Exhibit 10.61
AMENDMENT NO. 1
TO
NOTE PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT (this "Amendment No. 1")
is entered into as of July 15, 1997, by and among Doctors Health System, Inc., a
Maryland corporation (the "Company"), Genesis Holdings, Inc., a Delaware
Corporation (the "Investor"), and Genesis Health Ventures, Inc., a Pennsylvania
corporation ("GHV").
WHEREAS, the Company has entered into a Preferred Stock Purchase
Agreement dated of even date herewith pursuant to which The Beacon Group III -
Focus Value Fund, L.P. will purchase and the Company will sell in the aggregate
3,000,000 shares of a newly created Series D Convertible Preferred Stock for an
aggregate purchase price of $30,000,000 (the "Transaction").
WHEREAS, in connection with the Transaction, the Company, Investor and
GHV desire to amend the Note Purchase Agreement dated as of January 31, 1997
(the "Note Purchase Agreement") to modify, among other things, (i) the
definition of the term "Maturity Date" set forth in the Note Purchase Agreement
and (ii) the method of calculating the Conversion Price (as defined in the Note
Purchase Agreement) under Section 2.5.4 of the Note Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company, Investor and GHV hereby agree as follows:
1. Defined Terms. For purposes of this Amendment No. 1, capitalized
terms not otherwise defined herein shall have the respective meanings set forth
in the Note Purchase Agreement (as amended hereby).
2. Interest. Section 2.3 of the Note Purchase Agreement is hereby
amended and restated in its entirety to read as follows:
"The aggregate unpaid principal amount of each Advance from time to
time outstanding shall bear interest from the date of such Advance
until paid in full, at an annual rate of interest equal to 11%.
Payment of all accrued interest shall be made by the Company on the
Maturity Date by issuing to the Investor the number of shares of
Series C Preferred derived by dividing (x) the aggregate dollar
amount of all such accrued interest by (y) 17.5. The issue price of
such shares of Series C Preferred shall be $17.50 per share."
3. Maturity Date. Section 2.4.1 of the Note Purchase Agreement is
hereby amended and restated in its entirety to read as follows:
"The entire outstanding principal amount of all Advances (the
"Outstanding Principal Amount") shall become absolutely due and
payable by the Company to the Investor on January 31, 1999, unless
Investor exercises its right to convert the Outstanding Principal
Amount into Series C Preferred in accordance with the terms hereof."
4. Conversion Price. Section 2.5.4 of the Note Purchase Agreement is
hereby amended and restated in its entirety to read as follows:
"For purposes hereof, the Conversion Price shall be the purchase
price per share for each issuance of Series C Preferred upon any
conversion pursuant to this Section 2.5 which results in a weighted
average price of all issued and outstanding shares of Series C
Preferred, including the shares issued in such conversion, of $17.50
per share.
5. Actions Prompting Redemption. Section 6.3 of the Note Purchase
Agreement is hereby deleted in its entirety from the Note Purchase Agreement.
6. Use of Proceeds. Section 6.4 of the Note Purchase Agreement is
hereby renumbered Section 6.3 and the second sentence of such renumbered Section
6.4 is hereby amended and restated in its entirety to read as follows:
"Without the approval of the Investor, the Company shall not use the
proceeds of any Advance (i) to redeem the Company's Series A
Preferred Stock, Series B Preferred Stock, Series D Preferred Stock
or any securities of the Company with dividend, redemption or
liquidation rights senior to the dividend, redemption or liquidation
rights of the Series C Preferred or (ii) to pay any dividends or
interest thereon."
7. Acquisition of Specialist Groups. Section 6.5 of the Note Purchase
Agreement is hereby deleted in its entirety from the Note Purchase Agreement.
8. No Material Change to Business Plan. Section 6.6 of the Note
Purchase Agreement is hereby deleted in its entirety from the Note Purchase
Agreement.
9. Reservation of Shares. Section 6.7 of the Note Purchase Agreement is
hereby renumbered Section 6.4
10. Definition of Series D Preferred Stock. The following new definition
of Series D Preferred Stock is hereby added to Exhibit A to the Note Purchase
Agreement:
"Series D Preferred Stock" means the Series D Preferred Stock of the
Company."
11. Execution in Counterparts. This Amendment No. 1 may be executed in
any number of counterparts, each of which shall be deemed to be an original, but
all of which taken together shall constitute one and the same instrument.
12. Other Terms Unchanged. The Note Purchase Agreement, as amended by
this Amendment No. 1, shall remain and continue in full force and effect, shall
continue to be binding on the Company, Investor, and GHV and is in all respects
ratified and confirmed hereby.
IN WITNESS WHEREOF, the Company, Investor and GHV have caused this
Amendment No. 1 to Note Purchase Agreement to be duly executed and delivered in
its name and on its behalf as of the date first written above.
COMPANY
DOCTORS HEALTH SYSTEM, INC.
By: /s/ Stewart B. Gold
-------------------------------------
Name: Stewart B. Gold
Title: President
INVESTOR
GENESIS HOLDINGS, INC.
By: /s/ Xxx X. Xxxxxxxxx
-------------------------------------
Name: Xxx X. Xxxxxxxxx
Title: General Counsel-Corporate
& Corporate Secretary
GHV
GENESIS HEALTH VENTURES, INC.
By: /s/ Xxxx X. XxXxxxxxx
-------------------------------------
Name: Xxxx X. XxXxxxxxx
Title: Senior Vice President-
Law and Public Policy
