Exhibit 99.2
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SECOND SUPPLEMENTAL INDENTURE
(as to 7-3/8% Senior Notes due 2006)
SECOND 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 National City
Bank, 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 September 28, 2001,
providing for the issuance of an aggregate principal amount of $200,000,000 of
7-3/8% Senior Notes due 2006 (the "2006 Notes") and an aggregate principal
amount of $400,000,000 of 8-3/8% Senior Notes due 2011 (the "2011 Notes," and
together with the 2006 Notes, 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 or the Notes, as to a single maturity or
all of the Notes, with the written consent of the Holders of a majority in
principal amount of the then outstanding Notes to be affected thereby
("Requisite Consent");
WHEREAS, this Supplemental Indenture and the Proposed Amendments
contemplated herein shall only apply to the 2006 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 2006 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 2006 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 solely as it relates to the 2006
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.
"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, 8.375% Senior Notes due 2011 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 1.01 of the Indenture solely as it relates to the 2006
Notes 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 solely as it relates to the 2006
Notes 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."
(d) Section 1.01 of the Indenture solely as it relates to the 2006
Notes 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 solely as it relates to the
2006 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, 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 solely as it relates to the 2006 Notes 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 solely as it relates to the 2006
Notes 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 Senior
Notes or Senior Subordinated Notes shall not constitute an Event of
Default under this Section 6.01(e) solely as it relates to the 2006
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 6.01 of the Indenture solely as it relates to the 2006
Notes 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
solely with respect to the 2006 Notes for all purposes, and every holder of a
2006 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 2006 Notes
have provided consents (and not thereafter validly revoked such consent) to
such provision on or prior to the date hereof.
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 2006 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/ Gregory L. Doody
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Name: Gregory L. Doody
Title: Executive Vice President
General Counsel and Secretary
WILMINGTON TRUST COMPANY, AS TRUSTEE
By: /s/ Steve M. Cimalore
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Name: Steve M. Cimalore
Title: Vice President