AMENDMENT
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TO
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SECURITIES PURCHASE AGREEMENT
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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:
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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. ▇▇-▇▇▇-▇▇▇ at Bankers Trust Company
(ABA No. ▇▇▇▇▇▇▇▇▇) and (ii) $304,357 shall be paid to HCEP by wire
transfer to Account No. ▇▇-▇▇▇-▇▇▇ at Bankers Trust Company (ABA No.
021001003).
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.
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.
Percentage Size of Number of Purchasers'
of Stock Board Directors
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Greater than or 9 3
equal to 62.5%
Less than 62.5% but 8 2
greater than 33-1/3%
Less than or equal to 7 1
33 1/3% but greater
than 25%
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
Subsidiairies 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 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.
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.
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: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇
Senior Vice President and Chief
Financial Officer
HEALTH CARE CAPITAL PARTNERS L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
& CO., its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Member
HEALTH CARE EXECUTIVE PARTNERS L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
& CO., its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Member
Exhibit "A"
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AMENDMENT
TO
WARRANT NO. 1
THIS AMENDMENT, dated July 2, 1999 (this "Amendment"), to Warrant No.
1, dated January 26, 1999 (the "Warrant"), whereby Health Care Capital
Partners L.P. ("HCCP") is entitled to purchase from America Service Group
Inc. ("ASG") 129,640 shares of the Common Stock, par value $0.01 per share,
of ASG, is entered into by and among HCCP and ASG. The capitalized terms
used herein and not otherwise defined shall have the meanings assigned to
them in the Warrant.
WITNESSETH:
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WHEREAS, ASG has redeemed $7.5 million of the Notes on July 2, 1999,
pursuant to Section 9.1 of the Securities Purchase Agreement (the
"Agreement");
WHEREAS, ASG and HCCP agree that upon such redemption the Current
Warrant Price shall be reduced to $.01 per share with respect to one-half
of the Warrants issued under the Warrant; and
WHEREAS, ASG and HCCP desire to amend the Warrant as set forth below;
NOW, THEREFORE, in consideration of good valuable consideration, the
receipt and sufficiency of which are acknowledged hereby, ASG and HCCP
hereby agree to amend the Warrant as follows:
1. Section 4 - Adjustments. Clauses (a)(i) and (a)(ii) of Section
4.2 are amended by the deletion therefrom of the references of "July 26,
1999", and by the substitution of "August 31, 1999", for such date. Section
4.2 is further amended to add the following subsection:
(c) notwithstanding Section 4.2 (b) (iii), upon the redemption of $7.5
million aggregate principal amount of the Notes on July 2, 1999 by the
Company, the Current Warrant Price shall be reduced to $.01 per share
with respect to one-half of the warrants issued to the Holder under
this Warrant. The exercise price of the remaining warrants shall be
determined in accordance with the other provisions of Section 4 of
this Warrant.
2. Entire Agreement. The Warrant, as amended by this Amendment, sets
forth the entire understanding of the parties with respect to the warrants
issued to HCCP under the Agreement.
3. Effect of Amendment. On or after the date hereof, each reference
in the Warrant to "this Warrant," "hereunder," "hereof," "herein," or words
of like import, and each reference in any other documents entered into in
connection with the Warrant, shall mean and be a reference to the
Agreement, as amended hereby.
4. Ratification of Agreement. Except as specifically amended above,
the Agreement shall remain in full force and effect and is hereby ratified
and confirmed.
5. Governing Law. The Warrant and this Amendment shall be governed by
and construed and enforced in accordance with the laws of the State of New
York.
6. Counterparts. This Amendment 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.
IN WITNESS WHEREOF, ASG and HCCP have caused this Amendment to be
executed and delivered by their respective officers thereunto duly
authorized.
AMERICA SERVICE GROUP INC.
By:
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▇▇▇▇▇ ▇. ▇▇▇▇
Senior Vice President and Chief
Financial Officer
HEALTH CARE CAPITAL PARTNERS L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
& CO., its General Partner
By:
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Member
AMENDMENT
TO
WARRANT NO. 2
THIS AMENDMENT, dated July 2, 1999 (this "Amendment"), to Warrant No.
2, dated January 26, 1999 (the "Warrant"), whereby Health Care Executive
Partners, L.P. ("HCEP") is entitled to purchase from America Service Group
Inc. ("ASG") 5,360 shares of the Common Stock, par value $0.01 per share,
of ASG, is entered into by and among HCEP and ASG. The capitalized terms
used herein and not otherwise defined shall have the meanings assigned to
them in the Warrant.
WITNESSETH:
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WHEREAS, ASG has redeemed $7.5 million of the Notes on July 2, 1999,
pursuant to Section 9.1 of the Securities Purchase Agreement (the
"Agreement");
WHEREAS, ASG and HCEP agree that upon such redemption the Current
Warrant Price shall be reduced to $.01 per share with respect to one-half
of the Warrants issued under the Warrant; and
WHEREAS, ASG and HCEP desire to amend the Warrant as set forth below;
NOW, THEREFORE, in consideration of good and valuable consideration,
the receipt and sufficiency of which are acknowledged hereby, ASG and HCEP
hereby agree to amend the Warrant as follows:
1. Preamble. The reference to "129,640 shares of Common Stock" in
the preamble shall be deleted and "5,360 shares of Common Stock" shall be
inserted in lieu thereof.
2. Section 4 - Adjustments. Clauses (a)(i) and (a)(ii) of Section
4.2 are amended by the deletion therefrom of the references to "July 26,
1999", and by the substitution of "August 31, 1999", for such date.
Section 4.2 is further amended to add the following subsection:
(c) notwithstanding Section 4.2(b)(iii), upon the redemption of $7.5
million aggregate principal amount of the Notes on July 2, 1999 by the
Company, the Current Warrant Price shall be reduced to $.01 per share
with respect to one-half of the warrants issued to the Holder under
this Warrant. The exercise price of remaining warrants shall be
determined in accordance with the other provisions of Section 4 of
this Warrant.
3. Entire Agreement. The Warrant, as amended by this Amendment,
sets forth the entire understanding of the parties with respect to the
warrants issued to HCEP under the Agreement.
4. Effect of Amendment. On or after the date hereof, each reference
in the Warrant to "this Warrant," "hereunder," "hereof," "herein," or words
of like import, and each reference in any other documents entered into in
connection with the Warrant, 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 ratifed
and confirmed.
6. Governing Law. The Warrant and this Amendment shall be governed by
and construed and enforced in accordance with the laws of the State of New
York.
7. Counterparts. This Amendment 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.
IN WITNESS WHEREOF, ASG and HCEP have caused this Amendment to be
executed and delivered by their respective officers thereunto duly
authorized.
AMERICA SERVICE GROUP INC.
By:
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▇▇▇▇▇ ▇. ▇▇▇▇
Senior Vice President and Chief
Financial Officer
HEALTH CARE EXECUTIVE PARTNERS L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
& CO., its General Partner
By:
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Member