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Exhibit 2.4
AMENDMENT NO. 1 TO THE
RECAPITALIZATION AGREEMENT
AMENDMENT NO. 1, dated as of April 23, 1998 (this "Amendment"), to
the Recapitalization Agreement, dated as of March 6, 1998 (the "Agreement"),
among ECCA Merger Corp., a Delaware corporation ("Newco"), Eye Care Centers of
America, Inc., a Texas corporation (the "Company"), and the Sellers named
therein (the "Sellers").
WHEREAS, Newco, the Company and the Sellers (collectively, the
"Parties") have entered into the Agreement; and
WHEREAS, the Parties recognize that Section 2.6(a) of the Agreement
contains an error not intended by the Parties at the time of entering into the
Agreement; and desire to amend the Agreement to correct the aforementioned
error; and
WHEREAS, the Parties understand that any adjustment to the Merger
Consideration pursuant to Section 2.13 of the Agreement would cause a
post-closing adjustment to the Per Share Merger Consideration (as defined in the
Agreement) and would therefore affect the consideration to be paid to all
holders of interests in the Company entitled to payments under Section 2.6 of
the Agreement, the Parties desire, in the interest of further certainty with
regard to the timing and the amounts of payments to be made pursuant to Article
II of the Agreement, to amend the Agreement expressly to provide for the several
obligations of all of such interest holders to pay their respective pro rata
portions of any Shortfall Amount (as defined in the Agreement), to make
reference to the arrangements by which such interest holders will fund any such
payments from the cash consideration otherwise payable to them upon the
Effective Date (as defined in the Agreement) and to make certain related
amendments;
NOW THEREFORE, in consideration of the agreements and mutual
premises contained herein and in the Agreement, the Parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. For purposes of this Amendment, unless otherwise
indicated, capitalized terms have the meanings ascribed to them in the
Agreement.
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ARTICLE II
AMENDMENTS
2.1 AMENDMENTS TO SECTION 2.6(a). Section 2.6(a) of the Agreement is
hereby amended as follows:
(a) to delete from clause (v) thereof the words "in excess of
$3,920,000, if any", so that clause (v) thereof shall read in its entirety
as follows:
"(v) the amount of the Company Transaction Expenses, less"; and
(b) to amend the definition of "Per Share Merger Consideration"
contained therein to read in its entirety as follows:
"The "Per Share Merger Consideration" will be equal to (a) the
Aggregate Merger Consideration divided by (b) the number of Common
Shares outstanding immediately prior to the Effective Time,
including the Outstanding Shares, the Class B Warrant Shares and the
Deferred Shares (it being understood that the number of Deferred
Shares deemed outstanding at such time for purposes of this Section
2.6 shall include any fractional Deferred Shares required to be
distributed in cash in accordance with the Company's Deferred Stock
Plan), plus the number of Employee Option Shares subject to Employee
Options canceled pursuant to Section 2.6(e), plus the number of
Class A Warrant Shares subject to Class A Warrants retired and
canceled pursuant to Section 2.6(d), plus the number of BNP Warrant
Shares subject to the BNP Warrant canceled pursuant to Section
2.6(f)."
2.2 ADDITION OF SECTION 2.6(h). Section 2.6 of the Agreement is
hereby amended to add a paragraph (h), which shall read in its entirety as
follows:
"(h) Receipt of Payments. Notwithstanding anything to the contrary
contained in this Section 2.6:
(i) any cash amount payable at the Effective Time to any
holder of Common Shares (excluding Dissenter's Shares and Excluded
Shares as of the Effective Time), Employee Option Shares or BNP
Warrant Shares (each, a "Common Holder") shall be subject to the
adjustment to the Per Share Merger Consideration, if any, to be made
pursuant to Section 2.13. Accordingly, the amount of such cash
payable by the Company to each Common Holder, other than any
Potential Dissenting Shareholder (as defined in Section 2.9), shall
be paid subject to the withholding by the Seller Representative of
an amount equal to
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such Common Holder's Pro Rata Share (based on all securities of the
Company other than Preferred Shares for which such Common Holder is
entitled to cash consideration hereunder) of the aggregate amount
which the Sellers shall agree shall be deposited in escrow for the
purposes of funding the payment of any Shortfall Amount to the
Company pursuant to Section 2.13. At the Effective Time, the Company
shall pay such amount to be withheld by the Seller Representative in
accordance with the instructions of the Seller Representative.
