EXHIBIT (99)-7
EXCHANGE AGENT AGREEMENT
_________________, 2001
National City Bank
101 South Fifth Street, Third Floor
Louisville, Kentucky 40202
Ladies and Gentlemen:
HEALTHSOUTH Corporation (the "Company"), is offering to exchange (the
"Exchange Offer") its 7 3/8% Senior Notes due 2006 and 8 3/8% Senior Notes due
2011 (collectively, the "Exchange Notes"), which have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement on Form S-4 (File No. 333-______) for an equal principal
amount of its outstanding 7 3/8% Senior Notes due 2006 and 8 3/8% Senior Notes
due 2011, respectively (collectively, the "Private Notes"), which were issued in
a transaction exempt from registration under the Securities Act. The Exchange
Notes and the Private Notes are collectively referred to herein as the "Notes".
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
___________________, 2002, unless the Exchange Offer is extended as provided in
the Prospectus included in such Registration Statement (the "Prospectus"), in
which case the term "Expiration Date" shall mean the latest date and time to
which the Exchange Offer is extended. Upon execution of this Agreement, National
City Bank will act as the Exchange Agent for the Exchange Offer (the "Exchange
Agent"). A copy of the Prospectus is attached hereto as EXHIBIT A. Capitalized
terms used and not otherwise defined herein shall have the respective meanings
ascribed thereto in the Prospectus.
A copy of each of the form of the letter of transmittal (the "Letter of
Transmittal"), the form of the notice of guaranteed delivery (the "Notice of
Guaranteed Delivery"), the form of the letter to brokers and the form of the
letter of clients (collectively, the "Tender Documents"), to be used by holders
of Private Notes ("Holders") in order to receive Exchange Notes pursuant to the
Exchange Offer, is attached hereto as EXHIBIT B.
The Company hereby appoints you to act as Exchange Agent in connection
with the Exchange Offer. In carrying out your duties as Exchange Agent, you are
to act in accordance with the following provisions of this Agreement:
1. You are to mail the Prospectus and the Tender Documents to all of
the Holders and participants on the day that you are notified by the Company
that the Registration Statement has become effective under the Securities Act,
or as soon as practicable thereafter, and to make subsequent mailings thereof to
any persons who become Holders prior to the Expiration Date and to any persons
as may from time to time be requested by the Company. All mailings pursuant to
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this Section 1 shall be by first-class mail, postage prepaid, unless otherwise
specified by the Company. You shall also accept and comply with telephone
requests for information relating to the Exchange Offer, provided that such
information shall relate only to the procedures for tendering Private Notes in
(or withdrawing tenders of Private Notes from) the Exchange Offer. All other
requests for information relating to the Exchange Offer shall be directed to the
Company, Attention: Malcolm E. McVay, One HealthSouth Parkway, Birmingham,
Alabama 35243; Telephone (205) 969-6140; Facsimile (205) 969-4620.
2. You are to examine the Letters of Transmittal and the Private Notes
and other documents delivered or mailed to you, by or for the Holders, prior to
the Expiration Date, to ascertain whether (i) each Letter of Transmittal is
properly executed and completed in accordance with the instructions set forth
therein, (ii) the Private Notes are in proper form for transfer and (iii) any
other document required by the instructions accompanying the Letters of
Transmittal is completed and duly executed in accordance with such instructions.
In each case, where a Letter of Transmittal or other document has been
improperly executed or completed or, for any other reason, is not in proper
form, or some other irregularity exists, you are authorized to endeavor to take
such action as you consider appropriate to notify the tendering Holder of such
irregularity and as to the appropriate means of resolving the same.
Determination of questions as to the proper completion or execution of the
Letters of Transmittal, or as to the proper form for transfer of the Private
Notes or as to any other irregularity in connection with the submission of
Letters of Transmittal and/or Private Notes and other documents in connection
with the Exchange Offer, shall be made by the officers of, or counsel for, the
Company at their written instructions or oral direction confirmed by facsimile.
Any determination made by the Company on such questions shall be final and
binding.
3. At the written request of the Company or its counsel, Haskell
Slaughter Young & Rediker, L.L.C., you shall notify tendering Holders in the
event of any extension, termination or amendment of the Exchange Offer. In the
event of any such termination, you will return all tendered Private Notes to the
persons entitled thereto, at the request and expense of the Company.
