EXHIBIT 4.1
PURCHASE AGREEMENT
THIS AGREEMENT is made as of the __ day of August, 2002, by and between
America Service Group Inc. (the "Company"), a corporation organized under the
laws of the State of Delaware, with its principal offices at 000 Xxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000, and the purchaser whose name and address
is set forth on the signature page hereof (the "Purchaser").
IN CONSIDERATION of the mutual covenants contained in this Agreement,
the Company and the Purchaser agree as follows:
SECTION 1. Authorization of Sale of the Shares. Subject to the terms and
conditions of this Agreement, the Company has authorized the issuance and sale
of up to 1,100,000 shares (the "Shares") of common stock, par value $0.01 per
share (the "Common Stock"), of the Company.
SECTION 2. Agreement to Sell and Purchase the Shares. At the Closing (as
defined in Section 3), the Company will issue and sell to the Purchaser, and the
Purchaser will buy from the Company, upon the terms and conditions hereinafter
set forth, the number of Shares (at the purchase price) shown below:
Price Per
Number to Be Share In Aggregate
Purchased Dollars Price
--------- ------- -----
The Company proposes to enter into the same form of purchase agreement
with certain other investors (the "Other Purchasers") and expects to complete
sales of the Shares to them. The Purchaser and the Other Purchasers are
hereinafter sometimes collectively referred to as the "Purchasers," and this
Agreement and the agreements executed by the Other Purchasers are hereinafter
sometimes collectively referred to as the "Agreements." The term "Placement
Agent" shall mean Xxxxxxxxx & Company Inc.
SECTION 3. Delivery of the Shares at the Closing. The completion of the
purchase and sale of the Shares (the "Closing") shall occur as soon as
practicable and as agreed to by the parties hereto, following notification by
the Securities and Exchange Commission (the "Commission") to the Company of the
Commission's willingness to declare effective the registration statement to be
filed by the Company pursuant to Section 7.1 hereof (the "Registration
Statement"), at a place and time (the "Closing Date") to be agreed upon by the
Company and the Placement Agent. The Placement Agent will promptly notify the
Purchasers by facsimile transmission or otherwise of the date, place and time of
the Closing. The Company
will use its best efforts to ensure that the Registration Statement shall be
declared effective by the Commission no later than 5:00 p.m. on the Closing
Date.
At the Closing, the Company shall deliver to the Purchaser one or more
stock certificates registered in the name of the Purchaser, or, if so indicated
on the Stock Certificate Questionnaire attached hereto as Appendix I, in such
nominee name(s) as designated by the Purchaser, representing the number of
Shares set forth in Section 2 above and bearing an appropriate legend referring
to the fact that the Shares were sold in reliance upon the exemption from
registration under the Securities Act of 1933, as amended (the "Securities Act")
provided by Section 4(2) thereof and Rule 506 thereunder. The Company, at the
written request of the Purchaser, will promptly substitute one or more
replacement certificates without the legend at such time as the Registration
Statement is declared effective. The name(s) in which the stock certificates are
to be registered are set forth in the Stock Certificate Questionnaire attached
hereto as Appendix I. The Company's obligation to complete the purchase and sale
of the Shares and deliver such stock certificate(s) to the Purchaser at the
Closing shall be subject to the following conditions, any one or more of which
may be waived by the Company: (a) receipt by the Company of same-day funds in
the full amount of the purchase price for the Shares being purchased hereunder;
(b) completion of the purchases and sales under the Agreements with the
Purchasers; and (c) the accuracy in all material respects of the representations
and warranties made by the Purchasers and the fulfillment of those undertakings
of the Purchasers to be fulfilled prior to the Closing. The Purchaser's
obligation to accept delivery of such stock certificate(s) and to pay for the
Shares evidenced thereby shall be subject to the following conditions, any one
or more of which may be waived by the Purchaser: (a) the Commission has notified
the Company of the Commission's willingness to declare the Registration
Statement effective on or prior to the 60th day after the date such Registration
Statement was filed by the Company; (b) each of the representations and
warranties of the Company made herein shall be accurate in all material
respects; (c) the delivery to the Purchaser by counsel to the Company of a legal
opinion in a form reasonably satisfactory to counsel to the Placement Agent; and
(d) the fulfillment in all material respects of those undertakings of the
Company to be fulfilled prior to Closing. The Purchaser's obligations hereunder
are expressly not conditioned on the purchase by any or all of the Other
Purchasers of the Shares that they have agreed to purchase from the Company.
SECTION 4. Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants to, and covenants with, the Purchaser as
follows:
4.1. Organization and Qualification. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and the Company is qualified to do business as a foreign corporation
in each jurisdiction in which qualification is required, except where failure to
so qualify would not reasonably be expected to have a Material Adverse Effect
(as defined herein). The material subsidiaries of the Company are listed on
Exhibit A (each a "Subsidiary" and collectively the "Subsidiaries"). Each
Subsidiary is a direct or indirect wholly owned subsidiary of the Company. Each
Subsidiary is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and is qualified to do business as a
foreign entity in each jurisdiction in which qualification is required, except
where failure to so qualify would not have a Material Adverse Effect. For
purposes of this Agreement, the term "Material Adverse Effect" shall mean a
material adverse effect upon the business, prospects, financial condition,
properties or results of
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operations of the Company and its Subsidiaries, taken as a whole, except effects
caused by changes or circumstances affecting general market conditions in the
U.S. economy or which are generally applicable to the healthcare industry shall
not be deemed a Material Adverse Effect.
