FIRST AMENDMENT
TO
SECURITIES PURCHASE AGREEMENT
FIRST AMENDMENT (this "First Amendment") dated as of May 5, 2000, by
and among PROMEDCO MANAGEMENT COMPANY, a Delaware corporation (the "Company"),
GS CAPITAL PARTNERS III, L.P., a Delaware limited partnership ("GSCP"), and
certain affiliates of GSCP set forth on the signature page of this First
Amendment (the "GSCP Affiliates", and collectively with GSCP and including their
respective successors and assigns, the "Investors", and each individually, an
"Investor").
WHEREAS, the Company and the Investors previously entered into a
Securities Purchase Agreement (the "Securities Purchase Agreement") dated as of
January 13, 2000; and
WHEREAS, the Company and the Investors desire to amend the Securities
Purchase Agreement as set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Defined Terms; Interpretation. Unless otherwise specifically
defined herein, each term used herein which is defined in the Securities
Purchase Agreement has the meaning assigned to such term in the Securities
Purchase Agreement. Each reference to "hereof", "hereunder", "herein" and
"hereby" and each other similar reference and each reference to "this Agreement"
and each other similar reference contained in the Securities Purchase Agreement
shall from and after the effective date of this First Amendment refer to the
Securities Purchase Agreement as amended hereby, except in any instance in the
Securities Purchase Agreement where any such reference relates to the date of
the execution of the Securities Purchase Agreement in which instance such
reference shall relate to the Securities Purchase Agreement without giving
effect to this amendment.
SECTION 2. Amendments. The Securities Purchase Agreement is hereby
amended as follows:
(a) The second and third "Whereas" clauses are hereby amended and
restated in their entirety as follows:
WHEREAS, upon the terms and subject to the conditions set
forth in this Agreement, at the second closing (the "Second Closing"), the
Company wishes to issue and sell to the Investors, and the Investors wish to
purchase from the Company, an aggregate of 425,000 shares of the Company's
Series A Convertible Preferred Stock, par value $0.01 per share (the "Series A
Preferred Stock") and warrants (the "Warrants") to purchase up to 125,000 shares
of the Company's Series B Convertible Preferred Stock, par value $0.01 per share
(the "Series B Preferred Stock"; and together with the Series A Preferred Stock,
the "Preferred Stock"); and
WHEREAS, the Investors and the Company desire to provide for
the purchase and sale of the Notes, the GS Shares, the Series A Preferred Stock
and the Warrants and to establish certain rights and obligations in connection
therewith.
(b) The definitions of "Additional Financing" and "Certificate of
Designation" in Section 1.1 are hereby deleted.
(c) The following definitions from Section 1.1 are hereby amended and
restated in their entirety:
"Conversion Shares" shall mean the shares of Common Stock
issuable upon conversion of the Series A Preferred Stock and the Series B
Preferred Stock.
"Preferred Stock" shall mean the Series A Preferred Stock and
the Series B Preferred Stock.
"Second Closing Payment" shall be an amount in cash equal to
$795,000 payable to the Investors at the Second Closing as provided in Section
2.4.
"Shareholder Rights Plan" shall mean the Agreement, dated as
of February 18, 1997, between the Company and Xxxxxx Trust Company, as Rights
Agent, as amended.
"Standstill Period" shall mean the period from the date hereof
until the later of (i) the third anniversary of the date hereof and (ii) the
date on which GSCP and the GSCP Affiliates and Affiliates controlled by them
beneficially own, in the aggregate, a number of shares of Common Stock
constituting less than 10.0% of the Second Closing Ownership Amount (as such
ownership may be adjusted from time to time for stock splits, reverse stock
splits, dividends paid in Common Stock, reclassifications of the Common Stock,
and other similar events).
"Transaction Documents" shall mean this Agreement, the Notes,
the Warrant Agreement, the Voting Agreements, the Lock-up Agreements, the Series
A Certificate of Designation, the Series B Certificate of Designation, the
Registration Rights Agreement and all other contracts, agreements, schedules,
certificates and other documents being delivered pursuant to or in connection
with this Agreement or the transactions contemplated hereby or thereby.
