{"id":41192,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/officers-certificate-pursuant-to-sections-2-3-and-11-5-of-the2.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"officers-certificate-pursuant-to-sections-2-3-and-11-5-of-the2","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/officers-certificate-pursuant-to-sections-2-3-and-11-5-of-the2.html","title":{"rendered":"Officers&#8217; Certificate Pursuant to Sections 2.3 and 11.5 of the Subordinated Indenture &#8211; HealthSouth Corp. and The Bank of Nova Scotia Trust Co. of New York"},"content":{"rendered":"<pre>\n                             HEALTHSOUTH CORPORATION\n                        OFFICERS' CERTIFICATE PURSUANT TO\n               SECTIONS 2.3 AND 11.5 OF THE SUBORDINATED INDENTURE\n\n     Michael D. Martin and William W. Horton do hereby certify that they are the\nExecutive Vice President,  Chief Financial Officer and Treasurer and Senior Vice\nPresident,   Corporate  Counsel  and  Assistant  Secretary,   respectively,   of\nHEALTHSOUTH  Corporation,  a Delaware corporation (the 'Company') and do further\ncertify,  pursuant  to  resolutions  of the Board of  Directors  of the  Company\nadopted on March 6 and 17,  1998 (the  'Resolutions'),  and in  accordance  with\nSections 2.3 and 11.5 of the Subordinated  Indenture (the Subordinated Indenture\nas amended and  supplemented  by the  Resolutions  is herein  referred to as the\n'Subordinated Indenture') dated as of March 20, 1998 between the Company and The\nBank of Nova Scotia Trust  Company of New York, as trustee (the  'Trustee'),  as\nfollows:\n\n     (1) A series of subordinated securities to be issued under the Subordinated\nIndenture  and  designated  as  the  Company's  3.25%  Convertible  Subordinated\nDebentures due 2003 (the 'Debentures') has been authorized.  The following terms\nshall apply to the Debentures:\n\n          (a) The  Debentures  shall be limited  to  $575,000,000  in  aggregate\n     principal amount (including any over-allotment  option) and shall mature on\n     April 1, 2003;\n\n          (b) The Debentures  shall bear interest at the rate of 3.25% per annum\n     from March 20, 1998,  payable  semiannually  on each April 1 and October 1,\n     commencing October 1, 1998;\n\n          (c) The  Debentures  shall  be  issued  initially  in  part as  global\n     debentures in registered  form in the name of the  Depositary  (hereinafter\n     defined)  or its  nominee in such  denominations  otherwise  as in the form\n     attached  hereto as Annex A (the  'Form of  Debenture')  with such  changes\n     thereto  as may be  required  in  the  process  of  printing  or  otherwise\n     producing the Debentures not affecting the substance thereof;\n\n          (d) The Depositary for the global  Debentures  shall be The Depository\n     Trust Company;\n\n          (e)  The  global  Debentures  shall  be  exchangeable  for  definitive\n     Debentures  in  registered  form  substantially  the  same  as  the  global\n     Debentures in denominations of $1,000 or any integral multiple thereof upon\n     the  terms  and in  accordance  with  the  provisions  of the  Subordinated\n     Indenture;\n\n\n\n\n\n\n          (f)  The  Debentures  shall  be  payable  (as to  both  principal  and\n     interest)  when and as the  same  shall  become  due at the  office  of the\n     Trustee,  One Liberty Plaza,  New York,  New York 10006,  provided that, as\n     long as any part of the  Debentures  are in the form of one or more  global\n     Debentures,  payments of interest with respect  thereto may be made by wire\n     transfer and provided  further,  that with respect to Debentures  issued in\n     definitive form, the Company elects to exercise its option to have interest\n     payable by check mailed to the registered owners' address as they appear on\n     the Register, as kept by the Trustee on each Record Date;\n\n          (g) The  Record  Dates  for  the  Debentures  shall  be  March  15 and\n     September 15, as the case may be, preceding each interest payment date; and\n\n          (h) The  Debentures  shall  rank pari passu  with the  Company's  9.5%\n     Senior Subordinated Notes due 2001.\n\n     (2) The Form of Debenture  sets forth  certain of the terms  required to be\nset  forth in this  certificate  pursuant  to  Section  2.3 of the  Subordinated\nIndenture,  and said terms are incorporated herein by reference.  The Debentures\nwere issued at the initial offering price of 100% of principal amount.\n\n     (3) In addition to the covenants set forth in Article 3 of the Subordinated\nIndenture, the Debentures shall include the following additional covenant:\n\n     'SECTION  3.10  Limitations  on Certain  Other  Subordinated  Indebtedness.\n   \n          The  Company  shall not create,  incur,  assume or suffer to exist any\n     Indebtedness  that  is  subordinate  in  right  of  payment  to any  Senior\n     Indebtedness  unless  such  indebtedness  by its  terms or the terms of the\n     instrument creating or evidencing such indebtedness is subordinate in right\n     of payment to, or ranks pari passu with, the Debentures.'\n\n     (4) In  addition  to the Events of Default  set forth in Section 5.1 of the\nSubordinated Indenture,  the following additional Events of Default, shall apply\nwith respect to the Debentures  and shall be subject to the other  provisions of\nArticle 5 of the Subordinated Indenture:\n\n          (i) failure to provide timely notice of a Repurchase Event as required\n     by the Subordinated Indenture and\n\n          (ii) default in the payment of the Repurchase  Price in respect of any\n     Debentures on the Repurchase Date therefore.\n\n     (5) In addition to the purposes for which a  supplemental  indenture may be\nentered into without the consent of the Holders of the Debentures, the following\nshall be considered a purpose:\n\n\n\n\n\n\n\n          'to make any  provision  with  respect  to the  conversion  rights  of\n     Holders of Debentures  pursuant to the  requirements of Paragraph 8 herein,\n     in the event of a  consolidation,  merger or sale of assets  involving  the\n     Company.'\n\n     (6) In addition to the  limitations  on  supplemental  indentures  with the\nconsent of Holders set forth in Section 8.2 of the Subordinated  Indenture,  the\nfollowing  limitations,  shall apply with respect to the Debentures and shall be\nsubject to the other provisions of Article 8 of the Subordinated Indenture:\n\n          (i) impair the right of Holders of  Debentures  to require the Company\n     to repurchase Debentures upon the occurrence of a Repurchase Event.\n\n          (ii) make any change that  adversely  affects the right to convert any\n     security as  provided  in  Paragraph 8 herein or pursuant to Section 2.3 of\n     the  Subordinated  Indenture  (except as  permitted  by Section  8.1 of the\n     Subordinated Indenture).\n\n     (7) The  Debentures  shall be  subordinated  in right of  payment to Senior\nIndebtedness upon the following terms and conditions:\n\n     (a) Debentures Subordinate to Senior Indebtedness.\n\n          The Company covenants and agrees,  and each Holder of a Debenture,  by\n     his acceptance thereof,  likewise covenants and agrees, that, to the extent\n     and in the manner hereinafter set forth in this Paragraph 7 (subject to the\n     provisions of Article 10 of the Subordinated  Indenture),  the indebtedness\n     represented  by the  Debentures  and the payment of the  principal  of (and\n     premium, if any) and interest on each and all of the Debentures  (including\n     any  repurchases  or payments  pursuant  to  Paragraph 9 herein) are hereby\n     expressly  made  subordinate  and  subject in right of payment to the prior\n     payment in full of all Senior Indebtedness.\n\n     (b) Payment Over of Proceeds Upon Dissolution, Etc.\n\n          In the event of (1) any  insolvency or bankruptcy  case or proceeding,\n     or any receivership,  liquidation,  reorganization or other similar case or\n     proceeding  in  connection  therewith,  relative  to the  Company or to its\n     creditors,  as such,  or to a  substantial  part of its assets,  or (2) any\n     liquidation,  dissolution  or  other  winding  up of the  Company,  whether\n     voluntary  or  involuntary  and  whether  or not  involving  insolvency  or\n     bankruptcy, or (3) any assignment for the benefit of creditors or any other\n     marshalling of assets and liabilities of the Company,  then and in any such\n     event  specified in (1), (2) or (3) above (each such event,  if any, herein\n     sometimes referred to as a 'Proceeding') the holders of Senior Indebtedness\n     shall be  entitled  to  receive  payment in full of all  amounts  due or to\n     become due on or in respect of all Senior Indebtedness,  or provision shall\n     be\n\n\n\n\n\n\n     made for such payment in cash or cash  equivalents or otherwise in a manner\n     satisfactory to the holders of Senior  Indebtedness,  before the Holders of\n     the Debentures are entitled to receive any payment or  distribution  of any\n     kind or character,  whether in cash, property or securities,  on account of\n     principal  of (or  premium,  if any) or  interest on the  Debentures  or on\n     account of any purchase  (including any repurchase  pursuant to Paragraph 9\n     herein) or other acquisition of Debentures by the Company or any Subsidiary\n     of  the  Company  (all  such   payments,   distributions,   purchases   and\n     acquisitions  herein  referred  to,  individually  and  collectively,  as a\n     'Debentures  Payment'),   and  to  that  end  the  holders  of  all  Senior\n     Indebtedness  shall be entitled to receive,  for application to the payment\n     thereof,  any  Debentures  Payment which may be payable or  deliverable  in\n     respect of the Debentures in any such Proceeding.