4.2. Authorized Capital Stock. Except as disclosed in or contemplated by
the Confidential Private Placement Memorandum, dated August 2, 2002, prepared by
the Company, including all Exhibits, supplements and amendments thereto (the
"Private Placement Memorandum"), the Company had outstanding the capital stock
set forth under the heading "Capitalization" in the Private Placement Memorandum
as of the date set forth therein; the issued and outstanding shares of the
Company's Common Stock have been duly authorized and validly issued, are fully
paid and nonassessable, have been issued in compliance with all federal and
state securities laws, were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase securities, and
conform in all material respects to the description thereof contained in the
Private Placement Memorandum. Except as disclosed in the Private Placement
Memorandum, the Company does not have outstanding any options to purchase, or
any preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. With respect to each Subsidiary, (i) all
the issued and outstanding shares of each Subsidiary's capital stock have been
duly authorized and validly issued, are fully paid and nonassessable, have been
issued in compliance with applicable federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities, and (ii) there are no outstanding options
to purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of the Subsidiary's capital stock or any
such options, rights, convertible securities or obligations.
4.3. Issuance, Sale and Delivery of the Shares. The Shares have been
duly authorized and, when issued, delivered and paid for in the manner set forth
in this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable and free and clear of all pledges, liens, restrictions and
encumbrances (other than restrictions on transfer under state and/or federal
securities laws), and will conform in all material respects to the description
thereof set forth in the Private Placement Memorandum. No preemptive rights or
other rights to subscribe for or purchase exist with respect to the issuance and
sale of the Shares by the Company pursuant to this Agreement. No stockholder of
the Company has any right (which has not been waived or has not expired by
reason of lapse of time following notification of the Company's intent to file
the Registration Statement) to require the Company to register the sale of any
shares owned by such stockholder under the Securities Act in the Registration
Statement. No further approval or authority of the stockholders or the Board of
Directors of the Company will be required for the issuance and sale of the
Shares to be sold by the Company as contemplated herein.
4.4. Due Execution, Delivery and Performance of this Agreement. The
Company has full legal right, corporate power and authority to enter into this
Agreement and perform the transactions contemplated hereby. This Agreement has
been duly authorized, executed and delivered by the Company. The execution,
delivery and performance of this Agreement by the Company and the consummation
of the transactions herein contemplated will
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not violate any provision of the certificate of incorporation or bylaws of the
Company or any of its Subsidiaries and will not result in the creation of any
lien, charge, security interest or encumbrance upon any assets of the Company or
any of its Subsidiaries pursuant to the terms or provisions of, and will not (i)
conflict with, result in the breach or violation of, or constitute, either by
itself or upon notice or the passage of time or both, a default under (A) any
agreement, lease, franchise, license, permit or other instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries or any of their respective properties may be bound or affected
and in each case which would have a Material Adverse Effect, or (B) to the
Company's knowledge, any statute or any judgment, decree, order, rule or
regulation of any court or any regulatory body, administrative agency or other
governmental body applicable to the Company or any of its Subsidiaries or any of
their respective properties where such conflict, breach, violation or default is
likely to result in a Material Adverse Effect. No consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body is required for the execution and delivery of
this Agreement or the consummation of the transactions contemplated by this
Agreement, except for compliance with the blue sky laws and federal securities
laws applicable to the offering of the Shares. Upon the execution and delivery
of this Agreement, and assuming the valid execution thereof by the Purchaser,
this Agreement will constitute valid and binding obligations of the Company,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as the indemnification agreements of the Company in
Section 7.3 hereof may be limited by federal or state securities laws or the
public policy underlying such laws.
4.5. Accountants. The firm of Ernst & Young LLP, which has expressed its
opinion with respect to the consolidated financial statements to be included or
incorporated by reference in the Registration Statement and the prospectus which
forms a part thereof (the "Prospectus"), is an independent accountant as
required by the Securities Act and the rules and regulations promulgated
thereunder (the "Rules and Regulations").
4.6. No Defaults. Except as disclosed in the Private Placement
Memorandum and except as to defaults, violations and breaches which individually
or in the aggregate would not have a Material Adverse Effect, neither the
Company nor any of its Subsidiaries is in violation or default of any provision
of its certificate of incorporation or bylaws, or in breach of or default with
respect to any provision of any agreement, judgment, decree, order, lease,
franchise, license, permit or other instrument to which it is a party or by
which it or any of its properties are bound which could reasonably be expected
to have a Material Adverse Effect.
4.7. Contracts. The contracts described in the Private Placement
Memorandum that are material to the Company and its Subsidiaries, taken as a
whole, are in full force and effect on the date hereof; and neither the Company
nor any of its Subsidiaries is, nor, to the Company's knowledge, is any other
party in breach of or default under any of such contracts which would have a
Material Adverse Effect.
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4.8. No Actions. Except as disclosed in the Private Placement
Memorandum, there are no legal or governmental actions, suits or proceedings
pending or, to the Company's knowledge, threatened to which the Company or any
of its Subsidiaries is or may be a party or of which property owned or leased by
the Company or any of its Subsidiaries is or may be the subject, or related to
environmental or discrimination matters, which actions, suits or proceedings,
individually or in the aggregate, might reasonably be expected to have a
Material Adverse Effect; and no labor disturbance by the employees of the
Company exists or, to the Company's knowledge, is imminent which might
reasonably be expected to have a Material Adverse Effect. Neither the Company
nor any of its Subsidiaries is party to or subject to the provisions of any
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body which might reasonably be
expected to have a Material Adverse Effect.
