EXHIBIT 10.18
AMENDMENT NO. 1 TO SECURITIES PURCHASE AGREEMENT
THIS Amendment No. 1 (this "Amendment"), dated _____________, 2002 to
the SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated December 17, 1999, is
entered into by and among Allied Healthcare Group Limited, formerly known as
Transworld Holdings (UK) Limited, a company incorporated in England and Wales
with registered number 3890177 ("UK Parent"), Transworld Healthcare (UK)
Limited, a company incorporated in England and Wales with registered number
3370146 and a wholly-owned subsidiary of UK Parent ("TW UK"), each of the
Purchasers and Transworld Healthcare, Inc., a New York corporation and sole
shareholder of UK Parent ("Transworld"). Transworld, UK Parent and TW UK are
hereinafter referred to collectively as the "Corporate Group." All capitalized
terms which are used but otherwise defined herein shall have meanings specified
in the Agreement.
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, on December 17, 1999, the parties hereto entered into the
Agreement, pursuant to which (i) UK Parent issued and the Purchasers subscribed
for the Subordinated Notes; (ii) TW UK issued and the Purchasers subscribed for
the Warrants; (iii) TW UK issued and UK Parent subscribed for the Mirror Notes;
and (iv) TW UK issued and the Purchasers' Representative subscribed for a
Special Share of TW UK;
WHEREAS, as of the date hereof, Transworld has approved the
reorganization of the Corporate Group, pursuant to which TW UK shall become a
wholly-owned subsidiary of UK Parent, which is and shall remain a wholly-owned
subsidiary of Transworld (the "Reorganization") in accordance with that certain
Master Reorganization Agreement, dated as of April ___, 2002 by and among the
Corporate Group and the Investors named therein (the "Master Reorganization
Agreement");
WHEREAS, in connection with the Reorganization, the Warrants issued to
the Purchasers pursuant to the Agreement shall be cancelled and the Mirror Note
between UK Parent and TW UK is to be amended and restated;
WHEREAS, in connection with the Reorganization, the Purchasers will be
entitled, subject to the terms and conditions of the Master Reorganization
Agreement, to the right to receive shares of TWUS Common Stock and TWUS
Preferred Stock, and UK Parent will issue shares of the Mirror Preferred Stock
to TWUS; and
WHEREAS, in connection with the Reorganization and cancellation of the
Warrants the parties hereto desire to amend the Agreement to make appropriate
changes thereto to retain certain of the rights, covenants and agreements
originally provided thereon as to be applicable in light of the Reorganization.
NOW, THEREFORE, each of Transworld, UK Parent and TW UK, in
consideration of the mutual covenants and agreements set forth herein and for
other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
agrees with the Purchasers as follows and vice versa:
1. Amendment to Mirror Notes. Effective hereby, upon the terms and
subject to the conditions herein, the existing Mirror Notes shall be canceled
and the Amended and Restated Mirror Notes, substantially in the form attached
hereto as Exhibit A shall automatically be substituted therewith.
2. Amendment to Section 1.1. Effective hereby, the following
definitions shall be substituted in their entirety for the same definition in
Section 1.1 of the Agreement:
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly controlling (including, but not limited to, each
director and executive officer of such Person), controlled by or under direct or
indirect common control with such specified Person. A Person shall be deemed to
control a company if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such company
whether through the ownership of voting securities, by contract or otherwise.
Notwithstanding the foregoing, in no event shall the initial Purchasers be
considered Affiliates of the Companies (including of Transworld) for purposes of
this Agreement.
"Companies" means collectively, UK Parent and TW UK considered as a
single enterprise, until a successor replaces UK Parent or TW UK and thereafter
includes the successor or successors, as the case may be provided that, with
respect to Articles XVI and XVIII and Section 14 of this Amendment, "Companies"
shall also include Transworld along with UK Parent and TW UK.
"Covenant Breach" has the meaning ascribed thereto in Section 17 of the
Certificate of Designations.
"Credit Facility" means the credit agreement dated as of the date of
this Agreement among the Group Companies named therein, the Banks and the other
lenders, if any, parties thereto from time to time, as amended, restated,
supplemented, waived, replaced (whether or not upon termination, and whether
with the original lenders or otherwise), refinanced, restructured, or otherwise
modified from time to time (except to the extent that any such amendment,
restatement, supplement, waiver, replacement, refinancing, restructuring, or
other modification thereto would be prohibited by Section ____ of the
Certificate of Designations unless otherwise agreed by a Majority in Interest of
the Purchasers).
"Designated Indebtedness" means: (a) Bank Indebtedness, (b) Mezzanine
Indebtedness or (c) Refinancing Indebtedness with respect thereto.
"Group Companies" means UK Parent, TW UK and their respective
Subsidiaries; provided, that with respect to Articles XVI and XVIII, "Group
Companies" shall also include Transworld and its respective Subsidiaries.
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"Legal Holiday" means a Saturday, Sunday or a day on which banking
institutions in London, England, or New York, New York are not required to be
open.
"Liquidity Event" means (i) a sale, assignment, transfer, lease,
conveyance or other disposal of 90% or more of the Capital Shares of any of
Transworld, UK Parent or TW UK to a Person who is not an Institutional Investor
or an Affiliate of an Institutional Investor, including by way of scheme of
arrangement or other business combination (whether or not Transworld, UK Parent
or TW UK is the Surviving Person), whether in one transaction or a series of
related transactions, (ii) a sale, assignment, transfer, lease, conveyance or
disposal of Property or assets of the Group Companies representing in the
aggregate 90% or more of the total value of all Group Assets or generating in
the aggregate 90% or more of all Group Revenues, whether voluntary or
involuntary, in one transaction or a series of related transactions, or (iii) an
Insolvency Event with respect to Transworld, UK Parent or TW UK, other than by
reason of action taken by or on behalf of the Series A Director(s) or the
Purchasers as a group.
