Contract

Exhibit 10.2.3

WAIVER dated as of February 16, 2006 (this “Waiver”) to the Amended and Restated Credit Agreement dated as of March 21, 2005 (the “Credit Agreement”), among HEALTHSOUTH CORPORATION (the “Borrower”), the Lenders party thereto and JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral Agent.

WHEREAS, the Borrower has informed the Administrative Agent that it desires to issue Capital Stock of the Borrower generating Net Proceeds of up to $400,000,000, with such issuance to be completed no later than March 31, 2006 (such issuance, the “Equity Issuance”);

WHEREAS, Section 2.10(c) of the Credit Agreement requires that the Borrower apply 50% of the Net Proceeds from the issuance of any Capital Stock of the Borrower (other than any such issuance to any Subsidiary) to prepay Borrowings and/or cash collateralize Letters of Credit under the Credit Agreement in accordance with the terms of the Credit Agreement;

WHEREAS, the Borrower is contemplating a series of transactions pursuant to which, among other things, the Borrower will (a) offer to repurchase and, to the extent tendered, repurchase substantially all of its outstanding senior notes and senior subordinated notes, (b) repay all outstanding Loans and pay all other amounts due under, and terminate, the Credit Agreement and (c) repay certain other outstanding indebtedness (the transactions referred to in clauses (a) through (c) above being called the “Debt Refinancing”);

WHEREAS, Section 2.10(g) of the Credit Agreement requires that the Borrower notify the Administrative Agent of any prepayment of Loans under the Credit Agreement (in the case of a prepayment of Eurodollar Borrowings, three Business Days before the date of such prepayment);

WHEREAS, the Borrower has requested that compliance with (i) Section 2.10(c) of the Credit Agreement be waived to the extent necessary to permit the Borrower to use 100% of the Net Proceeds from the Equity Issuance to repay certain Existing Indebtedness of the Borrower and (ii) Section 2.10(g) of the Credit Agreement be waived to the extent such Section requires irrevocable notice three Business Days prior to a prepayment of Loans under the Credit Agreement in connection with the Debt Refinancing, and the undersigned Lenders, constituting the Required Lenders, are willing, on the terms and subject to the conditions set forth herein, to grant such a waiver;

NOW, THEREFORE, in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1. Defined Terms. Capitalized terms used and not defined herein shall have meanings given to them in the Credit Agreement.

SECTION 2. Waiver. Effective as of the Effective Date (as defined in Section 5), the Lenders hereby waive compliance by the Borrower with the provisions of (i) Section

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2.10(c) of the Credit Agreement to the extent, and only to the extent, necessary to permit the Borrower to apply 100% of Net Proceeds in an aggregate amount of up to $400,000,000 from the Equity Issuance to repay Existing Indebtedness of the Borrower and (ii) Section 2.10(g) of the Credit Agreement to the extent such Section requires irrevocable notice three Business Days prior to a prepayment of Loans under the Credit Agreement in connection with the Debt Refinancing.

SECTION 3. No Amendments or Other Waivers; Confirmation. Except as expressly set forth herein, this Waiver shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Lenders or the Administrative Agent under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle any Loan Party to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document in similar or different circumstances. This Waiver shall apply and be effective only with respect to the provisions of the Credit Agreement specifically referred to in Section 2 herein, and only to the extent specified in Section 2 herein.

SECTION 4. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that as of the date hereof:

(a) no Default or Event of Default has occurred and is continuing; and

(b) the representations and warranties of each Loan Party set forth in the Loan Documents are true and correct in all material respects on and as of the date hereof (and after giving effect to this Waiver) with the same effect as though made on and as of the date hereof (except to the extent such representations and warranties by their terms relate to an earlier date, in which case such representations and warranties were true and correct in all material respects on and as of such earlier date).

SECTION 5. Effectiveness. This Waiver shall become effective on the date (the “Effective Date”) on which the Administrative Agent shall have received counterparts hereof duly executed and delivered by the Borrower and the Required Lenders.

SECTION 6. Waiver Fee. In consideration of the agreements of the Lenders contained herein, the Borrower agrees to pay to the Administrative Agent, for the account of each Lender that delivers an executed counterpart of this Waiver by 5:00 p.m., New York City time, on February 22, 2006, a waiver fee (the “Waiver Fee”) in an amount equal to .05% of the aggregate amount of such Lender’s Commitments and Term Loans on such date, provided that such Waiver Fee shall not be payable unless and until this Waiver becomes effective as provided in Section 5 above, in which case such Waiver Fee shall become immediately payable by the Borrower.

