UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): May 7, 2004
HEALTHSOUTH Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
1-10315 63-0860407
(Commission File Number) (IRS Employer Identification No.)
One HealthSouth Parkway, Birmingham, Alabama 35243
(Address of Principal Executive Offices, Including Zip Code)
(205) 967-7116
(Registrant's Telephone Number, Including Area Code)
ITEM 5. Other Events and Required FD Disclosure.
On May 7, 2004, HEALTHSOUTH Corporation ("HEALTHSOUTH") announced
that it is amending its solicitation of consents from holders of its 10 3/4%
Senior Subordinated Notes due 2008 (the "Subordinated Notes") to further amend
the definition of "Refinancing Indebtedness" to conform the definition in the
indenture governing the Subordinated Notes to the definition in the indentures
for its Senior Notes. As proposed to be amended, the indenture would permit
the incurrence of indebtedness that is applied to refund, refinance or extend
indebtedness that was outstanding on September 25, 2000, as well as
indebtedness permitted to be incurred thereafter.
A copy of the press release announcing the foregoing is attached
hereto as Exhibit 99.1 and incorporated herein by reference and a copy of the
Supplement to the consent solicitation statement, which includes as Exhibit A
thereto an amended Supplemental Indenture relating to the proposed amendments,
is attached hereto as Exhibit 99.2 and incorporated herein by reference.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
See Exhibit Index.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
HEALTHSOUTH CORPORATION
By: /s/ Gregory L. Doody
-----------------------------
Name: Gregory L. Doody
Title: Executive Vice President,
General Counsel and Secretary
Dated: May 7, 2004
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
99.1 Press release of HEALTHSOUTH Corporation dated May 7, 2004.
99.2 Form of Supplement to the Consent Solicitation Statement
dated May 7, 2004.
EXHIBIT 99.1
News From
---------
[GRAPHIC OMITTED] HEALTHSOUTH
FOR IMMEDIATE RELEASE
May 7, 2004
HEALTHSOUTH MAKES CONFORMING AMENDMENT TO THE TERMS OF ITS
CONSENT SOLICITATION FOR ITS
10 3/4% Senior Subordinated Notes due 2008
BIRMINGHAM, Ala. - HEALTHSOUTH Corp. (OTC Pink Sheets: HLSH) today announced
that it is amending its solicitation of consents from holders of its 10 3/4%
Senior Subordinated Notes due 2008 to conform the definition of "Refinancing
Indebtedness" with the definition in the indentures for its Senior Notes. This
amendment would make the definition of "Refinancing Indebtedness" consistent
with the provisions in the Company's series of Senior Notes and permit the
incurrence of indebtedness that is applied to refund, refinance or extend
indebtedness that was outstanding on September 25, 2000, as well as
indebtedness permitted to be incurred thereafter.
HEALTHSOUTH is not further extending the expiration date of this solicitation,
which is currently scheduled to expire at 11:59 p.m., New York City Time, on
May 13, 2004. In order to provide holders with sufficient time to consider the
proposed amendments, as modified today, HEALTHSOUTH will not close the consent
solicitation relating to the 10 3/4% Senior Subordinated Notes due 2008 prior
to the consent expiration date of May 13, 2004. The proposed amendments will
become effective only upon satisfaction or waiver by HEALTHSOUTH of certain
conditions which include receipt of valid and unrevoked consents from holders
representing not less than a majority in aggregate principal amount of
outstanding notes for a series.
This news release is not a solicitation of consents with respect to any
securities. The consent solicitations are being made only pursuant to the
terms and conditions of the consent solicitation statements relating to each
series of Notes and the accompanying documents. These documents can be
obtained from Innisfree M&A Incorporated, the information agent, at
212-750-5833 (Banks and Brokers Call Collect) or 888-750-5834 (Noteholders
Call Toll-Free). Questions regarding the solicitations should be directed to
Credit Suisse First Boston, the solicitation agent, at 800-820-1653.
About HealthSouth
HealthSouth is the nation's largest provider of outpatient surgery, diagnostic
imaging and rehabilitative healthcare services, with nearly 1,700 locations
nationwide and abroad. HealthSouth can be found on the Web at
www.healthsouth.com.