4. Tender of the Private Notes may be made only as set forth in the
Letter of Transmittal. Notwithstanding the foregoing, tenders which the Company
shall approve in writing as having been properly tendered shall be considered to
be properly tendered. Letters of Transmittal and Notices of Guaranteed Delivery
shall be recorded by you as to the date and time of receipt and shall be
preserved and retained by you at the Company's expense for six years. Exchange
Notes are to be issued in exchange for Private Notes pursuant to the Exchange
Offer only in accordance with the provisions of Section 8 hereof and only (i)
against deposit with you prior to the Expiration Date or, in the case of a
tender in accordance with the guaranteed delivery procedures outlined in the
Letter of Transmittal, within three New York Stock Exchange trading days after
the Expiration Date of the Exchange Offer, together with executed Letters of
Transmittal and other documents required by the Exchange Offer or (ii) in the
event that the Holder is a participant in The Depository Trust Company ("DTC")
system, by the utilization of DTC's Automated Tender Offer Program ("ATOP") and
any evidence required by the Exchange Offer.
You are hereby directed to establish an account with respect to the
Private Notes at DTC (the "Book Entry Transfer Facility") within two business
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days after the date of the Prospectus. Any financial institution that is a
participant in the Book Entry Transfer Facility system may, until the Expiration
Date, make book-entry delivery of the Notes by causing the Book Entry Transfer
Facility to transfer such Notes into your account in accordance with the
procedure for such transfer established by the Book Entry Transfer Facility. In
every case, however, a Letter of Transmittal (or a manually executed facsimile
thereof), or an Agent's Message, properly completed and duly executed with any
required signature guarantees and any other required documents must be
transmitted to and received by you prior to the Expiration Date or the
guaranteed delivery procedures described in the Prospectus must be complied
with.
The term "Agent's Message" means a message transmitted by a participant
of the Book Entry Transfer Facility to and received by DTC and forming a part of
a Book Entry Confirmation, which states that such Book Entry Transfer Facility
has received an express acknowledgment from the participant in such Book Entry
Transfer Facility tendering the Private Notes that such participant has received
and agrees to be bound by the terms of the Letter of Transmittal and that the
Company may enforce such agreement against such participant.
5. Upon the oral or written request of the Company (with written
confirmation of any such oral request thereafter), you will transmit by
telephone, and promptly thereafter confirm in writing to Malcolm E. McVay, One
HealthSouth Parkway, Birmingham, Alabama 35243; Telephone (205) 969-6140;
Facsimile (205) 969-4620, or such other persons as the Company may reasonably
request, the aggregate number and principal amount of Private Notes tendered to
you and the number and principal amount of Private Notes properly tendered that
day. In addition, you will also inform the aforementioned persons, upon oral
request made from time to time (with written confirmation of such request
thereafter) prior to the Expiration Date, of such information as they or any of
them may reasonably request.
6. Upon the terms and subject to the conditions of the Exchange Offer,
delivery of Exchange Notes will be made by you promptly after acceptance of the
tendered Private Notes in accordance with Section 8 hereof. You will hold all
items which are deposited for tender with you after 5:00 p.m., New York City
time, on the Expiration Date pending further instructions from an officer of the
Company or its counsel.
7. If any Holder shall report to you that his or her failure to
surrender Private Notes registered in his or her name is due to the loss or
destruction of a certificate or certificates, you shall request such Holder (i)
to furnish to you an affidavit of loss and, if required by the Company, a bond
of indemnity in an amount and evidenced by such certificate or certificates of a
surety, as may be satisfactory to you and the Company, and (ii) to execute and
deliver an agreement to indemnify the Company and you in such form as is
acceptable to you and the Company. The obligees to be named in each such
indemnity bond shall include the Company and you. You shall report to the
Company the names of all Holders who claim that their Private Notes have been
lost or destroyed and the principal amount of such Private Notes.
8. Upon the expiration of the Exchange Offer, William T. Owens, William
W. Horton or Malcolm E. McVay, or another designated officer or agent of the
Company, will confirm to you orally (oral notice to be promptly confirmed in
writing) or in writing the aggregate principal amount of
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Private Notes being exchanged for Exchange Notes pursuant to the Exchange Offer.
The Private Notes accepted for exchange are to be delivered to the Trustee with
instructions to cancel such Private Notes and, unless otherwise instructed by
the Company, to destroy such canceled Private Notes and furnish the Company with
a certificate evidencing such destruction.
As soon as practicable after the Company notifies you of its election
to exchange Private Notes pursuant to the preceding paragraph, you shall either
(i) cause an aggregate principal amount of Exchange Notes equal to the aggregate
principal amount of Private Notes surrendered with and tendered by each Letter
of Transmittal or Agent's Message and accepted for exchange to be reflected, as
directed in such Letter of Transmittal or Agent's Message, on records maintained
by DTC, or, as applicable, (ii) at the request of the tendering Holder contained
in a Letter of Transmittal which is tendering Private Notes in definitive form,
cause to be delivered as directed in such Letter of Transmittal Exchange Notes
registered in the name or names specified in such Letter of Transmittal
evidencing an aggregate principal amount equal to the aggregate principal amount
of Private Notes surrendered with and tendered by such Letter of Transmittal.
