AMENDMENT NO. 1 TO RIGHTS AGREEMENT
AMENDMENT NO. 1 TO RIGHTS AGREEMENT, dated as of February 9,
1997 (the "Amendment") by and between TheraTx, Incorporated, a Delaware
corporation (the "Company"), and U.S. Stock Transfer Corporation (the "Rights
Agent").
RECITALS
WHEREAS, the Company and the Rights Agent are parties to a
Rights Agreement dated as of July 28, 1995 (the "Rights Agreement");
WHEREAS, Vencor, Inc., a Delaware corporation ("Vencor"),
Peach Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Vencor ("Vencor Sub"), and the Company have entered into an Agreement and Plan
of Merger dated as of February 9, 1997 (the "Vencor Merger Agreement") pursuant
to which Vencor Sub will commence a tender offer for all outstanding shares of
the Company's Common Stock on the terms set forth in the Vencor Merger Agreement
(the "Offer") and, thereafter, will merge with and into the Company (the
"Merger");
WHEREAS, the Board of Directors of the Company (including a
majority of the Continuing Directors (as defined in the Rights Agreement)) has
approved the Vencor Merger Agreement, the Offer and the Merger; and
WHEREAS, pursuant to Section 27 of the Rights Agreement, the
Board of Directors of the Company has determined that an amendment to the Rights
Agreement as set forth herein is necessary and desirable to reflect the
foregoing and the Company and the Rights Agent desire to evidence such amendment
in writing.
Accordingly, the parties agree as follows:
1. Amendment of Section 1(a). Section 1(a) of the Rights
Agreement is hereby amended by adding the word "(i)" after the word "foregoing,"
in the third line on page 2 and by adding the following after the word
"Agreement" in the tenth line on page 2:
", and (ii) none of Vencor, Vencor Sub or any of their
respective Affiliates or Associates shall be deemed to be an "Acquiring
Person" for any purpose of this Agreement by virtue of (x) the
acquisition of Common Shares pursuant to the Offer or the Merger (each
as defined in the Vencor Merger Agreement), (y) the execution, delivery
and performance of the Vencor Merger Agreement, or (z) the consummation
of the transactions contemplated by the Vencor Merger Agreement in
accordance with the terms thereof."
2. Amendment of Section 1(l). Section 1(l) of the
Rights Agreement is hereby amended by adding the following sentence at the end
thereof:
"Notwithstanding anything in this Agreement to the contrary, a
Distribution Date shall not be deemed to have occurred as a result of
the announcement or occurrence of (i) the acquisition of Common Shares
by Vencor or Vencor Sub pursuant to the Offer or the Merger (each as
defined in the Vencor Merger Agreement), (ii) the execution, delivery
and performance of the Vencor Merger Agreement, or (iii) the
consummation of the transactions contemplated by the Vencor Merger
Agreement in accordance with the terms thereof."
3. Sections 1(gg), (hh) and (ii). The following
subsections are hereby added after Section 1(ff) of the Rights Agreement:
"(gg) "Vencor" shall mean Vencor, Inc., a Delaware corporation.
(hh) "Vencor Merger Agreement" shall mean the Agreement and
Plan of Merger dated as of February 9, 1997 by and among Vencor, Vencor
Sub and the Company, as it may be amended from time to time.
(ii) "Vencor Sub" shall mean Peach Acquisition Corp., a
Delaware corporation and a wholly-owned subsidiary of Vencor, or any
other direct or indirect wholly-owned subsidiary of Vencor that is
substituted for Vencor Sub pursuant to the Vencor Merger Agreement."
4. Amendment of Section 7(a). Section 7(a) of the Rights
Agreement is hereby amended by deleting the word "or" before the word "(iv)" in
the tenth line thereof and by adding the following words at the end of Section
7(a) "or (v) immediately prior to the Effective Time (as such term is defined in
the Vencor Merger Agreement)."
5. Amendment of Section 13. Section 13 of the Rights
Agreement is hereby amended by adding the following after subsection (d)
thereof:
"(e) Notwithstanding anything in this Section 13 or in this
Agreement to the contrary, neither the acquisition of Common Shares
pursuant to the Offer or the Merger (each as defined in the Vencor
Merger Agreement), nor the execution, delivery and performance of the
Vencor Merger Agreement or the consummation of the transactions
contemplated by the Vencor Merger Agreement in accordance with the
terms thereof (each, an "Excluded Transaction"), shall be deemed to be
a transaction described in clause (1), (2) or (3) of Section 13(a)
hereof and no Excluded Transaction shall cause the
Rights to be adjusted or exercisable in accordance with this Section
13."
6. Effectiveness. This Amendment shall be deemed
effective as of the date hereof. Except as amended hereby, the Rights
Agreement shall remain in full force and effect and shall be otherwise
unaffected by this Amendment.
7. Miscellaneous. This Amendment shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes shall
be governed by and construed in accordance with the laws of such state
applicable to contracts to be made and performed entirely within such state.
This Amendment may be executed in any number of counterparts, each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument. If any
provision, covenant or restriction of this Amendment is held by a court of
competent jurisdiction or other authority to be invalid, illegal or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amendment shall remain in full force and effect and shall
in no way be effected, impaired or invalidated.
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EXECUTED as of the date set forth above.
Attest: THERATX, INCORPORATED
/s/ Xxxxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxx
------------------------- ------------------------
Name: Xxxxxxxx X. Xxxxx Name: Xxxxxx X. Xxxx
Title: Vice President, Counsel Title: Senior Vice President and
and Secretary Chief Financial Officer
Attest: U.S. STOCK TRANSFER CORPORATION
/s/ Xxxxxxx Xxxxxx /s/ Xxxxxxx X. Xxxxx
------------------------- ------------------------
Name: Xxxxxxx Xxxxxx Name: Xxxxxxx X. Xxxxx
Title: Vice President Title: Vice President