4.9. Properties. The Company and the Subsidiaries have good and
marketable title to all properties and assets reflected as owned in the
financial statements included in the Private Placement Memorandum, subject to no
lien, mortgage, pledge, charge or encumbrance of any kind except (i) those, if
any, reflected in the financial statements included in the Private Placement
Memorandum or otherwise in the Private Placement Memorandum, or (ii) those which
are not material in amount and do not adversely affect the use of such property
by the Company and its Subsidiaries. Each of the Company and its Subsidiaries
holds its leased properties under valid and binding leases, with such exceptions
as are not materially significant in relation to its business taken as a whole.
Except as disclosed in the Private Placement Memorandum, the Company leases all
such properties as are necessary to its operations as now conducted.
4.10. No Material Change. Since March 31, 2002 and except as described
in the Private Placement Memorandum (i) the Company and its Subsidiaries have
not incurred any material liabilities or obligations, indirect, or contingent,
or entered into any material oral or written agreement or other transaction
which is not in the ordinary course of business or which could reasonably be
expected to result in a material reduction in the future earnings of the Company
and its Subsidiaries; (ii) the Company and its Subsidiaries have not sustained
any material loss or interference with their businesses or properties from fire,
flood, windstorm, accident or other calamity not covered by insurance; (iii) the
Company and its Subsidiaries have not paid or declared any dividends or other
distributions with respect to their capital stock and neither the Company nor
any of its Subsidiaries is in default in the payment of principal or interest on
any outstanding debt obligations; (iv) there has not been any change in the
capital stock of the Company or any of its Subsidiaries other than the sale of
the Shares hereunder, shares or options issued pursuant to employee equity
incentive plans or purchase plans approved by the Company's Board of Directors
and repurchases of shares or options pursuant to repurchase plans already
approved by the Company's Board of Directors, or indebtedness not incurred in
the ordinary course of business that is material to the Company and its
Subsidiaries, taken as a whole; and (v) there has not been any other event which
has caused a Material Adverse Effect.
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4.11. Intellectual Property.
(a) The Company has ownership or license or legal right to use all
material patent, copyright, trade secret and trademark rights known by it to be
necessary to the conduct of the business of the Company as now conducted
(collectively, "Intellectual Property").
(b) All material licenses or other material agreements under which (i)
the Company is granted rights in Intellectual Property, and (ii) the Company has
granted rights to others in Intellectual Property owned or licensed by the
Company, are in full force and effect and, to the knowledge of the Company,
there is no material default by the Company or any other party thereto that
might reasonably be expected to have a Material Adverse Effect.
(c) To the Company's knowledge, the present business, activities and
products of the Company do not infringe any intellectual property of any other
person, except where such infringement would not have a Material Adverse Effect.
No proceeding charging the Company with infringement of any adversely held
Intellectual Property has been filed. To the Company's knowledge, the Company is
not making unauthorized use of any confidential information or trade secrets of
any person. To the Company's knowledge, the activities of the Company or any of
its employees on behalf of the Company do not violate any agreements or
arrangements known to the Company which any such employees have with other
persons, if any.
4.12. Compliance. Neither the Company nor any of its Subsidiaries has
been advised, nor has reason to believe, that it is not conducting its business
in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting its business, including, without
limitation, all applicable local, state and federal environmental laws and
regulations; except where failure to be so in compliance would not have a
Material Adverse Effect.
4.13. Taxes. Each of the Company and its Subsidiaries has filed all
necessary federal, state and foreign income and franchise tax returns and has
paid or accrued all taxes shown as due thereon, and neither the Company nor any
of its Subsidiaries has knowledge of a tax deficiency which has been or might be
asserted or threatened against it which might reasonably be expected to have a
Material Adverse Effect.
4.14. Transfer Taxes. On the Closing Date, all stock transfer or other
taxes (other than income taxes) which are required to be paid in connection with
the sale and transfer of the Shares to be sold to the Purchaser hereunder will
be, or will have been, fully paid or provided for by the Company and all laws
imposing such taxes will be or will have been complied with.
4.15. Investment Company. The Company is not an "investment company" or
an "affiliated person" of, or "promoter" or "principal underwriter" for an
investment company, within the meaning of the Investment Company Act of 1940, as
amended.
4.16. Offering Materials. The Company has not distributed and will not
distribute prior to the Closing Date any offering material in connection with
the offering and sale of the Shares other than the Private Placement Memorandum.
The Company has not in the past nor will it hereafter take any action
independent of the Placement Agent to sell, offer for sale or
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solicit offers to buy any securities of the Company which would bring the offer,
issuance or sale of the Shares, as contemplated by this Agreement, within the
provisions of Section 5 of the Securities Act, unless such offer, issuance or
sale was or shall be within the exemptions of Section 4 of the Securities Act.
Based in part upon the representations and warranties of the Purchaser contained
in Section 5 of this Agreement, the offer, sale and issuance of the Shares as
contemplated by this Agreement are exempt from the registration requirements of
the Securities Act, and from the registration or qualification requirements of
the laws of any applicable state or U.S. jurisdiction which has not or will not
be obtained.
4.17. Insurance. The Company and its Subsidiaries maintain insurance of
the types and in the amounts that the Company reasonably believes is adequate
for their businesses, including, but not limited to, insurance covering all real
and personal property leased by the Company and its Subsidiaries against theft,
damage, destruction, acts of vandalism and all other risks customarily insured
against by similarly situated companies, all of which insurance is in full force
and effect.
4.18. Additional Information. The information contained in the following
documents, which the Placement Agent has furnished to the Purchaser, or will
furnish prior to the Closing, does not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
in which they were made, not misleading, as of their respective final dates:
(a) the Company's Annual Report on Form 10-K for the year ended December
31, 2001;
(b) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2002;
(c) the Company's Current Report on Form 8-K filed on July 24, 2002;
(d) the draft Registration Statement;
(e) the Private Placement Memorandum, including all addenda and exhibits
thereto (other than the Purchase Agreement and the Appendices); and
(f) all other documents, if any, filed by the Company with the
Commission since December 31, 2001 pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
4.19. Price of Common Stock. The Company has not taken, and will not
take, directly or indirectly, any action designed to cause or result in, or
which has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of the Common Stock to
facilitate the sale or resale of the Common Stock.