(d) The following definitions are hereby added to Section 1.1:
"Amended and Restated Credit Agreement" shall have the meaning ascribed
thereto in Section 5.3.
"PIK Notes" shall have the meaning ascribed thereto in the
Notes.
"Series A Certificate of Designation" shall have the meaning
ascribed thereto in Section 2.6(a)(iv).
"Series B Certificate of Designation" shall have the meaning
ascribed thereto in Section 2.6(a)(v).
"Second Closing Ownership Amount" shall mean the number of
shares of Common Stock beneficially owned by the Investors as of the Second
Closing (excluding the number of shares of Common Stock issuable upon conversion
of the Series B Preferred Stock).
"Series A Preferred Stock" shall have the meaning ascribed
thereto in the recitals.
"Series B Preferred Stock" shall have the meaning ascribed
thereto in the recitals.
"Warrant Agreement" shall have the meaning ascribed thereto in
Section 2.6(a)(iii).
"Warrant Shares" shall mean the shares of Series B Preferred
Stock issuable upon exercise of the Warrants.
"Warrants" shall have the meaning ascribed thereto in the
recitals.
(e) The heading of Article II is hereby amended and restated in its
entirety as follows:
ARTICLE II
ISSUANCE AND SALE OF NOTES, GS SHARES, SERIES A PREFERRED STOCK AND WARRANTS
(f) Section 2.4 is hereby amended and restated in its entirety as
follows:
2.4. Second Issuance, Purchase and Sale. Upon the terms and
subject to the conditions set forth herein, at the Second Closing, the Company
shall issue and sell to each Investor, and each Investor shall purchase from the
Company, the number of shares of Series A Preferred Stock and Warrants set forth
opposite such Investor's name on the signature page of the First Amendment to
this Agreement (i) for an aggregate cash purchase price equal to $26,500,000,
minus the sum of (x) the Second Closing Payment, (y) any accrued and unpaid
interest on the Notes through and including the Second Closing Date and (z) the
aggregate principal amount of any PIK Notes issued to the Investors together
with any accrued and unpaid interest thereon through and including the Second
Closing Date (the "Second Closing Cash Purchase Price"), and (ii) in exchange
for all of the Notes and GS Shares issued to such Investor at the Initial
Closing (the transactions to occur at the Second Closing, the "Second
Purchase"); provided, that the Investors shall have the right to reallocate
among the Investors the Series A Preferred Stock and Warrants to be purchased by
each Investor by delivering written notice of such reallocation to the Company
not less than three days prior to the Second Closing so long as such
reallocation does not change the total number of Series A Preferred Stock and
Warrants being acquired hereunder or the Second Closing Purchase Price. The
Company and the Investors agree that for U.S. federal, state and local income
Tax purposes, the portion of the Second Closing Cash Purchase Price allocable to
the Warrants shall be $547,797. The Company and the Investors agree that they
shall not take any position inconsistent with any such allocation.
