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