"Majority in Interest of the Purchasers" or "Majority in Interest"
means the holders of greater than 50% of the sum of (i) all shares of Common
Stock issuable upon conversion of all shares of Series A Preferred Stock that
remain outstanding as of the time of determination and (ii) shares of Common
Stock issued upon conversion of the shares of Series A Preferred Stock;
provided, however, that with respect to clause (ii) only those shares of Common
Stock beneficially owned by the Person who converted the corresponding Series A
Preferred stock (or their Affiliates) shall be included in the calculation of a
Majority in Interest.
"Mirror Notes" has the meaning ascribed thereto in the recitals hereof;
and shall also refer to the refinanced Mirror Notes issued pursuant to Section 1
of the Amendment No. 1 to the Agreement.
"Purchasers" has the meaning ascribed thereto in the introduction
hereof, provided, however, that with respect to any Securities that are Shares
of Series A Preferred Stock, the Purchasers shall include any "holders" thereof,
as such term is defined in the Certificate of Designations.
"Qualified Average Price" means the Closing Price per Share of Common
Stock as reported by the principal securities exchange on which the Shares of
Common Stock are listed for trading, so long as such exchange is the New York
Stock Exchange, the NASDAQ National Market, the American Stock Exchange or a
Designated Offshore Securities Market, for 30 consecutive Trading Days, provided
that (i) on each one of such Trading Days the Closing Price is equal to or
higher than the minimum price required to achieve a Qualified Public Value if
such price alone was deemed to equal the Qualified Average Price and (ii)
throughout such 30-day period at least 20% of the Ordinary Shares outstanding
are held by Persons who are not Affiliates of Transworld, any Group Company or
any Purchaser and are freely transferable in the public trading market.
"Qualified Public Value" means a Qualified Average Price such that the
product of such Qualified Average Price times the aggregate number of shares of
Common Stock issued pursuant
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to or issuable upon conversion of the shares of Series A Preferred Stock is
equal to or greater than 2.5 times the Total Investment.
"Redemption Security" has the meaning ascribed thereto in Section 6.3
hereof.
"Securities" mean, collectively, the Subordinated Notes, the PIK Notes,
the Warrants, the Ordinary Shares issuable upon exercise of the Warrants, the
Mirror Notes, the Mirror PIK Notes, the shares of Series A Preferred Stock and
the shares of the Mirror Preferred Stock.
"Transaction Documents" means, collectively, this Agreement (including
the Amendment), the Subordinated Notes, the PIK Notes, the Warrant Instrument,
the Warrants, the Mirror Notes, the Mirror PIK Notes, the Registration Rights
Agreement, the Voting Trust Agreement, the Intercreditor Agreement, the
Transworld Rights Letter, the Purchaser's Rights Letter, the Joinder Agreement,
the Expenses Sharing Letter Agreement, the Certificate of Designations, the
Charter Documents of Transworld, UK Parent and TW UK, the Master Reorganization
Agreement and any and all agreements, certificates, instruments and other
documents contemplated hereby or thereby or executed and delivered in connection
herewith or therewith.
"Voting Trust Agreement" means the Voting Trust Agreement, dated as of
the date hereof, by and among TW UK, UK Parent, Transworld, the Purchasers'
Representative and the Trustee, as such is amended from time to time.
3. Amendment to Section 1.1. Effective hereby, the following
definitions shall be added to the defined terms included in Section 1.1 of the
Agreement:
"Certificate of Designations" means Sections ___ of the Certificate of
Amendment dated ____, 2002 to Transworld's Certificate of Incorporation.
"Closing Date" shall have the meaning ascribed to such term in the
Master Reorganization Agreement.
"Common Stock" means the common stock, par value $.01 per share, of
Transworld.
"holders" shall mean the holders of the Series A Preferred Stock,
unless such other meaning is clearly ascribed.
"Holders Redemption" shall have the meaning set forth in Section 8.1 of
this Agreement.
"Holders' Redemption Offer" shall have the meaning set forth in Section
8.2 of this Agreement.
"Holders' Redemption Purchase Date" shall have the meaning set forth in
Section 8.2 of this Agreement.
"Institutional Investors" means Triumph Partners III, L.P., Triumph III
Investors, L.P., and Paribas.
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"Insolvency Breach" has the meaning ascribed thereto in Section 17(b)
of the Certificate of Designations.
"Lead Investor" means Triumph Partners III, L.P.
"Master Reorganization Agreement" has the meaning set forth in Section
__ of the Certificate of Designations.
"Mirror Note Redemption Price" has the meaning set forth in Section __
of the Certificate of Designations.
"Mirror PIK Note Redemption Price" has the meaning set forth in Section
__ of the Certificate of Designations.
"Mirror Preferred Stock" has the meaning set forth in Section __ of the
Certificate of Designations.
"Mirror Preferred Stock Preference Amount" has the meaning set forth in
Section __ of the Certificate of Designations.
"Mirror Preferred Stock Purchase Price" has the meaning set forth in
Section __ of the Certificate of Designations.
"Series A Preferred Stock" has the meaning set forth in Section __ of
the Certificate of Designations.
"Series A Director" has the meaning set forth in Section 3(a) of the
Certificate of Designations.
"Series A Preference amount" has the meaning set forth in Section 4(a)
of the Certificate Designations.
"Series A Purchase Price" shall have the meaning set forth in Section
8(a) of the Certificate of Designations.
4. Amendment to Section 4.22(c). Effective hereby, the following
paragraph shall be substituted in its entirety for Sections 4.22(c) of the
Agreement:
(c) TW UK shall be under no liability with respect to any claim
under this Article IV unless and until the aggregate amount of all claims
against TW UK exceed (pound)250,000, but if liability exceeds that figure then
all claims, including claims previously notified, shall accrue against TW UK.
The aggregate liability of TW UK with respect to all claims under this Article
IV shall not exceed (pound)22.0 million, plus all outstanding and accrued
interest on the Subordinated Notes and the PIK Notes and accrued dividends
(whether or not declared or paid) on the shares of Series A Preferred Stock.