(ii) For purposes of this Section 2.6 and Sections 2.9 and
2.13, a Potential Dissenting Shareholder shall be deemed a "Common
Holder" until he shall have perfected his dissenter's rights in
accordance with Article 5.12 of the TBCA. Any amounts that would
otherwise be payable at the Effective Time to a Potential Dissenting
Shareholder shall be retained by the Company until such time as the
holder thereof shall have either (A) perfected his dissenter's
rights or (B) consented to the Merger or otherwise waived, lost or
failed timely to perfect his dissenter's rights, at which time the
applicable provisions of Section 2.9 shall apply. In the case of any
Potential Dissenting Shareholder who thereafter becomes entitled to
receive the Per Share Merger Consideration with respect to such
Potential Dissenting Shareholder's Common Shares pursuant to Section
2.9, the Company shall promptly thereafter pay to such holder the
aggregate consideration to which he is then entitled.
(iii) The Seller Representative shall have authority to act on
behalf of each Common Holder (other than a Potential Dissenting
Shareholder) for purposes of giving instructions and notices to the
Company, any of the Company's representatives and any escrow agent
appointed by the Sellers with respect to the deposit, custody and
release of funds to be escrowed pursuant to clause (i) hereof. Any
Shortfall Amount that shall be paid to the Company from the funds in
escrow shall be deducted from the escrowed amount with respect to
each such Common Holder, and any additional amounts owed by a Common
Holder shall be determined, on the basis of each such Common
Holder's Pro Rata Share of the Aggregate Merger Consideration. Any
Shortfall Amount that shall be payable by any former Potential
Dissenting Shareholder who shall have theretofore received the
aggregate consideration to which he was entitled in accordance with
clause (ii) of this Section 2.6(h) shall be paid to the Company
(based on such holder's Pro Rata Share of the Shortfall Amount) by
such holder.
(iv) The parties acknowledge and agree that the escrow of
funds otherwise payable to the Common Holders at the Effective Time
in accordance with clause (i) of this Section 2.6(h) is intended for
the benefit of the Sellers only and the Company is not an intended
third party beneficiary of such escrow, provided that nothing in
this clause (iv) shall be construed to limit any rights or
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remedies that may otherwise be available to the Company with respect
to property or assets of such Common Holders generally, whether or
not subject to an escrow."
2.3 AMENDMENTS TO SECTION 2.9. Section 2.9 shall be amended to read
in its entirety as follows:
"2.9 Dissenter's Rights. A holder of Common Shares immediately prior
to the Effective Time who shall not have consented to the Merger or
otherwise waived, effectively withdrawn or lost such holder's right to
dissent from the Merger under the TBCA (a "Potential Dissenting
Shareholder") shall not be entitled to vote or exercise any other rights
of a shareholder, including without limitation, any rights to any
dividends or other distributions pursuant to this Article II. Any Person
(including any Person who is a Potential Dissenting Shareholder as of the
Effective Time) who shall have perfected his dissenter's rights in
accordance with Article 5.12 of the TBCA and shall not have effectively
withdrawn or lost such holder's right to dissent from the Merger under the
TBCA (each, a "Dissenting Shareholder") shall be entitled to receive only
the payment as provided by Article 5.12 of the TBCA with respect to Common
Shares owned by such Dissenting Shareholder ("Dissenter's Shares"). If any
Potential Dissenting Shareholder shall have failed properly to perfect or
shall have effectively withdrawn or lost the right to dissent with respect
to any Common Shares, such shares shall thereupon be treated as though
such shares had been converted into the right to receive the Per Share
Merger Consideration pursuant to Section 2.6(a). The Company shall give
Newco (i) prompt written notice of any dissenters' demands for payment,
attempted withdrawals of such demands and any other instruments served
pursuant to applicable law received by the Company relating to dissenters'
rights and (ii) the opportunity to direct all negotiations with respect to
dissenters under the TBCA. The Company shall not, without the prior
written consent of Newco, voluntarily make any payment with respect to any
demands for payment by Dissenting Shareholders, offer to settle or settle
any such demands or approve any withdrawal of such demands."
