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EXHIBIT 2
AMENDMENT NO. 1 TO STOCKHOLDER RIGHTS AGREEMENT
THIS AMENDMENT NO. 1 TO STOCKHOLDER RIGHTS AGREEMENT
("Amendment"), is made as of the 9th day of April, 1999, by and between CORAM
HEALTHCARE CORPORATION, a Delaware corporation (the "Company"), and BANKBOSTON,
N.A., a national banking association, as Rights Agent (the "Rights Agent"),
which term shall include any successor Rights Agent hereunder. All initially
capitalized terms used herein which are not otherwise defined herein shall have
the meanings ascribed to them in the Rights Agreement (as such term is defined
below).
RECITALS
A. The Company and the Rights Agent entered into that certain
Stockholder Rights Agreement dated as of June 25, 1997 (the "Rights Agreement").
B. At a meeting of the Board of Directors of the Company (the
"Company Board") held on April 7, 1999, the Company Board approved an amendment
to certain provisions of the Agreement as set forth herein.
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Rights Agent
hereby agree as follows:
1. Definition of Bridgenote Investors. Section 1.1(e) of the
Rights Agreement is hereby amended and restated to read in its entirety as
follows:
(e) "Subordinated Debtholders" shall mean Xxxxxxx Xxxxx
Credit Partners L.P., Cerberus Partners, L.P. and
Foothill Capital Corporation (together with such
person's Affiliates and Associates).
2. Definition of Exempted Person. Section 1.1(i) of the Rights
Agreement is hereby amended and restated to read in its entirety as follows:
"Exempted Person" shall mean any Institutional Investor, any Minority
Investor and any Subordinated Debtholder. Notwithstanding the
foregoing,
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(1) if any Institutional Investor or Minority
Investor acquires Beneficial Ownership of the outstanding
Common Stock in excess of that percentage expressly approved
in writing by the Board of Directors (y) by reason of share
purchases of the Company reducing the number of shares of
Common Stock outstanding (provided such Exempted Person does
not acquire additional shares of Common Stock) or (z)
inadvertently, if such Exempted Person notifies the Board of
Directors of such inadvertent purchase within five (5)
business days and within two (2) business days after such
notice divests itself of enough shares of Common Stock so as
to no longer have the Beneficial Ownership of the outstanding
Common Stock in excess of the specified percentage, such
Institutional Investor or Minority Investor will not cease to
be an Exempted Person.
(2)(x) in the event that any Subordinated Debtholder
acquires Beneficial Ownership of shares of Common Stock other
than (A) as a holder or other beneficial owner of or upon the
conversion of the Company's Series B Senior Subordinated
Convertible Notes, (B) as a holder of or upon exercise of
warrants to purchase Common Stock issued pursuant to that
certain Credit Agreement, dated as of August 20, 1998 among
the Company, Coram, Inc. and the Subordinated Debtholders; (C)
as a holder of or upon exercise of warrants to purchase Common
Stock issued pursuant to the Credit Agreement, dated as of
April 6, 1995 among the Company, Coram, Inc., the lenders
named therein and Chemical Bank as Administrative Agent,
Collateral Agent and Fronting Bank, as amended, (D) shares of
Common Stock representing up to 1% of the amount outstanding
from time to time held by such Subordinated Debtholder or its
Affiliates or Associates in accounts for the benefit of
clients of such entity or (E) shares representing up to 1% of
the amount outstanding from time to time held by such
Subordinated Debtholder or its Affiliates or Associates for
proprietary accounts, then such Subordinated Debtholder shall
cease to be an "Exempted Person" for all purposes hereunder
effective immediately prior to the time of such acquisition
unless such acquisition shall have been inadvertent and such
Exempted Person notifies the Board of Directors of such
inadvertent purchase within five (5) business days after
obtaining knowledge thereof and within two (2) business days
after such notice divests itself of the Beneficial Ownership
so acquired; and (y) the designation of the Subordinated
Debtholders set forth herein shall apply only to the Persons
expressly named herein as Subordinated Debtholders and their
respective Affiliates and Associates and shall not extend to
provide the designation of "Exempted Person" or any rights or
privileges deriving therefrom to any other party, including
without limitation any assignee or transferee of any
Subordinated Debtholder.
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3. Except as expressly amended and modified under this
Amendment, the terms and provisions of the Rights Agreement are hereby ratified
and affirmed in their entirety.
4. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
5. This Amendment may be signed in any number of counterparts
each of which shall be deemed to be an original and all of which taken together
shall constitute one and the same instrument.
6. This Amendment constitutes the entire agreement of the
parties with respect to the amendment of the Rights Agreement and all prior or
contemporaneous agreements or understandings, verbal or written, with respect
thereto are hereby superseded by this Amendment.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above set forth.
CORAM HEALTHCARE CORPORATION
By: /s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
BANKBOSTON, N.A.
By: /s/ XXXXX XXXXXX
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Name: Xxxxx Xxxxxx
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Title: Director, Client Services
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Signature page of the Amendment No. 1 to
Stockholder Rights Agreement, dated as of
April 9, 1999, between CORAM HEALTHCARE
CORPORATION and BANKBOSTON, N.A., as Rights
Agent
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