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SECTION 7. Expenses. The Borrower agrees to reimburse the Administrative Agent for its reasonable and documented out-of-pocket expenses in connection with this Waiver, including the reasonable and documented fees, charges and disbursements of counsel for the Administrative Agent.

SECTION 8. Governing Law; Counterparts. (a) This Waiver and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York.

(b) This Waiver may be executed by one or more of the parties to this Waiver on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Waiver may be delivered by facsimile transmission electronic pdf of the relevant signature pages hereof.

SECTION 9. Headings. The headings of this Waiver are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be duly executed and delivered by their duly authorized officers as of the day and year first above written.

HEALTHSOUTH CORPORATION,
by		/s/ XXXX XXXXXXX
		Name: Xxxx Xxxxxxx
		Title: Executive Vice President and Chief
		Financial Officer

JPMORGAN CHASE BANK, N.A.,
individually and as Administrative Agent,
by		/s/ XXXX XXX XXX
		Name:		Xxxx Xxx Xxx
		Title:		Vice President

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SIGNATURE PAGE FOR

WAIVER DATED FEBRUARY 16, 2006

TO THE HEALTHSOUTH CORPORATION

AMENDED AND RESTATED CREDIT AGREEMENT

DATED AS OF MARCH 21, 2005

Institution:		First Commercial Bank
by		/s/ XXXX X. XXXXXX
		Name:		Xxxx X. Xxxxxx
		Title:		Sr. Vice President
Institution:		Xxxxxxx Xxxxx Capital Corp.
by		/s/ XXXXXXX X. X’XXXXX
		Name:		Xxxxxxx X. X’Xxxxx
		Title:		Vice President
Institution:		Credit Suisse, Cayman Islands
		Branch
by		/s/ XXXXX XXXXXX
		Name:		Xxxxx Xxxxxx
		Title:		Managing Director
by		/s/ XXXXXXX X. XXXXXXXXXX
		Name:		Xxxxxxx X. Xxxxxxxxxx
		Title:		Vice President
Institution:		Regiment Capital, LTD
by		Regiment Capital Management
		LLC as its Investment Advisor
by		Regiment Capital Advisors, LP
		its Manager and pursuant to
		delegated authority

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by		/s/ XXXXXXX X. XXXXXXXX
		Name:		Xxxxxxx X. Xxxxxxxx
		Title:		President
Institution:		The Foothill Group, Inc.
by		/s/ XXXXXXX X. XXXXXXXX
		Name:		Xxxxxxx X. Xxxxxxxx
		Title:		SVP
Institution:		Grand Central Asset Trust,
		BDC Series
by		/s/ XXXXX X. XXXX
		Name:		Xxxxx X. Xxxx
		Title:		Attorney-in-fact
Institution:		The Hartford Mutual Funds,
		Inc., on behalf of the Hartford
		Floating Rate Fund by Hartford
		Investment Management
		Company, its sub-advisor
by		/s/ ADRAYLL XXXXX
		Name:		Adrayll Xxxxx
		Title:		AVP
Institution:		WB Loan Funding 1, LLC
by		/s/ XXXXX X. XXXXX
		Name:		Xxxxx X. Xxxxx
		Title:		Associate
Institution:		WB Loan Funding 2, LLC
by		/s/ XXXXX X. XXXXX
		Name:		Xxxxx X. Xxxxx
		Title:		Associate

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Institution:		WB Loan Funding 3, LLC
by		/s/ XXXXX X. XXXXX
		Name:		Xxxxx X. Xxxxx
		Title:		Associate
Institution:		Spiret IV Loan Trust 2003-B
by		Wilmington Trust Company
		not in its individual capacity
		but solely as trustee
by		/s/ XXXXXX X. XXXXXXX
		Name:		Xxxxxx X. Xxxxxxx
		Title:		Financial Services Officer
by		/s/ XXXXX X. XXXXXX
		Name:		Xxxxx X. Xxxxxx
		Title:		Financial Services Officer
Institution:		Deutsche Bank Trust Company
		Americas
by		/s/ XXXXX X. XXXXX
		Name:		Xxxxx X. Xxxxx
		Title:		Vice President
by		/s/ XXXXXXX XXXXXXX
		Name:		Xxxxxxx Xxxxxxx
		Title:		Director
Institution:		SunAmerica Life Insurance
		Company
by		AIG Global Investment Corp.,
		Its Investment Advisor
by		/s/ W. XXXXXXX XXXXXX
		Name:		W. Xxxxxxx Xxxxxx
		Title:		Managing Director

