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EXHIBIT 2.4
EXECUTION COPY
AMENDMENT
TO
SECURITIES PURCHASE AGREEMENT
THIS AMENDMENT, dated June 17, 1999 (this "Amendment") to that certain
Securities Purchase Agreement, dated January 26, 1999 (the "Agreement"), by and
among America Service Group Inc. ("ASG"), Health Care Capital Partners L.P.
("HCCP") and Health Care Executive Partners, L.P. ("HCEP," and together with
HCCP, the "Purchasers"), is entered into by and among ASG and the Purchasers.
The capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Agreement.
WITNESSETH:
WHEREAS, ASG intends to redeem $7.5 million of the Notes on or before
July 9, 1999, pursuant to Section 9.1 of the Agreement;
WHEREAS, the Purchasers agree to waive ASG's obligation to provide
notice of such redemption in accordance with Section 9.3(a) of the Agreement;
and
WHEREAS, ASG and the Purchasers desire to amend the Agreement as set
forth below;
NOW, THEREFORE, in consideration of good and valuable consideration,
the receipt and sufficiency of which are acknowledged hereby, ASG and the
Purchasers hereby agree as follows:
1. Redemption of Notes. ASG hereby agrees to redeem $7.5 million
aggregate principal amount of the Notes on July 2, 1999 by paying $7,660,000,
which the parties agree is the "Redemption Price" specified in Section 9.1 of
the Agreement, to the Purchasers prior to 2:00 p.m. on such date. The Redemption
Price shall be paid by wire transfer of immediately available funds to the
Purchasers as follows: (i) $7,355,643 shall be paid to HCCP by wire transfer to
Account No. 00-000-000 at Bankers Trust Company (ABA No. 000000000) and (ii)
$304,357 shall be paid to HCEP by wire transfer to Account No.
00-000-000 at Bankers Trust Company (ABA No.000000000).
Simultaneously with the payment of the Redemption Price, ASG and the
Purchasers shall execute and deliver amended and restated Warrant Certificates
reflecting the amendments set forth in Exhibit "A" to this Amendment.
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Purchasers hereby waive the receipt of notice of redemption of the
Notes pursuant to Section 9.3(a) of the Agreement.
ASG hereby agrees that it will not take action to redeem any Notes and
that no other Notes shall be redeemable at the option of the Company, other than
the principal amount of the Notes to be redeemed pursuant to this Amendment,
except in the event that (a) the Company shall have duly convened the
Stockholders Meeting and (b) the Company shall then be entitled to defer the
payment of penalty interest pursuant to the proviso of Section 8.3(b) of the
Agreement.
2. Amendments to the Agreement. The Agreement is hereby amended as
follows:
(a) Section 6.12 - Board Membership. Section 6.12 shall be amended
and restated to read as follows:
For as long as the Purchasers and their Affiliates and Affiliates
of the general partner of the Purchasers own the percentage of the
aggregate Face Value of Preferred Stock issued hereunder or Common
Stock issuable upon conversion of such Preferred Stock specified in
the table below, the Company shall fix and maintain the number of
directors as specified in such table and shall take all necessary
action to cause the appointment of the number of nominees of the
Purchasers specified in such table as members of the Board. If the
Purchasers own 25% or less of the aggregate Face Value of Preferred
Stock issued hereunder or Common Stock issuable upon conversion of
such Preferred Stock, the Purchasers shall not be entitled to any
representation on the Board. The percentage of the aggregate Face
Value of Preferred Stock issued hereunder or Common Stock issuable
upon conversion of such Preferred Stock shall be computed based on
200,000 shares of Preferred Stock, which represents the 150,000 shares
of Preferred Stock issuable upon conversion of the Notes and the
50,000 shares of Preferred Stock issued hereunder. The Purchasers
agree that their nominees shall be persons reasonably acceptable to
the Company.
