer,
     dissolution,  liquidation,  winding up or tender offer. Neither the failure
     to give such notice nor any defect  therein  shall  affect the  legality or
     validity of the  proceedings  described  in clauses (a) through (d) of this
     subparagraph  8.6. If at the time the Trustee  shall not be the  conversion
     agent,  a copy of such notice shall also  forthwith be filed by the Company
     with the Trustee.

     (g)  Company to Reserve Common Stock.

          The Company shall at all times  reserve and keep  available out of its
     authorized  but unissued  Common  Stock,  for the purpose of effecting  the
     conversion  of  Debentures,  the full number of shares of Common Stock then
     issuable upon the conversion of all outstanding Debentures.






     (h)  Taxes on Conversions.

          The Company  will pay any and all taxes that may be payable in respect
     of the  issue or  delivery  of  shares of  Common  Stock on  conversion  of
     Debentures  pursuant hereto. The Company shall not, however, be required to
     pay any tax which may be payable in respect of any transfer involved in the
     issue and  delivery of shares of Common  Stock in a name other than that of
     the Holder of the  Debenture or  Debentures  to be  converted,  and no such
     issue or delivery shall be made unless and until the Person requesting such
     issue  has  paid  to the  Company  the  amount  of  any  such  tax,  or has
     established to the satisfaction of the Company that such tax has been paid.

     (i)  Covenant as to Common Stock.

          The  Company  covenants  that all shares of Common  Stock which may be
     issued  upon  conversion  of  Debentures  will upon issue be fully paid and
     nonassessable and, except as provided in subparagraph 8.8, the Company will
     pay all taxes, liens and charges with respect to the issue thereof.

     (j)  Cancellation of Converted Debentures.

          All  Debentures  delivered  for  conversion  shall be delivered to the
     Trustee to be canceled by or at the  direction of the Trustee,  which shall
     dispose  of the  same as  provided  in  Section  2.10  of the  Subordinated
     Indenture.

     (k)  Provisions in Case of Consolidation, Merger or Sale of Assets.

          In case of any  consolidation  of the Company  with,  or merger of the
     Company  into,  any other  Person,  any merger of another  Person  into the
     Company (other than a merger which does not result in any reclassification,
     conversion,  exchange or cancellation of outstanding shares of Common Stock
     of the Company) or any sale or transfer of all or substantially  all of the
     assets of the Company, the Person formed by such consolidation or resulting
     from such merger or which  acquires such assets,  as the case may be, shall
     execute and deliver to the Trustee a supplemental  indenture providing that
     the  Holder  of each  Debenture  then  outstanding  shall  have  the  right
     thereafter,  during the  period  such  Debenture  shall be  convertible  as
     specified in subparagraph 8.1, to convert such Debenture only into the kind
     and amount of  securities,  cash and other  property  receivable  upon such
     consolidation, merger, sale or transfer by a holder of the number of shares
     of Common  Stock of the Company into which such  Debenture  might have been
     converted  immediately  prior  to  such  consolidation,   merger,  sale  or
     transfer,  assuming  such  holder of Common  Stock of the  Company is not a
     Person with which the Company consolidated or into which the Company merged
     or which  merged  into the  Company or to which such sale or  transfer  was
     made,  as the case may be  ('Constituent  Person'),  or an  Affiliate  of a
     constituent Person, and failed to exercise his rights of election,






     if any,  as to the kind or amount of  securities,  cash and other  property
     receivable upon such consolidation, merger, sale or transfer (provided that
     if the kind or amount of  securities,  cash and other  property  receivable
     upon such consolidation,  merger, sale or transfer is not the same for each
     share  of  Common  Stock  of the  Company  held  immediately  prior to such
     consolidation, merger, sale or transfer by others than a constituent Person
     or an  Affiliate  thereof  and in respect of which such  rights of election
     shall not have been exercised  ('non-electing share'), then for the purpose
     of this Section the kind and amount of securities,  cash and other property
     receivable  upon  such  consolidation,  merger,  sale or  transfer  by each
     non-electing  share shall be deemed to be the kind and amount so receivable
     per share by a plurality  of the  non-electing  shares.  Such  supplemental
     indenture shall provide for adjustments which, for events subsequent to the
     effective  date  of  such  supplemental  indenture,   shall  be  as  nearly
     equivalent as may be  practicable to the  adjustments  provided for in this
     Paragraph 8. The above provisions of this Paragraph 8 shall similarly apply
     to successive consolidations, mergers, sales or transfers.

     (l)  Trustee's Disclaimer.