Statements contained in this press release which are not historical facts are
forward-looking statements. In addition, HealthSouth, through its senior
management, may from time to time make forward-looking public statements
concerning the matters described herein. Such forward-looking statements are
necessarily estimates based upon current information, involve a number of
risks and uncertainties and are made pursuant to the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995. HEALTHSOUTH's actual
results may differ materially from the results anticipated in these
forward-looking statements as a result of a variety of factors. While it is
impossible to identify all such factors, factors which could cause actual
results to differ materially from those estimated by HealthSouth include, but
are not limited to: the investigations by the Department of Justice and the
Securities Exchange Commission into HEALTHSOUTH's financial reporting and
related activity; HEALTHSOUTH's statement that as a result of the
investigations, the Company's previously filed financial statements should no
longer be relied upon and may result in the Company restating its prior
financial statements; the withdrawal by HEALTHSOUTH's former accountants of
their audit reports on all of the Company's previously filed financial
statements; the outcome of pending litigation relating to these matters;
significant changes in HEALTHSOUTH's management team; HEALTHSOUTH's ability to
successfully amend, restructure and/or renegotiate its existing indebtedness
or cure or receive a waiver of alleged defaults under such agreement[s, the
inability of which may result in HealthSouth filing a voluntary petition for
bankruptcy]; HEALTHSOUTH's ability to continue to operate in the ordinary
course and manage its relationships with its creditors, including its lenders,
bondholders, vendors and suppliers, employees and customers; changes, delays
in or suspension of reimbursement for HEALTHSOUTH's services by governmental
or private payors; changes in the regulation of the healthcare industry at
either or both of the federal and state levels; changes to the implementation
of the prospective payment system for inpatient rehabilitation services;
competitive pressures in the healthcare industry and HEALTHSOUTH's response
thereto; HEALTHSOUTH's ability to obtain and retain favorable arrangements
with third-party payors; general conditions in the economy and capital
markets; and other factors which may be identified from time to time in the
Company's SEC filings and other public announcements.
###
For more information contact Andy Brimmer at 205-410-2777.
EXHIBIT 99.2
SUPPLEMENT TO
CONSENT SOLICITATION STATEMENT
HEALTHSOUTH CORPORATION
Solicits Consents and Waivers Relating to its
$319,260,000 Aggregate Principal Amount of 10.750% Senior Subordinated
Notes due 2008 (CUSIP No. 421924AP6)
This Supplement (the "Supplement") of HEALTHSOUTH Corporation ("we"
or "us") supplements and amends our Consent Solicitation Statement dated March
16, 2004, as previously amended (the "Consent Solicitation Statement") and
related Consent Form (the "Consent Form") pursuant to which we are soliciting
(the "Consent Solicitation") consents ("Consents") of Holders (as defined
below) as of the Record Date (as defined below) of the $319,260,000
outstanding aggregate principal amount of our 10.750% Senior Subordinated
Notes due 2008 (the "Notes") to proposed amendments (as amended and
supplemented hereby, the "Proposed Amendments") to certain provisions of the
Indenture dated as of September 25, 2000 (the "Indenture"), between
HEALTHSOUTH, as issuer, and HSBC Bank, USA, as successor trustee to The Bank
of New York (the "Trustee").
The term "Record Date" means 5:00 p.m., New York City time, on March
15, 2004, and the term "Holder" means (1) each person shown on the records of
the registrar for the Notes as a holder on the Record Date or (2) any other
person who has been authorized by proxy or in any other manner acceptable to
HEALTHSOUTH to vote the applicable Notes on behalf of such Holder.
In this Supplement, we are supplementing and amending the Consent
Solicitation to further amend the definition of "Refinancing Indebtedness" to
conform the definition in the Indenture to the definition in the indentures
for our Senior Notes to permit the incurrence of indebtedness that is applied
to refund, refinance or extend our Indebtedness.
Except as set forth herein, no other terms of the Consent
Solicitation have been amended or supplemented and remain as set forth in the
Consent Solicitation Statement. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings given to them in the Consent
Solicitation Statement.
In the event that the Conditions described in the Consent
Solicitation Statement are satisfied or waived, including the receipt of the
Requisite Consents (i.e., consent of Holders of not less than a majority in
outstanding principal amount of Notes), we will pay to Holders who deliver
valid and unrevoked Consents prior to the Expiration Date the Consent Fee.