\n\n          In the event that,  notwithstanding  the foregoing  provisions of this\n     subparagraph  7.2,  the Trustee or the Holder of any  Debenture  shall have\n     received any Debentures  Payment before all Senior  Indebtedness is paid in\n     full or  payment  thereof  provided  for in cash  or  cash  equivalents  or\n     otherwise in a manner  satisfactory to the holders of Senior  Indebtedness,\n     and if such fact shall, at or prior to the time of such Debentures Payment,\n     have been made known to the Trustee  pursuant to  subparagraph  7.10 or, as\n     the case  may be,  such  Holder,  then and in such  event  such  Debentures\n     Payment  shall  be paid  over or  delivered  forthwith  to the  trustee  in\n     bankruptcy,  receiver,  liquidating trustee, custodian,  assignee, agent or\n     other Person making  payment or  distribution  of assets of the Company for\n     application to the payment of all Senior Indebtedness  remaining unpaid, to\n     the extent  necessary to pay all Senior  Indebtedness in full, after giving\n     effect to any concurrent  payment or  distribution to or for the holders of\n     Senior Indebtedness.\n\n          For  purposes  of this  Paragraph  7 only,  the words 'any  payment or\n     distribution  of any  kind or  character,  whether  in  cash,  property  or\n     securities'  shall not be deemed to  include a payment or  distribution  of\n     stock or securities of the Company provided for by a plan of reorganization\n     or  readjustment  authorized  by an order or decree of a court of competent\n     jurisdiction in a reorganization proceeding under any applicable bankruptcy\n     law or of any other corporation provided for by such plan of reorganization\n     or  readjustment,  which stock or securities are  subordinated  in right of\n     payment to all then outstanding  Senior  Indebtedness to substantially  the\n     same  extent  as,  or to a  greater  extent  than,  the  Debentures  are so\n     subordinated  as provided in this  Paragraph  7. The  consolidation  of the\n     Company  with,  or the merger of the Company  into,  another  Person or the\n     liquidation  or  dissolution  or the Company  following  the  conveyance or\n     transfer of all or  substantially  all of its  properties  and assets as an\n     entirety  to  another  Person  upon the terms and  conditions  set forth in\n     Article 9 of the  Subordinated  Indenture  shall not be deemed a Proceeding\n     for the  purposes  of this  subparagraph  7.2 if the Person  formed by such\n     consolidation  or into  which the  Company  is merged or the  Person  which\n     acquires by conveyance or transfer such properties and assets substantially\n     as an entirety, as the case may\n\n\n\n\n\n\n     be, shall, as a part of such consolidation, merger, conveyance or transfer,\n     comply  with the  conditions  set forth in  Article  9 of the  Subordinated\n     Indenture.\n\n          (c)  Prior  Payment  to  Senior   Indebtedness  Upon  Acceleration  of\n     Debentures.\n\n          In the event that any  Debentures  are declared due and payable before\n     their  Stated  Maturity,  then and in such event the  holders of the Senior\n     Indebtedness  outstanding  at the time such  Debentures  so become  due and\n     payable shall be entitled to receive  payment in full of all amounts due or\n     to become due on or in respect of all  Senior  Indebtedness,  or  provision\n     shall be made for such payment in cash or cash  equivalents or otherwise in\n     a manner  satisfactory to the holders of such Senior  Indebtedness,  before\n     the  Holders of the  Debentures  are  entitled  to receive  any  Debentures\n     Payment  (including  any  payment  which  may be  payable  by reason of the\n     payment of any other  indebtedness of the Company being subordinated to the\n     payment of the Debentures).\n\n          In the event that,  notwithstanding  the foregoing,  the Company shall\n     make any  Debentures  Payment to the  Trustee  or any Holder of  Debentures\n     prohibited  by the foregoing  provisions  of this  Paragraph 7, and if such\n     fact shall, at or prior to the time of such Debentures  Payment,  have been\n     made known to the Trustee pursuant to subparagraph 7.10 or, as the case may\n     be, such Holder,  then and in such event such  Debentures  Payment shall be\n     paid over and delivered forthwith to the Company.\n\n          The  provisions  of this  subparagraph  7.3  shall  not  apply  to any\n     Debentures  Payment  with  respect  to  which  subparagraph  7.2  would  be\n     applicable.\n\n     (d)  No Payment in Certain Circumstances.\n\n          (a) No payment  or  distribution  of any assets of the  Company of any\n     kind or character  shall be made on account of the Debentures or on account\n     of the purchase, redemption or other acquisition of the Debentures upon the\n     occurrence  of any  default in the  payment of any Senior  Indebtedness  in\n     excess of  $5,000,000  beyond any  applicable  grace  period  with  respect\n     thereto,  unless  and until  such  default  is cured or waived or ceases to\n     exist or such Senior Indebtedness is discharged.\n\n          (b) During the  continuation of any non-payment  event of default with\n     respect  to any  Designated  Senior  Indebtedness  pursuant  to  which  the\n     maturity  thereof may be  accelerated,  no payment or  distribution  of any\n     assets of the Company of any kind or character shall be made by the Company\n     on  account of  Subordinated  Obligations  or on  account of the  purchase,\n     redemption or other  acquisition of the Debentures for the period specified\n     below (the 'Payment  Blockage  Period').  The Payment Blockage Period shall\n     commence  upon the receipt of notice by the Company or the Trustee from any\n     representative of a\n\n\n\n\n\n\n     holder of Designated  Senior  Indebtedness  and shall end on the earlier of\n     (i) 179 days  thereafter,  (ii) the  date on which  such  event is cured or\n     waived or ceases to exist or on which such Designated  Senior  Indebtedness\n     is  discharged,  (iii) the date on which the  maturity of any  indebtedness\n     (other than Senior  Indebtedness)  shall have been accelerated by virtue of\n     such event,  or (iv) the date on which such Payment  Blockage  Period shall\n     have been  terminated  by notice to the  Company  or the  Trustee  from the\n     representative of holders of the Designated Senior Indebtedness  initiating\n     such Payment Blockage  Period,  after which the Company shall resume making\n     any and all required  payments in respect of the Debentures,  including any\n     missed  payments.  Only one Payment Blockage Period may be commenced during\n     any period of 365  consecutive  days.  No event of default  with respect to\n     Designated  Senior  Indebtedness that existed or was continuing on the date\n     of the  commencement  of any Payment  Blockage  Period with  respect to the\n     Designated Senior Indebtedness initiating such Payment Blockage Period will\n     be,  or can be,  made the basis for the  commencement  of a second  Payment\n     Blockage  Period  whether or not within a period of 365  consecutive  days,\n     unless  such event of default  has been cured or waived for a period of not\n     less than 90 consecutive  days. In no event may a Payment  Blockage  Period\n     extend beyond 179 days.\n\n          In the event that,  notwithstanding  the foregoing,  the Company shall\n     make any  Debentures  Payment to the  Trustee  or any Holder of  Debentures\n     prohibited by the foregoing  provisions  of this  subparagraph  7.4, and if\n     such fact shall, at or prior to the time of such Debentures  Payment,  have\n     been made known to the Trustee or, as the case may be,  such  Holder,  then\n     and in such event such Debentures  Payment shall be paid over and delivered\n     forthwith to the Company.\n\n          The  Trustee  shall give prompt  written  notice to the Company of any\n     notice  from a  holder  of  Senior  Indebtedness  received  by the  Trustee\n     pursuant  to  subparagraph  7.10  which  would  prohibit  the making of any\n     payment to or by the Trustee with respect to any Debentures.\n\n          The  provisions  of this  subparagraph  7.4  shall  not  apply  to any\n     Debentures  Payment  with  respect  to  which  subparagraph  7.2  would  be\n     applicable.\n\n     (e)  Payment Permitted If No Default.\n\n          Nothing contained in this Paragraph 7 or elsewhere in the Subordinated\n     Indenture or in any of the Debentures shall prevent (1) the Company, at any\n     time  except  during  the  pendency  of  any  Proceeding   referred  to  in\n     subparagraph  7.2 or under the conditions  described in subparagraph 7.3 or\n     7.4 from making Debentures Payments,  or (2) the application by the Trustee\n     of any money  deposited  with it  hereunder to  Debentures  Payments or the\n     retention of such Debentures  Payment by Holders of Debentures,  if, at the\n     time of such\n\n\n\n\n\n\n     application by the Trustee,  it did not have knowledge that such Debentures\n     Payment would have been prohibited by the provisions of this Paragraph 7.\n\n     (f)  Subrogation to Rights of Holders of Senior Indebtedness.\n\n          Subject to the  payment in full of all amounts due or to become due on\n     or in respect of Senior Indebtedness,  or the provision for such payment in\n     cash or cash  equivalents  or  otherwise  in a manner  satisfactory  to the\n     holders  of  Senior  Indebtedness,  the  Holders  of  Debentures  shall  be\n     subrogated  to the  extent of the  payments  or  distributions  made to the\n     holders of such  Senior  Indebtedness  pursuant to the  provisions  of this\n     Paragraph 7 (equally  and ratably with the holders of all  indebtedness  of\n     the Company which by its express terms is  subordinated  to indebtedness of\n     the  Company  to  substantially  the  same  extent  as the  Debentures  are\n     subordinated  and is entitled to like rights of  subrogation) to the rights\n     of the  holders  of  such  Senior  Indebtedness  to  receive  payments  and\n     distributions  of cash,  property and  securities  applicable to the Senior\n     Indebtedness  until the principal of (and premium,  if any) and interest on\n     the Debentures shall be paid in full. For purposes of such subrogation,  no\n     payments or distributions to the holders of the Senior  Indebtedness of any\n     cash,  property or  securities  to which the Holders of  Debentures  or the\n     Trustee would be entitled  except for the  provisions of this  Paragraph 7,\n     and no payments over pursuant to the  provisions of this Paragraph 7 to the\n     holders of Senior  Indebtedness  by Holders of  Debentures  or the Trustee,\n     shall,  as among the Company,  its  creditors  other than holders of Senior\n     Indebtedness  and the Holders of the Debentures,  be deemed to be a payment\n     or distribution by the Company to or on account of the Senior Indebtedness.