VOTING AGREEMENT
VOTING AGREEMENT ("Agreement") dated as of March 31, 1995, between
Horizon Healthcare Corporation, a Delaware corporation ("Acquiror"), and the
undersigned stockholders (collectively, the "Stockholders") of Continental
Medical Systems, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Stockholders beneficially own an aggregate of 3,440,239
shares (together with any additional shares as to which beneficial ownership
is acquired by any member of the Stockholder Group described below, the
"Company Shares") of Common Stock, par value $.01 per share ("Company Common
Stock"), of the Company.
WHEREAS, Acquiror is prepared to enter into an Agreement and Plan of
Merger with the Company (the "Merger Agreement") providing for the merger of
a wholly owned subsidiary of Acquiror into the Company and the conversion in
such merger of each share of Company Common Stock into the number of shares
of the Common Stock, par value $.001 per share, of Acquiror set forth in the
Merger Agreement (the "Merger");
WHEREAS, the Stockholders fully support the Merger and, in order to
encourage Acquiror to enter into the Merger Agreement with the Company, the
Stockholders are willing to enter into certain arrangements with respect to
the Company Shares;
NOW THEREFORE, in consideration of the premises set forth above, the
mutual promises set forth below, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. STOCKHOLDERS' SUPPORT OF THE MERGER. From the date hereof until March
31, 1996, or, if earlier, termination of the Merger Agreement:
(a) No Stockholder or any corporation or other person controlled
by any Stockholder or any affiliate or associate thereof, other than the
Company and its subsidiaries (collectively, the "Stockholder Group"),
will, directly or indirectly, sell, transfer, pledge or otherwise
dispose of, or grant a proxy with respect to, any Company Shares to any
person other than Acquiror or its designee, or grant an option with
respect to any of the foregoing, or enter into any other agreement or
arrangement with respect to any of the foregoing.
(b) No Stockholder or any other member of the Stockholder Group will
initiate, solicit or encourage (including by way of furnishing information
or assistance), or take any other action to facilitate, any inquiries or
the making of any proposal relating to, or that may
reasonably be expected to lead to, any merger, consolidation, share
exchange, business combination or similar transaction involving the
Company or any of its subsidiaries or the acquisition in any manner,
directly or indirectly, of a material equity interest in any voting
securities of, or a substantial portion of the assets of, the Company
or any of its Significant Subsidiaries, other than the transactions
contemplated by this Agreement (a "Competing Transaction"), or enter
into discussions or negotiate with any person or entity in furtherance
of such inquiries or to obtain a Competing Transaction, or agree to, or
endorse, any Competing Transaction, or authorize or permit any of the
officers, directors or employees of any Stockholder or any member of
the Stockholder Group or any investment banker, financial advisor,
attorney, accountant or other representative retained by any Stockholder
or any other member of the Stockholder Group to take any such action.
Each Stockholder shall promptly notify Acquiror of all relevant terms of
any such inquiries or proposals received by such Stockholder or any other
member of the Stockholder Group or by any such officer, director,
employee, investment banker, financial advisor, attorney, accountant or
other representative relating to any of such matters and if such inquiry
or proposal is in writing, such Stockholder shall deliver or cause to be
delivered to Acquiror a copy of such inquiry or proposal.
(c) The Stockholders agree that the Stockholders will vote, and will
cause each member of the Stockholder Group to vote, all Company Shares
beneficially owned by such persons (i) in favor of the Merger and (ii)
subject to the provisions of paragraph (d) below, against any combination
proposal or other matter that may interfere or be inconsistent with the
Merger (including without limitation a Competing Transaction).
(d) The Stockholders agree that, if requested by Acquiror, it will
not, and it will cause each member of the Stockholder Group not to, attend
or vote any Company Shares beneficially owned by any such person at any
annual or special meeting of stockholders, or execute any written consent
of stockholders, during such period.
(e) The Stockholders shall take all affirmative steps reasonably
requested by Acquiror to indicate their full support for the Merger, and
hereby consent to Acquiror's announcement in any press release, public
filing, advertisement or other document, that the Stockholders fully
support the Merger.
(f) Acquiror and the Stockholders agree that they shall use all
reasonable efforts to seek the successful completion of the Merger in an
expeditious manner.
(g) To the extent inconsistent with the provisions of this
Section 2, each member of the Stockholder Group hereby revokes any and
all proxies with respect to such member's Company Shares or any other
voting securities of the Company.
Nothing in this Agreement shall be deemed to prohibit any Stockholder
from acting in accordance with such Stockholder s fiduciary duties solely to
the extent that such Stockholder is acting in the capacity of officer or
director of the Company.
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2. MISCELLANEOUS
(a) The Stockholders, on the one hand, and Acquiror, on the other,
acknowledge and agree that irreparable damage would occur if any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches
of the provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court of the United States or any state thereof
having jurisdiction, in addition to any other stockholder to which they may
be entitled at law or equity.
(b) Descriptive headings are for convenience only and shall not control
or affect the meaning or construction of any provision of this Agreement.