(g) Section 2.6(a) is hereby amended and restated in its entirety as
follows:
(a) At the Second Closing, the Company shall deliver to the Investors
the following:
(i) certificates representing the shares of Series A
Preferred Stock in the amounts set forth opposite such Investor's name
on the signature page to the First Amendment to this Agreement;
(ii) certificates representing the number of Warrants
being purchased by each Investor as set forth opposite such Investor's
name on the signature page to the First Amendment to this Agreement;
(iii) an executed copy of the Warrant Agreement, in
the form of Exhibit A to the First Amendment to this Agreement (the
"Warrant Agreement");
(iv) a copy of the Certificate of Designation of the
Series A Preferred Stock (the "Series A Certificate of Designation"),
as filed with the Secretary of State of the State of Delaware;
(v) a copy of the Certificate of Designation of the
Series B Preferred Stock (the "Series B Certificate of Designation"),
as filed with the Secretary of State of the State of Delaware;
(vi) a copy of the executed Amended and Restated
Credit Agreement and evidence, satisfactory to the Investors, that the
transactions contemplated thereunder shall have closed prior to or
simultaneously with the Second Closing;
(vii) an opinion of the Company's counsel, dated as
of the Second Closing Date, addressed to the Investors in the form of
Exhibit B to the First Amendment to this Agreement, which opinion shall
be satisfactory to the Investors;
(viii) a copy of the resolutions adopted by the Company's stockholders
at the Stockholders Meeting, which resolutions shall be satisfactory to the
Investors;
(ix) evidence, satisfactory to the Investors, that the Preferred
Designees have been appointed to the Board of Directors and that the Board of
Directors consists of ten directors effective as of the Second Closing;
(x) evidence, satisfactory to the Investors, that the Warrant Shares
have been reserved for issuance and delivery;
(xi) evidence, satisfactory to the Investors, that the Conversion
Shares have been reserved for issuance and delivery upon conversion of the
Preferred Stock;
(xii) copies of all third-party consents required to be obtained by the
Company prior to the Second Closing as set forth on Schedule 6.2(h), which
consents shall be satisfactory to the Investors;
(xiii) an Officers' Certificate, dated as of the Second Closing Date,
certifying that the conditions set forth in Sections 6.2(a) and 6.2(b) have been
satisfied; and
(xiv) such other instruments and documents as the Investors reasonably
request.
(h) Section 2.6(b)(ii) is hereby amended by adding the words "and any
PIK Notes issued to the Investors prior to the Second Closing" after the words
"Initial Closing".
(i) The heading and preamble of Article III is hereby amended and
restated in its entirety as follows:
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each Investor,
as of January 13, 2000 with respect to all representations and warranties and as
of May 5, 2000 with respect to all representations and warranties that were
modified by the First Amendment to this Agreement, and as of the Second Closing
Date with respect to all of the representations and warranties (to the extent
the Second Closing is consummated), as follows:
(j) Section 3.2 is hereby amended and restated in its entirety as
follows:
3.2. Due Authorization. The Company has all right, corporate
power and authority to enter into this Agreement and each of the other
Transaction Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by the Company of
this Agreement and each of the other Transaction Documents to which it is a
party, the issuance and sale of the Notes, the GS Shares, the Series A Preferred
Stock and the Warrants by the Company and the compliance by the Company with
each of the provisions of this Agreement and each of the other Transaction
Documents to which it is a party (including the reservation and issuance of the
Conversion Shares, the reservation and issuance of Warrant Shares, and the
consummation by the Company of the transactions contemplated hereby and thereby)
(a) are within the corporate power and authority of the Company and (b) have
been duly authorized by all requisite corporate proceedings on the part of the
Company, except for the approval by the stockholders of the Company referenced
in Section 5.6. The Board of Directors has determined that it is advisable and
in the best interest of the Company's stockholders for the Company to consummate
the issuance and sale of the Notes, the GS Shares, the Series A Preferred Stock
and the Warrants upon the terms and subject to the conditions set forth in this
Agreement, and has unanimously recommended that the Company's stockholders
approve the transactions referenced in Section 5.6. As of May 5, 2000, the Board
of Directors consists of eight directors and the Initial Noteholder Designee has
been duly appointed to serve as a member of the Board of Directors and the
Executive Committee of the Board of Directors as of January 20, 2000. This
Agreement has been, and each of the other Transaction Documents to which the
Company is a party when executed and delivered by the Company will be, duly and
validly executed and delivered by the Company, and this Agreement constitutes,
and each of such other Transaction Documents when executed and delivered by the
Company will constitute, a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, except as
enforceability against the Company may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar Laws now or hereafter in
effect relating to the rights of creditors generally. The GS Shares have been
duly and validly issued and are outstanding, fully paid and nonassessable. At
the Second Closing, the Conversion Shares will be validly reserved for issuance,
and upon issuance in accordance with the Series A Certificate of Designation and
Series B Certificate of Designation will be duly and validly issued and
outstanding, fully paid and nonassessable. At the Second Closing, the Warrant
Shares will be validly reserved for issuance, and upon issuance in accordance
with the terms of the Warrants will be duly and validly issued and outstanding,
fully paid and nonassessable.