\n\n     (g)  Provisions Solely to Define Relative Rights.\n\n          The provisions of this Paragraph 7 are and are intended solely for the\n     purpose of defining the relative rights of the Holders of the Debentures on\n     the one hand and the  holders  of Senior  Indebtedness  on the other  hand.\n     Nothing  contained in this  Paragraph 7 or  elsewhere in this  Subordinated\n     Indenture or in the Debentures is intended to or shall (1) impair, as among\n     the Company,  its creditors other than holders of Senior  Indebtedness  and\n     the Holders of Debentures, the obligation of the Company, which is absolute\n     and  unconditional,  to pay to the Holders of  Debentures  the principal of\n     (and  premium,  if any) and  interest  on the  Debentures,  and to make any\n     repurchases of the Debentures  required by Paragraph 9 hereof,  as and when\n     the same shall become due and payable in accordance  with the terms hereof;\n     or (2) affect the  relative  rights  against  the Company of the Holders of\n     Debentures  and  creditors of the Company  other than the holders of Senior\n     Indebtedness;  or (3) prevent  the  Trustee or the Holder of any  Debenture\n     from  exercising  all remedies  otherwise  permitted by applicable law upon\n     default under the Subordinated  Indenture,  subject to the rights,  if any,\n     under this Paragraph 7 of the holders of Senior\n\n\n\n\n\n\n     Indebtedness to receive cash, property and securities  otherwise payable or\n     deliverable to the Trustee or such Holder.\n\n     (h)  Trustee to Effectuate Subordination and Payment Provisions.\n\n          Each Holder of a Debenture by his  acceptance  thereof  authorizes and\n     directs the  Trustee on his behalf to take such action as may be  necessary\n     or  appropriate  to effectuate  the  subordination  and payment  provisions\n     provided in this Paragraph 7 and appoints the Trustee his  attorney-in-fact\n     for any and all such purposes.\n\n     (i)  No Waiver of Subordination Provisions.\n\n          No right of any present or future holder of any Senior Indebtedness to\n     enforce  subordination  as herein  provided shall at any time in any way be\n     prejudiced  or  impaired  by any act or  failure  to act on the part of the\n     Company or by any act or failure to act, in good faith, by any such holder,\n     or by any  noncompliance  by the  Company  with the terms,  provisions  and\n     covenants  of the  Subordinated  Indenture,  regardless  of  any  knowledge\n     thereof any such holder may have or be otherwise charged with.\n\n          Without in any way limiting the generality of the foregoing paragraph,\n     the holders of Senior  Indebtedness may, at any time and from time to time,\n     without  the  consent  of or notice to the  Trustee  or the  Holders of the\n     Debentures,   without  incurring  responsibility  to  the  Holders  of  the\n     Debentures and without impairing or releasing the subordination provided in\n     this Paragraph 7 or the obligations  hereunder of the Holders of Debentures\n     to the holders of Senior Indebtedness, do any one or more of the following:\n     (i)  change  the  manner,  place or terms of  payment or extend the time of\n     payment of, or renew or alter, Senior  Indebtedness,  or otherwise amend or\n     supplement in any manner Senior  Indebtedness or any instrument  evidencing\n     the same or any agreement  under which Senior  Indebtedness is outstanding;\n     (ii) sell,  exchange,  release or otherwise deal with any property pledged,\n     mortgaged or otherwise  securing  Senior  Indebtedness;  (iii)  release any\n     Person liable in any manner for the collection of Senior Indebtedness;  and\n     (iv) exercise or refrain from exercising any rights against the Company and\n     any other Person.\n\n     (j)  Notice to Trustee.\n\n          The  Company  shall give prompt  written  notice to the Trustee of any\n     fact known to the Company which would prohibit the making of any payment to\n     or by the  Trustee  in  respect  of  the  Debentures.  Notwithstanding  the\n     provisions of this Paragraph 7 or any other  provision of the  Subordinated\n     Indenture, the Trustee shall not be charged with knowledge of the existence\n     of any facts  which would  prohibit  the making of any payment to or by the\n     Trustee in respect of the  Debentures,  unless and until the Trustee  shall\n     have received written notice\n\n\n\n\n\n\n     thereof  from the  Company or a holder of Senior  Indebtedness  or from any\n     trustee therefor; and, prior to the receipt of any such written notice, the\n     Trustee,  subject  to the  provisions  of Section  6.1 of the  Subordinated\n     Indenture,  shall be entitled in all  respects to assume that no such facts\n     exist;  provided,  however, that if the Trustee shall not have received the\n     notice provided for in this  subparagraph 7.10 at least three Business Days\n     prior to the date upon  which by the  terms  hereof  any  money may  become\n     payable for any purpose (including,  without limitation, the payment of the\n     principal of (and premium,  if any) or interest on, or amounts payable upon\n     redemption  or  repurchase  of,  any  Debenture),   then,  anything  herein\n     contained  to the  contrary  notwithstanding,  the Trustee  shall have full\n     power and  authority  to  receive  such  money and to apply the same to the\n     purpose for which such money was  received and shall not be affected by any\n     notice to the contrary  which may be received by it within  three  Business\n     Days prior to such date.\n\n          Subject  to  the  provisions  of  Section  6.1  of  the   Subordinated\n     Indenture, the Trustee shall be entitled to rely on the delivery to it of a\n     written  notice by a Person  representing  himself to be a holder of Senior\n     Indebtedness (or a trustee therefor) to establish that such notice has been\n     given by a holder of Senior  Indebtedness (or a trustee  therefor).  In the\n     event that the Trustee  determines  in good faith that further  evidence is\n     required  with  respect  to the  right of any  Person as a holder of Senior\n     Indebtedness to participate in any payment or distribution pursuant to this\n     Paragraph 7, the Trustee may request such Person to furnish evidence to the\n     reasonable  satisfaction  of  the  Trustee  as  to  the  amount  of  Senior\n     Indebtedness  held by such  Person,  the  extent  to which  such  person is\n     entitled to participate in such payment or distribution and any other facts\n     pertinent to the rights of such Person under this  Paragraph 7, and if such\n     evidence is not furnished, the Trustee may defer any payment to such Person\n     pending  judicial  determination  as to the right of such Person to receive\n     such payment.\n\n     (k)  Reliance on Judicial Order or Certificate of Liquidating Agent.\n\n          Upon any payment or distribution of assets of the Company  referred to\n     in this Paragraph 7, the Trustee,  subject to the provisions of Section 6.1\n     of the  Subordinated  Indenture,  and the  Holders of  Debentures  shall be\n     entitled to rely upon any order or decree entered by any court of competent\n     jurisdiction in which such  Proceeding is pending,  or a certificate of the\n     trustee in bankruptcy,  receiver,  liquidating trustee, custodian, assignee\n     for the benefit of creditors,  agent or other Person making such payment or\n     distribution, delivered to the Trustee or to the Holders of Debentures, for\n     the purpose of  ascertaining  the Persons  entitled to  participate in such\n     payment or distribution,  the holders of the Senior  Indebtedness and other\n     indebtedness  of the Company,  the amount thereof or payable  thereon,  the\n     amount or amounts paid or distributed thereon and all other facts pertinent\n     thereto or to this Paragraph 7.\n\n\n\n\n\n\n     (l)  Trustee Not Fiduciary for Holders of Senior Indebtedness.\n\n          The  Trustee  shall  not be deemed  to owe any  fiduciary  duty to the\n     holders of Senior  Indebtedness and shall not be liable to any such holders\n     if it shall in good faith  mistakenly  pay over or distribute to Holders of\n     Debentures  or to the  Company or to any other  Person  cash,  property  or\n     securities to which any holders of Senior Indebtedness shall be entitled by\n     virtue of this Paragraph 7 or otherwise.\n\n     (m)  Rights of Trustee as Holder of Senior  Indebtedness;  Preservation  of\n          Trustee's Rights.\n\n          The Trustee in its  individual  capacity  shall be entitled to all the\n     rights  set  forth  in  this   Paragraph  7  with  respect  to  any  Senior\n     Indebtedness which may at any time be held by it, to the same extent as any\n     other  holder of  Senior  Indebtedness,  and  nothing  in the  Subordinated\n     Indenture shall deprive the Trustee of any of its rights as such holder.\n\n          Nothing in this  Paragraph 7 shall apply to claims of, or payments to,\n     the Trustee under or pursuant to Section 6.7 of the Subordinated Indenture.\n\n     (n)  Paragraph Applicable to Paying Agents.