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5. Amendment to Article VI. Effective hereby, the following shall be
substituted in its entirety for Article VI of the Agreement: Intentionally
Omitted.
6. Amendment to Article VII. Effective hereby, the following shall be
substituted in its entirety for Article VII of the Agreement: Intentionally
Omitted
7. Amendment to Article VIII. Effective hereby, the following shall be
substituted in its entirety for Article VIII of the Agreement:
ARTICLE VIII
REDEMPTION OF TRANSWORLD SERIES A PREFERRED STOCK
8.1 Redemption of Transworld Series A Preferred Stock. The Series
A Preferred Stock, subject to the terms of the Intercreditor Agreement,
shall be subject to purchase and Redemption by Transworld, in whole or
in part, at the Series A Purchase Price, at the option of a Majority in
Interest of the Purchasers ("Holders' Redemption") upon and after the
occurrence of a Redemption Event; provided, however, that the Holders'
Redemption cannot be exercised on more than three (3) separate
occasions or for an aggregate Series A Purchase Price equal to less
than (i)(pound)5.0 million on any occasion or (ii) 100% of the
remaining shares of Series A Preferred Stock outstanding at the time if
exercise of the Holders' Redemption would result in less than(pound)5.0
million of Original Issue Price being owed with respect to all
remaining outstanding shares of Series A Preferred Stock in the
aggregate. In such event UK Parent shall be required to redeem, subject
to the limitations of Section 8.5, the shares of the Series A Preferred
Stock in the manner provided in Section 8.3 hereof and TW UK shall be
required to redeem, subject to the limitations of Section 8.5, the
Mirror Notes and Mirror PIK Notes in the manner provided in Section 8.3
hereof. The date on which such Redemption Event occurs is referred to
as the "Redemption Event Trigger Date." A "Redemption Event" shall
mean, with respect to the shares of Series A Preferred Stock elected to
be purchased by the Purchasers, (i) any Liquidity Event, or (ii) a date
subsequent to the December 17, 2007 if the Bank Indebtedness and the
Mezzanine Indebtedness have been paid in full on or before such date.
The "Series A Purchase Price" shall be equal to the Series A Preference
Amount.
8.2 Holders' Redemption Offer Procedures. Within five (5) Business
Days after Transworld becomes aware of the occurrence of a Redemption
Event and in any event not later than the Redemption Event Trigger
Date, Transworld shall mail a notice (the "Holders' Redemption Offer")
to each of the Purchasers notifying them that the shares of Series A
Preferred Stock will be purchased and redeemed, respectively, at the
election of the Purchasers in accordance with this Article VIII. If a
Majority in Interest of the Purchasers elect to exercise their
redemption rights pursuant to this Article VIII, they shall give notice
to Transworld setting forth the number of shares of Series A Preferred
Stock to be
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redeemed and the purchase date shall be the earlier of (i) a date
selected by Transworld, but not later than 30 days from the date such
notice is given, or (ii) if such notice relates to a Liquidity Event
and is given prior to the occurrence of the Liquidity Event, the date
of completion of the Liquidity Event (the "Holders' Redemption Purchase
Date"). An election to exercise purchase and redemption rights pursuant
to this Article VIII in connection with a Liquidity Event shall in all
circumstances be conditional upon the completion of the Liquidity Event
and no obligation to purchase or redeem, as the case may be, shares of
Series A Preferred Stock shall arise if the Liquidity Event is not
completed. In the event a Holders' Redemption is exercised with respect
to a Liquidity Event, the Purchasers will be entitled to withdraw their
election to tender the shares of Series A Preferred Stock by delivering
to Transworld, for receipt not later than the close of business on the
second Business Day preceding the Holders' Redemption Purchase Date,
facsimile transmission or letter to that effect. Upon a Purchaser's
election to tender any shares of Series A Preferred Stock, the
Purchaser will be required to surrender such shares of Series A
Preferred Stock to Transworld at the address specified in the signature
page hereto prior to the close of business on the Business Day
preceding the Holders' Redemption Purchase Date. On the Holders'
Redemption Purchase Date, Transworld will purchase the shares of Series
A Preferred Stock tendered pursuant to Section 8.1 hereof for cash in
an amount equal to the aggregate Series A Purchase Price for all shares
of Series A Preferred Stock tendered for purchase. If not all of the
shares of Series A Preferred Stock tendered pursuant to a Holders'
Redemption Offer can be purchased or redeemed, respectively, by
Transworld for any reason, Transworld shall select, on or prior to the
Holders' Redemption Purchase Date, the shares of Series A Preferred
Stock (or portions thereof) shares of Series A Preferred Stock to be
purchased and redeemed, as the case may be, pro rata among the
Purchasers and dividends shall continue to accrue on all shares of
Series A Preferred Stock not redeemed, provided, however, that nothing
in this Article VIII shall be deemed a waiver or contractual impairment
of the right of the Purchasers to have all shares of Series A Preferred
Stock purchased and redeemed in full pursuant to Section 8.1 hereof and
Transworld shall not be relieved of its obligations to redeem
unredeemed shares of Series A Preferred Stock in full. Promptly after
the Holders' Redemption Purchase Date, Transworld shall, with respect
to any shares of Series A Preferred Stock not purchased or redeemed,
respectively, in whole, return to the appropriate Purchaser, the
unredeemed shares of Series A Preferred Stock or a new stock
certificate, as the case may be, equal in number to the unredeemed
portion of the tendered shares of Series A Preferred Stock.
