AMENDMENT NO. 1 TO
RIGHTS AGREEMENT
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Amendment No. 1 (this "Amendment"), dated as of January 13, 2000,
to the Rights Agreement, dated as of February 18, 1997 (the "Rights
Agreement"), between ProMedCo Management Company, a Delaware corporation
(the "Company") and Xxxxxx Trust and Savings Bank, an Illinois Banking
Corporation (the "Rights Agent"), at the direction of the Company.
WHEREAS, pursuant to Section 27 of the Rights Agreement, the
Company and the Rights Agent may from time to time supplement or amend the
Rights Agreement in accordance with Section 27 thereof;
WHEREAS, all acts and things necessary to make this Amendment
valid and enforceable have been performed and done; and
WHEREAS, on December 27, 1999 the Board of Directors resolved
to adopt this Amendment No. 1 to Rights Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, that the Rights Agreement is hereby amended as
follows:
1. Section 1(a) of the Rights Agreement is hereby amended to read
in its entirety as follows:
"Acquiring Person" shall mean, subject to the next sentence,
any Person (as such term is hereinafter defined) who or which,
together with any Affiliates and Associates of such Person, shall
be the Beneficial Owner (as such term is hereinafter defined) of
15% or more of the then outstanding Common Shares.
Notwithstanding the foregoing, (A) the term "Acquiring Person"
shall not include (i) the Company, (ii) any Subsidiaries of the
Company, (iii) any employee benefit plan of the Company or of any
Subsidiaries of the Company, (iv) any Person or entity organized,
appointed or established by the Company for or pursuant to the
terms of any such plan, or (v) any of the Goldman Stockholders
(as such term is hereinafter defined), unless such Goldman
Stockholders subsequently become the Beneficial Owner of more
than the Grandfathered Amount of Common Shares and (B) no Person
shall be deemed to be an Acquiring Person, either (x) as a result
of the acquisition of Common Shares by the Company which, by
reducing the number of Common Shares outstanding, increases the
proportional number of Common Shares beneficially owned by such
Person together with all Affiliates and Associates of such
Person; except that if (1) a Person would become an Acquiring
Person (but for the operation of this sub clause (x)) as a result
of the acquisition of Common Shares by the Company and (2) after
such share acquisition by the Company, such Person, or an
Affiliate or Associate of such Person, becomes the Beneficial
Owner of any additional Common Shares, then such Person shall be
deemed an Acquiring Person, or (y) if (1) within 8 days after
such Person would otherwise have become an Acquiring Person (but
for the operation of this sub-clause (y)), such Person notifies
the Board of Directors that such Person did so inadvertently and
(2) within 2 days after such notification, such Person divests a
sufficient number of Common Shares so that such Person is the
Beneficial Owner of less than 15% of the outstanding Common
Shares following such divestiture.
2. Section 1(f) of the Rights Agreement is hereby amended to read
in its entirety as follows:
"Common Shares" when used with reference to the Company shall
mean the shares of Common Stock, par value $0.01 per share, of the Company
and securities convertible into or exchangeable for shares of such Common
Stock. "Common Shares" when used with reference to any Person other than
the Company shall mean the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person.
3. The following definitions are hereby added to Section 1:
"Goldman Stockholders" shall mean each of GS Capital
Partners III, L.P., GS Capital Partners III Offshore, L.P.,
Xxxxxxx, Xxxxx & Co. Xxxxxxxxxxx Xxxx, Xxxxx Xxxxxx Xxxx 0000,
LLC and their respective Affiliates, Associates, successors and
assigns and each of their respective, partners, stockholders,
members, officers and directors.
"Grandfathered Amount" shall mean, with respect to the
Goldman Stockholders, as of any date, an amount equal to the sum
of (i) all Common Shares of the Company beneficially owned by the
Goldman Stockholders as of January 13, 2000, (ii) all Common
Shares the Goldman Stockholders become the Beneficial Owner of
after January 13, 2000, pursuant to, and in accordance with the
terms of, the Securities Purchase Agreement (the "Securities
Purchase Agreement"), dated as of January 13, 2000, by and among
the Company and the Investors (as defined therein) and the other
Transaction Documents (as defined therein) entered into in
connection therewith, (iii) Ordinary Course Broker Dealer Shares,
and (iv) an additional 1,400,000 Common Shares (other than
Ordinary Broker Dealer Shares).
"Ordinary Course Broker Dealer Shares" shall mean Common
Shares, the beneficial ownership of which is acquired in
connection with the activities of a broker or dealer registered
under Section 15 of the Exchange Act, including, but not limited
to, the acquisitions of beneficial ownership of such shares as a
result of any market-making or underwriting activities (including
any shares acquired for the investment account of a broker or
dealer in connection with such underwriting activities), or the
acquisition of Common Shares as a result of the exercise of
investment or voting discretion authority with respect to any of
its customer accounts, or the acquisition in good faith of such
shares in connection with a debt previously contracted.
4. Section 27 of the Rights Agreement is hereby amended to read
in its entirety as follows:
The Company may from time to time supplement or amend this
Agreement without the approval of any holders of Right
Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, or to make any
other provisions with respect to the Rights which the Company may
deem necessary or desirable, any such supplement or amendment to
be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any
Person becomes an Acquiring Person, this Agreement shall not be
amended in any manner which would adversely affect the interests
of the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of such person). Without limiting the
foregoing, the Company may at any time prior to such time as any
Person becomes an Acquiring Person amend this Agreement to lower
the thresholds in Sections 1(a) and 3 hereof to not less than the
greater of (x) the sum of .001% and the largest percentage of the
outstanding Common Shares then known by the Company to be
beneficially owned by any Person (other than the Company, or any
Subsidiary of the Company, or any entity holding Common Shares
for or pursuant to the terms of any such plan) and (y) 10%.
Notwithstanding anything in this Agreement to the contrary, (i)
no supplement or amendment that changes the rights and duties of
the Rights Agent under this Agreement shall be effective without
the written consent of the Rights Agent and (ii) the Company
shall not amend, modify or supplement any provision of this
Agreement which adversely affects the rights and benefits of any
Goldman Stockholder under any such provision in any such case
without the prior written consent of the Goldman Stockholders. It
is understood and agreed that the Goldman Stockholders are each a
third party beneficiary to this Rights Agreement and may enforce
the provisions of this Section as if it were a party to the
Rights Agreement.
5. The Rights Agreement shall not otherwise be supplemented or
amended by virtue of this Amendment, but shall remain in full force and
effect. This Amendment may be executed in one or more counterparts, all of
which shall be considered one and the same amendment and each of which
shall be deemed an original.
IN WITNESS WHEREOF, the undersigned have caused this Amendment to
be duly executed, all on the day and year first above written.
Attest: PROMEDCO MANAGEMENT COMPANY
By: /s/ Xxxxxxx Xxxxxxx By: /s/ H. Xxxxx Xxxxx
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Name: Xxxxxxx Xxxxxxx Name: H. Xxxxx Xxxxx
Title: Senior Vice President Title: President and CEO
Attest: XXXXXX TRUST AND SAVINGS BANK,
as Rights Agent
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxxx Name: Xxxx Xxxxxx
Title: Vice President Title: Vice President