\n\n          In case at any time any Paying Agent other than the Trustee shall have\n     been  appointed  by the  Company  and be then  acting  hereunder,  the term\n     'Trustee'  as used in this  Paragraph  7 shall  in such  case  (unless  the\n     context otherwise requires) be construed as extending to and including such\n     Paying Agent within its meaning as fully for all intents and purposes as if\n     such Paying Agent were named in this Paragraph 7 in addition to or in place\n     of the Trustee;  provided,  however, that subparagraph 7.13 shall not apply\n     to the Company or any Affiliate of the Company if it or such Affiliate acts\n     as Paying Agent.\n\n     (8) The Debentures  shall be convertible into shares of Common Stock of the\nCompany upon the following terms and conditions:\n\n     (a)  Conversion Privilege and Conversion Price.\n\n          Subject to and upon  compliance  with the provisions of this Paragraph\n     8, at the option of the Holder  thereof,  any  Debentures or any portion of\n     the principal  amount  thereof  which is $1,000 or an integral  multiple of\n     $1,000 may be converted at the principal amount thereof, or of such portion\n     thereof,  into fully paid and nonassessable  shares  (calculated as to each\n     conversion  to the nearest 1\/100 of a share) of Common Stock of the Company\n     at the conversion price,  determined as hereinafter  provided, in effect at\n     the time of conversion.  Such conversion right shall expire at the close of\n     business  on April 1, 2003.  In case a  Debentures  or  portion  thereof is\n     called for redemption at the election of\n\n\n\n\n\n\n     the  Company,  such  conversion  right in respect of the  Debentures  shall\n     expire at the close of business on the second  business day  preceding  the\n     Redemption Date.\n\n          The price at which  shares of Common  Stock  shall be  delivered  upon\n     conversion  (herein  called  the  'conversion  price')  shall be  initially\n     $36.625 per share of Common Stock.  The conversion  price shall be adjusted\n     in certain instances as provided in this Paragraph 8.\n\n     (b)  Exercise of Conversion Privilege.\n\n          In order to  exercise  the  conversion  privilege,  the  Holder of any\n     Debenture to be converted shall surrender such Debenture,  duly endorsed or\n     assigned to the Company or in blank, at any office or agency of the Company\n     maintained  for that  purpose  pursuant to Section 3.2 of the  Subordinated\n     Indenture, accompanied by written notice of conversion in the form provided\n     on the  Debenture (or such other notice as is acceptable to the Company) at\n     such office or agency that the Holder elects to convert such  Debenture or,\n     if less than the entire  principal  amount thereof is to be converted,  the\n     portion  thereof to be converted.  Debentures  issued as global  Debentures\n     will  be  converted  in  accordance  with  the  standing  instructions  and\n     procedures of the Depositary and its participants.  Debentures  surrendered\n     for conversion  during the period from the close of business on any Regular\n     Record Date  through and  including  the next  Interest  Payment Date shall\n     (except  in the case of  Debentures  or  portions  thereof  which have been\n     called for  redemption  on a  Redemption  Date  occurring on or before such\n     Interest Payment Date) be accompanied by payment in New York Clearing House\n     funds or other funds  acceptable  to the Company of an amount  equal to the\n     interest  payable on such Interest  Payment Date on the principal amount of\n     Debentures being  surrendered for conversion.  Subject to the provisions of\n     Section  2.7 of the  Subordinated  Indenture  relating  to the  payment  of\n     Defaulted  Interest by the Company,  the interest payment with respect to a\n     Debenture called for redemption on a Redemption Date during the period from\n     the close of business on any Regular  Record Date through and including the\n     next Interest  Payment Date shall be payable on such Interest  Payment Date\n     to the Holder of such  Debenture  at the close of business on such  Regular\n     Record Date  notwithstanding  the conversion of such  Debenture  after such\n     Regular Record Date and on or prior to such Interest  Payment Date, and the\n     Holder  converting  such  Debenture  need not  include  a  payment  of such\n     interest  payment amount upon  surrender of such Debenture for  conversion.\n     Except as  provided  in the  preceding  sentence  and  subject to the final\n     paragraph  of  Section  2.7 of the  Subordinated  Indenture,  no payment or\n     adjustment  shall be made upon any  conversion  on account of any  interest\n     accrued on the Debentures  surrendered  for conversion or on account of any\n     dividends on the Common Stock issued upon conversion.\n\n\n\n\n\n\n          Debentures shall be deemed to have been converted immediately prior to\n     the  close of  business  on the day of  surrender  of such  Debentures  for\n     conversion in accordance  with the foregoing  provisions,  and at such time\n     the rights of the Holders of such  Debentures as Holders  shall cease,  and\n     the Person or Persons  entitled to receive the Common Stock  issuable  upon\n     conversion  shall be  treated  for all  purposes  as the  record  holder or\n     holders of such Common Stock at such time. As promptly as practicable on or\n     after the  conversion  date,  the Company  shall issue and shall deliver at\n     such office or agency a certificate or certificates  for the number of full\n     shares of Common Stock issuable upon  conversion,  together with payment in\n     lieu of any fraction of a share, as provided in subparagraph 8.3.\n\n          In the case of any  Debenture  which is converted  in part only,  upon\n     such   conversion   the  Company   shall  execute  and  the  Trustee  shall\n     authenticate  and  deliver to the  Holder  thereof,  at the  expense of the\n     Company,  a new  Debenture or Debentures  of  authorized  denominations  in\n     aggregate  principal  amount  equal  to  the  unconverted  portion  of  the\n     principal amount of such Subordinated Security.\n\n     (c)  Fractions of Shares.\n\n          No fractional  shares of Common Stock shall be issued upon  conversion\n     of  Debentures.  If more  than  one  Debenture  shall  be  surrendered  for\n     conversion at one time by the same Holder,  the number of full shares which\n     shall be issuable upon conversion thereof shall be computed on the basis of\n     the aggregate  principal  amount of the Debentures  (or specified  portions\n     thereof) so  surrendered.  Instead of any fractional  share of Common Stock\n     which would  otherwise  be issuable  upon  conversion  of any  Debenture or\n     Debentures (or specified  portions  thereof),  the Company shall pay a cash\n     adjustment  in respect of such fraction in an amount equal to such fraction\n     multiplied by the Closing Price per share of Common Stock  (consistent with\n     subparagraph  8.4(h)  below)  at  the  close  of  business  on  the  day of\n     conversion  (or,  if such day is not a  Trading  Day,  on the  Trading  Day\n     immediately preceding such day).\n\n     (d)  Adjustment of Conversion Price.\n\n          (a) In  case  the  Company  shall  pay or  make a  dividend  or  other\n     distribution  on any class of capital stock of the Company in Common Stock,\n     the  conversion  price in  effect at the  opening  of  business  on the day\n     following the date fixed for the determination of stockholders  entitled to\n     receive such dividend or other distribution shall be reduced by multiplying\n     such  conversion  price by a fraction of which the  numerator  shall be the\n     number of shares of Common  Stock  outstanding  at the close of business on\n     the date fixed for such  determination and the denominator shall be the sum\n     of such number of shares and the total number of shares  constituting  such\n     dividend  or  other  distribution,   such  reduction  to  become  effective\n     immediately after the opening of business on\n\n\n\n\n\n\n     the day following the date fixed for such  determination.  For the purposes\n     of this  clause  (a),  the  number of  shares  of Common  Stock at any time\n     outstanding  shall not include  shares held in the  treasury of the Company\n     but shall include shares issuable in respect of scrip  certificates  issued\n     in lieu of  fractions of shares of Common  Stock.  The Company will not pay\n     any dividend or make any distribution on shares of Common Stock held in the\n     treasury of the Company.\n\n          (b) In case the Company shall issue rights, options or warrants to all\n     holders of its Common Stock (not being available on an equivalent  basis to\n     Holders of the Debentures upon conversion)  entitling them to subscribe for\n     or  purchase  shares  of Common  Stock at a price  per share  less than the\n     Current  Market  Price  on  the  date  fixed  for  the   determination   of\n     stockholders  entitled to receive  such rights,  options or  warrants,  the\n     conversion  price in effect at the opening of business on the day following\n     the date fixed for such determination  shall be reduced by multiplying such\n     conversion  price by a fraction of which the numerator  shall be the number\n     of shares of Common Stock  outstanding at the close of business on the date\n     fixed for such  determination  plus the  number  of shares of Common  Stock\n     which the aggregate of the offering  price of the total number of shares of\n     Common Stock so offered for subscription or purchase would purchase at such\n     Current Market Price and the  denominator  shall be the number of shares of\n     Common  Stock  outstanding  at the close of  business on the date fixed for\n     such determination plus the number of shares of Common Stock so offered for\n     subscription or purchase,  such reduction to become  effective  immediately\n     after the opening of business on the day  following the date fixed for such\n     determination. For the purposes of this clause (b), the number of shares of\n     Common Stock at any time  outstanding  shall not include shares held in the\n     treasury  of the Company but shall  include  shares  issuable in respect of\n     scrip  certificates  issued in lieu of fractions of shares of Common Stock.