Holders of Notes for which no Consent is delivered will not receive a Consent
Fee, even though the Proposed Amendments and Waivers, if approved, will bind
all Holders and their transferees.
Each Holder who Consents to the Proposed Amendments will also be
waiving all alleged and potential defaults under the Indenture relating to
events occurring on or prior to the effectiveness of the Proposed Amendments
and any and all rights to cause the principal of, and accrued interest on, the
Notes to become immediately due and payable as a result of such alleged and
potential defaults (the "Waivers"). Except where the context otherwise
requires, references in this Supplement to Consents to the Proposed Amendments
will also include Consents to the Waivers.
Holders who have previously delivered properly executed Consent Forms
to the Information Agent may revoke such Consents at anytime prior to the date
on which the Trustee under the Indenture receives evidence that the Requisite
Consents have been obtained in accordance with the terms of the Indenture (the
"Consent Date"). In order to provide Holders with sufficient time to consider
the Proposed Amendments and Waivers, the Consent Date shall not occur prior to
May 13, 2004. Holders who have previously delivered properly executed Consent
Forms to the Information Agent and do not revoke such Consents will receive
the increased Consent Fee if the Conditions to the Consent Solicitation are
satisfied or waived.
Regardless of the outcome of the Consent Solicitation, the Notes will
continue to be outstanding and will continue to bear interest as provided in
the Indenture. The changes included in the Proposed Amendments will not alter
our obligation to pay the principal of or interest on the Notes or alter the
stated interest rate, maturity date or redemption provisions of the Notes.
Prior to delivering any consent, you are encouraged to read and
consider carefully this supplement in conjunction with the Consent
Solicitation Statement and the Consent Form previously distributed to you.
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WE HAVE NOT FILED ANY QUARTERLY OR ANNUAL REPORT WITH THE SEC FOR PERIODS
AFTER SEPTEMBER 30, 2002, AND WE HAVE CAUTIONED THAT THE FINANCIAL
INFORMATION CONTAINED IN PREVIOUSLY FILED REPORTS SHOULD NOT BE RELIED
UPON. ACCORDINGLY, NO FINANCIAL STATEMENTS ARE AVAILABLE FOR ANY
PRIOR PERIOD, AND YOU SHOULD NOT RELY ON OUR
FINANCIAL STATEMENTS AND REPORTS PREVIOUSLY
FILED WITH THE SEC.
-------------------------------------------------------------------------------
The Solicitation Agent for the Consent Solicitation is:
Credit Suisse First Boston
See "Risk Factors" beginning on page 36 of the Consent Solicitation
Statement for a discussion of some of the risks you should consider before you
consent to the Proposed Amendments and Waivers.
The date of this Supplement is May 7, 2004.
MODIFICATION TO THE CONSENT SOLICITATION
Expiration Date
On April 29, 2004, we announced the extension of the Expiration Date
to 11:59 p.m., New York City Time, on May 13, 2004 (the "Expiration Date"),
unless further extended by us. We are not further extending the Expiration
Date of the Consent Solicitation.
Revocation
Consents may be revoked at any time prior to the Consent Date. All
prior Consents that are not validly revoked prior to the Consent Date by the
Holder granting such Consent in accordance with the procedures set forth in
the Consent Solicitation Statement will be valid Consents. In order to provide
Holders with sufficient time to consider the Proposed Amendments and Waivers,
the Consent Date shall not occur prior to May 13, 2004.
Further Amendments to the Indenture and Clarification of Previously Proposed
Amendments
Holders are urged to read the description of the Proposed Amendments
included in the Consent Solicitation Statement dated March 16, 2004, as
previously amended. As used herein, the terms "Proposed Amendments and
Waivers" and "Proposed Amendments" will include all amendments proposed in
this Supplement. The Proposed Amendments and Waivers constitute a single
proposal and a consenting Holder must Consent to the Proposed Amendments and
Waivers as an entirety and may not consent selectively with respect to certain
of the Proposed Amendments or Waivers.
