EXHIBIT 3 - FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT
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: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer
GS CAPITAL PARTNERS III, L.P.
315,858 shares of Series A Preferred
By: GS Advisors III, L.L.C., Stock
its general partner
By: /s/ Xxxx X. Xxxxxx
------------------------------- 92,899 Warrants
Name: Xxxx X. Xxxxxx
Title: Vice President
GS CAPITAL PARTNERS III OFFSHORE, L.P.
86,833 shares of Series A Preferred
By: GS Advisors III, L.L.C., Stock
its general partner
By: /s/ Xxxx X. Xxxxxx
------------------------------- 25,539 Warrants
Name: Xxxx X. Xxxxxx
Title: Vice President
XXXXXXX, XXXXX & CO.
VERWALTUNGS GMBH 14,582 shares of Series A Preferred
Stock
By: /s/ Xxxxxxx X. X'Xxxxx
------------------------------- 4,289 Warrants
Name: Xxxxxxx X. X'Xxxxx
Title: Managing Director
and
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Registered Agent
XXXXX XXXXXX XXXX 0000, X.X.
By: Stone Street 2000, L.L.C., 7,727 shares of Series A Preferred
its general partner Stock
By: /s/ Xxxx X. Xxxxxx
------------------------------- 2,273 Warrants
Name: Xxxx X. Xxxxxx
Title: Vice President