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Institution:		SunAmerica Senior Floating
		Rate Fund
by		AIG Global Investment Corp.,
		Its Investment Sub-Advisor
by		/s/ W. XXXXXXX XXXXXX
		Name:		W. Xxxxxxx Xxxxxx
		Title:		Managing Director
Institution:		Galaxy CLO 1999-1, Ltd.
by		AIG Global Investment Corp.,
		Its Collateral Manager
by		/s/ W. XXXXXXX XXXXXX
		Name:		W. Xxxxxxx Xxxxxx
		Title:		Managing Director
Institution:		Xxxxxxxxxxx Senior Floating Rate Fund
by		/s/ XXXX XXXXXXX
		Name:		Xxxx Xxxxxxx
		Title:		AVP
Institution:		Xxxxx Fargo Bank
by		/s/ XXXX XXXXXXX
		Name:		Xxxx Xxxxxxx
		Title:		Senior Vice President

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Institution:		TRS Quogue LLC
by		/s/ XXXXX X. XXXXXX
		Name:		Xxxxx X. Xxxxxx
		Title:		Vice President
Institution:		Citibank, N.A.
by		/s/ XXXXX X. XXXXXX
		Name:		Xxxxx X. Xxxxxx
		Title:		Attorney-In-Fact
Institution:		Citicorp North America, Inc.
by		/s/ XXXXXX XXXXXXXX
		Name:		Xxxxxx Xxxxxxxx
		Title:		Vice President
Institution:		NYLIM Institutional Floating Rate Fund, L.P.
by		New York Life Investment Management LLC, its Investment Manager
by		/s/ X. XXXXXXXXX
		Name:		X. Xxxxxxxxx
		Title:		Director
Institution:		MainStay Floating Rate Fund, a series of Eclipse Funds, Inc.
by		New York Life Investment Management LLC
by		/s/ X. XXXXXXXXX
		Name:		X. Xxxxxxxxx
		Title:		Director

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Institution:		TRS Callisto LLC
by		/s/ XXXXX X. XXXXXX
		Name:		Xxxxx X. Xxxxxx
		Title:		Vice President
Institution:		AG Alpha Credit Master, Ltd.
by		Xxxxxx Xxxxxx & Co., L.P. As Investment Manager
by		/s/ XXXXXXX X. XXXXXX
		Name:		Xxxxxxx X. Xxxxxx
		Title:		Authorized Signatory
Institution:		Riviera Funding LLC
by		/s/ M. XXXXXXXX XXXXXXX
		Name:		M. Xxxxxxxx Xxxxxxx
		Title:		Assistant Vice President
Institution:		Western Asset Floating Rate High Income Fund LLC
by		/s/ XXXXXXX X. XXXXXX
		Name:		Xxxxxxx X. Xxxxxx
		Title:		Portfolio Manager
Institution:		First Trust/Highland Capital Floating Rate Income Fund
by		/s/ XXX XXXXXXXXX
		Name:		Xxx Xxxxxxxxx
		Title:		Portfolio Manager

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Institution:		Citadel Hill 2000 Ltd.
by		/s/ XXXXX XXXXXXX
		Name:		Xxxxx Xxxxxxx
		Title:		Authorized Signatory
Institution:		Sankaty Advisors, LLC as Collateral Manager for Prospect Funding I, LLC as Term Lender
by		/s/ XXXXX X. XXXXXXX III
		Name:		Xxxxx X. Xxxxxxx III
		Title:		Managing Director
Institution:		Sankaty High Yield Partners, III, L.P.
by		/s/ XXXXX X. XXXXXXX III
		Name:		Xxxxx X. Xxxxxxx III
		Title:		Managing Director
Institution:		Sankaty High Yield Partners, II, L.P.
by		/s/ XXXXX X. XXXXXXX III
		Name:		Xxxxx X. Xxxxxxx III
		Title:		Managing Director
Institution:		Xxxxxxx Xxxxx Credit Partners
by		/s/ XXXXX XXXXXXX
		Name:		Xxxxx Xxxxxxx
		Title:		Authorized Signatory