8.3 Mandatory Redemption of Mirror Preferred Stock and Mirror
Notes. Upon written notice to each of UK Parent and TW UK of
Transworld's intention to purchase and redeem the shares of Series A
Preferred Stock pursuant to Sections 8.1 and 8.2 above (which notice
Transworld will be required to serve as reasonably practicable after
notice of election is given to the Corporation pursuant to Section 8.2,
and subject to the limitations of Section 8.5, UK Parent
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shall, immediately prior to such purchase and redemption by Transworld,
redeem and purchase the Mirror Preferred Stock (in accordance with the
terms and provisions of the Charter Documents of UK Parent.
Concurrently, and subject to the limitations of Section 8.5, TW UK
shall, immediately prior to such purchase and redemption of the Mirror
Preferred Stock by UK Parent, redeem the Mirror Notes and the Mirror
PIK Notes. Transworld shall use the funds it receives from such
redemption of the Mirror Preferred Stock to purchase and redeem the
shares of Series A Preferred Stock tendered by the Purchasers and
accepted for redemption by Transworld pursuant to Section 8.2 hereof.
UK Parent shall use the funds it receives from such redemption of the
Mirror Notes to purchase and redeem the Mirror Preferred Stock tendered
by Transworld pursuant to this Section 8.3 and the Charter Documents of
UK Parent.
8.4 Obligations of UK and TW UK Upon Holders' Redemption. Prior to
the Holder's Redemption Purchase Date, in connection with a Liquidity
Event, UK Parent will, and UK Parent shall cause TW UK, in good faith
to seek, to obtain any required consent of the holders of the Bank
Indebtedness and/or the Mezzanine Indebtedness the terms of which
prohibit Transworld from purchasing the Series A Preferred Stock or UK
Parent from purchasing the Mirror Preferred Stock and/or TW UK from
redeeming the Mirror Notes and the Mirror PIK Notes, as the case may
be, so as to permit the making of the Holders' Redemption Offer and the
purchasing of the shares of Series A Preferred Stock pursuant to
Section 8.1, respectively, including repayment out of the proceeds of
such Liquidity Event of all Obligations under such Bank Indebtedness
and/or Mezzanine Indebtedness to the extent necessary to permit the
making of the Holders' Redemption Offer and the purchase of shares of
Series A Preferred Stock and accompanying purchase of the Mirror
Preferred Stock, Mirror Notes and Mirror PIK Notes pursuant to Section
8.3 hereof.
8.5 Holders' Redemption Prohibited. Subject to compliance with
Section 8.4 hereof, if, at a Holders' Redemption Purchase Date,
Transworld is prohibited or prevented under Applicable Laws (including
lack of surplus under the laws of the State of New York) or under any
other contractual or other arrangement, including, or other legal
restriction whatsoever, directly or indirectly (which shall be deemed
to encompass a similar prohibition or prevention with respect to UK
Parent's or TW UK's or other Subsidiary's of Transworld compliance with
the provisions of Section 8.3) from purchasing all shares of Series A
Preferred Stock for which purchase is elected hereunder pursuant to the
Holders' Redemption, then Transworld shall purchase such shares of
Series A Preferred Stock, to the extent permissible and shall purchase
the remaining shares of Series A Preferred Stock, as soon as Transworld
is not so prohibited. Transworld shall use all reasonable endeavors to
take such action as shall be necessary or appropriate to review and
promptly remove any impediment to its ability to purchase the shares of
Series A Preferred Stock under the circumstances contemplated by
Section 8.1 hereof (including to cause UK Parent and/or TW UK
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to take substantially similar actions), other than the Credit
Agreements and the Intercreditor Agreement; provided, however, that
this provision shall not require the repayment of Designated
Indebtedness other then upon the occurrence of a Liquidity Event. In
the event that Transworld fails for any reason to purchase any shares
of Series A Preferred Stock for which purchase is required pursuant to
Section 8.1 hereof , then (i) the Purchasers shall have the right to
revoke their exercises of the Holders' Redemption at any time and (ii)
if the Purchasers do not elect to so revoke such exercise, during the
period from the applicable Holders' Redemption Purchase Date through to
the date on which such shares of Series A Preferred Stock are purchased
and redeemed, Transworld shall pay, in addition to such amounts due
pursuant to exercise of the Holders' Redemption, to the Purchasers an
amount equal to two percent (2%) per annum of the Series A Purchase
Price for any of the shares of Series A Preferred Stock not purchased
hereunder and the shares of Series A Preferred Stock which remain
outstanding shall continue to accrue dividends at the rate stated in
Section 2 of the Certificate of Designations, plus two percent (2%) per
annum. Nothing in this Section 8.5 shall impair or be deemed to limit,
modify or affect the rights of the Purchasers (unless otherwise
restricted, including, without limitation, under the Intercreditor
Agreement) to pursue any available remedy, at law or in equity, to
enforce or seek to enforce, in any manner whatsoever, Transworld's
obligations under this Article VIII, including without limitation
filing any suit or complaint or seeking to file a suit or complaint
with any court of competent jurisdiction to obtain injunctive or other
equitable relief and/or damages arising from a breach of Transworld's
obligation to purchase the shares of Series A Preferred Stock and
enforcing any judgment obtained in any such suit in any manner
available under Applicable Law to judgment creditors in general.
8.6 Failure of Transworld, UK Parent and TW UK to Honor Holders'
Redemption. In the event that either Transworld or UK Parent fails to
perform in full its obligations following the Purchasers' election to
exercise the Holders' Redemption pursuant to Section 8.1 hereof, and TW
UK fails to perform its obligations as a guarantor of the obligations
of Transworld and UK Parent pursuant to Section 8.7 hereof, then a
Majority in Interest of the Purchasers shall have the right to exercise
the Holders' Redemption against TW UK to the same extent and with the
same effect as such exercise against Transworld, and TW UK hereby
agrees that it shall be fully bound by this Article VIII as if it were
Transworld, except that (A) to the extent that any deductions and
withholdings on account of Taxes are required under Applicable Law, or
of any Taxes imposed on any Purchaser as a result of failure of
Transworld to fulfill its obligations under Section 8.1 hereof, and TW
UK to fulfill its obligations under Section 8.7 below which would not
have been required had no such failure occurred (unless such failure
was directly attributable to a prohibition against such fulfillment by
Transworld, UK Parent or TW UK, as the case may be, under Applicable
Law), the Series A Purchase Price shall be increased, as may be
necessary, so that after making all such deductions and withholdings
and taking into account all such
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Taxes (whether applicable to the original redemption price payable
or to additional sums payable under this Section 8.6, and taking into
account all Taxes on and arising by reason of the payment of additional
sums payable under this Section 8.6), the Purchasers receive an amount
equal to the sum that they would have received had no such deductions
or withholdings been made or Taxes imposed, (B) the Companies shall
make required deductions or withholdings, and (C) the Companies shall
pay the full amount deducted or withheld to the relevant taxing or
other Governmental Entity.