4.20. Legal Opinion. As a condition to the Purchasers' obligation to
purchase the Shares, legal counsel to the Company will deliver one or more legal
opinions to the Placement Agent in a form reasonably satisfactory to the
Placement Agent and its counsel. Such
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opinions also shall state that each of the Purchasers may rely thereon as though
it were addressed directly to such Purchaser.
4.21. Certificate. At the Closing, the Company will deliver to Purchaser
a certificate executed by the Chairman of the Board or President and the chief
financial or accounting officer of the Company, dated as of the Closing Date, in
form and substance reasonably satisfactory to the Purchasers, to the effect that
the representations and warranties of the Company set forth in this Section 4
are true and correct as of the date of this Agreement for those representations
and warranties that already are qualified by a materiality standard and true and
correct in all material respects as of the date of this Agreement for those
representations and warranties that are not so qualified and as of the Closing
Date, and to the effect that the Company has complied with all the agreements
and satisfied all the conditions herein on its part to be performed or satisfied
on or prior to such Closing Date.
4.22. Reporting Company; Form S-3. The Company is subject to the
reporting requirements of the Exchange Act and has filed all reports required
thereby. The Company is eligible to register the Shares for resale by the
Purchaser on a registration statement on Form S-3 under the Securities Act. To
the Company's knowledge, there exist no facts or circumstances (including
without limitation any required approvals or waivers or any circumstances that
may delay or prevent the obtaining of accountant's consents) that reasonably
could be expected to prohibit or delay the preparation and filing of a
registration statement on Form S-3 that will be available for the resale of the
Shares by the Purchaser.
4.23. Use of Purchaser Name. Except as may be required by applicable law
or regulation, the Company shall not use the Purchaser's name or the name of any
of its affiliates in any advertisement, announcement, press release or other
similar public communication unless it has received the prior written consent of
the Purchaser for the specific use contemplated or as otherwise required by
applicable law or regulation.
4.24. Related Party Transactions. No transaction has occurred between or
among the Company, any of the Subsidiaries and their affiliates, officers or
directors or any affiliate or affiliates of any such officer or director that is
required to have been described under applicable securities laws in its Exchange
Act filings and is not so described in such filings.
4.25. Off-Balance Sheet Arrangements. There is no transaction,
arrangement or other relationship between the Company and an unconsolidated or
other off-balance sheet entity that is required to be disclosed by the Company
in its Exchange Act filings and is not so disclosed or that otherwise would be
reasonably likely to have a Material Adverse Effect. There are no such
transactions, arrangements or other relationships with the Company that may
create contingencies or liabilities that are not otherwise disclosed by the
Company in its Exchange Act filings.
4.26. Governmental Permits, Etc. Each of the Company and its
Subsidiaries has all franchises, licenses, certificates and other authorizations
from such federal, state or local government or governmental agency, department
or body that are currently required for the operation of the business of the
Company and its Subsidiaries as currently conducted, except where the failure to
posses currently such franchises, licenses, certificates and other
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authorizations is not reasonably expected to have a Material Adverse Effect. The
Company and its Subsidiaries have not received any notice of proceedings
relating to the revocation or modification of any such permit which, if the
subject of an unfavorable decision, ruling or finding, could reasonably be
expected to have a Material Adverse Effect.
4.27. Financial Statements. The consolidated financial statements of the
Company and the related notes contained in its Exchange Act filings present
fairly, in accordance with generally accepted accounting principles, the
consolidated financial position of the Company and its Subsidiaries as of the
dates indicated, and the results of their operations, cash flows and the changes
in stockholders' equity for the periods therein specified, subject, in the case
of unaudited financial statements for interim periods, to normal year-end audit
adjustments. Such consolidated financial statements (including the related
notes) have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods therein
specified, except that unaudited financial statements may not contain all
footnotes required by generally accepted accounting principles.
4.28. Listing. The Company shall comply with all requirements of the
Nasdaq National Market with respect to the issuance of Shares and shall use its
best efforts to have the Shares listed on the Nasdaq National Market on or
before the first date that the Registration Statement is declared effective by
the Commission.
SECTION 5. Representations, Warranties and Covenants of the Purchaser.
(a) The Purchaser represents and warrants to, and covenants with, the Company
that: (i) the Purchaser is knowledgeable, sophisticated and experienced in
making, and is qualified to make, decisions with respect to investments in
shares representing an investment decision like that involved in the purchase of
the Shares, including investments in securities issued by the Company and
comparable entities, and has had the opportunity to request, receive, review and
consider all information it deems relevant in making an informed decision to
purchase the Shares; (ii) the Purchaser is acquiring the number of Shares set
forth in Section 2 above in the ordinary course of its business and for its own
account for investment only and with no present intention of distributing any of
such Shares or any arrangement or understanding with any other persons regarding
the distribution of such Shares (this representation and warranty not limiting
the Purchaser's right to sell pursuant to the Registration Statement or in
compliance with the Securities Act and the Rules and Regulations, or, other than
with respect to any claims arising out of a breach of this representation and
warranty, the Purchaser's right to indemnification under Section 7.3); (iii) the
Purchaser will not, directly or indirectly, offer, sell, pledge, transfer or
otherwise dispose of (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of) any of the Shares except in compliance with the
Securities Act and the Rules and Regulations and any applicable state securities
laws; (iv) the Purchaser has completed or caused to be completed the
Registration Statement Questionnaire attached hereto as part of Appendix I, for
use in preparation of the Registration Statement, and the answers thereto are
true and correct as of the date hereof and will be true and correct as of the
effective date of the Registration Statement and the Purchaser will notify the
Company immediately of any material change in any such information provided in
the Registration Statement Questionnaire until such time as the Purchaser has
sold all of its Shares or until the Company is no longer required to keep the
Registration Statement effective; (v) the Purchaser has, in connection with its
decision to purchase the number of Shares set forth in Section 2 above, relied
solely upon the Private
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Placement Memorandum and the documents included therein or incorporated by
reference and the representations and warranties of the Company contained
herein; (vi) the Purchaser has had an opportunity to discuss this investment
with representatives of the Company and ask questions of them; and (vii) the
Purchaser is an "accredited investor" within the meaning of Rule 501(a) of
Regulation D promulgated under the Securities Act.