Tenders pursuant to the Exchange Offer are irrevocable, except that
Private Notes tendered pursuant to the Exchange Offer may be withdrawn at any
time prior to the Expiration Date as described in the Prospectus.
If, pursuant to the terms of the Exchange Offer, the Company does not
accept and exchange all or any part of the Private Notes, or Private Notes are
tendered but withdrawn prior to the Expiration Date, or partial tenders are
made, you shall promptly return to, or, upon the order of, the tendering Holder,
certificates for Private Notes not exchanged.
Any certificates for unexchanged Notes forwarded by first-class mail
shall be so forwarded under an existing insurance policy protecting you and the
Company from loss or liability arising out of the non-receipt or non-delivery of
such certificates or by registered mail insured separately for the replacement
value of such certificates.
9. For your services as the Exchange Agent hereunder, the Company shall
pay you in accordance with the schedule of fees attached hereto as EXHIBIT C.
The Company also will reimburse you, for your reasonable out-of-pocket expenses
(including, but not limited to, reasonable attorneys' fees and expenses not
previously paid to you) in connection with your services promptly after
submission to the Company of itemized statements.
10. You are not authorized to pay any concessions, commissions or
solicitation fees to any broker, dealer, bank or other person or to engage or
utilize any person to solicit tenders.
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11. As the Exchange Agent hereunder, you:
(a) shall have no duties or obligations other than those
specifically set forth herein or in the Exhibits attached hereto or as
may be subsequently requested in writing of you by the Company and
agreed to by you in writing with respect to the Exchange Offer;
(b) will be regarded as making no representations and having
no responsibilities as to the validity, accuracy, sufficiency, value or
genuineness of any Private Notes deposited with you hereunder of any
Exchange Notes, any tender Documents or other documents prepared by the
Company in connection with the Exchange Offer;
(c) shall not be obligated to take any legal action hereunder
which might in your judgment involve any expense or liability unless
you shall have been furnished with an indemnity reasonably satisfactory
to you;
(d) may rely on, and shall be fully protected and indemnified
as provided in Section 12 hereof in acting upon, the written or oral
instructions with respect to any matter relating to your acting as
Exchange Agent specifically covered by this Agreement or supplementing
or qualifying any such action of any officer or agent of such other
person or persons as may be designated or whom you reasonably believe
have been designated by the Company;
(e) may consult with counsel of your selection, including
counsel for the Company, and the advice of such counsel shall be full
and complete authorization and protection in respect in good faith and
in accordance with such advice of such counsel;
(f) shall not at any time advise any person as to the wisdom
of the Exchange Offer or as to the market value or decline or
appreciation in market value of any Private Notes or Exchange Notes;
(g) shall not be liable for any action which you may do or
refrain from doing in connection with this Agreement except for your
gross negligence, willful misconduct or bad faith;
(h) shall not be required to expend or risk your own funds or
otherwise to incur any liability, financial or otherwise, in the
performance of any of your duties hereunder or in the exercise of any
of your rights or powers if you shall have reasonable grounds for
believing that repayment of such funds or indemnity satisfactory to you
against such risk or liability is not assured to you;
(i) may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion,
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report, notice, request, consent, order, approval or other paper or
document believed by you to be genuine and to have been signed or
presented by the proper party or parties;
(j) shall be entitled, if in the administration of the
provisions of this Agreement you shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering any
action to be taken hereunder, to receive, and such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in
the absence of gross negligence, willful misconduct or bad faith on
your part, be deemed to be conclusively proved and established, by a
certificate signed by one of the Company's authorized officers and
delivered to you, and such certificate, in the absence of gross
negligence, willful misconduct or bad faith on your part, shall be full
warrant to you for any action taken, suffered or omitted by it under
the provisions of this Agreement upon the faith thereof;
(k) may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
attorneys, custodians or nominees appointed with due care; and
(l) may at any time resign by giving 30 days' written notice
of resignation to the Company. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor and, upon
the acceptance by the successor of such appointment, release you from
your obligations hereunder by written instrument, a copy of which
instrument shall be delivered to each of you and your successor. If no
successor shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, you may
petition any court of competent jurisdiction for the appointment of a
successor.