Further Amendment to the Definition of Refinancing Indebtedness
Section 4.11 of the Indenture currently limits our ability to incur
additional Indebtedness, subject to certain exceptions. One of the permitted
exceptions to the incurrence of additional Indebtedness is the incurrence of
"Refinancing Indebtedness" which is generally, the incurrence of Indebtedness
that is applied to refund, refinance or extend our Indebtedness that we
incurred as of September 25, 2000. As submitted to Holders and described in
the Consent Solicitation Statement dated as of March 16, 2004, the Proposed
Amendments to the Indenture, provide, in part, for the amendment of the
definition of "Refinancing Indebtedness" to include indebtedness that is
designated by HEALTHSOUTH as "Refinancing Indebtedness" and the proceeds of
which are not used for any purpose other than to refund, refinance, repurchase
or extend existing indebtedness or pay down revolving Bank Debt,
notwithstanding that it is not immediately (or contemporaneously) applied for
the refunding, refinancing repurchase or extension of other indebtedness.
We are seeking a further amendment that would expand the definition
of Refinancing Indebtedness to also permit the incurrence of Indebtedness that
is applied to refund, refinance or extend any Indebtedness that we are
permitted to incur under Section 4.11 of the Indenture, subject to certain
exceptions, notwithstanding that such Indebtedness was not incurred as of
September 25, 2000. We are seeking this further amendment to the definition of
Refinancing Indebtedness in order to maintain flexibility to refinance
outstanding indebtedness whether or not it was outstanding on September 25,
2000. This further amendment was inadvertently omitted from the Consent
Solicitation and is being included to conform the definition of Refinancing
Indebtedness in the Indenture to the comparable definition in each of our
indentures that contain a similar restriction in our Senior Notes following
the consummation of our consent solicitations.
Capitalized terms used in this section "Further Amendment to the
Definition of Refinancing Indebtedness" without definition shall have the
meanings set forth in the Indenture.
A copy of the revised Form of Supplemental Indenture, marked to
indicate changes from the Form of Supplemental Indenture attached to the
Consent Solicitation Statement dated March 16, 2004, is attached hereto as
Exhibit A.
EXCEPT AS SPECIFICALLY SET FORTH HEREIN, NO OTHER TERMS OF THE
CONSENT SOLICITATION HAVE BEEN SUPPLEMENTED OR AMENDED AND REMAIN AS SET FORTH
IN THE CONSENT SOLICITATION STATEMENT. COPIES OF THE INDENTURE ARE AVAILABLE
FROM THE INFORMATION AGENT UPON REQUEST.
CONSENT SOLICITATION MATTERS
Holders who have previously delivered Consents in accordance with the
procedures set forth in the Consent Solicitation Statement and who still wish
to Consent with respect to their Notes in the Consent Solicitation, as
modified and amended by the Supplement, do not need to take any further
action.
WE ARE NOT DELIVERING A SUPPLEMENTAL CONSENT FORM TO HOLDERS. HOLDERS
MAY CONTINUE TO USE EITHER THE CONSENT FORM DELIVERED TO HOLDERS WITH THE
CONSENT SOLICITATION STATEMENT DATED MARCH 16, 2004 OR THE CONSENT FORM
DELIVERED TO HOLDERS WITH THE SUPPLEMENT DATED APRIL 29, 2004. Holders who
wish to Consent must deliver their properly completed and executed Consent
Form to the Information Agent at the address set forth on the back cover page
of this Supplement, the Consent Solicitation Statement and in the Consent Form
in accordance with the instructions set forth in the Consent Solicitation
Statement and the Consent Form.
CONSENTS SHOULD NOT BE DELIVERED TO HEALTHSOUTH, THE TRUSTEE OR THE
SOLICITATION AGENT. HOWEVER, WE RESERVE THE RIGHT TO ACCEPT ANY CONSENT
RECEIVED BY HEALTHSOUTH, THE TRUSTEE OR THE SOLICITATION AGENT.
Subject to applicable laws, we reserve the right, in our sole
discretion and regardless of whether any of the Conditions have been
satisfied, at any time prior to the Expiration Date, to (1) extend the
Expiration Date, (2) amend the terms of the Consent Solicitation or (3) modify
the form or amount of the consideration to be paid pursuant to the Consent
Solicitation. In addition, we reserve the right, in our sole discretion, to
extend, amend or modify any or all of the consent solicitations for our Senior
Notes in any manner we deem appropriate, including paying higher or lower
consent fees than the Consent Fee proposed to be paid hereunder. If we make a
material change to the terms of the Consent Solicitation, we will promptly
disclose such change in a manner reasonably calculated to inform the Holders
of such change and extend the Consent Solicitation for a period we deem to be
adequate to permit Holders to deliver and/or revoke their Consents.