\n     The Company  will not issue any  rights,  options or warrants in respect of\n     shares of Common Stock held in the treasury of the Company.\n\n          (c) In case  outstanding  shares of Common  Stock shall be  subdivided\n     into a greater number of shares of Common Stock,  the  conversion  price in\n     effect at the opening of business on the day  following  the day upon which\n     such subdivision becomes effective shall be proportionately  reduced,  and,\n     conversely,  in case  outstanding  shares of  Common  Stock  shall  each be\n     combined into a smaller  number of shares of Common Stock,  the  conversion\n     price in effect at the  opening of business  on the day  following  the day\n     upon which such  combination  becomes  effective  shall be  proportionately\n     increased,  such  reduction  or  increase,  as the case may be,  to  become\n     effective  immediately  after the opening of business on the day  following\n     the day upon which such subdivision or combination becomes effective.\n\n          (d) In case the Company shall, by dividend or otherwise, distribute to\n     all holders of its Common Stock  evidences of its  indebtedness,  shares of\n     any class of its capital stock or other assets (including  securities,  but\n     excluding any\n\n\n\n\n\n\n     rights,  options or warrants referred to in clause (b) of this subparagraph\n     8.4, any dividend or distribution  paid  exclusively in cash referred to in\n     clause (e) of this subparagraph 8.4, any dividend or distribution  referred\n     to in clause (a) of this  subparagraph  8.4 and any merger or consolidation\n     to which subparagraph 8.11 applies), the conversion price shall be adjusted\n     so that the same  shall  equal  the price  determined  by  multiplying  the\n     conversion  price in effect  immediately  prior to the close of business on\n     the date fixed for the  determination  of stockholders  entitled to receive\n     such distribution by a fraction of which the numerator shall be the Current\n     Market  Price on the date fixed for such  determination  less the then fair\n     market value (as determined by the Board of Directors,  whose determination\n     shall be  conclusive  and  described in a Board  Resolution  filed with the\n     Trustee) of the portion of the assets,  shares or evidences of indebtedness\n     so distributed  applicable to one share of Common Stock and the denominator\n     shall be such Current  Market Price,  such  adjustment to become  effective\n     immediately  prior to the opening of business on the day following the date\n     fixed for the  determination  of  stockholders  entitled  to  receive  such\n     distribution.\n\n          (e) In case the Company shall, by dividend or otherwise, distribute to\n     all  holders  of  its  Common  Stock  cash  (excluding  any  cash  that  is\n     distributed  upon a merger or consolidation to which Paragraph 9 applies or\n     as part of a  distribution  referred to in clause (d) of this  subparagraph\n     8.4) in an aggregate amount that,  combined together with (1) the aggregate\n     amount of any other  distributions  to all holders of its Common Stock made\n     exclusively  in cash within the 12 months  preceding the date of payment of\n     such  distribution  and in respect of which no adjustment  pursuant to this\n     clause (e) has been made,  and (2) the  aggregate of any cash plus the fair\n     market value (as determined by the Board of Directors,  whose determination\n     shall be conclusive and described in a Board  Resolution) of  consideration\n     payable  in  respect  of any  tender  offer  by the  Company  or any of its\n     Subsidiaries  for all or any portion of the Common Stock  concluded  within\n     the 12 months  preceding  the date of payment of such  distribution  and in\n     respect of which no adjustment  pursuant to clause (f) of this subparagraph\n     8.4 has been made, exceeds 12.5% of the product of the Current Market Price\n     on the date for the  determination  of  holders  of shares of Common  Stock\n     entitled to receive such distribution  times the number of shares of Common\n     Stock  outstanding on such date,  then, and in each such case,  immediately\n     after the close of business on such date for determination,  the conversion\n     price shall be reduced so that the same shall equal the price determined by\n     multiplying the conversion price in effect  immediately  prior to the close\n     of  business  on the  date  fixed  for  determination  of the  stockholders\n     entitled to receive such  distribution  by a fraction (i) the  numerator of\n     which shall be equal to the Current Market Price on the date fixed for such\n     determination  less an amount  equal to the  quotient  of (x) the excess of\n     such combined amount over such 12.5% and (y) the number of shares of Common\n     Stock  outstanding on such date for  determination and (ii) the denominator\n     of\n\n\n\n\n\n\n     which  shall  be  equal  to the  Current  Market  Price  on such  date  for\n     determination.\n\n          (f) In case a tender offer made by the Company or any  Subsidiary  for\n     all or any portion of the Common  Stock shall  expire and such tender offer\n     (as  amended  upon the  expiration  thereof)  shall  require the payment to\n     stockholders  (based on the acceptance (up to any maximum  specified in the\n     terms of the tender  offer) of Purchased  Shares (as defined  below)) of an\n     aggregate  consideration  having a fair market value (as  determined by the\n     Board of Directors,  whose  determination shall be conclusive and described\n     in a Board Resolution) that combined together with (1) the aggregate of the\n     cash plus the fair market value (as  determined  by the Board of Directors,\n     whose   determination   shall  be  conclusive  and  described  in  a  Board\n     Resolution),  as of the expiration of such tender offer,  of  consideration\n     payable  in  respect  of any other  tender  offer,  by the  Company  or any\n     Subsidiary for all or any portion of the Common Stock  expiring  within the\n     12 months  preceding the  expiration of such tender offer and in respect of\n     which no  adjustment  pursuant to this clause (f) has been made and (2) the\n     aggregate  amount of any  distributions  to all  holders  of the  Company's\n     Common  Stock  made  exclusively  in cash  within 12 months  preceding  the\n     expiration  of such  tender  offer and in  respect  of which no  adjustment\n     pursuant to clause (e) of this Section has been made,  exceeds 12.5% of the\n     product of the Current  Market  Price as of the last time (the  'Expiration\n     Time')  tenders  could have been made  pursuant to such tender offer (as it\n     may be  amended)  times the  number of shares of Common  Stock  outstanding\n     (including any tendered  shares) on the Expiration  Time, then, and in each\n     such case,  immediately  prior to the  opening of business on the day after\n     the date of the Expiration  Time, the conversion price shall be adjusted so\n     that  the  same  shall  equal  the  price  determined  by  multiplying  the\n     conversion  price in effect  immediately  prior to close of business on the\n     date of the Expiration  Time by a fraction (i) the numerator of which shall\n     be equal to (A) the  product of (I) the current  market  price per share of\n     the Common Stock (determined as provided in clause (h) of this subparagraph\n     8.4) on the date of the  Expiration  Time and (II) the  number of shares of\n     Common Stock outstanding  (including any tendered shares) on the Expiration\n     Time less (B) the amount of cash plus the fair market value  (determined as\n     aforesaid) of the aggregate  consideration payable to stockholders based on\n     the  acceptance  (up to any  maximum  specified  in the terms of the tender\n     offer) of  Purchased  Shares,  and (ii) the  denominator  of which shall be\n     equal to the  product  of (A) the  current  market  price  per share of the\n     Common  Stock  (determined  as provided in clause (h) of this  subparagraph\n     8.4) as of the Expiration Time and (B) the number of shares of Common Stock\n     outstanding  (including any tendered shares) as of the Expiration Time less\n     the number of all  shares  validly  tendered  and not  withdrawn  as of the\n     Expiration  Time (the shares  deemed so  accepted  up to any such  maximum,\n     being referred to as the 'Purchased Shares').\n\n\n\n\n\n\n          (g) The  reclassification  of Common Stock into  securities  including\n     securities other than Common Stock (other than any reclassification  upon a\n     consolidation or merger to which subparagraph 8.11 applies) shall be deemed\n     to involve (i) a distribution of such securities other than Common Stock to\n     all   holders   of  Common   Stock   (and  the   effective   date  of  such\n     reclassification   shall  be  deemed   to  be  'the  date   fixed  for  the\n     determination of stockholders  entitled to receive such  distribution'  and\n     the 'date fixed for such determination' within the meaning of clause (d) of\n     this subparagraph 8.4), and (ii) a subdivision or combination,  as the case\n     may be, of the  number of shares of Common  Stock  outstanding  immediately\n     prior to such  reclassification  into the number of shares of Common  Stock\n     outstanding   immediately  thereafter  (and  the  effective  date  of  such\n     reclassification shall be deemed to be 'the day upon which such subdivision\n     becomes  effective'  or  'the  day  upon  which  such  combination  becomes\n     effective', as the case may be, and 'the day upon which such subdivision or\n     combination  becomes  effective'  within the  meaning of clause (c) of this\n     subparagraph 8.4).