12. The Company covenants and agrees to indemnify and hold harmless you
and your officers, directors, employees, agents and affiliates (collectively,
the "Indemnified Parties" and each an "Indemnified Party") against any loss,
liability or reasonable expense of any nature (including reasonable attorneys'
and other fees and expenses) incurred without gross negligence, willful
misconduct or bad faith on an Indemnified Party's part, in connection with the
administration of the duties of the Indemnified Parties hereunder in accordance
with this Agreement; provided, however, such Indemnified Party shall use its
best effort to notify the Company by letter, or by cable, telex or facsimile
confirmed by letter, of the written assertion of a claim against such
Indemnified Party, or of any action commenced against such Indemnified Party,
promptly after but in any event within 10 days of the date such Indemnified
Party shall have received any such written assertion of a claim or shall have
been served with a summons, or other legal process, giving information as to the
nature and basis of the claim; provided, however, that failure to so notify the
Company shall not relieve the Company of any liability which it may otherwise
have hereunder except such liability that is a direct result of such Indemnified
Party's failure to so notify the Company. The Company shall be entitled to
participate at its own expense in the defense of any such claim or legal action,
and if the Company so elects or if the Indemnified Party in such notice to the
Company so directs, the Company shall assume
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the defense of any suit brought toenforce any such claim. In the event the
Company assumes such defense, the Company shall not be liable for any fees and
expenses thereafter incurred by such Indemnified Party which is incurred as a
result of the need to have separate representation because of a conflict of
interest between such Indemnified Party and the Company. No Indemnified Party
shall enter into a settlement or other compromise with respect to any
indemnified loss, liability or expense without the prior written consent or the
Company, which shall not be unreasonably withheld or delayed if not adverse to
the Company's interests. Obligations under this Section 12 shall survive the
termination of this Agreement or the earlier resignation or termination of the
Exchange Agent.
13. This Agreement and your appointment as the Exchange Agent shall be
construed and enforced in accordance with the laws of the State of New York
(without regard to its conflicts of law principles) and shall inure to the
benefit of, and the obligations created hereby shall be binding upon the
successors and assigns of, the parties hereto. No other person shall acquire or
have any rights under or by virtue of this Agreement.
14. This Agreement may not be modified, amended or supplemented without
an express written agreement executed by the parties hereto. Any inconsistency
between this Agreement and the Tender Documents, as they may from time to time
be supplemented or amended, shall be resolved in favor of the latter, except
with respect to the duties, liabilities and indemnification of you as Exchange
Agent.
15. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
16. In case any provision of this Agreement 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.
17. Unless terminated earlier by the parties hereto, this Agreement
shall terminate 90 days following the Expiration Date. Notwithstanding the
foregoing, Sections 9 and 12 shall survive the termination of this Agreement.
Upon any termination of this Agreement, you shall promptly deliver to the
Trustee any certificates for Private Notes or Exchange Notes, funds or property
then held by you as Exchange Agent under this Agreement.
18. All notices and communications hereunder shall be in writing and
shall be deemed to be duly given on the date received if delivered by reputable
overnight courier or registered mail, postage prepaid, or sent by facsimile as
follows:
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If to the Company: HEALTHSOUTH Corporation
One HealthSouth Parkway
Birmingham, Alabama 35243
Attention: William W. Horton
Telephone: (205) 969-4977
Facsimile: (205) 969-4730
and a copy to: Haskell Slaughter Young & Rediker, L.L.C.
1200 AmSouth/Harbert Plaza
1901 Sixth Avenue North
Birmingham, Alabama 35203
Attention: Robert E. Lee Garner
Telephone: (205) 251-1000
Facsimile: (205) 324-1133
If to you: National City Bank
101 South Fifth Street, Third Floor
Louisville, Kentucky 40202
Attention: Charles Lush
Telephone: (502) 581-7354
Facsimile: (502) 581-4198
or such other address or telecopy number as any of the above may have furnished
to the other parties in writing for such purposes.
19. This Agreement and all of the obligations hereunder shall
be assumed by any and all successors and assigns of the Company.
If the foregoing is in accordance with your understanding, please
indicate your agreement by signing and returning the enclosed copy of this
Agreement to the Company.
Very truly yours,
HEALTHSOUTH Corporation
By
-----------------------------------
William W. Horton
Executive Vice President and
Corporate Counsel and
Assistant Secretary
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Agreed to this ___ day of _________________, 2001.
National City Bank
By:
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EXHIBIT A
PROSPECTUS
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EXHIBIT B
LETTER OF TRANSMITTAL AND TENDER DOCUMENTS
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EXHIBIT C
SCHEDULE OF FEES FOR SERVICES AS
EXCHANGE AGENT FOR
HEALTHSOUTH CORPORATION
7 3/8% SENIOR NOTES DUE 2006
AND 8 3/8% SENIOR NOTES DUE 2011
EXCHANGE AGENT FEE
To cover the acceptance of the appointment, the review and
consideration of the documentation, communication with the working parties,
normal functions of the Exchange Agent, including the establishment and
maintenance of required records and accounts, distribution of tender
documentation, and receipt of tendered Notes and supporting documentation.
One-Time Fee of $2,000.
OUT-OF-POCKET EXPENSES, DTC SERVICE CHARGES AND EXPENSES, LEGAL FEES AND
EXPENSES, IF AND WHEN INCURRED, FEES AND DISBURSEMENTS AND SERVICES OF AN
UNANTICIPATED OR EXTRAORDINARY NATURE WILL BE CHARGED WHEN OR IF INCURRED.
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331856.1