(b) The Purchaser understands that the Shares are being offered and sold
to it in reliance upon specific exemptions from the registration requirements of
the Securities Act, the Rules and Regulations and state securities laws and that
the Company is relying upon the truth and accuracy of, and the Purchaser's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of the Purchaser to acquire
the Shares.
(c) For the benefit of the Company, the Purchaser agreed orally with the
Placement Agent to keep confidential all information concerning this private
placement. The Purchaser understands that the information contained in the
Private Placement Memorandum is strictly confidential and proprietary to the
Company and has been prepared from the Company's publicly available documents
and other information and is being submitted to the Purchaser solely for such
Purchaser's confidential use. The Purchaser agrees to use the information
contained in the Private Placement Memorandum for the sole purpose of evaluating
a possible investment in the Shares and the Purchaser hereby acknowledges that
it is prohibited from reproducing or distributing the Private Placement
Memorandum, this Agreement, or any other offering materials or other information
provided by the Company in connection with the Purchaser's consideration of its
investment in the Company, in whole or in part, or divulging or discussing any
of their contents, except to its financial, investment or legal advisors in
connection with its proposed investment in the Shares. Further, the Purchaser
understands that the existence and nature of all conversations and
presentations, if any, regarding the Company and this offering must be kept
strictly confidential. The Purchaser understands that the federal securities
laws impose restrictions on trading based on information regarding this
offering. In addition, the Purchaser hereby acknowledges that unauthorized
disclosure of information regarding this offering may result in a violation of
Regulation FD. This obligation will terminate upon the filing by the Company of
a press release or press releases describing this offering.
(d) The Purchaser understands that its investment in the Shares involves
a significant degree of risk, including a risk of total loss of the Purchaser's
investment, and the Purchaser has full cognizance of and understands all of the
risk factors related to the Purchaser's purchase of the Shares, including, but
not limited to, those set forth under the caption "Risk Factors" in the Private
Placement Memorandum. The Purchaser understands that the market price of the
Common Stock has been volatile and that no representation is being made as to
the future value of the Common Stock. The Purchaser has the knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of an investment in the Shares and has the ability to bear the
economic risks of an investment in the Shares.
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(e) The Purchaser understands that no United States federal or state
agency or any other government or governmental agency has passed upon or made
any recommendation or endorsement of the Shares.
(f) The Purchaser understands that, until such time as the Registration
Statement has been declared effective or the Shares may be sold pursuant to Rule
144 under the Securities Act without any restriction as to the number of
securities as of a particular date that can then be immediately sold, the Shares
initially will bear a restrictive legend in substantially the following form:
"The Shares evidenced by this certificate have not been registered under
the Securities Act of 1933, as amended (the "Securities Act") or the
securities laws of any state or other jurisdiction. The Shares may not
be offered, sold, pledged or otherwise transferred except (1) pursuant
to an exemption from registration under the Securities Act or (2)
pursuant to an effective registration statement under the Securities
Act, in each case in accordance with all applicable securities laws of
the states and other jurisdictions, and in the case of a transaction
exempt from registration, unless the Company has received an opinion of
counsel reasonably satisfactory to it that such transaction does not
require registration under the Securities Act and such other applicable
laws."
(g) The Purchaser's principal executive offices are in the jurisdiction
set forth immediately below the Purchaser's name on the signature pages hereto.
(h) The Purchaser hereby covenants with the Company not to make any sale
of the Shares under the Registration Statement without complying with the
provisions of this Agreement and without effectively causing the prospectus
delivery requirement under the Securities Act to be satisfied, and the Purchaser
acknowledges and agrees that such Shares are not transferable on the books of
the Company unless the certificate submitted to the transfer agent evidencing
the Shares is accompanied by a separate Purchaser's Certificate of Subsequent
Sale: (i) in the form of Appendix II hereto, (ii) executed by an officer of, or
other authorized person designated by, the Purchaser, and (iii) to the effect
that (A) the Shares have been sold in accordance with the Registration
Statement, the Securities Act and any applicable state securities or blue sky
laws and (B) the requirement of delivering a current prospectus has been
satisfied. The Purchaser will notify the Company promptly after the sale of all
of its Shares. The Purchaser acknowledges that there may occasionally be times
when the Company must suspend the use of the Prospectus forming a part of the
Registration Statement (a "Suspension") until such time as an amendment to the
Registration Statement has been filed by the Company and declared effective by
the Commission, or until such time as the Company has filed an appropriate
report with the Commission pursuant to the Exchange Act. The Purchaser hereby
covenants that it will not sell any Shares pursuant to said Prospectus during
the period commencing at the time at which the Company gives the Purchaser
written notice of the Suspension of the use of said Prospectus and ending at the
time the Company gives the Purchaser written notice that the Purchaser may
thereafter effect sales pursuant to said Prospectus. Notwithstanding the
foregoing, the Company agrees that no Suspension shall be for a period of
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longer than 60 consecutive days, and no Suspension shall be for a period of an
aggregate in any 365-day period of longer than 90 days.