You should direct any questions concerning the terms of the Consent
Solicitation to the Solicitation Agent at the address or telephone number set
forth on the back cover page hereof.
You should direct any requests for assistance in completing and
delivering Consent Forms or requests for additional copies of this Supplement,
the Consent Solicitation Statement, the Consent Form or other related
documents to the Information Agent at the address or telephone number set
forth on the back cover page hereof.
In making a decision in connection with the Consent Solicitation,
Holders must rely on their own examination of HEALTHSOUTH and the terms of the
Consent Solicitation, including the merits and risks involved. Holders should
not construe the contents of this Supplement or the Consent Solicitation
Statement as providing any legal, business, financial or tax advice. Each
Holder should consult with its own legal, business, financial and tax advisors
with respect to any such matters concerning this Supplement or the Consent
Solicitation Statement and the Consent Solicitation contemplated hereby and
thereby.
Form of
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated
as of [______], 2004, among HEALTHSOUTH Corporation, a Delaware corporation
(the "Company"), and HSBC Bank, USA, as successor trustee to The Bank of New
York under the Indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of September 25, 2000,
providing for the issuance of an aggregate principal amount of $350 million of
10 3/4% Senior Subordinated Notes due 2008 (the "Notes");
WHEREAS, the Special Committee of the Board of Directors of the
Company has determined that it is in the best interests of the Company to
authorize and approve the amendments to the Indenture (the "Proposed
Amendments") set forth in this Supplemental Indenture;
WHEREAS, Section 8.02 of the Indenture provides that the Company and
the Trustee may amend the Indenture with the written consent of the Holders of
a majority in principal amount of the then outstanding Notes ("Requisite
Consent");
WHEREAS, the Company has distributed Consent Solicitation Statements,
dated March 16, 2004 (as supplemented and amended, the "Solicitation
Statements"), and accompanying Consent Forms to the Holders of the Notes in
connection with the Proposed Amendments as described in the Solicitation
Statements;
WHEREAS, the Requisite Consent to the Proposed Amendments to the
provisions of the Indenture have been received by the Company and the Trustee
and all other conditions precedent, if any, provided for in the Indenture
relating to the execution of this Supplemental Indenture have been complied
with as of the date hereof; and
WHEREAS, the execution and delivery of this Supplemental Indenture
have been duly authorized by the Company and all conditions and requirements
necessary to make this instrument a valid and binding agreement have been duly
performed and complied with;
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Company and the Trustee mutually covenant and agree for the equal and ratable
benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. DEFINITIONS.
(a) Section 1.01 of the Indenture is hereby amended to include the
following new definitions:
"Digital Hospital" means the planned 219-bed acute care hospital
located on Highway 280 in Birmingham, Alabama replacement for the HEALTHSOUTH
Medical Center.
"Digital Hospital Transaction" means any sale, joint venture, sale
leaseback or other related financing transaction involving the Digital
Hospital.
"Fiscal Year" means the twelve month period ending on December 31.
"Historical Reports" means Annual Report(s) on Form 10-K containing
audited financial statements required to be filed with the Commission for any
Fiscal Year ended on or prior to December 31, 2003.
"Report Date" means the date on which the Company shall deliver the
Supplemental Report.
"Senior Notes" means our 6.875% Senior Notes due 2005, 7.000% Senior
Notes due 2008, 8.500% Senior Notes due 2008, 7.375 Senior Notes due 2006,
8.375% Senior Notes due 2011 and 7.625% Senior Notes due 2012.
"Supplemental Report" means the Annual Report on Form 10-K for the
Fiscal Year ending December 31, 2004, containing audited financial statements
required to be filed with the Commission pursuant to the Exchange Act for the
Fiscal Year ending on December 31, 2004."