\n\n          (h) For the purpose of any computation under clauses (b), (d), (e) and\n     (f) of this  subparagraph 8.4, the current market price per share of Common\n     Stock (the  'Current  Market  Price') on any date shall be deemed to be the\n     average of the daily  Closing  Prices for the 5  consecutive  Trading  Days\n     selected by the Company  commencing  not more than 20 Trading  Days before,\n     and ending not later than,  the earlier of the day in question  and the day\n     before the 'ex' date with respect to the issuance or distribution requiring\n     such  computation.  The  'Closing  Price' for each Trading Day shall be the\n     reported  last sale price  regular  way or, in case no such  reported  sale\n     takes place on such day, the average of the reported  closing bid and asked\n     prices  regular  way, in either case on the New York Stock  Exchange or, if\n     the Common Stock is not listed or admitted to trading on such Exchange,  on\n     the  principal  national  securities  exchange on which the Common Stock is\n     listed or  admitted  to trading or, if not listed or admitted to trading on\n     any national securities exchange, on the National Association of Securities\n     Dealers  Automated  Quotations  system  ('NASDAQ')  National  Market System\n     ('NASDAQ\/NMS')  or, if not listed or admitted to trading on NASDAQ\/NMS,  on\n     NASDAQ, or, if the Common Stock is not listed or admitted to trading on any\n     national securities exchange or NASDAQ\/NMS or quoted on NASDAQ, the average\n     of the  closing  bid and  asked  prices in the  over-the-counter  market as\n     furnished by any New York Stock Exchange  member firm selected from time to\n     time by the Company for that purpose.  For purposes of this paragraph,  the\n     term ''ex' date',  when used with respect to any issuance or  distribution,\n     shall mean the first date on which the Common Stock  trades  regular way on\n     such exchange or in such market  without the right to receive such issuance\n     or distribution.\n\n          (i) No adjustment in the conversion price shall be required to be made\n     until cumulative  adjustments  (plus any adjustments not previously made by\n     reason  of this  paragraph  (i))  amount  to at least 1% of the  conversion\n     price,\n\n\n\n\n\n\n     as last adjusted;  provided,  however, that any adjustments which by reason\n     of this  subparagraph  (i) are not  required  to be made  shall be  carried\n     forward  and  taken  into  account  in  any  subsequent   adjustment.   All\n     calculations under this subparagraph (i) shall be made to the nearest cent.\n\n          (j) In addition to those  required by clauses (a),  (b), (c), (d), (e)\n     and (f) of this  subparagraph  8.4,  the Company from time to time may make\n     such  reductions in the conversion  price by any amount,  (i) to the extent\n     permitted  by law for any  period  of at least 20 days,  in which  case the\n     Company  shall give 15 days notice of such decrease and (ii) to such extent\n     as it considers to be advisable in order that any event treated for federal\n     income tax  purposes  as a dividend  of stock or stock  rights  will not be\n     taxable  to the  holders  of  shares  of  Common  Stock  or, if that is not\n     possible,  to diminish any income taxes that are otherwise  payable because\n     of such event. The Company shall have the power to resolve any ambiguity or\n     correct  any error in this  clause (j) and its actions in so doing shall be\n     final and conclusive.\n\n     (e)  Notice of Adjustments of Conversion Price.\n\n          Whenever the conversion price is adjusted as herein provided:\n\n               (a) the Company  shall compute the adjusted  conversion  price in\n          accordance  with  subparagraph  8.4 and shall  prepare  a  certificate\n          signed by the  Treasurer  of the Company  setting  forth the  adjusted\n          conversion price and showing in reasonable detail the facts upon which\n          such  adjustment is based,  and such  certificate  shall  forthwith be\n          filed  at  each  office  or  agency  maintained  for  the  purpose  of\n          conversion of Debentures  pursuant to Section 3.2 of the  Subordinated\n          Indenture; and\n\n               (b) a notice stating that the conversion  price has been adjusted\n          and setting  forth the adjusted  conversion  price shall  forthwith be\n          required, and as soon as practicable after it is required, such notice\n          shall be mailed by the Company to all Holders of  Debentures  at their\n          last addresses as they shall appear in the Security Register.\n\n     (f)  Notice of Certain Corporate Action.\n\n          In case:\n\n               (a)  the  Company   shall   declare  a  dividend  (or  any  other\n          distribution)  on its Common Stock payable  otherwise than in cash out\n          of its earned surplus; or\n\n               (b) the Company  shall  authorize  the granting to the holders of\n          its Common  Stock of rights or warrants to  subscribe  for or purchase\n          any shares of capital stock of any class or of any other rights; or\n\n\n\n\n\n\n\n               (c) of any  reclassification  of the Common  Stock of the Company\n          (other than a subdivision or combination of its outstanding  shares of\n          Common Stock),  or of any  consolidation,  merger or share exchange to\n          which  the  Company  is  a  party  and  for  which   approval  of  any\n          stockholders of the Company is required, or of the sale or transfer of\n          all or substantially all of the assets of the Company; or\n\n               (d) of the voluntary or involuntary  dissolution,  liquidation or\n          winding up of the Company; or\n\n               (e) the Company or any  Subsidiary  shall commence a tender offer\n          for all or a portion of the  Company's  outstanding  Common  Stock (or\n          shall amend any such tender offer);\n\n     then  the  Company  shall  cause  to be  filed  at each  office  or  agency\n     maintained for the purpose of conversion of Debentures  pursuant to Section\n     3.2 of the  Subordinated  Indenture,  and  shall  cause to be mailed to all\n     Holders  at their  last  addresses  as they  shall  appear in the  Security\n     Register,  at least 20 days (or 10 days in any case specified in clause (a)\n     or (b) above) prior to the applicable  record or effective date hereinafter\n     specified,  a notice  stating (x) the date on which a record is to be taken\n     for the purpose of such dividend, distribution,  rights or warrants, or, if\n     a record is not to be taken,  the date as of which  the  holders  of Common\n     Stock of record to be entitled to such  dividend,  distribution,  rights or\n     warrants   are  to  be   determined,   or  (y)  the  date  on  which   such\n     reclassification,  consolidation,  merger, share exchange,  sale, transfer,\n     dissolution,  liquidation, winding up or tender offer is expected to become\n     effective, and the date or dates as of which it is expected that holders of\n     Common Stock of record shall be entitled to exchange their shares of Common\n     Stock  for  securities,  cash  or  other  property  deliverable  upon  such\n     reclassification,  consolidation,  merger, share exchange,  sale, transfer,\n     dissolution,  liquidation,  winding up or tender offer. Neither the failure\n     to give such notice nor any defect  therein  shall  affect the  legality or\n     validity of the  proceedings  described  in clauses (a) through (d) of this\n     subparagraph  8.6. If at the time the Trustee  shall not be the  conversion\n     agent,  a copy of such notice shall also  forthwith be filed by the Company\n     with the Trustee.\n\n     (g)  Company to Reserve Common Stock.\n\n          The Company shall at all times  reserve and keep  available out of its\n     authorized  but unissued  Common  Stock,  for the purpose of effecting  the\n     conversion  of  Debentures,  the full number of shares of Common Stock then\n     issuable upon the conversion of all outstanding Debentures.\n\n\n\n\n\n\n     (h)  Taxes on Conversions.\n\n          The Company  will pay any and all taxes that may be payable in respect\n     of the  issue or  delivery  of  shares of  Common  Stock on  conversion  of\n     Debentures  pursuant hereto. The Company shall not, however, be required to\n     pay any tax which may be payable in respect of any transfer involved in the\n     issue and  delivery of shares of Common  Stock in a name other than that of\n     the Holder of the  Debenture or  Debentures  to be  converted,  and no such\n     issue or delivery shall be made unless and until the Person requesting such\n     issue  has  paid  to the  Company  the  amount  of  any  such  tax,  or has\n     established to the satisfaction of the Company that such tax has been paid.\n\n     (i)  Covenant as to Common Stock.\n\n          The  Company  covenants  that all shares of Common  Stock which may be\n     issued  upon  conversion  of  Debentures  will upon issue be fully paid and\n     nonassessable and, except as provided in subparagraph 8.8, the Company will\n     pay all taxes, liens and charges with respect to the issue thereof.\n\n     (j)  Cancellation of Converted Debentures.\n\n          All  Debentures  delivered  for  conversion  shall be delivered to the\n     Trustee to be canceled by or at the  direction of the Trustee,  which shall\n     dispose  of the  same as  provided  in  Section  2.10  of the  Subordinated\n     Indenture.\n\n     (k)  Provisions in Case of Consolidation, Merger or Sale of Assets.