(c) All notices, consents, requests, instructions, approvals and other
communications provided for herein shall be validly given, made or served, if
in writing and delivered personally, by telecopier or sent by registered
mail, postage prepaid:
If to Acquiror:
Horizon Healthcare Corporation
6001 Indian School Road, N.E., Suite 530
Albuquerque, N.M. 87110
Attention: Chairman of the Board
Telecopier No.: (505) 881-5097
with a copy to:
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin
Houston, Texas 77002-6760
Attention: William E. Joor III
Telecopier No.: (713) 758-2346
and
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019-6150
Attention: Barry A. Bryer
Telecopier No: (212) 403-2000
If to the Stockholders:
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c/o Rocco A. Ortenzio
Continental Medical Systems, Inc.
P. O. Box 715
600 Wilson Lane
Mechanicsburg, PA 17055
Attention: General Counsel
Telecopier No.: (717) 790-9974
with a copy to:
Drinker Biddle & Reath
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, Pennsylvania 19107-3496
Attention: F. Douglas Raymond III
Telecopier No.: (215) 988-2757
or to such other address or telecopier number as any party may, from time to
time, designate in a written notice given in a like manner. Notice given by
telecopier shall be deemed delivered on the day the sender receives
telecopier confirmation that such notice was received at the telecopier
number of the addressee. Notice given by mail as set out above shall be
deemed delivered three days after the date the same is postmarked.
(d) From and after the termination of this Agreement, the covenants of
the parties set forth herein shall be of no further force or effect and the
parties shall be under no further obligation with respect thereto.
(e) DEFINITIONS. For purposes of this Agreement, the following terms
shall have the following meanings:
(i) AFFILIATE. "Affiliate" shall have the meaning ascribed to it
in Rule 12b-2 of the General Rules and Regulations under the Exchange Act,
as in effect on the date hereof.
(ii) BENEFICIAL OWNER. A person shall be deemed a "beneficial owner"
of or to have "beneficial ownership" Company Shares in accordance with the
interpretation of the term "beneficial ownership" as defined in Rule
13-d(3) under the Exchange Act, as in effect on the date hereof, provided
that a person shall be deemed to be the beneficial owner of, and to have
beneficial ownership of, Company Shares that such person or any Affiliate
of such person has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights,
exchange rights, warrant or options, or otherwise.
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(iii) MERGER. "Merger" shall mean the transaction referred to in the
second whereas clause of this Agreement, or any amendment to or
modification does not reduce the value of the financial consideration to
be received by Stockholders pursuant to the transaction set forth in the
Merger Agreement.
(iv) PERSON. A "person" shall mean any individual, firm,
corporation, partnership, trust, limited liability company or other
entity.
(v) SIGNIFICANT SUBSIDIARY. "Significant Subsidiary" shall have
the meaning ascribed to it in Rule 1-02 of SEC Regulation S-X as in
effect on the date hereof.
(g) DUE AUTHORIZATION; NO CONFLICTS. The Stockholders hereby represent
and warrant to Acquiror as follows: the Stockholders have full power and
authority to enter into this Agreement. Neither the execution or delivery of
this Agreement nor the consummation of the transactions contemplated herein
will (a) conflict with or result in a breach, default or violation of (i) any
of the terms, provisions or conditions of the Certificate of Incorporation or
Bylaws of any member of the Stockholder Group or (ii) any agreement, proxy,
document, instrument, judgment, decree, order, governmental permit,
certificate, license, law, statute, rule or regulation to which any member of
the Stockholder Group is a party or to which it is subject, (b) result in the
creation of any lien, charge or other encumbrance on any shares of Company
Common Stock or (c) require any member of the Stockholder Group to obtain the
consent of any private nongovernmental third party. No consent, action,
approval or authorization of, or registration, declaration or filing with,
any governmental department, commission, agency or other instrumentality or
any other person or entity is required to authorize, or is otherwise required
in connection with, the execution and delivery of this Agreement or any
Stockholder's performance of the terms of this Agreement or the validity or
enforceability of this Agreement.
(h) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective heirs,
personal representatives, successors, assigns and Affiliates, but shall not
be assignable by any party hereto without the prior written consent of the
other parties hereto.
(i) WAIVER. No party may waive any of the terms or conditions of this
Agreement except by a duly signed writing referring to the specific provision
to be waived.
(j) GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware.
(k) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement,
and supersedes all other and prior agreements and understandings, both
written and oral, among the parties hereto and their Affiliates.
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(l) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Stockholders and Acquiror have each caused this
Agreement to be duly executed by their respective officers, each of whom is
duly authorized, all as of the day and year first above written.
HORIZON HEALTHCARE CORPORATION
By: /s/ NEAL ELLIOTT
-------------------------------------
Neal Elliott
Chairman of the Board and President
STOCKHOLDERS:
/s/ ROCCO A. ORTENZIO
----------------------------------------
Rocco A. Ortenzio
/s/ ROBERT A. ORTENZIO
----------------------------------------
Robert A. Ortenzio
LIBERTY INVESTORS, INC.
By /s/ GEORGE P. WARREN, JR.
--------------------------------------
Name: George P. Warren, Jr.
Title: Vice President
HEALTHCARE INVESTORS, INC.
By /s/ GEORGE P. WARREN, JR.
--------------------------------------
Name: George P. Warren, Jr.
Title: Vice President
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