(k) Section 3.3 is hereby amended and restated in its entirety as
follows:
3.3. Capitalization. As of January 13, 2000 and May 5, 2000,
the authorized capital stock of the Company consists of (i) 50,000,000 shares of
Common Stock, of which 21,732,423 shares are issued and outstanding and (ii)
20,000,000 shares of preferred stock, par value $0.01 per share, of which no
shares are issued and outstanding. All of the issued and outstanding shares of
Common Stock have been duly authorized and are validly issued, fully paid and
nonassessable. Other than the shares of Series A Preferred Stock to be issued to
the Investors at the Second Closing and the Warrant Shares, no shares of capital
stock of the Company are entitled to preemptive rights. Except as set forth on
Schedule 3.3, as disclosed in the SEC Reports or as contemplated by this
Agreement or the other Transaction Documents, there are no outstanding
subscription rights, options, warrants, convertible or exchangeable securities
or other rights of any character whatsoever relating to issued or unissued
capital stock of the Company, or any Commitments of any character whatsoever
relating to issued or unissued capital stock of the Company or pursuant to which
the Company or any of the Subsidiaries is or may become bound to issue or grant
additional shares of its capital stock or related subscription rights, options,
warrants, convertible or exchangeable securities or other rights, or to grant
preemptive rights. Except as set forth on Schedule 3.3, as disclosed in the SEC
Reports or as contemplated by this Agreement or the other Transaction Documents,
(i) the Company has not agreed to register any securities under the Securities
Act or under any state securities law or granted registration rights to any
Person or entity and (ii) there are no voting trusts, stockholders agreements,
proxies or other Commitments or understandings in effect to which the Company is
a party or of which it has Knowledge with respect to the voting or transfer of
any of the shares of Common Stock. Except as set forth on Schedule 3.3, to the
extent that any options, warrants or any of the other rights described above are
outstanding, neither the issuance and sale of the Notes, the GS Shares, the
Preferred Stock, the Warrants, nor the issuance of any Conversion Shares or the
Warrant Shares will result in an adjustment of the exercise or conversion price
or number of shares issuable upon the exercise or conversion of any such
options, warrants or other rights.
(l) Section 3.9 of the Securities Purchase Agreement is hereby amended
by adding the following
paragraph (c) to the end thereof:
(c) The Company has received all consents required to be
obtained prior to the execution and delivery of the First Amendment to this
Agreement including, without limitation, the consent of the Required Lenders
under the Credit Agreement to the transactions contemplated hereby and by the
other Transaction Documents. The Company has delivered to the Investors a
complete and correct copy of a commitment letter from General Electric Capital
Corporation relating to its agreement to purchase $20 million in aggregate
principal amount of the Company's Tranche B Term Notes under the Amended and
Restated Credit Agreement.
(m) Section 3.20 of the Securities Purchase Agreement is hereby amended
and restated in its entirety as follows:
3.20. Offering of the Notes, the GS Shares, the Series A
Preferred Stock and the Warrants. (a) It is not necessary in connection with the
offer, sale and delivery of the Notes, the GS Shares, the Series A Preferred
Stock or the Warrants to the Investors to register the Notes, the GS Shares, the
Series A Preferred Stock or the Warrants under the Securities Act. Until such
time as the exchange notes are issued pursuant to the Exchange and Registration
Rights Agreement or the Notes or exchange notes are otherwise registered
pursuant to an effective registration statement under the Securities Act, it is
not necessary to qualify an indenture relating to the Notes or exchange notes
under the TIA.
