FIRST AMENDMENT TO RIGHTS AGREEMENT
This First Amendment to Rights Agreement (this "Amendment"), dated as
of February 17, 1997, is by and between Horizon/CMS Healthcare Corporation, a
Delaware corporation (the "Company"), and ChaseMellon Shareholder Services,
L.L.C., a New Jersey limited liability company (the "Rights Agent"), as
successor to Chemical Trust Company of California (the "Predecessor Rights
Agent").
WHEREAS, the Company and the Rights Agent, as successor to the
Predecessor Rights Agent, are parties to that certain Rights Agreement, dated as
of September 15, 1994 (the "Rights Agreement);
WHEREAS, the Company proposes to enter into that certain Plan and
Agreement of Merger, dated as February 17, 1997 (the "Merger Agreement"), with
HEALTHSOUTH Corporation, a Delaware Corporation ("HEALTHSOUTH"), and Xxxx
Acquisition Corporation, a Delaware Corporation and wholly owned subsidiary of
HEALTHSOUTH;
WHEREAS, in connection with the execution of the Merger Agreement, the
Company desires to make certain amendments to the Rights Agreement; and
WHEREAS, the parties hereto desire to amend the Rights Agreement to
reflect that the Rights Agent pursuant to such agreement is ChaseMellon
Shareholder Services, L.L.C., as successor to the Predecessor Rights Agent;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
1. The definition of "Acquiring Person" set forth in Section 1 of the
Rights Agreement is hereby amended to add the following sentence as the last
sentence of such definition:
"Notwithstanding the foregoing, HEALTHSOUTH Corporation shall not be
deemed to be an Acquiring Person solely as result of its acquisition of
all of the outstanding Voting Shares of the Company pursuant to the
merger (the "Merger") contemplated by that certain Plan and Agreement
of Merger, dated as of February 17, 1997 (the "Merger Agreement"), by
and among the Company, HEALTHSOUTH Corporation, a Delaware Corporation
("HEALTHSOUTH"), and Xxxx Acquisition Corporation, a Delaware
Corporation and wholly owned subsidiary of HEALTHSOUTH."
2. Section 14 of the Rights Agreement is hereby amended to add the
following sentence as the last sentence of such Section:
"Notwithstanding the foregoing, the provisions of this Section shall
not apply to the Merger and no Person shall be required to take any
action pursuant to this Section in connection with the execution and
performance of the Merger Agreement or the consummation of the Merger."
3. The Rights Agreement is hereby amended to add a new Section 36 as
set forth below:
"Section 36. Termination. This Agreement shall terminate and
be of no further force and effect immediately prior to the Effective
Time (as defined in the Merger Agreement) or, if earlier, the Final
Expiration Date."
4. The Rights Agreement is hereby amended as necessary to reflect that
ChaseMellon Shareholder Services, L.L.C., as successor to the Predecessor Rights
Agent, is the Rights Agent pursuant to the Rights Agreement.
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5. This Amendment shall be effective immediately prior to the execution
and delivery of the Merger Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered, all as of the date first above written.
HORIZON/CMS HEALTHCARE CORPORATION
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
Vice President of Legal Affairs
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
As Rights Agent
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Vice President
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