          The Trustee has no duty to  determine  when an  adjustment  under this
     Paragraph 8 should be made, how it should be made or what it should be. The
     Trustee  makes  no  representation  as to  the  validity  or  value  of any
     securities or assets  issued upon  conversion  of  Debentures.  The Trustee
     shall not be  responsible  for the  Company's  failure to comply  with this
     Paragraph 8.

     (9) The  Debentures  shall be  subject to  repurchase  at the option of the
Holders upon the following terms and conditions:

     9.1  Right to Require Repurchase.

          In the event that a Repurchase  Event (as  hereinafter  defined) shall
     occur  after the date of issuance  of the  Debentures,  then each Holder of
     Debentures  shall have the right,  at the Holder's  option,  to require the
     Company to  repurchase,  and upon the  exercise  of such right the  Company
     shall repurchase,  all of such Holder's  Debentures,  or any portion of the
     principal  amount  thereof that is an integral  multiple of $1,000,  on the
     date (the 'Repurchase  Date') that is 30 days after the date of the Company
     Notice (as defined in subparagraph  9.2), for cash at a purchase price (the
     'Repurchase Price') equal to 100% of the principal amount of the Debentures
     to be  repurchased,  together  with  accrued  and  unpaid  interest  to the
     Repurchase  Date.  Such right to require the  repurchase of the  Debentures
     shall not continue  after a discharge  of the Company from its  obligations
     with  respect  to the  Debentures  in  accordance  with  Article  10 of the
     Subordinated Indenture, unless a Repurchase Event shall have occurred prior
     to such discharge.






     9.2  Notices; Method of Exercising Repurchase Right, Etc.

          (a) Unless the Company shall have  theretofore  called for  redemption
     all of the Outstanding Debentures, on or before the 15th calendar day after
     the occurrence of a Repurchase  Event,  the Company or, at the request (and
     expense)  of the  Company,  the  Trustee,  shall  mail  to all  Holders  of
     Debentures  a  notice  (the  'Company  Notice')  of the  occurrence  of the
     Repurchase  Event and of the repurchase right set forth herein arising as a
     result thereof.

          Each notice of a repurchase right shall state:

               (1) the Repurchase Date,

               (2) the date by which the repurchase right must be exercised,

               (3) the Repurchase Price for the Debentures, and

               (4) a description  of the procedure  which a Holder of Debentures
          must follow to exercise a repurchase right.

          No failure  of the  Company  to give the  foregoing  notices or defect
     therein  shall limit any Holder's  right to exercise a repurchase  right or
     affect the validity of the proceedings for the repurchase of Debentures.

          If any of the foregoing  provisions are  inconsistent  with applicable
     law, such law shall govern.

          (b) To  exercise a  repurchase  right,  a Holder of  Debentures  shall
     deliver to the  Company  (or an agent  designated  by the  Company for such
     purpose)  and to the  Trustee  on or before  the close of  business  on the
     Repurchase Date (i) written notice of the Holder's  exercise of such right,
     which notice shall set forth the name of the Holder,  the principal  amount
     of the  Debentures  to be  repurchased,  a  statement  that an  election to
     exercise  the  repurchase  right  is  being  made  thereby,  and  (ii)  the
     Debentures with respect to which the repurchase  right is being  exercised,
     duly  endorsed for transfer to the  Company.  Such written  notice shall be
     irrevocable,  except that the right of the Holder to convert the Debentures
     with  respect  to which  the  repurchase  right is  being  exercised  shall
     continue until the close of business on the Repurchase Date.

          (c) In the event a repurchase  right shall be exercised in  accordance
     with  the  terms  hereof,  the  Company  shall  pay or cause to be paid the
     Repurchase  Price in cash to the Holder on the  Repurchase  Date,  together
     with  accrued  and unpaid  interest to the  Repurchase  Date  payable  with
     respect  to  the  Debentures  as to  which  the  purchase  right  has  been
     exercised;  provided, however, that installments of interest that mature on
     or prior to the Repurchase  Date shall be payable in cash to the Holders of
     such Debentures, or one or more






     predecessor Debentures,  registered as such at the close of business on the
     relevant  Regular  Record Date  according  to the terms and  provisions  of
     Article 2 of the Subordinated Indenture.

          (d) If any Debenture  surrendered for repurchase  shall not be so paid
     on the Repurchase Date, the principal  shall,  until paid, bear interest to
     the extent permitted by applicable law from the Repurchase Date at the rate
     borne by the Debenture and each  Debenture  shall remain  convertible  into
     Common Stock until the principal of such Debenture  shall have been paid or
     duly provided for.