8.7 TW UK Guaranty.
(a) TW UK hereby unconditionally, irrevocably and absolutely
guarantees payment in full of the obligations of Transworld and UK
Parent to the Purchasers upon the election of the Purchasers to
exercise the Holders' Redemption with respect to the shares of Series A
Preferred Stock. To the extent that Transworld and/or UK Parent
defaults on such obligations, TW UK shall be absolutely and
unconditionally obligated to pay the Series A Purchase Price, in
immediately available funds in full on the Holders' Redemption Purchase
Date, and shall not be entitled to set off any claim of any kind which
Transworld, UK Parent or TW UK may have against anyone whether arising
under or by reason of this Agreement, the other Transaction Documents
or for any other reason of any kind. In the event that the Purchasers
shall not for any reason receive on the Holders' Redemption Purchase
Date the full payment of the Series A Purchase Price for the shares of
Series A Preferred Stock being purchased and redeemed, then in any
proceeding instituted by the Purchasers, no defense by TW UK to its
obligation to pay the Series A Purchase Price, whether by counterclaim,
affirmative defense or new matter, that is not also available to
Transworld with respect to the primary obligation to purchase or redeem
the shares of Series A Preferred Stock pursuant to the Holders'
Redemption, shall be interposed or shall be of any force or effect,
said defenses being waived for purposes of such proceeding.
(b) Subject to compliance in full with this Article VIII by
the Purchasers, TW UK waives any and all notice of the creation,
renewal, extension or accrual of any component of the Series A Purchase
Price and notice of or proof of reliance by the Purchasers upon this
Section 8.7 or acceptance of this Section 8.7; the obligation to pay
the Series A Purchase Price shall conclusively be deemed to have been
created, contracted or incurred in reliance upon this Section 8.7; and
all dealings between Transworld, UK Parent or TW UK, on the one hand,
and the Purchasers, on the other, shall likewise be conclusively
presumed to have been had or consummated in reliance upon this Section
8.7. TW UK waives diligence, presentment, protest, demand for payment
and notice of default or nonpayment to or upon TW UK with respect to
the Series A Purchase Price. TW UK's obligations under this Section 8.7
shall be construed as a continuing, absolute and unconditional
guarantee of payment to pay the Series A Purchase
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Price and shall not be diminished or impaired by (i) any defense,
set-off or counterclaim (other than a defense of payment) which may at
any time be available to or be asserted by Transworld, UK Parent or TW
UK against the Purchasers, or (ii) any other circumstance whatsoever
(with or without notice to or knowledge of Transworld, UK Parent or TW
UK) which constitutes, or might be construed to constitute, an
equitable or legal discharge of Transworld from the obligation to pay
the entire Series A Purchase Price, or of TW UK under this Section 8.7,
upon the occurrence of any Insolvency Proceedings or in any other
instance.
(c) This Section 8.7 shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Series A Purchase Price is rescinded or must
otherwise be restored or returned by the Purchasers upon the occurrence
of any Insolvency Proceedings relating to Transworld or UK Parent or
upon or as a result of the appointment of a receiver, intervener or
conservator of, or trustee or similar officer for, Transworld or UK
Parent or any substantial part of its property, or otherwise, all as
though such payments had not been made.
(d) Any provision of this Section 8.7 which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
(e) No failure to exercise, or any delay in exercising, on
the part of the Purchasers, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any
right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Purchasers of any right or remedy hereunder
on any one occasion shall not be construed as a bar to any right or
remedy which the Purchaser would otherwise have on any future occasion.
The rights and remedies provided in this Section 8.7 are cumulative,
may be exercised singly or concurrently and are not exclusive of any
rights or remedies provided by law.
8.8 Further Action. Subject to the requirements of law, each of
Transworld and UK Parent (or their successors or assigns or any Person
to whom they transfer any of their shares in UK Parent or TW UK,
respectively) shall exercise or direct the exercise of their voting
rights (whether at a general or extraordinary meeting of shareholders
or by consent in lieu of a meeting of shareholders) and where
appropriate to give effect to such matters, shall convene any necessary
shareholders meeting, for the purpose of passing (and, not
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revoking) such resolutions as may be required by law to approve or
authorize any purchase of Securities pursuant to Article VIII hereof).
8. Amendments to Articles IX, X, XI, XII, XIII, XIV and XV. Effective
hereby, the following shall be substituted in its entirety for Articles IX, X,
XI, XII, XIII, XIV and XV of the Agreement: Intentionally Omitted
9. Amendment to Article XVI. Effective hereby, the following shall be
substituted in its entirety for Article XVI of this Agreement:
ARTICLE XVI
SUCCESSORS
16.1 Merger or Consolidation.
(a) The Companies shall not directly or indirectly, by
operation of law or otherwise (i) be acquired by any other Person; (ii)
permit substantially all of their assets to be acquired by any other
Person (including an acquisition of stock of Subsidiaries which in the
aggregate account for substantially all of the Corporation's assets);
(iii) consolidate, merge, or otherwise combine with or into any other
Person; (iv) permit any other Person to acquire, consolidate, merge, or
otherwise combine with or into the Companies; (v) permit any other
Person to acquire, consolidate, merge, or otherwise combine with or
into or be consolidated, merged, or otherwise combined with or into by,
any Subsidiary (in a transaction in which such Subsidiary (or successor
Person) remains (or becomes) a Subsidiary); or (vi) directly or
indirectly, transfer, convey, sell, lease or otherwise dispose of all
or substantially all of the properties and assets of any of the
Subsidiaries as an entirety or permit any of the Subsidiaries to do any
of the foregoing (except for the merger, consolidation or other
combination of any Subsidiary of the Companies with or into, or the
disposition of all or substantially all of the assets of any Subsidiary
of the Companies to, the Companies or any Wholly-Owned Subsidiary of
the Companies), unless:
(i) in any such transaction in which the Person acquires by
transfer, conveyance, consolidations, merger, combination, sale,
lease or other disposition, as applicable, all or substantially
all of the properties and assets of the Companies as an entirety
(for purposes of this Article XVI, "Successor Companies"), such
Successor Companies (i) shall be a corporation or limited
liability company, (ii) shall be organized, duly incorporated and
validly existing under the laws of the United States or England,
(iii) shall expressly assume pursuant to the terms and conditions
of this Agreement, in form reasonably satisfactory to a Majority
in Interest of the Purchasers, the obligations with respect to the
shares of Series A Preferred Stock then outstanding, and the
performance of the covenants and obligations set forth in this
Agreement and the Certificate of
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Designation on the part of the Companies to be performed or
observed or shall agree to such alternative obligations, such
that, following such assumption and agreement, the Purchasers will
continue to have the right to achieve practical realization of the
principal benefits intended to be provided to them hereby and
thereby, which the Companies understand to include, without
limitation, (A) the practical realization of the principal
benefits intended to be provided under the Holders' Redemption as
provided in Article 8, (B) the covenants as provided in Section 13
of the Certificate of Designations and (C) the enforcement against
the Companies of any Covenant Breach or Insolvency Breach as
provided in Section 17 of the Certificate of Designations, as
nearly as may be, in relation to the circumstances of such
Successor Companies) and (iv) shall take all such action and pass
all such resolutions as may be necessary to enable it to assume
and agree on all such obligations, including, without limitation,
the obligations with respect to the guarantee of the Holders'
Redemption and the purchase of shares of Series A Preferred Stock
under Article VIII hereof;
(ii) immediately before and after giving effect to such
transaction, no Covenant Breach or Event of Default shall have
occurred and be continuing;
(iii) the Companies have delivered to the Purchasers an
Officers' Certificate and a written opinion from legal counsel,
each stating that such consolidation, merger, amalgamation,
combination, conveyance, transfer, lease or acquisition and, if
the assumption of the obligations of the Companies under this
Agreement or the Certificate of Designations is required in
connection with such transaction, such documents effecting such
assumption, complies with this Article XVI and that all conditions
precedent herein for relating to such transaction have been
complied with and satisfied.
(b) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions, of all or substantially all of the properties and assets
of one or more Subsidiaries, the Capital Shares of which constitutes
all or substantially all of the properties and assets of the Companies,
shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Companies.
16.2 Surviving Person Substituted. Upon any acquisition, disposal,
consolidation, merger or other combination, or any transfer of assets
in accordance with Section 16.1, the Surviving Person (if other than
the Companies) following such transaction or formed by such
consolidation or into which the Companies are merged or otherwise
combined or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power
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of, the Companies under this Agreement and the Certificate of
Designations with the same effect as if such Surviving Person had been
named as the Companies herein. When, and only when, a Successor Company
assumes all of the obligations of the Companies hereunder and under the
Securities and agrees to be bound hereby and thereby, the predecessor
shall be released from such obligations.
10. Amendment to Article XVII. Effective hereby, the following shall be
substituted in its entirety for Article XVII of the Agreement: Intentionally
Omitted.
11. Amendment to Article XVIII. Effective hereby, the following shall
be substituted in its entirety for Article XVIII of the Agreement:
ARTICLE XVIII
AMENDMENTS
18.1 Amendments and Supplements Requiring Consent of Purchasers;
Other Consents.
(a) Except as otherwise provided in Section 18.1(b) or
18.1(c) hereof, as applicable, this Agreement and the Securities may be
amended or supplemented with the written consent of, and any existing
Covenant Breach or Event of Default or compliance with any provision of
this Agreement or the Securities may be waived only with the
affirmative vote at a meeting written or the consent of a Majority in
Interest of Purchasers.
(b) Without the consent of every affected Purchaser who is a
registered owner of shares of Series A Preferred Stock with an
aggregate Original Issue Price of (pound)500,000 or more, no amendment,
supplement or waiver to this Agreement shall: (i) reduce the Original
Issue Price, principal amount or value of the Series A Preferred Stock,
the Mirror Preferred Stock, the Mirror Notes or the Mirror PIK Notes;
(ii) reduce the number of shares of Common Stock issuable upon
conversion of any shares of Series A Preferred Stock (except pursuant
to adjustment provisions as provided therein), change the fixed
maturity of any Mirror Note or Mirror PIK Note or alter the provisions
with respect to the redemption of the Series A Preferred Stock, the
Mirror Preferred Stock, the Mirror Note or Mirror PIK Note in a manner
adverse to the Purchasers; (iii) reduce the rate of or change the time
for payment of dividends or interest on any shares of Series A
Preferred Stock, the Mirror Preferred Stock, Mirror Note or the Mirror
PIK Notes; (iv) waive a Covenant Breach or Event of Default in the
payment of principal of, or interest on, any shares of Series A
Preferred Stock, the Mirror Preferred Stock, or Mirror Note or the
Mirror PIK Note or on the payment of the Series A Purchase Price or
Series A Preference Amount, or the Mirror Preferred Stock Purchase
Price or the Mirror Preferred Stock Preference Amount or the Mirror
Note Redemption Price or the Mirror PIK Note Redemption Price
14
(except that a Majority in Interest of the Purchasers may (A) rescind
an Acceleration that resulted from a non-payment default, and (B) waive
the payment default that resulted from such Acceleration); (v) make any
share of Series A Preferred Stock or Mirror Preferred Stock or Mirror
Note or Mirror PIK Notes payable in consideration other than that
stated in the Certificate of Designation or such instruments; (vi)
waive a payment of the Series A Purchase Price, Series A Preference
Amount, Mirror Preferred Stock Purchase Price, Mirror Preferred Stock
Preference Amount, the Mirror Note Redemption Price or the Mirror PIK
Note Redemption Price, upon redemption or purchase of the relevant
Security; or (vii) make any change in this Section 18.1(b).