(b) The Company has not, directly or indirectly, offered, sold
or solicited any offer to buy and will not, directly or indirectly, offer, sell
or solicit any offer to buy, any security of a type or in a manner which would
be integrated with the sale of the Notes, the GS Shares, the Series A Preferred
Stock or the Warrants and require any of the Notes, the GS Shares, the Series A
Preferred Stock or the Warrants to be registered under the Securities Act. None
of the Company, its Affiliates or any person acting on its or any of their
behalf has engaged or will engage in any form of general solicitation or general
advertising (within the meaning of Rule 502(c) under the Securities Act) in
connection with the offering of the Notes, the GS Shares, the Preferred Stock or
the Warrants. With respect to any Notes, GS Shares, Series A Preferred Stock or
Warrants, if any, sold in reliance upon the exemption afforded by Regulation S:
(i) none of the Company, its Affiliates or any person acting on its or their
behalf has engaged or will engage in any directed selling efforts within the
meaning of Regulation S and (ii) each of the Company and its Affiliates and any
Person acting on its or their behalf has complied and will comply with the
offering restrictions set forth in Regulation S.
(c) The Notes are eligible for resale pursuant to Rule 144A
and will not, as of the date hereof, be of the same class as securities listed
on a national securities exchange registered under Section 6 of the Exchange Act
or quoted on a U.S. automated interdealer quotation system.
(n) Section 3.22 is hereby amended and restated in its entirety as
follows:
3.22. Solvency. The Company is not, and after giving effect to
the issuance and sale of the Notes, the GS Shares, the Series A Preferred Stock
and the Warrants, and the exercise of the Warrants and the purchase of the
Warrant Shares in connection therewith, and the application of the proceeds
therefrom will not be, insolvent within the meaning of Title 11 of the United
States Code or any comparable state law provision.
(o) Section 4.1 is hereby amended and restated in its entirety as
follows:
4.1. Acquisition for Investment. Such Investor is acquiring the Notes,
the GS Shares, the Series A Preferred Stock and the Warrants for its own
account, for investment and not with a view to the distribution thereof within
the meaning of the Securities Act.
(p) Section 4.2 is hereby amended and restated in its entirety as
follows:
4.2. Restricted Securities. Such Investor understands that (i)
the Notes, the GS Shares, the Series A Preferred Stock and the Warrants will not
be registered under the Securities Act or any state securities laws by reason of
their issuance by the Company in a transaction exempt from the registration
requirements thereof and (ii) the Notes, the GS Shares, the Series A Preferred
Stock, the Warrants, the Conversion Shares and the Warrant Shares, may not be
sold unless such disposition is registered under the Securities Act and
applicable state securities laws or is exempt from registration thereunder.
(q) Section 5.1(iii) is hereby amended by deleting the words
"Certificate of Designation" and inserting in place thereof the words "Series A
Certificate of Designation and Series B Certificate of Designation".
(r) Section 5.3 is hereby amended and restated in its entirety as
follows:
5.3. Bank Financing. Prior to or concurrently with the Second
Closing, the Company shall have entered into an amended and restated credit
agreement with its lenders on terms satisfactory to the Investors in their sole
discretion (the "Amended and Restated Credit Agreement"), and the closing
thereunder shall have occurred. Without limiting the generality of the
foregoing, the Amended and Restated Credit Agreement shall provide, among other
things, for (i) a commitment from General Electric Capital Corporation to
purchase $20 million in aggregate principal amount of the Company's Tranche B
Term Notes; and (ii) Bank of America, N.A.'s revolving credit commitment to be
increased by at least $5 million from its existing revolving credit commitment
under the Credit Agreement. In determining whether the Amended and Restated
Credit Agreement is satisfactory to the Investors in their sole discretion, the
Investors shall not be deemed to have accepted or agreed to any terms contained
in any draft documents or term sheets disclosed to the Investors prior to the
execution and delivery of the First Amendment to this Agreement.