2.4 AMENDMENTS TO SECTION 2.13(b). Paragraphs (v) and (vi) of
Section 2.13(b) shall be amended to read in their entirety as follows:
"(v) If Adjusted Net Working Capital is less than both Target
Net Working Capital and Indicative Net Working Capital, then the
Aggregate Merger Consideration shall be adjusted downward by the
amount by which Adjusted Net Working Capital is less than Indicative
Net Working Capital and the Sellers shall pay this shortfall amount
(the "Shortfall Amount") to the Company; provided, however, that no
adjustment payment shall be required unless the Shortfall Amount is
greater than $100,000, in which event the Sellers shall pay the
entire Shortfall Amount to the Company; provided, further, however,
that if Indicative
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Net Working Capital is greater than Target Net Working Capital and
Adjusted Net Working Capital is less than Target Net Working Capital
then the Shortfall Amount shall not exceed the amount by which the
Adjusted Net Working Capital is less than Target Net Working
Capital. Amounts withheld by the Seller Representative, and
deposited in escrow, in accordance with Section 2.6(h)(i) from the
cash consideration to which the Common Holders are otherwise
entitled at the Effective Time shall be held for the benefit of the
Sellers in order to satisfy the several obligations of the Sellers
to pay any Shortfall Amount; provided that, for such purpose, each
Common Holder (including any Seller) shall be liable for only such
Common Holder's Pro Rata Share of any Shortfall Amount.
(vi) If Adjusted Net Working Capital is greater than
Indicative Net Working Capital and Indicative Net Working Capital is
less than Target Net Working Capital, the Aggregate Merger
Consideration shall be adjusted upward by the amount by which
Adjusted Net Working Capital exceeds Indicative Net Working Capital
and the Company shall pay to the Common Holders an aggregate amount
equal to the excess (the "Excess Amount"); provided, however, that
the amount of any upward adjustment to the Aggregate Merger
Consideration, and any resulting payment by the Company to the
Common Holders, shall not exceed the amount by which Indicative Net
Working Capital is less than Target Net Working Capital; and
provided, further, however, that no adjustment payment shall be
required unless the Excess Amount is greater than $100,000, in which
event the Company shall pay the entire Excess Amount to the Common
Holders. Any Excess Amount payable by the Company shall be allocated
among all Common Holders receiving any part of the Aggregate Merger
Consideration in accordance with such Common Holders' respective Pro
Rata Shares."
ARTICLE III
MISCELLANEOUS
3.1 SCOPE OF AMENDMENTS. Except as otherwise expressly provided for
in this Amendment, the Agreement shall remain in full force and effect. All
references in the Agreement to the "Agreement" shall be deemed to be references
to the Agreement as amended by this Amendment.
3.2 COUNTERPARTS. For the convenience of the parties hereto, this
Amendment may be executed in any number of counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts shall
together constitute the same agreement.
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IN WITNESS WHEREOF, this Amendment has been duly executed and
delivered by the Parties or their duly authorized representatives as of the date
first above written.
ECCA MERGER CORP.
/s/ Xxxxxx X. Xxxxx, Xx.
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By: Xxxxxx X. Xxxxx, Xx.
Title: Vice President
EYE CARE CENTERS OF
AMERICA, INC.
/s/ Xxxxxxx X. Xxxxxxx
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By: Xxxxxxx X. Xxxxxxx
Title: President and CEO
SELLERS:
EQUITY LINKED INVESTORS L.P.
By: Xxxxx X. Xxxxx Associates
General Partner
/s/ Xxxxx X. Xxxxx
--------------------------------------
By: Xxxxx X. Xxxxx
Attorney-in-fact
EQUITY LINKED INVESTORS II
By: Xxxxx X. Xxxxx Associates - II
General Partner
/s/ Xxxxx X. Xxxxx
--------------------------------------
By: Xxxxx X. Xxxxx
Attorney-in-fact
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INDOSUEZ EYE CARE PARTNERS
By: Indosuez XX XX, Inc., its
Managing General Partner
By: /s/ Xxxxx Xxxxxxxx
--------------------------------
Xxxxx Xxxxxxxx
Vice President
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Vice President
XXXXXXX X. XXXXXXX
/s/ Xxxxxxx X. Xxxxxxx
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XXXXXX X. XXXXXXXX
/s/ Xxxxxx X. Xxxxxxxx
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XXXXXXX X. XXXXXXXX
/s/ Xxxxxxx X. Xxxxxxxx
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AGT HOLDINGS, LLC
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President
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XXXXXXX X. XXXXX
/s/ Xxxxxxx X. Xxxxx
--------------------------------------
XXXX XXXXX XXXXXXX
/s/ Xxxx Xxxxx Xxxxxxx
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