\n\n          In case of any  consolidation  of the Company  with,  or merger of the\n     Company  into,  any other  Person,  any merger of another  Person  into the\n     Company (other than a merger which does not result in any reclassification,\n     conversion,  exchange or cancellation of outstanding shares of Common Stock\n     of the Company) or any sale or transfer of all or substantially  all of the\n     assets of the Company, the Person formed by such consolidation or resulting\n     from such merger or which  acquires such assets,  as the case may be, shall\n     execute and deliver to the Trustee a supplemental  indenture providing that\n     the  Holder  of each  Debenture  then  outstanding  shall  have  the  right\n     thereafter,  during the  period  such  Debenture  shall be  convertible  as\n     specified in subparagraph 8.1, to convert such Debenture only into the kind\n     and amount of  securities,  cash and other  property  receivable  upon such\n     consolidation, merger, sale or transfer by a holder of the number of shares\n     of Common  Stock of the Company into which such  Debenture  might have been\n     converted  immediately  prior  to  such  consolidation,   merger,  sale  or\n     transfer,  assuming  such  holder of Common  Stock of the  Company is not a\n     Person with which the Company consolidated or into which the Company merged\n     or which  merged  into the  Company or to which such sale or  transfer  was\n     made,  as the case may be  ('Constituent  Person'),  or an  Affiliate  of a\n     constituent Person, and failed to exercise his rights of election,\n\n\n\n\n\n\n     if any,  as to the kind or amount of  securities,  cash and other  property\n     receivable upon such consolidation, merger, sale or transfer (provided that\n     if the kind or amount of  securities,  cash and other  property  receivable\n     upon such consolidation,  merger, sale or transfer is not the same for each\n     share  of  Common  Stock  of the  Company  held  immediately  prior to such\n     consolidation, merger, sale or transfer by others than a constituent Person\n     or an  Affiliate  thereof  and in respect of which such  rights of election\n     shall not have been exercised  ('non-electing share'), then for the purpose\n     of this Section the kind and amount of securities,  cash and other property\n     receivable  upon  such  consolidation,  merger,  sale or  transfer  by each\n     non-electing  share shall be deemed to be the kind and amount so receivable\n     per share by a plurality  of the  non-electing  shares.  Such  supplemental\n     indenture shall provide for adjustments which, for events subsequent to the\n     effective  date  of  such  supplemental  indenture,   shall  be  as  nearly\n     equivalent as may be  practicable to the  adjustments  provided for in this\n     Paragraph 8. The above provisions of this Paragraph 8 shall similarly apply\n     to successive consolidations, mergers, sales or transfers.\n\n     (l)  Trustee's Disclaimer.\n\n          The Trustee has no duty to  determine  when an  adjustment  under this\n     Paragraph 8 should be made, how it should be made or what it should be. The\n     Trustee  makes  no  representation  as to  the  validity  or  value  of any\n     securities or assets  issued upon  conversion  of  Debentures.  The Trustee\n     shall not be  responsible  for the  Company's  failure to comply  with this\n     Paragraph 8.\n\n     (9) The  Debentures  shall be  subject to  repurchase  at the option of the\nHolders upon the following terms and conditions:\n\n     9.1  Right to Require Repurchase.\n\n          In the event that a Repurchase  Event (as  hereinafter  defined) shall\n     occur  after the date of issuance  of the  Debentures,  then each Holder of\n     Debentures  shall have the right,  at the Holder's  option,  to require the\n     Company to  repurchase,  and upon the  exercise  of such right the  Company\n     shall repurchase,  all of such Holder's  Debentures,  or any portion of the\n     principal  amount  thereof that is an integral  multiple of $1,000,  on the\n     date (the 'Repurchase  Date') that is 30 days after the date of the Company\n     Notice (as defined in subparagraph  9.2), for cash at a purchase price (the\n     'Repurchase Price') equal to 100% of the principal amount of the Debentures\n     to be  repurchased,  together  with  accrued  and  unpaid  interest  to the\n     Repurchase  Date.  Such right to require the  repurchase of the  Debentures\n     shall not continue  after a discharge  of the Company from its  obligations\n     with  respect  to the  Debentures  in  accordance  with  Article  10 of the\n     Subordinated Indenture, unless a Repurchase Event shall have occurred prior\n     to such discharge.\n\n\n\n\n\n\n     9.2  Notices; Method of Exercising Repurchase Right, Etc.\n\n          (a) Unless the Company shall have  theretofore  called for  redemption\n     all of the Outstanding Debentures, on or before the 15th calendar day after\n     the occurrence of a Repurchase  Event,  the Company or, at the request (and\n     expense)  of the  Company,  the  Trustee,  shall  mail  to all  Holders  of\n     Debentures  a  notice  (the  'Company  Notice')  of the  occurrence  of the\n     Repurchase  Event and of the repurchase right set forth herein arising as a\n     result thereof.\n\n          Each notice of a repurchase right shall state:\n\n               (1) the Repurchase Date,\n\n               (2) the date by which the repurchase right must be exercised,\n\n               (3) the Repurchase Price for the Debentures, and\n\n               (4) a description  of the procedure  which a Holder of Debentures\n          must follow to exercise a repurchase right.\n\n          No failure  of the  Company  to give the  foregoing  notices or defect\n     therein  shall limit any Holder's  right to exercise a repurchase  right or\n     affect the validity of the proceedings for the repurchase of Debentures.\n\n          If any of the foregoing  provisions are  inconsistent  with applicable\n     law, such law shall govern.\n\n          (b) To  exercise a  repurchase  right,  a Holder of  Debentures  shall\n     deliver to the  Company  (or an agent  designated  by the  Company for such\n     purpose)  and to the  Trustee  on or before  the close of  business  on the\n     Repurchase Date (i) written notice of the Holder's  exercise of such right,\n     which notice shall set forth the name of the Holder,  the principal  amount\n     of the  Debentures  to be  repurchased,  a  statement  that an  election to\n     exercise  the  repurchase  right  is  being  made  thereby,  and  (ii)  the\n     Debentures with respect to which the repurchase  right is being  exercised,\n     duly  endorsed for transfer to the  Company.  Such written  notice shall be\n     irrevocable,  except that the right of the Holder to convert the Debentures\n     with  respect  to which  the  repurchase  right is  being  exercised  shall\n     continue until the close of business on the Repurchase Date.\n\n          (c) In the event a repurchase  right shall be exercised in  accordance\n     with  the  terms  hereof,  the  Company  shall  pay or cause to be paid the\n     Repurchase  Price in cash to the Holder on the  Repurchase  Date,  together\n     with  accrued  and unpaid  interest to the  Repurchase  Date  payable  with\n     respect  to  the  Debentures  as to  which  the  purchase  right  has  been\n     exercised;  provided, however, that installments of interest that mature on\n     or prior to the Repurchase  Date shall be payable in cash to the Holders of\n     such Debentures, or one or more\n\n\n\n\n\n\n     predecessor Debentures,  registered as such at the close of business on the\n     relevant  Regular  Record Date  according  to the terms and  provisions  of\n     Article 2 of the Subordinated Indenture.\n\n          (d) If any Debenture  surrendered for repurchase  shall not be so paid\n     on the Repurchase Date, the principal  shall,  until paid, bear interest to\n     the extent permitted by applicable law from the Repurchase Date at the rate\n     borne by the Debenture and each  Debenture  shall remain  convertible  into\n     Common Stock until the principal of such Debenture  shall have been paid or\n     duly provided for.\n\n          (e) Any  Debenture  which is to be  repurchased  only in part shall be\n     surrendered  to the  Trustee  (with,  if the  Company  or  the  Trustee  so\n     requires,  due endorsement by, or a written  instrument of transfer in form\n     satisfactory  to the Company and the Trustee  duly  executed by, the Holder\n     thereof or his attorney duly authorized in writing),  and the Company shall\n     execute,  and the Trustee shall  authenticate  and deliver to the Holder of\n     such  Debenture  without  service  charge,  a new Debenture or  Debentures,\n     containing identical terms and conditions,  of any authorized  denomination\n     as requested by such Holder in aggregate  principal  amount equal to and in\n     exchange for the unrepurchased portion of the principal of the Debenture so\n     surrendered.\n\n          (f) Prior to the  Repurchase  Date, the Company shall deposit with the\n     Trustee  or with a Paying  Agent (or,  if the  Company is acting as its own\n     Paying Agent, segregate and hold in trust as provided in Section 3.4 of the\n     Subordinated Indenture) an amount of money sufficient to pay the Repurchase\n     Price of the Debentures that are to be repaid on the Repurchase Date.\n\n     9.3  'Change of Control,'  'Termination of Trading' and 'Repurchase  Event'\n          Defined.\n\n          (a) A Change of Control or a Termination of Trading shall constitute a\n     'Repurchase  Event' giving rise to the right under this  Paragraph 9 on the\n     part of each Holder of a Debenture to require,  at the Holder's option, the\n     Company to repurchase such Holder's Debentures.