(b) Section 1.01 of the Indenture is hereby amended to replace the
period at the end of the existing definition of "Attributable Indebtedness"
with a semicolon and to insert thereafter the following new language:
"and provided further, that Attributable Indebtedness
incurred in connection with the Digital Hospital Transaction shall be
limited to Indebtedness incurred on a recourse basis by the Company
or a Subsidiary of the Company (other than a Joint Venture formed for
the purpose of owning, running, operating or managing the Digital
Hospital) or Indebtedness with respect to which the Company or any
such Subsidiary is otherwise liable on a recourse basis."
(c) Section 1.01 of the Indenture is hereby amended to insert the
following new language immediately before the proviso contained in the
existing definition of "Refinancing Indebtedness":
"or other Indebtedness that was permitted by this Indenture to be
incurred under Section 4.11 except for Indebtedness incurred under clause (iv)
or (v) of Section 4.11(b)"
(d) Section 1.01 of the Indenture is hereby amended to replace the
period at the end of the existing definition of "Refinancing Indebtedness"
with a semicolon and to insert thereafter the following new language:
"and provided further that: so long as (y) the Company
designates such Indebtedness as Refinancing Indebtedness and (z) the
net proceeds of such Refinancing Indebtedness are not used for any
purpose other than refinancing existing indebtedness or a repayment
of revolving Bank Debt, such Indebtedness shall constitute
Refinancing Indebtedness notwithstanding that it is not immediately
applied to the refunding, refinancing, repurchase or extension of
other Indebtedness."
(e) Section 1.01 of the Indenture is hereby amended to delete the
"and" at the end of existing clause (iv) of the existing definition of
"Permitted Investments", to replace the period at the end of the existing
clause (v) with a semicolon and to insert thereafter the following new clause
(vi):
"and (vi) any Investment arising from the transfer of assets
made pursuant to the Digital Hospital Transaction."
3. REPORTS. Section 4.02 of the Indenture is hereby amended by
deleting the section in its entirety and replacing it with the following:
"From and after the Report Date and for all periods ending on or
after December 31, 2005, whether or not required by the rules and
regulations of the Commission, so long as any Notes are outstanding,
the Company shall file with the Commission, to the extent such
filings are accepted by the Commission, and shall furnish (within 15
days after such filing) to the Trustee and to the Holders all
quarterly and annual reports and other information, documents and
reports that would be required to be filed with the Commission
pursuant to Section 13 of the Exchange Act if the Company were
required to file under such section. In addition to the foregoing,
the Company shall file the Historical Reports with the Commission on
or prior to June 30, 2005 and the Supplemental Report on or prior to
December 31, 2005. The Company shall also furnish to the Trustee and
to the Holders all other quarterly and annual reports and other
information, documents and reports required to be filed with the
Commission promptly after such reports and other information and
documents are filed with the Commission. In addition, the Company
shall make such information available to prospective purchasers of
the Notes, securities analysts and broker-dealers who request it in
writing. Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt
of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein,
including the Company's compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on
Officers' Certificates)."
4. LIMITATION ON EXISTING INDEBTEDNESS AND SUBSIDIARY PREFERRED
STOCK. Section 4.11(b) of the Indenture is hereby amended to delete the "and"
at the end of existing clause (v) and to replace the existing clause (vi) with
the following new clauses (vi) and (vii):
"(vi) the Company may incur Indebtedness consisting of Bank Debt in
an aggregate principal amount at any time outstanding not to exceed
$750,000,000; and (vii) the Subsidiaries of the Company may incur
Indebtedness, including all Refinancing Indebtedness incurred in
exchange for, or the net proceeds of which are applied to refund,
refinance or extend, any Indebtedness incurred pursuant to this
clause (vii), in an aggregate principal amount at any time
outstanding not to exceed $250,000,000, in addition to Existing
Indebtedness and other Indebtedness permitted to be incurred by
Subsidiaries of the Company pursuant to the foregoing clauses (ii) -
(vi)."