          (e) Any  Debenture  which is to be  repurchased  only in part shall be
     surrendered  to the  Trustee  (with,  if the  Company  or  the  Trustee  so
     requires,  due endorsement by, or a written  instrument of transfer in form
     satisfactory  to the Company and the Trustee  duly  executed by, the Holder
     thereof or his attorney duly authorized in writing),  and the Company shall
     execute,  and the Trustee shall  authenticate  and deliver to the Holder of
     such  Debenture  without  service  charge,  a new Debenture or  Debentures,
     containing identical terms and conditions,  of any authorized  denomination
     as requested by such Holder in aggregate  principal  amount equal to and in
     exchange for the unrepurchased portion of the principal of the Debenture so
     surrendered.

          (f) Prior to the  Repurchase  Date, the Company shall deposit with the
     Trustee  or with a Paying  Agent (or,  if the  Company is acting as its own
     Paying Agent, segregate and hold in trust as provided in Section 3.4 of the
     Subordinated Indenture) an amount of money sufficient to pay the Repurchase
     Price of the Debentures that are to be repaid on the Repurchase Date.

     9.3  'Change of Control,'  'Termination of Trading' and 'Repurchase  Event'
          Defined.

          (a) A Change of Control or a Termination of Trading shall constitute a
     'Repurchase  Event' giving rise to the right under this  Paragraph 9 on the
     part of each Holder of a Debenture to require,  at the Holder's option, the
     Company to repurchase such Holder's Debentures.

          (b) For purposes of this  Paragraph 9, 'Change of Control' shall occur
     when: (i) all or  substantially  all of the Company's assets are sold as an
     entirety  to any Person or related  group of  Persons;  (ii) there shall be
     consummated  any  consolidation  or merger of the  Company (A) in which the
     Company  is not the  continuing  or  surviving  corporation  (other  than a
     consolidation  or merger with a wholly owned  subsidiary  of the Company in
     which all  shares  of Common  Stock  outstanding  immediately  prior to the
     effectiveness   thereof  are  changed  into  or  exchanged   for  the  same
     consideration) or (B) pursuant to which the Common Stock would be converted
     into  cash,  securities  or  other  property,  in each  case  other  than a
     consolidation or merger of the Company in






     which  the  holders  of  the  Common   Stock   immediately   prior  to  the
     consolidation or merger have,  directly or indirectly,  at least a majority
     of the total voting power of all classes of capital stock  entitled to vote
     generally  in the  election of  directors  of the  continuing  or surviving
     corporation immediately after such consolidation or merger in substantially
     the same proportion as their ownership of Common Stock  immediately  before
     such  transaction;  (iii) any Person,  or any Persons acting together which
     would  constitute a 'group' for  purposes of Section  13(d) of the Exchange
     Act,  together with any  affiliates  thereof,  shall  beneficially  own (as
     defined in Rule  13d-3  under the  Exchange  Act) at least 50% of the total
     voting  power of all classes of capital  stock of the  Company  entitled to
     vote  generally in the  election of  directors of the Company;  (iv) at any
     time  during  any  consecutive  two-year  period,  individuals  who  at the
     beginning of such period  constituted the Board of Directors of the Company
     (together with any new directors  whose election by such Board of Directors
     or whose  nomination  for election by the  stockholders  of the Company was
     approved  by a vote of  66-2/3% of the  directors  then still in office who
     were either  directors at the beginning of such period or whose election or
     nomination for election was previously so approved) cease for any reason to
     constitute  a majority of the Board of  Directors  of the  Company  then in
     office;  or (v) the Company is  liquidated or dissolved or adopts a plan of
     liquidation or dissolution.

          (c) For purposes of this Paragraph 9, a 'Termination of Trading' shall
     occur if the Common Stock (or other common stock into which the  Debentures
     are then  convertible)  is neither  listed for  trading on a U.S.  national
     securities  exchange nor approved for trading on an  established  automated
     over-the-counter trading market in the United States.

     (10)  In  addition  to  the  definitions  set  forth  in  Article  1 of the
Subordinated  Indenture,  the Debentures shall include the following  additional
definitions,  which, in the event of a conflict with the definitions of terms in
the Subordinated Indenture, shall control:

     'Change of Control' shall have the meaning specified in subparagraph 9.3.

     'Closing Price' has the meaning specified in subparagraph 8.4(h).

     'Common Stock'  includes any stock of any class of the Company which has no
preference  in respect of  dividends  or of amounts  payable in the event of any
voluntary or involuntary  liquidation,  dissolution or winding-up of the Company
and which is not subject to redemption by the Company.  However,  subject to the
provisions of  subparagraph  8.11,  shares  issuable on conversion of Debentures
shall include only shares of the class designated as Common Stock of the Company
at the date of this instrument or shares of any class or classes  resulting from
any reclassification or  reclassifications  thereof and which have no preference
in respect of dividends or of amounts  payable in the event of any  voluntary or
involuntary liquidation,  dissolution or winding-up of the Company and which are
not subject to  redemption  by the Company;  provided  that if at any time there
shall be more than one such resulting  class, the shares of each such class then
so issuable shall be substantially in the proportion which the






total number of shares of such class  resulting from all such  reclassifications
bears to the total number of shares of all such classes  resulting from all such
reclassifications.