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Institution:		TRSL LLC
by		/s/ XXXXXXX XXXXXXX
		Name:		Xxxxxxx Xxxxxxx
		Title:		Assistant Vice President
Institution:		Waterville Funding LLC
by		/s/ M. XXXXXXXX XXXXXXX
		Name:		M. Xxxxxxxx Xxxxxxx
		Title:		Assistant Vice President
Institution:		Blackrock Global Floating Rate Income Trust
by		/s/ XXX XXXXXXX
		Name:		Xxx Xxxxxxx
		Title:		Authorized Signatory
Institution:		Blackrock Limited Duration Income Trust
by		/s/ XXX XXXXXXX
		Name:		Xxx Xxxxxxx
		Title:		Authorized Signatory
Institution:		Magnetite Asset Investors LLC
by		/s/ XXX XXXXXXX
		Name:		Xxx Xxxxxxx
		Title:		Authorized Signatory
Institution:		Magnetite Asset Investors III LLC
by		/s/ XXX XXXXXXX
		Name:		Xxx Xxxxxxx
		Title:		Authorized Signatory

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Institution:		Colonial Funding LLC
by		/s/ M. XXXXXXXX XXXXXXX
		Name: M. Xxxxxxxx Xxxxxxx Title: Assistant Vice President
Institution:		PPM Spyglass Funding Trust
by		/s/ M. XXXXXXXX XXXXXXX
		Name: M. Xxxxxxxx Xxxxxxx Title: Authorized Agent
Institution:		PPM Monarch Bay Funding LLC
by		/s/ M. XXXXXXXX XXXXXXX
		Name: M. Xxxxxxxx Xxxxxxx Title: Assistant Vice President
Institution:		Fidelity Puritan Trust: Fidelity Puritan Fund
by		/s/ XXXX X. XXXXXXXX
		Name: Xxxx X. Xxxxxxxx Title: Assistant Treasurer
Institution:		PPM Shadow Creek Funding LLC
by		/s/ M. XXXXXXXX XXXXXXX
		Name: M. Xxxxxxxx Xxxxxxx Title: Assistant Vice President
Institution:		Fidelity Advisor Series II: Fidelity Advisor Floating Rate High Income Fund
by		/s/ XXXX X. XXXXXXXX
		Name: Xxxx X. Xxxxxxxx Title: Assistant Treasurer

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Institution:		Fidelity Central Investment Portfolios LLC: Fidelity Floating Rate Central Investment Portfolio
by		/s/ XXXX X. XXXXXXXX
		Name: Xxxx X. Xxxxxxxx Title: Assistant Treasurer
Institution:		Birchwood Funding LLC
by		/s/ M. XXXXXXXX XXXXXXX
		Name: M. Xxxxxxxx Xxxxxxx Title: Assistant Vice President
Institution:		Raintree Trading LLC
by		/s/ M. XXXXXXXX XXXXXXX
		Name: M. Xxxxxxxx Xxxxxxx Title: Assistant Vice President
Institution:		Classic Cayman B.D. Limited
by		/s/ XXXXX XXXXX
		Name: Xxxxx Xxxxx Title: Authorized Signatory
by		/s/ XXXXXX XXXXXX
		Name: Xxxxxx Xxxxxx Title: Authorized Signatory
Institution:		Pioneer Floating Rate Trust
by		/s/ XXX XXXXXXXXX
		Name: Xxx Xxxxxxxxx Title: Portfolio Manager

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Institution:		Highland Floating Rate Advantage Fund
by		/s/ XXX XXXXXXXXX
		Name: Xxx Xxxxxxxxx Title: Senior Vice President
Institution:		Highland Floating Rate LLC
by		/s/ XXX XXXXXXXXX
		Name: Xxx Xxxxxxxxx Title: Senior Vice President
Institution:		Senior Debt Portfolio
by		Boston Management and Research as Investment Advisor
by		/s/ XXXXXXX X. XXXXXXX
		Name: Xxxxxxx X. Xxxxxxx Title: Vice President
Institution:		Xxxxx Xxxxx Senior Income Trust
by		Xxxxx Xxxxx Management as Investment Advisor
by		/s/ XXXXXXX X. XXXXXXX
		Name: Xxxxxxx X. Xxxxxxx Title: Vice President
Institution:		Xxxxx Xxxxx Institutional Senior Loan Fund
by		Xxxxx Xxxxx Management as Investment Advisor