(s) Section 5.6 is hereby amended and restated in its entirety as
follows:
5.6. Proxy Statement; Stockholders Meeting. The Company shall
hold the Stockholders Meeting as soon as practicable after the date hereof for
the purpose of acting upon this Agreement and the transactions to be consummated
at the Second Closing to the extent requiring stockholder approval, including,
without limitation, the issuance and sale of the Series A Preferred Stock and
the Warrants to the Investors; provided, however, that at the request of GSCP,
the Company shall adjourn the Stockholders Meeting from time to time until all
of the conditions set forth in Article VI (other than the condition set forth in
Section 6.1(c) and other than those conditions that by their nature are to be
satisfied at the Second Closing) are satisfied or waived, such that the
Stockholders Meeting shall take place on the same day as the Second Closing in
accordance with Section 2.5. The Company shall recommend that its stockholders
approve this Agreement and the transactions contemplated hereby requiring such
stockholder approval. The Company and the Investors shall cooperate in the
preparation of the Proxy Statement to be mailed to the Company's stockholders in
connection with the solicitation of such approval and shall use their reasonable
best efforts to take, or cause to be taken, all actions necessary to prepare the
Proxy Statement, file the Proxy Statement with the SEC and respond to any
comments it may have, and distribute the Proxy Statement to the Company's
stockholders as expeditiously as practicable; provided, that the Company shall
file the Proxy Statement with the SEC no later than January 31, 2000 and the
Company shall file a supplement to the Proxy Statement in connection with the
execution of the First Amendment to this Agreement no later than May 15, 2000.
The Company shall give the Investors a reasonable opportunity to review and
comment on the Proxy Statement and related communications with stockholders of
the Company, and the Investors shall have the right to consent to any
descriptions of or references to (i) the Investors or any of their Affiliates,
and (ii) the Transaction Documents and the other agreements executed
concurrently therewith and the transactions contemplated thereby in the Proxy
Statement or such communications, which consent shall not be unreasonably
withheld or delayed.
(t) Section 5.9(b) is hereby amended and restated in its entirety as
follows:
(b) From the Second Closing Date and for so long as the
Investors and their Affiliates collectively beneficially own not less than (i)
66 2/3% of the Second Closing Ownership Amount (as such ownership may be
adjusted for stock splits, reverse stock splits, dividends paid in Common Stock,
reclassifications of the Common Stock, and other similar events), GSCP shall
have the right to designate, at all times and from time to time, three directors
of the Company; (ii) 33 1/3% of the Second Closing Ownership Amount (as such
ownership may be adjusted for stock splits, reverse stock splits, dividends paid
in Common Stock, reclassifications of the Common Stock, and other similar
events), GSCP shall have the right to designate, at all times and from time to
time, two directors of the Company; and (iii) 10.0% of the Second Closing
Ownership Amount (as such ownership may be adjusted for stock splits, reverse
stock splits, dividends paid in Common Stock, reclassifications of the Common
Stock, and other similar events), GSCP shall have the right to designate, at all
times and from time to time, one director of the Company (individuals designated
pursuant to this paragraph, the "Preferred Designees", and together with the
Noteholder Designees, the "Investor Designees"). The Initial Preferred Designees
elected pursuant to paragraph (c) below and the Initial Noteholder Designee
elected prior to the Initial Closing shall be the initial Preferred Designees.
(u) Section 5.9(f) is hereby amended and restated in its entirety as
follows:
(f) After the date hereof, without the prior written consent
of GSCP, the Board of Directors (i) shall not consist of more than eight members
so long as the Investors and their Affiliates own any Notes and (ii) shall not
consist of more than ten members so long as the Investors and their Affiliates
beneficially own at least 10.0% of Second Closing Ownership Amount (as such
ownership may be adjusted for stock splits, reverse stock splits, dividends paid
in Common Stock, reclassifications of the Common Stock, and other similar
events).
(v) Section 5.10 is hereby amended and restated in its entirety as
follows:
5.10. Certificates of Designation. The Series A Certificate of
Designation, in the form of Exhibit C to the First Amendment to this Agreement,
and the Series B Certificate of Designation, in the form of Exhibit D to the
First Amendment to this Agreement, set forth the terms, designations, powers,
preferences and relative participation, optional and other special rights,
qualifications, limitations and restrictions of the Series A Preferred Stock and
the Series B Preferred Stock, respectively. The Company shall, prior to or
concurrently with the Second Closing, cause the Series A Certificate of
Designation and Series B Certificate of Designation to be filed with the
Secretary of State of the State of Delaware.
(w) Section 5.15 is hereby amended and restated as follows:
5.15. Transfer Taxes. The Company shall be responsible for any
Liability with respect to any transfer, stamp or similar Taxes that may be
payable in connection with the execution, delivery and performance of this
Agreement including, without limitation, any such Taxes with respect to the
issuance or transfer of the Notes, the GS Shares, the Series A Preferred Stock,
the Warrants, the Conversion Shares or the Warrant Shares.