(d) After an amendment, supplement or waiver under this
Section 18.1 becomes effective, the Companies shall mail to the
Purchasers a notice briefly describing the amendment, supplement or
waiver. Any failure of the Companies to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity
of any such amended or supplemental Agreement or waiver.
18.2 Revocation and Effect of Consents.
(a) Until an amendment, supplement or waiver becomes
effective, a consent to it by the Purchasers is a continuing consent by
such Purchasers and every subsequent holder of Securities (whether
subsequently holding in whole or in part), even if notation of the
consent is not made on any Security.
(b) The Companies may, but shall not be obligated to, fix a
record date for the purpose of determining the subsequent holders of
Securities entitled to consent to any amendment or waiver. If a record
date is fixed, then notwithstanding the provisions of the immediately
preceding paragraph, those Persons who were holders of Securities at
such record date (or their duly designated proxies), and only those
Persons, shall be entitled to consent to such amendment or waiver or to
revoke any consent previously given, whether or not such Persons
continue to be holders of such Securities after such record date.
(c) After an amendment or waiver becomes effective it shall
bind the Purchasers and any subsequent holder.
18.3 Notation on or Exchange of Securities. The Companies may
place an appropriate notation about an amendment, supplement or waiver
on any Security thereafter issued in exchange for any Security issued
and outstanding as of the date of such amendment, supplement or waiver.
The Companies, in exchange for such issued and outstanding Securities,
may issue all new Securities that reflect the amendment, supplement or
waiver. Failure to make the appropriate notation or issue a new
Security shall not affect the validity and effect of such amendment,
supplement or waiver.
15
18.4 Board Approval. The Companies may not sign an amendment,
supplement or waiver with respect to this Agreement until the Board of
Directors of Transworld approves it.
12. Amendment to Section 21.10. Effective hereby, the following shall
be substituted in its entirety for Section 21.10. of the Agreement:
21.10 Merger. This Agreement, the Subordinated Notes, the PIK
Notes, the Warrant Instrument, the Mirror Notes, the Mirror PIK Notes,
the shares of Series A Preferred Stock, the Certificate of
Designations, the shares of Mirror Preferred Stock, and the other
Transaction Documents collectively constitute the entire agreement of
the Companies and the Purchasers and express the entire understanding
of the Companies and the Purchasers with respect to the Securities.
13. Amendment to Section 21.12. Effective hereby, the following shall
be substituted in its entirety for Section 21.12 of the Agreement:
21.12 Conflict. If there is a conflict between the provisions of
(i) this Agreement or the Voting Trust Agreement and (ii) the Charter
Documents of Transworld, TW UK or UK Parent or any of the other Group
Companies during the continuance of this Agreement or the Voting Trust
Agreement (as the case may be), it is the intention of the parties
hereto that the provisions of this Agreement or the Voting Trust
Agreement (as the case may be) shall prevail over such Charter
Documents during such period and accordingly Transworld, the Companies
and the Purchasers shall exercise all voting and other rights and
powers available to them so as to give effect to the provisions of this
Agreement or the Voting Trust Agreement (as the case may be) and shall
further if necessary procure any required amendment to the Charter
Documents of the Group Companies.
14. Tax Covenants of the Companies Applicable to the Purchasers'
Securities. As a material inducement for the Purchasers to enter into this
Amendment and the Master Reorganization Agreement, each of the Companies hereby
makes the following covenants and agreements; provided, however, that all such
covenants and agreements shall, notwithstanding the terms thereof, lapse upon
the Lead Investor (or any of its Affiliates, which, for purposes of this
paragraph 14, shall included any limited partner or other constituent owner of
the Lead Investor) holding none of the shares of Series A Preferred Stock issued
to the Lead Investor on the Closing Date (including shares of Common Stock
issued upon conversion thereof):
(a) None of the Companies and any of their respective Subsidiaries
and other affiliates shall take any action, or fail to take any action, that
would cause the exchanges set forth in Section 1.1(a), (b), (c)(ii), (d)(ii),
and (e)(ii) of the Master Reorganization Agreement (collectively, the "Tax-Free
Exchanges") not to qualify as a "B" reorganization within the meaning of Section
368(a)(1)(B) of the Code.
(b) Without limiting the foregoing Section 16(a):
16
(i) none of the Companies and any of their respective
Subsidiaries and other affiliates will file any Tax Return or take any
position inconsistent with the treatment of the Tax-Free Exchanges as a
"B" reorganization within the meaning of Section 368(a)(1)(B) of the
Code;
(ii) each of the Companies and their respective Subsidiaries
and other affiliates will comply with the record keeping and
information reporting requirements set forth in Treasury Regulations
Section 1.368-3;
(iii) each of the Companies, the Subsidiaries and other
Affiliates covenant that UK Parent will at all times during the
two-year period commencing with the Closing Date continue to be an
entity that is disregarded as separate from its owner for U.S. federal
income tax purposes as contemplated by Treasury Regulations Section
301.7701-3;
(iv) each of the Companies, the Subsidiaries and other
Affiliates covenant that TW UK will at all times during the two-year
period commencing with the Closing Date continue to be a corporation,
as defined under Treasury Regulations Section 301.7701-2(b), for U.S.