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by		/s/ XXXXXXX X. XXXXXXX
		Name: Xxxxxxx X. Xxxxxxx Title: Vice President
Institution:		Xxxxx Xxxxx CDO III, Ltd.
by		Xxxxx Xxxxx Management as Investment Advisor
by		/s/ XXXXXXX X. XXXXXXX
		Name: Xxxxxxx X. Xxxxxxx Title: Vice President
Institution:		Xxxxx Xxxxx CDO VI, Ltd.
by		Xxxxx Xxxxx Management as Investment Advisor
by		/s/ XXXXXXX X. XXXXXXX
		Name: Xxxxxxx X. Xxxxxxx Title: Vice President
Institution:		Xxxxxxx & Co.
by		Boston Management and Research as Investment Advisor
by		/s/ XXXXXXX X. XXXXXXX
		Name: Xxxxxxx X. Xxxxxxx Title: Vice President
Institution:		Xxxxx Xxxxx VT Floating Rate Income Fund
by		Xxxxx Xxxxx Management as Investment Advisor
by		/s/ XXXXXXX X. XXXXXXX
		Name: Xxxxxxx X. Xxxxxxx Title: Vice President

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Institution:		Xxxxx Xxxxx Limited Duration Income Fund
by		Xxxxx Xxxxx Management as Investment Advisor
by		/s/ XXXXXXX X. XXXXXXX
		Name:		Xxxxxxx X. Xxxxxxx
		Title:		Vice President
Institution:		Tolli & Co.
by		Xxxxx Xxxxx Management as Investment Advisor
by		/s/ XXXXXXX X. XXXXXXX
		Name:		Xxxxxxx X. Xxxxxxx
		Title:		Vice President
Institution:		Xxxxx Xxxxx Senior Floating Rate Trust
by		Xxxxx Xxxxx Management as Investment Advisor
by		/s/ XXXXXXX X. XXXXXXX
		Name:		Xxxxxxx X. Xxxxxxx
		Title:		Vice President
Institution:		Xxxxx Xxxxx Floating Rate Income Trust
by		Xxxxx Xxxxx Management as Investment Advisor
by		/s/ XXXXXXX X. XXXXXXX
		Name:		Xxxxxxx X. Xxxxxxx
		Title:		Vice President

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Institution:		Xxxxx Xxxxx Short Duration Diversified Income Fund
by		Xxxxx Xxxxx Management as Investment Advisor
by		/s/ XXXXXXX X. XXXXXXX
		Name:		Xxxxxxx X. Xxxxxxx
		Title:		Vice President
Institution:		Chatham Asset High Yield Master Fund, Ltd.
by		Chatham Asset Management, LLC, as Investment Advisor
by		/s/ XXXXXXX XXXXXXXXXX
		Name:		Xxxxxxx Xxxxxxxxxx
		Title:		Managing Member
Institution:		Wachovia Bank, National Association
by		/s/ XXXXX XxXXX
		Name:		Xxxxx XxXxx
		Title:		Vice President
Institution:		Xxxxxxx Sachs Credit Partners
by		/s/ XXXXXXXX XXXXXX
		Name:		Xxxxxxxx Xxxxxx
		Title:		Vice President

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Institution:		Xxxxxx Floating Rate Income Fund
by		/s/ XXXX XXXXX
		Name:		Xxxx Xxxxx
		Title:		V.P.
Institution:		Xxxxxx Diversified Income Trust
by		/s/ XXXX XXXXX
		Name:		Xxxx Xxxxx
		Title:		V.P.
Institution:		Xxxxxx Premier Income Trust
by		/s/ XXXX XXXXX
		Name:		Xxxx Xxxxx
		Title:		V.P.
Institution:		Special Situations Investing Group
by		/s/ XXXXXX XXXXXXXXXX
		Name:		Xxxxxx Xxxxxxxxxx
		Title:		Authorized Signatory
Institution:		Xxxxx Xxxxx CDO VIII, Ltd.
by		Xxxxx Xxxxx Management as Investment Advisor
by		/s/ XXXXXXX X. XXXXXXX
		Name:		Xxxxxxx X. Xxxxxxx
		Title:		Vice President

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