\n\n          (b) For purposes of this  Paragraph 9, 'Change of Control' shall occur\n     when: (i) all or  substantially  all of the Company's assets are sold as an\n     entirety  to any Person or related  group of  Persons;  (ii) there shall be\n     consummated  any  consolidation  or merger of the  Company (A) in which the\n     Company  is not the  continuing  or  surviving  corporation  (other  than a\n     consolidation  or merger with a wholly owned  subsidiary  of the Company in\n     which all  shares  of Common  Stock  outstanding  immediately  prior to the\n     effectiveness   thereof  are  changed  into  or  exchanged   for  the  same\n     consideration) or (B) pursuant to which the Common Stock would be converted\n     into  cash,  securities  or  other  property,  in each  case  other  than a\n     consolidation or merger of the Company in\n\n\n\n\n\n\n     which  the  holders  of  the  Common   Stock   immediately   prior  to  the\n     consolidation or merger have,  directly or indirectly,  at least a majority\n     of the total voting power of all classes of capital stock  entitled to vote\n     generally  in the  election of  directors  of the  continuing  or surviving\n     corporation immediately after such consolidation or merger in substantially\n     the same proportion as their ownership of Common Stock  immediately  before\n     such  transaction;  (iii) any Person,  or any Persons acting together which\n     would  constitute a 'group' for  purposes of Section  13(d) of the Exchange\n     Act,  together with any  affiliates  thereof,  shall  beneficially  own (as\n     defined in Rule  13d-3  under the  Exchange  Act) at least 50% of the total\n     voting  power of all classes of capital  stock of the  Company  entitled to\n     vote  generally in the  election of  directors of the Company;  (iv) at any\n     time  during  any  consecutive  two-year  period,  individuals  who  at the\n     beginning of such period  constituted the Board of Directors of the Company\n     (together with any new directors  whose election by such Board of Directors\n     or whose  nomination  for election by the  stockholders  of the Company was\n     approved  by a vote of  66-2\/3% of the  directors  then still in office who\n     were either  directors at the beginning of such period or whose election or\n     nomination for election was previously so approved) cease for any reason to\n     constitute  a majority of the Board of  Directors  of the  Company  then in\n     office;  or (v) the Company is  liquidated or dissolved or adopts a plan of\n     liquidation or dissolution.\n\n          (c) For purposes of this Paragraph 9, a 'Termination of Trading' shall\n     occur if the Common Stock (or other common stock into which the  Debentures\n     are then  convertible)  is neither  listed for  trading on a U.S.  national\n     securities  exchange nor approved for trading on an  established  automated\n     over-the-counter trading market in the United States.\n\n     (10)  In  addition  to  the  definitions  set  forth  in  Article  1 of the\nSubordinated  Indenture,  the Debentures shall include the following  additional\ndefinitions,  which, in the event of a conflict with the definitions of terms in\nthe Subordinated Indenture, shall control:\n\n     'Change of Control' shall have the meaning specified in subparagraph 9.3.\n\n     'Closing Price' has the meaning specified in subparagraph 8.4(h).\n\n     'Common Stock'  includes any stock of any class of the Company which has no\npreference  in respect of  dividends  or of amounts  payable in the event of any\nvoluntary or involuntary  liquidation,  dissolution or winding-up of the Company\nand which is not subject to redemption by the Company.  However,  subject to the\nprovisions of  subparagraph  8.11,  shares  issuable on conversion of Debentures\nshall include only shares of the class designated as Common Stock of the Company\nat the date of this instrument or shares of any class or classes  resulting from\nany reclassification or  reclassifications  thereof and which have no preference\nin respect of dividends or of amounts  payable in the event of any  voluntary or\ninvoluntary liquidation,  dissolution or winding-up of the Company and which are\nnot subject to  redemption  by the Company;  provided  that if at any time there\nshall be more than one such resulting  class, the shares of each such class then\nso issuable shall be substantially in the proportion which the\n\n\n\n\n\n\ntotal number of shares of such class  resulting from all such  reclassifications\nbears to the total number of shares of all such classes  resulting from all such\nreclassifications.\n\n     'Current Market Price' has the meaning specified in subparagraph 8.4(h).\n\n     'Designated  Senior  Indebtedness'  means  (i)  amounts  now  or  hereafter\noutstanding under the Company's  existing bank credit facilities or indebtedness\nincurred  to  extend,  refund or  refinance  such  amounts  and (ii) any  Senior\nIndebtedness  which, at the time of  determination,  has an aggregate  principal\namount outstanding of at least $20 million and is specifically designated in the\ninstrument   evidencing   such  Senior   Indebtedness   as  'Designated   Senior\nIndebtedness' by the Company.\n\n     'NASDAQ'  and  'NASDAQ\/NMS'  have the meanings  specified  in  subparagraph\n8.4(h).\n\n     'Repurchase Date' has the meaning specified in subparagraph 9.1.\n\n     'Repurchase Event' has the meaning specified in subparagraph 9.3(d).\n\n     'Repurchase Price' has the meaning specified in subparagraph 9.15.\n\n     'Senior   Indebtedness'  means  all  indebtedness,   liabilities  or  other\nobligations of the Company,  other than the Debentures,  whether existing on the\ndate of execution of this Indenture or thereafter created,  incurred or assumed,\nexcept any such other  indebtedness,  liabilities or other  obligations  that by\ntheir terms or by operation of law are  subordinated  to, or  subordinated  on a\nparity with, the Debentures.\n\n     'Debentures Payment' has the meaning specified in subparagraph 7.2.\n\n     'Subordinated  Obligations'  means any principal of,  premium,  if any, and\ninterest on the  Debentures  payable  pursuant to the terms of the Debentures or\nupon acceleration, including any amounts received upon the exercise of rights of\nrescission  or  other  rights  of  action  (including  claims  for  damages)  or\notherwise,  to the extent  relating to the purchase  price of the  Debentures or\namounts  corresponding  to such principal,  premium,  if any, or interest on the\nDebentures.\n\n     'Termination of Trading' has the meaning specified in subparagraph 9.3(b).\n\n     'Trading Day' means each Monday, Tuesday,  Wednesday,  Thursday and Friday,\nother  than  any day on  which  securities  are  not  traded  on the  applicable\nsecurities exchange or in the applicable securities market.\n\n     (11) The  Debentures  shall not be subject to any  defeasance  pursuant  to\nSection 10.1 of the Subordinated Indenture.\n\n     (12) Each of the  undersigned is authorized to approve the form,  terms and\nconditions of the Debentures pursuant to the Resolutions.\n\n\n\n\n\n\n\n     (13)  Attached  hereto  as  Annex  B is a  true  and  correct  copy  of the\nResolutions.\n\n     (14) Attached  hereto as Annex C are true and correct  copies of the letter\naddressed to the Trustee entitling the Trustee to rely on the Opinion of Counsel\nattached  thereto,  which Opinion  relates to the  Debentures  and complies with\nSection 11.5 of the Subordinated Indenture.\n\n     (15)  Each  of  the   undersigned   has  reviewed  the  provisions  of  the\nSubordinated  Indenture,   including  the  covenants  and  conditions  precedent\npertaining to the issuance of the Debentures.\n\n     (16) In  connection  with  this  certificate  each of the  undersigned  has\nexamined documents, corporate records and certificates and has spoken with other\nofficers of the Company.\n\n     (17) Each of the undersigned has made such examination and investigation as\nis necessary  to enable him to express an informed  opinion as to whether or not\nthe covenants and conditions precedent of the Subordinated  Indenture pertaining\nto the issuance of the Debentures have been satisfied.\n\n     (18) In our opinion all of the covenants and conditions  precedent provided\nfor in the  Subordinated  Indenture for the issuance of the Debentures have been\nsatisfied.\n\n     (19) If and to the extent that any provision of this certificate  qualifies\nor conflicts with any provision of the Subordinated Indenture, the provisions of\nthis certificate shall control.\n\n     Capitalized terms used herein that are not otherwise defined shall have the\nmeanings  ascribed thereto in the Subordinated  Indenture or the Debentures,  as\nthe case may be.\n\n                            [signature page follows]\n\n\n\n\n\n\n     IN WITNESS  WHEREOF,  each of the  undersigned  officers has executed  this\ncertificate this 20th day of March 1998.\n\n                                                  \/s\/MICHAEL D. MARTIN\n                                              __________________________________\n                                              Name:  Michael D. Martin\n                                              Title: Executive Vice President,\n                                                     Chief Financial Officer and\n                                                     Treasurer\n\n                                                  \/s\/WILLIAM W. HORTON\n                                              __________________________________\n                                              Name:  William W. Horton\n                                              Title: Senior Vice President,\n                                                     Corporate Counsel and\n                                                     Assistant Secretary\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7751],"corporate_contracts_industries":[9438],"corporate_contracts_types":[9560,9566],"class_list":["post-41192","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-healthsouth-corp","corporate_contracts_industries-health__misc","corporate_contracts_types-finance","corporate_contracts_types-finance__indenture"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41192","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41192"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41192"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41192"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41192"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}