federal income tax purposes;
(v) each of the Companies, the Subsidiaries and other
Affiliates covenant that the voting trust established pursuant to the
Voting Trust Agreement will at all times during the two-year period
commencing with the Closing Date continue to be either an entity that
is disregarded as separate from its owner as contemplated by Treasury
Regulations Section 301.7701-3 or a grantor trust for U.S. federal
income tax purposes;
(vi) each of the Companies, the Subsidiaries and other
Affiliates covenant that TWUS will legally and beneficially own 100% of
the stock TW UK immediately after the consummation of the
Reorganization (as defined in the Master Reorganization Agreement)
either directly or indirectly through UK Parent and the voting trust
established by the Voting Trust Agreement, and TWUS shall at all times
during the two-year period commencing with the Closing Date retain
control of TW UK within the meaning of Code Section 368(c)(1);
(vii) on or prior to the Closing Date, none of TWUS, any of
its Subsidiaries or other affiliates (including, without limitation, UK
Parent) will acquire any shares of stock of TW UK other than pursuant
to the terms of this Agreement;
(viii) on or prior to the Closing Date, TWUS will treat
itself, for U.S. federal income tax purposes, as the direct owner of
the shares of TW UK beneficially owned by UK Parent and legally owned
by the voting trust established by the Voting Trust Agreement for the
two-year period commencing with the Closing Date, and shall not file
Tax Returns relating to such two-year period, including amended Tax
Returns, inconsistent with such treatment; and
17
(ix) TW UK solely shall pay the expenses and taxes required
to be paid by Section 1.3 of the Master Reorganization Agreement and
Section 10.7 of the Master Reorganization Agreement, such expenses and
taxes shall be paid out of the operating cash flow and cash balances of
TW UK, TW UK shall not borrow any amounts or otherwise incur any
indebtedness for the purpose of or in connection with the paying of any
such expenses and taxes, and TW UK shall not be reimbursed, directly or
indirectly, by TWUS or any of the Subsidiaries or other affiliates of
TWUS (including, without limitation, UK Parent) for any such
expenditures.
(c) TWUS and UK Parent represent and warrant that, at all times
since December 17, 1999, (i) none of TWUS, any of its Subsidiaries and other
affiliates (including, without limitation, UK Parent but excluding TW UK) has
acquired stock of TW UK other than directly from TW UK in connection with the
formation of TW UK; (ii) TW UK acquired shares of its own stock, if any such
acquisitions have occurred, solely with consideration attributable to its own
operating cash flow and cash balances and not with consideration attributable to
a loan or other indebtedness or capital contribution to TW UK; and (iii) TWUS
has treated itself for U.S. federal income tax purposes as the direct owner of
the shares of TW UK beneficially owned by UK Parent and legally owned by the
voting trust established pursuant to the Voting Trust Agreement, and the voting
trust established pursuant to the Voting Trust Agreement has at all times been
either an entity that is disregarded as separate from its owner as contemplated
by Treasury Regulations Section 301.7701-3 or a grantor trust for U.S. federal
income tax purposes.
(d) None of the Companies and any of their respective Subsidiaries
and other affiliates is aware of any fact that would cause the Tax-Free
Exchanges not to qualify as a "B" reorganization within the meaning of Section
368(a)(1)(B) of the Code.
(e) Each of the Companies, their Subsidiaries and other Affiliates
represents and warrants that it has no present plan or intention to take any
actions or fail to take any actions that would cause the covenants set forth in
Section 14(b)(iii)-(vi) and (viii) to be violated as if such covenants were not
limited to the two-year period therein.
(f) None of the Companies, any of their Subsidiaries or other
Affiliates has acquired stock of TWUK in anticipation or contemplation of the
Tax-Free Exchange.
15. Directors. Each of TWUS and UK Parent hereby agrees to use its best
efforts to nominate for director(s) of TWUS and UK Parent, respectively, at any
instance whereupon a vote or selection for such director(s) shall occur,
including without limitation, at each meeting of the stockholders of TW UK and
UK Parent, respectively (or in each action by written consent in lieu of a
meeting), for the election of director or upon the creation of or existence of
any vacancy in the Board of Directors, those individuals as appropriate such
that the Board of Directors of TWUS and UK Parent, respectively, will be
comprised identically to the Board of Directors of TW UK.
16. Other Provisions Unchanged. Except as specifically amended hereby,
all other terms and conditions of the Agreement shall remain in full force and
effect. To the extent that
18
the Agreement includes such terms as "herein," "hereto," "in this Agreement" and
the like, such terms shall be interpreted to refer to the Agreement, as modified
by this Amendment.
17. Counterparts. This Amendment may be executed in separate
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same instruments.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment to the Agreement on the date first written above.
COMPANIES:
SIGNED AS A DEED FOR AND ON BEHALF OF
TRANSWORLD HEALTHCARE (UK) LIMITED
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
SIGNED AS A DEED FOR AND ON BEHALF OF
ALLIED HEALTHCARE GROUP LIMITED,
FORMERLY KNOWN AS
TRANSWORLD HOLDINGS (UK) LIMITED
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
20
PURCHASERS:
Signed as a deed for and on behalf of
TRIUMPH PARTNERS III, L.P.
By: Triumph III Advisors, L.P., its
general partner
By: Triumph III Advisors, Inc., its
general partner
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
Signed as a deed for and on behalf of
TRIUMPH III INVESTORS, L.P.
By: Triumph III Investors, Inc., its
general partner
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
21
Signed as a Deed by
PARIBAS
acting by its duly authorized attorney
-----------------------------------------
Name:
22
SIGNED AS A DEED BY
TRANSWORLD HEALTHCARE, INC.
ACTING BY ITS DULY AUTHORIZED ATTORNEY
By:
-------------------------------------
Name:
Title:
[OTHER PURCHASERS TO BE ADDED]
23