(i) The Purchaser further represents and warrants to, and covenants
with, the Company that (i) the Purchaser has full right, power, authority and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, (ii) the making and
performance of this Agreement by the Purchaser and the consummation of the
transactions herein contemplated will not violate any provision of the
organizational documents of the Purchaser or conflict with, result in the breach
or violation of, or constitute, either by itself or upon notice or the passage
of time or both, a default under any material agreement, mortgage, deed of
trust, lease, franchise, license, indenture, permit or other instrument to which
the Purchaser is a party, or any statute or any authorization, judgment, decree,
order, rule or regulation of any court or any regulatory body, administrative
agency or other governmental body applicable to the Purchaser, (iii) no consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required on the part of the
Purchaser for the execution and delivery of this Agreement or the consummation
of the transactions contemplated by this Agreement, (iv) upon the execution and
delivery of this Agreement, this Agreement shall constitute a legal, valid and
binding obligation of the Purchaser, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except to the extent enforcement of the
indemnification provisions, set forth in Section 7.3 of this Agreement, may be
limited by federal or state securities laws or the public policy underlying such
laws and (v) there is not in effect any order enjoining or restraining the
Purchaser from entering into or engaging in any of the transactions contemplated
by this Agreement.
SECTION 6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement or by the
Placement Agent, all covenants, agreements, representations and warranties made
by the Company and the Purchaser herein and in the certificates for the Shares
delivered pursuant hereto shall survive the execution of this Agreement, the
delivery to the Purchaser of the Shares being purchased and the payment
therefor.
SECTION 7. Registration of the Shares; Compliance with the Securities
Act.
7.1. Registration Procedures and Expenses. The Company shall:
(a) as soon as practicable, prepare and file with the Commission the
Registration Statement on Form S-3 relating to the resale of the
Shares by the Purchaser from time to time through the automated
quotation system of the Nasdaq National Market or the facilities
of any national securities exchange on which the Common Stock is
then traded or in privately-negotiated transactions;
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(b) use its reasonable efforts, subject to the receipt of necessary
information from the Purchasers, to cause the Commission to
notify the Company of the Commission's willingness to declare
the Registration Statement effective within 60 days after the
date the Registration Statement is filed by the Company;
(c) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the Prospectus
used in connection therewith as may be necessary to keep the
Registration Statement effective until the earliest of (i) two
years after the effective date of the Registration Statement,
(ii) the date on which the Shares may be resold by the
Purchasers without registration by reason of Rule 144(k) under
the Securities Act or any other rule of similar effect, or (iii)
such time as all Shares purchased by the Purchaser under this
Agreement have been sold pursuant to a registration statement;
(d) for so long as the Registration Statement is effective, furnish
to the Purchaser with respect to the Shares registered under the
Registration Statement (and to each underwriter, if any, of such
Shares) such reasonable number of copies of Prospectuses in
conformity with the requirements of the Securities Act, in order
to facilitate the public sale or other disposition of all or any
of the Shares by the Purchaser; provided, however, that the
obligation of the Company to deliver copies of Prospectuses to
the Purchaser shall be subject to the receipt by the Company of
reasonable assurances from the Purchaser that the Purchaser will
comply with the applicable provisions of the Securities Act and
of such other securities or blue sky laws as may be applicable
in connection with any use of such Prospectuses;
(e) file documents required of the Company for normal blue sky
clearance in states specified in writing by the Purchaser;
provided, however, that the Company shall not be required to
qualify to do business or consent to service of process in any
jurisdiction in which it is not now so qualified or has not so
consented;
(f) bear all expenses in connection with the procedures in
paragraphs (a) through (e) of this Section 7.1 and the
registration of the Shares pursuant to the Registration
Statement, other than fees and expenses, if any, of counsel or
other advisers to the Purchasers or underwriting discounts,
brokerage fees and commissions incurred by the Purchasers, if
any; and
(g) advise the Purchasers, promptly after it shall receive notice or
obtain knowledge of the issuance of any stop order by the
Commission delaying or suspending the effectiveness of the
Registration Statement or of the initiation of any proceeding
for that purpose; and it will promptly use its best efforts to
prevent the issuance of any stop order or to obtain its
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withdrawal at the earliest possible moment if such stop order
should be issued.
7.2. Transfer of Shares After Registration. The Purchaser agrees that it
will not effect any disposition of the Shares or its right to purchase the
Shares that would constitute a sale within the meaning of the Securities Act or
any applicable state securities laws, except as contemplated in the Registration
Statement referred to in Section 7.1 or as otherwise permitted by law, and that
it will promptly notify the Company of any changes in the information set forth
in the Registration Statement regarding the Purchaser or its plan of
distribution.
7.3. Indemnification. For the purpose of this Section 7.3:
(i) the term "Purchaser/Affiliate" shall mean any affiliate of the
Purchaser, including a transferee who is an affiliate of the
Purchaser, and any person who controls the Purchaser or any
affiliate of the Purchaser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act; and
(ii) the term "Registration Statement" shall include any preliminary
prospectus, final prospectus, exhibit, supplement or amendment
included in or relating to, and any document incorporated by
reference in, the Registration Statement referred to in Section
7.1.