(x) Section 5.16(a) is hereby amended and restated as follows:
(a) So long as any Notes, GS Shares, Preferred Stock, Warrants
or Conversion Shares are outstanding, the Company shall file all reports
required to be filed by it under the Securities Act and the Exchange Act and
after the Second Closing, shall take such further action as the Investors may
reasonably request, all to the extent required to enable the Investors to sell
any of the foregoing securities pursuant to and in accordance with Rule 144.
Such action shall include, but not be limited to, making available adequate
current public information meeting the requirements of paragraph (c) of Rule
144. During the period of two years following the Initial Closing, the Company
shall not, and shall not permit any of its Affiliates to, resell any of the
Notes which constitute "restricted securities" under Rule 144 that have been
reacquired by any of them.
(y) Section 5.18(a) is hereby amended and restated as follows:
(a) From the Second Closing Date and for so long as the
Investors collectively beneficially own not less than 10.0% of the total number
of shares of Common Stock outstanding from time to time, in the event the
Company proposes to issue any capital stock of any kind (including any Common
Stock, preferred stock, warrants, options or securities or units comprising
securities convertible into or exchangeable for Common Stock or preferred stock
or rights to acquire the same) of the Company, other than (1) pursuant to an
employee or non-management director stock option plan, stock bonus plan, stock
purchase plan or other management equity program or plan, (2) pursuant to any
merger, share exchange or acquisition pursuant to which shares of Common Stock
are exchanged for, or issued upon cancellation or conversion of, equity
securities of an entity engaged primarily in, or to acquire assets primarily for
use in, the business conducted by the Company and the Subsidiaries or a business
reasonably related to the business conducted by the Company and the
Subsidiaries, or (3) securities issuable upon exercise of previously issued
warrants, options or other rights to acquire capital stock or upon conversion of
previously issued securities convertible into capital stock, then the Company
shall:
(i) deliver to the Investors written notice setting forth in reasonable
detail (1) the terms and provisions of the securities proposed to be issued (the
"Proposed Securities"); (2) the price and other terms of the proposed sale of
such securities; (3) the amount of such securities proposed to be issued; and
(4) such other information as the Investors may reasonably request in order to
evaluate the proposed issuance; and
(ii) offer to issue to the Investors in the aggregate a portion of the
Proposed Securities equal to a percentage determined by dividing (x) the number
of shares of Common Stock beneficially owned by the Purchasers (assuming
exercise of the Warrants (and conversion of the Warrant Shares upon exercise of
the Warrants into Common Stock) and conversion of all of the shares of Series A
Preferred Stock into Common Stock), by (y) the total number of shares of Common
Stock then outstanding.
The Investors must exercise the purchase rights hereunder within ten business
days after receipt of such notice from the Company.
(z) Section 5.19(a) is hereby amended by deleting the words "the
Investors" and inserting in place thereof the words "GSCP and the GSCP
Affiliates".
(aa) Section 5.19(a)(A) is hereby amended by deleting the words "the
Investors" and inserting in place thereof the words "GSCP and the GSCP
Affiliates".
(bb) Section 5.19(a)(B) is hereby amended by deleting the words "the
Investors or the Investor Designees" and inserting in place thereof the words
"GSCP and the GSCP Affiliates or Investor Designees appointed by GSCP".
(cc) Section 5.19(b) is hereby amended by inserting the words "Series
A" before the words "Certificate of Designation".
(dd) Section 5.20 is hereby amended by inserting the words "Series A"
before the words "Preferred
Stock".
(ee) Section 5.22 is hereby amended and restated in its entirety as
follows:
5.22. Use of Proceeds. The proceeds from the sale of the Notes, the GS
Shares, the Series A Preferred Stock and the Warrants shall be used for general
corporate purposes as shall be determined by the Board of Directors.
