Exhibit 99.3
------------
FIRST SUPPLEMENTAL INDENTURE
(as to 7.000% Senior Notes due 2008)
FIRST SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as
of June 24, 2004, among HEALTHSOUTH Corporation, a Delaware corporation (the
"Company"), and Wilmington Trust Company, as successor trustee to PNC Bank,
National Association, as trustee 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 June 22, 1998, providing
for the issuance of an aggregate principal amount of $250.0 million of 6.875%
Senior Notes due 2005 (the "2005 Notes") and an aggregate principal amount of
$250.0 million of 7.0% Senior Notes due 2008 (the "2008 Notes," and together
with the 2005 Notes, the "Notes");
WHEREAS, pursuant to Sections 2.3 and 11.5 of the Indenture, the
Company delivered an Officers' Certificate, dated as of June 22, 1998, which
contains certain additional covenants that are included in the Notes (the
"Certificate");
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 8.2 of the Indenture provides that the Company and
the Trustee may amend the Indenture with the written consent of the Holders of
not less than a majority in aggregate principal amount of the Notes at the time
Outstanding of all series affected thereby ("Requisite Consent");
WHEREAS, this Supplemental Indenture and the Proposed Amendments
contemplated herein shall only apply to the 2008 Notes;
WHEREAS, the Company has distributed Consent Solicitation Statements,
dated March 16, 2004 as supplemented and amended on April 29, 2004, May 14,
2004 and June 8, 2004 (as supplemented and amended, the "Solicitation
Statements"), and accompanying Consent Forms to the Holders of the 2008 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 2008 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 1.1 of the Indenture solely as it relates to the 2008
Notes 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 the 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.
"Joint Venture" means any Person at least a majority of whose revenues
result from healthcare related businesses or facilities.
"Report Date" means the date on which the Company shall deliver the
Supplemental Report.
"Senior Notes" means our 7.375% Senior Notes due 2006, 6.875% Senior
Notes due 2005, 8.375% Senior Notes due 2011, 8.500% Senior Notes due 2008 and
7.625% Senior Notes due 2012.
"Senior Subordinated Notes" means our 10.750% Senior Subordinated
Notes due 2008.
"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 1.1 of the Indenture (as more fully set out in the
Certificate) is hereby amended solely as it relates to the 2008 Notes to
replace the period at the end of the existing definition of "Attributable Debt"
with a semicolon and to insert thereafter the following new language:
"provided, however, that Attributable Debt 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."
3. LIMITATION ON LIENS. Section 3.10 of the Indenture (as more fully
set out in the Certificate) is hereby amended solely as it relates to the 2008
Notes to replace the "or" at the end of existing clause (x) with a semicolon,
to replace the period at the end of existing clause (xi) with an "or" and to
add the following new clause (xii):
"(xii) liens securing obligations under the Credit Agreement
dated as of June 14, 2002 among the Company, JPMorgan Chase Bank, as
Administrative Agent and the other parties thereto, as amended,
modified, supplemented, replaced, refinanced, refunded or extended
from time to time."
4. REPORTS BY COMPANY. Section 4.4 of the Indenture solely as it
relates to the 2008 Notes 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, the Company shall file with the Trustee and the
Commission, and transmit to Holders, such information, documents and
other reports, and such summaries thereof, as may be required pursuant
to the Trust Indenture Act at the times and in the manner provided
pursuant to such Act; provided that any such information, documents or
reports required to be filed with the Commission pursuant to Section
13 or 15(d) of the Exchange Act, shall be filed with the Trustee
within 15 days after the same is so required to be filed with the
Commission. 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."
5. EVENTS OF DEFAULT DEFINED, ACCELERATION OF MATURITY; WAIVER OF
DEFAULT.
(a) Section 5.1(e) of the Indenture solely as it relates to the 2008
Notes is hereby amended to insert the following new language immediately
following the semicolon at the end of existing Section 5.1(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 Senior
Notes or Senior Subordinated Notes shall not constitute an Event of
Default under this Section 5.1(e) solely as it relates to the 2008
Notes 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 5.1 of the Indenture solely as it relates to the 2008
Notes is hereby amended to delete the word "or" at the end of current paragraph
(g), to include the following new paragraphs as paragraphs (h) and (i) and to
reletter the current paragraph (h) as new paragraph (j):
"(h) the Company shall fail to file the Historical Reports with
the Commission on or prior to June 30, 2005;
(i) the Report Date does not occur on or prior to December 31,
2005; or"
6. HOLDERS' RIGHT TO REQUIRE PURCHASE. Solely as it relates to the
2008 Notes, the Indenture is hereby amended to add the following new Article 13:
"ARTICLE 13 HOLDERS' RIGHT TO REQUIRE PURCHASE. Each Holder
of the Securities shall have the right to require the Company to
purchase all Securities held by such Holder on January 15, 2007, for a
purchase price equal to 100% of the principal amount of such
Securities, plus accrued interest thereon to the date of purchase (the
"Purchase Price").
A Holder electing to require the Company to purchase its Securities
must provide written notice of its election to exercise its put option
pursuant to this Article 13 not more than 150 days and no fewer than
120 days prior to January 15, 2007, and the Company shall purchase the
Securities from all Holders who have delivered such notice on January
15, 2007.
Holders electing to have their Securities purchased by the Company
shall be required to surrender the Securities to the Paying Agent (or,
if the Company is acting as its own Paying Agent, to the Company)
prior to the close of business on January 15, 2007.
On January 15, 2007, the Company shall accept the Securities for
payment and deposit with the Paying Agent (or, if the Company is
acting as its own Paying Agent, set aside, segregate and hold in trust
as provided in Section 3.4) U.S. legal tender sufficient to pay the
Purchase Price of the Securities to be purchased on January 15, 2007,
the Paying Agent (or, if the Company is acting as its own Paying
Agent, the Company) shall mail to each Holder of Securities being
purchased payment in an amount equal to the Purchase Price for such
Securities.
7. 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.
8. 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.
9. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
10. 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.
11. 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
solely with respect to the 2008 Notes for all purposes, and every holder of a
2008 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 (i) such provision complies with the Trust
Indenture Act and (ii) Holders of the requisite principal amount of 2008 Notes
have provided consents (and not thereafter validly revoked such consent) to
such provision on or prior to the date hereof.
12. 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.
13. 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 2008 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 June 24, 2004.
HEALTHSOUTH CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President
General Counsel and Secretary
WILMINGTON TRUST COMPANY, AS TRUSTEE
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