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Percentage Size of Number of Purchasers'
of Stock Board Directors
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>62.5% 9 3
-
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<62.5%, but 8 2
>33-1/3%
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<33-1/3%, but 7 1
-
>25%
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So long as the Purchasers are entitled to designate directors pursuant
to this Section 6.12, the Company shall cause the Board to appoint at least
one Director designated by the Purchasers to the executive, audit and
compensation committees of the Board and each other committee established
by the Board. At each subsequent annual meeting for the election of
directors, the Purchasers will be entitled to propose (and the Company will
nominate and recommend) such persons nominated by the Purchasers as members
of the Board. In the event of any vacancy arising by reason of the
resignation, death, removal or inability to serve as the Purchasers'
nominee, the Purchasers shall be entitled to designate a successor to fill
each vacancy until the next annual meeting for the election of directors.
The Company agrees that if such nominee or nominees is not elected, (i) the
Purchasers will be entitled to have observational rights at all meetings of
the Board of Directors and the Purchasers shall have the same access to
information concerning the business and operations of the Company and its
Subsidiaries at the same time as the directors of the Company and shall be
entitled to participate in discussions and consult with the Board, without
voting, and (ii) the Company will nominate and recommend such person or
persons proposed by the Purchasers at each subsequent annual meeting until
the nominee or nominees of the Purchasers has been elected to the Board.
(b) Section 6A. The phrase "one-third (unless a greater percentage is
required below) of shares of Preferred Stock issued or issuable hereunder" in
Section 6A shall be amended by inserting at the end of such phrase "based on
200,000 shares of Preferred Stock, which represents the 150,000 shares of
Preferred Stock issuable upon conversion of the Notes and the 50,000 shares of
Preferred Stock issued hereunder."
(c) Section 6C. The phrase "at least 25% of the aggregate Face Value
of Preferred Stock issued pursuant to this Agreement" in Section 6C shall be
amended by inserting at the end of such phrase "based on 200,000 shares of
Preferred Stock, which represents the 150,000 shares of Preferred Stock issuable
upon conversion of the Notes and the 50,000 shares of Preferred Stock issued
hereunder."
(d) Section 6.3. The phrase "So long as the Purchasers hold Issuable
Preferred Stock" in the first sentence of Section 6.3 shall be deleted and the
phrase "So long as the Purchasers hold any shares of Preferred Stock issued
hereunder or any shares of Common Stock issued upon conversion of the Preferred
Stock issued hereunder" shall be inserted in lieu thereof.
(e) Section 6.19. The reference to "no later than six months from the
Closing Date" at the end of Section 6.19 shall be deleted and "no later than
August 31, 1999" shall be inserted in lieu thereof.
(f) Section 8.3. The reference to "July 26, 1999" in clauses (b)(ii)
and (b)(iii) of Section 8.3 shall be deleted and "August 31, 1999" shall be
inserted in lieu thereof.
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3. Entire Agreement. The Agreement, as amended by this Amendment, sets
forth the entire understanding of the parties with respect to the transaction
contemplated hereby.
4. Effect of Amendment. On or after the date hereof, each reference in the
Agreement to "this Agreement," "hereunder," "hereof," "herein," or words of like
import, and each reference in any other documents entered into in connection
with the Agreement, shall mean and be a reference to the Agreement, as amended
hereby.
5. Ratification of Agreement. Except as specifically amended above, the
Agreement shall remain in full force and effect and is hereby ratified and
confirmed.
6. Governing Law. This Amendment shall be governed by and construed and
enforced in accordance with the laws of the State of New York.
7. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[Signatures Appear on Following Page]
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IN WITNESS WHEREOF, ASG and the Purchasers have caused this Amendment
to be executed and delivered by their respective officers thereunto duly
authorized.
AMERICA SERVICE GROUP INC.
By: _________________________________
Xxxxx X. Xxxx
Senior Vice President and
Chief Financial Officer
HEALTH CARE CAPITAL PARTNERS L.P.
By: XXXXXX XXXXXXX XXXXXXXX
& CO., its General Partner
By: __________________________
Xxxxx X. Xxxxxxx
Member
HEALTH CARE EXECUTIVE PARTNERS L.P.
By: XXXXXX XXXXXXX XXXXXXXX
& CO., its General Partner
By: __________________________
Xxxxx X. Xxxxxxx
Member
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