     'Current Market Price' has the meaning specified in subparagraph 8.4(h).

     'Designated  Senior  Indebtedness'  means  (i)  amounts  now  or  hereafter
outstanding under the Company's  existing bank credit facilities or indebtedness
incurred  to  extend,  refund or  refinance  such  amounts  and (ii) any  Senior
Indebtedness  which, at the time of  determination,  has an aggregate  principal
amount outstanding of at least $20 million and is specifically designated in the
instrument   evidencing   such  Senior   Indebtedness   as  'Designated   Senior
Indebtedness' by the Company.

     'NASDAQ'  and  'NASDAQ/NMS'  have the meanings  specified  in  subparagraph
8.4(h).

     'Repurchase Date' has the meaning specified in subparagraph 9.1.

     'Repurchase Event' has the meaning specified in subparagraph 9.3(d).

     'Repurchase Price' has the meaning specified in subparagraph 9.15.

     'Senior   Indebtedness'  means  all  indebtedness,   liabilities  or  other
obligations of the Company,  other than the Debentures,  whether existing on the
date of execution of this Indenture or thereafter created,  incurred or assumed,
except any such other  indebtedness,  liabilities or other  obligations  that by
their terms or by operation of law are  subordinated  to, or  subordinated  on a
parity with, the Debentures.

     'Debentures Payment' has the meaning specified in subparagraph 7.2.

     'Subordinated  Obligations'  means any principal of,  premium,  if any, and
interest on the  Debentures  payable  pursuant to the terms of the Debentures or
upon acceleration, including any amounts received upon the exercise of rights of
rescission  or  other  rights  of  action  (including  claims  for  damages)  or
otherwise,  to the extent  relating to the purchase  price of the  Debentures or
amounts  corresponding  to such principal,  premium,  if any, or interest on the
Debentures.

     'Termination of Trading' has the meaning specified in subparagraph 9.3(b).

     'Trading Day' means each Monday, Tuesday,  Wednesday,  Thursday and Friday,
other  than  any day on  which  securities  are  not  traded  on the  applicable
securities exchange or in the applicable securities market.

     (11) The  Debentures  shall not be subject to any  defeasance  pursuant  to
Section 10.1 of the Subordinated Indenture.

     (12) Each of the  undersigned is authorized to approve the form,  terms and
conditions of the Debentures pursuant to the Resolutions.







     (13)  Attached  hereto  as  Annex  B is a  true  and  correct  copy  of the
Resolutions.

     (14) Attached  hereto as Annex C are true and correct  copies of the letter
addressed to the Trustee entitling the Trustee to rely on the Opinion of Counsel
attached  thereto,  which Opinion  relates to the  Debentures  and complies with
Section 11.5 of the Subordinated Indenture.

     (15)  Each  of  the   undersigned   has  reviewed  the  provisions  of  the
Subordinated  Indenture,   including  the  covenants  and  conditions  precedent
pertaining to the issuance of the Debentures.

     (16) In  connection  with  this  certificate  each of the  undersigned  has
examined documents, corporate records and certificates and has spoken with other
officers of the Company.

     (17) Each of the undersigned has made such examination and investigation as
is necessary  to enable him to express an informed  opinion as to whether or not
the covenants and conditions precedent of the Subordinated  Indenture pertaining
to the issuance of the Debentures have been satisfied.

     (18) In our opinion all of the covenants and conditions  precedent provided
for in the  Subordinated  Indenture for the issuance of the Debentures have been
satisfied.

     (19) If and to the extent that any provision of this certificate  qualifies
or conflicts with any provision of the Subordinated Indenture, the provisions of
this certificate shall control.

     Capitalized terms used herein that are not otherwise defined shall have the
meanings  ascribed thereto in the Subordinated  Indenture or the Debentures,  as
the case may be.

                            [signature page follows]






     IN WITNESS  WHEREOF,  each of the  undersigned  officers has executed  this
certificate this 20th day of March 1998.

                                                  /s/MICHAEL D. MARTIN
                                              __________________________________
                                              Name:  Michael D. Martin
                                              Title: Executive Vice President,
                                                     Chief Financial Officer and
                                                     Treasurer

                                                  /s/WILLIAM W. HORTON
                                              __________________________________
                                              Name:  William W. Horton
                                              Title: Senior Vice President,
                                                     Corporate Counsel and
                                                     Assistant Secretary