(a) The Company agrees to indemnify and hold harmless each Purchaser and
each Purchaser/Affiliate against any losses, claims, damages, liabilities or
expenses, joint or several, to which such Purchaser or Purchaser/Affiliate may
become subject, under the Securities Act, the Exchange Act, or any other federal
or state statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with the prior
written consent of the Company), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, including the
Prospectus, financial statements and schedules, and all other documents filed as
a part thereof, as amended at the time of effectiveness of the Registration
Statement, including any information deemed to be a part thereof as of the time
of effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant to Rule
434, of the Rules and Regulations, or the Prospectus, in the form first filed
with the Commission pursuant to Rule 424(b) of the Regulations, or filed as part
of the Registration Statement at the time of effectiveness if no Rule 424(b)
filing is required, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state in any of them a
material fact required to be stated therein or necessary to make the statements
in any of them, in light of the circumstances under which they were made, not
misleading, or arise out of or are based in whole or in part on any inaccuracy
in the representations or warranties of the Company contained in this Agreement,
or any failure of the Company to perform its obligations hereunder or under law,
and will promptly reimburse each such Purchaser and each such
Purchaser/Affiliate for any legal and other expenses as such expenses are
reasonably incurred by such Purchaser or such Purchaser/Affiliate in connection
with investigating, defending or preparing to defend, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided,
however, that the
-14-
Company will not be liable in any such case to the extent, but only to the
extent, that any such loss, claim, damage, liability or expense arises out of or
is based upon (i) an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Purchaser expressly
for use therein, or (ii) the failure of such Purchaser to comply with the
covenants and agreements contained in Sections 5 or 7.2, or (iii) the inaccuracy
of any representation or warranty made by such Purchaser herein or (iv) any
statement or omission in any Prospectus that is corrected in any subsequent
Prospectus that was delivered to the Purchaser prior to the pertinent sale or
sales by the Purchaser.
(b) Each Purchaser will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, against
any losses, claims, damages, liabilities or expenses to which the Company, each
of its directors, each of its officers who signed the Registration Statement or
controlling person may become subject, under the Securities Act, the Exchange
Act, or any other federal or state statutory law or regulation, or at common law
or otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Purchaser) insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof as
contemplated below) arise out of or are based upon (i) any failure to comply
with the covenants and agreements contained in Sections 5 or 7.2 hereof, or (ii)
the inaccuracy of any representation or warranty made by such Purchaser herein,
or (iii) any untrue or alleged untrue statement of any material fact contained
in the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement, the Prospectus, or
any amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any Purchaser
expressly for use therein, and will reimburse the Company, each of its
directors, each of its officers who signed the Registration Statement or
controlling person for any legal and other expense reasonably incurred by the
Company, each of its directors, each of its officers who signed the Registration
Statement or controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action.
(c) Promptly after receipt by an indemnified party under this Section
7.3 of notice of the threat or commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party under this Section 7.3, promptly notify the indemnifying party in writing
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party for
contribution or otherwise under the indemnity agreement contained in this
Section 7.3 to the extent it is not prejudiced as a result of such failure. In
case any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying party,
the indemnifying party will be entitled to participate in, and, to the extent
that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with
-15-
counsel reasonably satisfactory to such indemnified party; provided, however, if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded,
based on an opinion of counsel reasonably satisfactory to the indemnifying
party, that there may be a conflict of interest between the positions of the
indemnifying party and the indemnified party in conducting the defense of any
such action or that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 7.3 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate counsel,
reasonably satisfactory to such indemnifying party, representing all of the
indemnified parties who are parties to such action) or (ii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after notice
of commencement of action, in each of which cases the reasonable fees and
expenses of counsel shall be at the expense of the indemnifying party. In no
event shall any indemnifying party be liable in respect of any amounts paid in
settlement of any action unless the indemnifying party shall have approved in
writing the terms of such settlement; provided that such consent shall not be
unreasonably withheld. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnification could have been sought hereunder by such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(d) If the indemnification provided for in this Section 7.3 is required
by its terms but is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party under paragraphs (a), (b) or
(c) of this Section 7.3 in respect to any losses, claims, damages, liabilities
or expenses referred to herein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of any losses, claims, damages, liabilities or expenses referred to herein (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Purchaser from the private placement of Common Stock
hereunder or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but the relative
fault of the Company and the Purchaser in connection with the statements or
omissions or inaccuracies in the representations and warranties in this
Agreement and/or the Registration Statement which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The respective relative benefits received by the
Company on the one hand and each Purchaser on the other shall be deemed to be in
the same proportion as the amount paid by such Purchaser to the Company pursuant
to this Agreement for the Shares purchased by such Purchaser that were sold
pursuant to the Registration Statement bears to the difference (the
-16-
"Difference") between the amount such Purchaser paid for the Shares that were
sold pursuant to the Registration Statement and the amount received by such
Purchaser from such sale. The relative fault of the Company, on the one hand,
and each Purchaser on the other shall be determined by reference to, among other
things, whether the untrue or alleged statement of a material fact or the
omission or alleged omission to state a material fact or the inaccurate or the
alleged inaccurate representation and/or warranty relates to information
supplied by the Company or by such Purchaser and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in paragraph (c) of this
Section 7.3, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim. The
provisions set forth in paragraph (c) of this Section 7.3 with respect to the
notice of the threat or commencement of any threat or action shall apply if a
claim for contribution is to be made under this paragraph (d); provided,
however, that no additional notice shall be required with respect to any threat
or action for which notice has been given under paragraph (c) for purposes of
indemnification. The Company and each Purchaser agree that it would not be just
and equitable if contribution pursuant to this Section 7.3 were determined
solely by pro rata allocation (even if the Purchaser were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this paragraph.
Notwithstanding the provisions of this Section 7.3, no Purchaser shall be
required to contribute any amount in excess of the amount by which the
Difference exceeds the amount of any damages that such Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Purchasers' obligations to contribute pursuant to this
Section 7.3 are several and not joint.
