AMENDMENT NO. 2 TO
RIGHTS AGREEMENT
Amendment No. 2 (this "Amendment"), dated as of May 5, 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;
WHEREAS, on December 27, 1999, the Board of Directors resolved to adopt
Amendment No. 1 to Rights Agreement; and
WHEREAS, on May 5, 2000, the Board of Directors resolved to adopt this
Amendment No. 2 to Rights Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, 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, dated as of January 13, 2000, as amended by the
First Amendment to Securities Purchase Agreement (together,
the "Amended Securities Purchase Agreement"), dated as of May
___, 2000, by and among the Company and the Investors (as
defined therein) and the other Transaction Documents (as
defined therein) entered into in connection with the Amended
Securities Purchase Agreement, (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:_____________________ By:_________________________________
Name Name:
Title: Title:
Attest: XXXXXX TRUST AND SAVINGS BANK, AS RIGHTS AGENT
By:_____________________ By:_________________________________