(ff) Section 6.1(c) is hereby amended and restated as follows:
(c) the issuance of the Series A Preferred Stock and the
Warrants to the Investors in connection with the Second Purchase shall have been
approved and adopted by the requisite vote of the stockholders of the Company in
accordance with applicable NASDAQ rules and the Company's certificate of
incorporation and by-laws.
(gg) Section 6.2(a) is hereby amended and restated as follows:
(a) each of the representations and warranties of the Company
contained in this Agreement shall be true and correct (disregarding for this
purpose all references in such representations and warranties to any
materiality, Material Adverse Effect, Knowledge or similar qualifications) when
made (other than representations and warranties that were modified by the First
Amendment to this Agreement, which shall be true and correct as of May 5, 2000)
and as of the Second Closing (except to the extent such representations and
warranties are made as of a particular date, in which case such representations
and warranties shall have been true and correct in all material respects as of
such date), except for failures to be true and correct which individually or in
the aggregate would not reasonably be expected to have a Material Adverse
Effect;
(hh) Section 6.2(c) is hereby amended by deleting the words
"Certificate of Designation" and inserting in place thereof "Series A
Certificate of Designation and Series B Certificate of Designation".
(ii) Section 6.2(e) is hereby amended and restated in its entirety as
follows:
(e) the Company shall have entered into the Amended and
Restated Credit Agreement on terms satisfactory to the Investors in their sole
discretion as provided in Section 5.3 hereof, and the closing of the
transactions contemplated thereunder shall occur prior to or simultaneously with
the Second Closing;
(jj) Section 6.2(h) is hereby amended by deleting the word "and" at the
end thereof.
(kk) Section 6.2(i) is hereby amended by deleting clause (i) thereof
and inserting in place
thereof the following:
(i) the Warrant Shares shall have been duly authorized and reserved for
issuance;
(j) the Company shall have paid in full all interest that is due and
payable under the Notes; and
(k) the Company shall have made the deliveries set forth in Section
2.6(a) hereof.
(ll) Section 7.1(b) is hereby amended and restated in its entirety as
follows:
(b) by either the Investors or the Company if the Second Closing shall
not have been
consummated by June 15, 2000; or
(mm) Section 8.5(c) is hereby amended and restated in its entirety as
follows:
(c) The parties agree to treat any indemnification payments
made by the Company pursuant to this Agreement for Tax purposes as adjustments
to the purchase price of the Notes, the GS Shares, the Series A Preferred Stock
or the Warrants, as the case may be.
(nn) Section 9.1 is hereby amended by deleting the words "$700,000" and
inserting in place thereof "$800,000".
(oo) Section 9.3 is hereby amended by adding the words ", the Warrants"
immediately after the words "GS Shares".
(pp) Section 9.5 is hereby amended by adding the words ", the Warrants"
immediately after each instance in which the words "GS Shares" appear therein.
(qq) The references on the signature to the Securities Purchase
Agreement as to the number of shares of Preferred Stock each Investor is
purchasing at the Second Closing are hereby deleted.
SECTION 3. Counterparts; Effectiveness. This Amendment may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Amendment shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
SECTION 4. Miscellaneous. Except as expressly set forth in this
Amendment, the Securities Purchase Agreement shall otherwise remain unchanged
and in full force and effect and remain binding upon the parties hereto.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment or have caused this Amendment to be duly executed by their respective
authorized officers as of the day and year first above written.
PROMEDCO MANAGEMENT COMPANY
By:
Name:
Title:
GS CAPITAL PARTNERS III, L.P.
$_______ Notes
By: GS Advisors III, L.L.C.,
its general partner
By: _____________________
Name:
Title:
GS CAPITAL PARTNERS III OFFSHORE, L.P.
By: GS Advisors III, L.L.C.,
its general partner
By: _____________________
Name:
Title:
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XXXXXXX, XXXXX & CO.
VERWALTUNGS GMBH
By: _____________________
Name:
Title:
and
By: _____________________
Name:
Title:
XXXXX XXXXXX XXXX 0000, X.X.
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By: Stone Street 2000, L.L.C.,
its general partner
By: _____________________
Name:
Title:
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