7.4. Termination of Conditions and Obligations. The restrictions imposed
by Section 5 or this Section 7 upon the transferability of the Shares shall
cease and terminate as to any particular number of the Shares upon the passage
of two years from the effective date of the Registration Statement covering such
Shares or at such time as an opinion of counsel satisfactory in form and
substance to the Company shall have been rendered to the effect that such
conditions are not necessary in order to comply with the Securities Act.
7.5. Information Available. So long as the Registration Statement is
effective covering the resale of Shares owned by the Purchaser, the Company will
furnish to the Purchaser:
(a) as soon as practicable after available (but in the case of the
Annual Report to the Stockholders, within 150 days after the end
of each fiscal year of the Company), one copy of (i) its Annual
Report to Stockholders (which Annual Report shall contain
financial statements audited in accordance with generally
accepted accounting principles by a national firm of certified
public accountants), (ii) if not included in substance in the
Annual Report to Stockholders, upon the request of Purchaser,
its Annual Report on Form 10-K, (iii) upon request of Purchaser,
its quarterly reports
-17-
on Form 10-Q, and (iv) a full copy of the particular
Registration Statement covering the Shares (the foregoing, in
each case, excluding exhibits);
(b) upon the reasonable request of the Purchaser, a reasonable
number of copies of the Prospectuses, and any supplements
thereto, to supply to any other party requiring such
Prospectuses;
and the Company, upon the reasonable request of the Purchaser and with prior
notice, will be available to the Purchaser or a representative thereof at the
Company's headquarters to discuss information relevant for disclosure in the
Registration Statement covering the Shares and will otherwise cooperate with any
Purchaser conducting an investigation for the purpose of reducing or eliminating
such Purchaser's exposure to liability under the Securities Act, including the
reasonable production of information at the Company's headquarters, subject to
appropriate confidentiality limitations.
SECTION 8. Broker's Fee. The Purchaser acknowledges that the Company
intends to pay to the Placement Agent a fee in respect of the sale of the Shares
to the Purchaser. The Purchaser and the Company hereby agree that the Purchaser
shall not be responsible for such fee and that the Company will indemnify and
hold harmless the Purchaser and each Purchaser/Affiliate against any losses,
claims, damages, liabilities or expenses, joint or several, to which such
Purchaser or Purchaser/Affiliate may become subject with respect to such fee.
Each of the parties hereto hereby represents that, on the basis of any actions
and agreements by it, there are no other brokers or finders entitled to
compensation in connection with the sale of the Shares to the Purchaser.
SECTION 9. Notices. All notices required or permitted hereunder shall be
in writing and shall be deemed effectively given: (i) upon delivery to the party
to be notified; (ii) when received by confirmed facsimile or (iii) one (1)
business day after deposit with a nationally recognized overnight carrier,
specifying next business day delivery, with written verification of receipt. All
communications shall be sent to the Company and the Purchaser as follows or at
such other addresses as the Company or the Purchaser may designate upon ten (10)
days' advance written notice to the other party:
(a) if to the Company, to:
America Service Group Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Facsimile: 000-000-0000
Attn: Xxxx X. Xxxxxxx, Esq., Chief Legal Officer
with a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile: 404-572-5100
Attn: Xxxxxx X. Xxxxxxxx, Esq.; and
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(b) if to the Purchaser, at its address as set forth at the end of this
Agreement.
SECTION 10. Changes. This Agreement may not be modified or amended
except pursuant to an instrument in writing signed by the Company and the
Purchaser. No provision hereunder may be waived other than in a written
instrument executed by the waiving party.
SECTION 11. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
SECTION 12. Severability. In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
SECTION 13. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the federal
law of the United States of America.
SECTION 14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered (including by facsimile) to the other parties.
SECTION 15. Entire Agreement. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Purchaser makes any
representation, warranty, covenant or undertaking with respect to such matters.
SECTION 16. Assignment. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
parties hereto and their respective permitted successors, assigns, heirs,
executors and administrators. This Agreement and the rights of the Purchaser
hereunder may be assigned by the Purchaser with the prior written consent of the
Company, except such consent shall not be required in cases of assignments by an
investment adviser to a fund for which it is the adviser or by or among funds
that are under common control, provided that such assignee agrees to be bound by
the terms of this Agreement.
-19-
SECTION 17. Further Assurances. Each party agrees to cooperate fully
with the other parties and to execute such further instruments, documents and
agreements and to give such further written assurance as may be reasonably
requested by any other party to evidence and reflect the transactions described
herein and contemplated hereby and to carry into effect the intents and purposes
of this Agreement.
[Remainder of Page Left Intentionally Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
AMERICA SERVICE GROUP INC.
By
-------------------------------
Print or Type:
Name of Purchaser
(Individual or Institution):
----------------------------------
Name of Individual representing
Purchaser (if an Institution):
----------------------------------
Title of Individual representing
Purchaser (if an Institution):
---------------------------------
Signature by:
Individual Purchaser or Individual
representing Purchaser:
----------------------------------
Address:
-----------------------
Telephone:
-----------------------
Telecopier:
-----------------------
-21-
EXHIBIT A
NAME OF SUBSIDIARY JURISDICTION OF FORMATION
Prison Health Services, Inc Tennessee
EMSA Government Services, Inc. Florida
EMSA Correctional Care, Inc. Florida
EMSA Military Services, Inc. Florida
EMSA Limited Partnership Florida
Prison Health Services of Indiana, LLC Indiana
Correctional Health Services, Inc. New Jersey
Secure Pharmacy Plus, Inc. Tennessee