5. EVENTS OF DEFAULT.
(a) Section 6.01(e) of the Indenture is hereby amended to insert the
following new language immediately following the semicolon at the end of
existing Section 6.01(e):
"provided however, that from and after the date upon which
this Supplemental Indenture becomes effective in accordance with the
terms of the Indenture, any such acceleration by holders of our other
Senior Notes or Senior Subordinated Notes shall not constitute an
Event of Default under this Section 6.01(e) until (i) the trustee or
the requisite number of registered holders of such indebtedness have
made a demand for payment to the Company and (ii) the trustee or the
requisite number of registered holders of such indebtedness have
obtained a judgment from a court of competent jurisdiction ordering
the Company to pay all amounts owing under such other series of our
Senior Notes or Senior Subordinated Notes, as the case may be, that
has effectively accelerated such indebtedness in accordance with the
terms of the applicable indenture;"
(b) Section 6.01 of the Indenture is hereby amended to delete the
word "or" from the end of existing paragraph (f), to replace the period at the
end of existing paragraph (g) with a semi-colon and to include the following
new paragraphs (h) and (i):
"(h) the Company shall fail to file the Historical Reports with the
Commission on or prior to June 30, 2005; or
(i) the Report Date does not occur on or prior to December 31,
2005."
6. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
7. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
8. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
9. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Company. The Trustee accepts the
trusts created by the Indenture, as amended and supplemented by this
Supplemental Indenture, and agrees to perform the same upon the terms and
conditions of the Indenture, as amended and supplemented by this Supplemental
Indenture.
10. RATIFICATION OF INDENTURE; SUPPLEMENTAL PART OF INDENTURE. Except
as specifically amended and supplemented by this Supplemental Indenture, the
Indenture shall remain in full force and effect and is hereby ratified and
confirmed. This Supplemental Indenture shall form a part of the Indenture for
all purposes, and every holder of a Note heretofore or hereafter authenticated
and delivered shall be bound hereby. This Supplemental Indenture shall become
effective as of the date hereof at such time as executed counterparts of this
Supplemental Indenture have been delivered by each party hereto to the other
party hereto; provided, however, that no provision of this Supplemental
Indenture shall be effective or binding on the parties hereto unless such
provision complies with the Trust Indenture Act.
11. VALIDITY; ENFORCEABILITY. In case any provisions in this
Supplemental Indenture shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
12. THIRD-PARTY BENEFICIARY. Nothing in this Supplemental Indenture,
express or implied, shall give to any Person, other than the parties hereto
and their successors under the Indenture and the Holders of the Notes, any
benefit or any legal or equitable right, remedy or claim under the Indenture.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of [ ], 2004.
HEALTHSOUTH CORPORATION
By:
------------------------
Name:
Title:
HSBC BANK, USA, AS TRUSTEE
By:
------------------------
Name:
Title:
Delivery of a Consent Form to an address other than the address
listed below or transmission of instructions by facsimile other than as set
forth below is not valid delivery of the Consent Form. However, we reserve the
right to accept Consent Forms delivered by any reasonable means or in any form
that reasonably evidences the giving of Consent. The Consent Form and any
other required documents should be sent or delivered by each Holder or such
Holder's broker, dealer, commercial bank, trust company or other nominee to
the Information Agent at its address or facsimile number set forth below.
The Information Agent for the Consent Solicitation is:
INNISFREE M&A INCORPORATED
Delivery to Innisfree M&A Incorporated, the Information Agent for the
Consent Solicitation:
By Regular or Certified Mail: By Hand or by Overnight Mail or Courier:
Innisfree M&A Incorporated Innisfree M&A Incorporated
P.O. Box 5143 501 Madison Avenue, 20th Floor
New York, NY 10150-5143 New York, NY 10022
By Facsimile
(Eligible Guarantor Institutions Only):
212-750-5799
To Confirm Facsimile Receipt by Telephone
(Eligible Guarantor Institutions Only)
212-750-5833
For Information:
Noteholders Call Toll-Free:
888-750-5834
Banks and Brokers Call Collect:
212-750-5833
Questions and requests for assistance or for additional copies of the
Supplement, the Consent Solicitation Statement and Consent Form may be
directed to the Information Agent at its telephone numbers and locations
listed above. All questions regarding the terms of the Consent Solicitation
shall be directed to the Solicitation Agent at the telephone number and
address set forth below. You may also contact your broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Consent
Solicitation.
The Solicitation Agent for the Consent Solicitation is:
CREDIT SUISSE FIRST BOSTON LLC
11 Madison Avenue
New York, NY 10010
U.S. Toll Free:
1-800-820-1653 Attn:
Liability Management Group