EXHIBIT 10.3
SECOND AMENDMENT TO MASTER REORGANIZATION AGREEMENT
SECOND AMENDMENT TO MASTER REORGANIZATION AGREEMENT (this "Amendment"),
dated as of June 26, 2002, by and among Allied Healthcare International Inc.
(f/k/a "Transworld Healthcare, Inc."), a New York corporation ("TWUS"), Allied
Healthcare Group Limited (f/k/a "Transworld Holdings (UK) Limited"), a company
incorporated in England and Wales with registered number 3890177 ("AHG"),
Transworld Healthcare (UK) Limited, a company incorporated in England and Wales
with registered number 3370146 ("TWUK", and, together with TWUS and AHG, the
"Corporate Group"), the holders of ordinary shares of TWUK named in EXHIBIT A to
the Agreement (the "Ordinary Shareholders," and each individually, an "Ordinary
Shareholder"), Triumph Partners III, L.P. ("Triumph", which is sometimes
referred to herein as the "Special Share Holder"), as the holder of the "Special
Share" of TWUK (as such is designated in the Articles of Association of TWUK
(the "UK Charter"), the "Special Share"), the holders of redeemable shares of
TWUK named in EXHIBIT B to the Agreement attached hereto (the "Redeemable
Shareholders," and each individually, a "Redeemable Shareholder"), the holders
of equity warrants of TWUK named in EXHIBIT C to the Agreement (the "Equity
Warrant Holders," and each individually, an "Equity Warrant Holder") and the
holders of mezzanine warrants of TWUK named in EXHIBIT D to the Agreement (the
"Mezzanine Warrant Holders," and each individually, a "Mezzanine Warrant
Holder"). Capitalized terms used herein have the meanings ascribed to such terms
in the Agreement.
RECITALS
WHEREAS, the Corporate Group and certain of the Investors have
previously entered into that certain Master Reorganization Agreement, dated as
of April 24, 2002 and amended by a First Amendment dated May 16, 2002 (the
"Agreement"); and
WHEREAS, the parties desire to further amend certain provisions of the
Agreement as fully set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, TWUS, TWUK, AHG and the Investors hereby agree as follows:
1. Amendment of Section 1.1(g). Section 1.1(g) of the Agreement is
hereby amended and restated by deleting it in its entirety and substituting the
following:
"(g) Payment of PIK Interest. The PIK Interest will be treated in
the Reorganization as follows:
(i) with respect to those holders of AHG Notes who are
taxpayers in the United Kingdom (ZRH Nominees (0051) Limited,
Orion Nominees Limited, Xxxxxxx Xxxxxxxx, Xxxxx Xxxxxxx, Xxxxxxx
Xxxxxx, and Xxxxx Xxxxxxx), by the issuance of funding notes (the
"Loan Notes") by AHG to such holders in an amount representing the
accrued PIK Interest amount minus UK tax
withholding at the required 20% rate, as set forth on the
Valuation Matrix, which Loan Notes will thereupon be exchanged for
a number of shares of TWUS Common Stock to be determined by
reference to the Valuation Matrix. Following such exchange, AHG
will satisfy its obligations to TWUS under the Loan Notes by the
issue of AHG ordinary shares;
(ii) with respect to the AHG Notes held by BNP Paribas,
by the issuance of Loan Notes by AHG to BNP Paribas in an amount
representing the accrued PIK Interest amount set forth on the
Valuation Matrix, which Loan Notes will thereupon be exchanged for
a number of shares of TWUS Common Stock to be determined by
reference to the Valuation Matrix. Following such exchange, AHG
will satisfy its obligations to TWUS under the Loan Notes by the
issue of AHG ordinary shares; and
(iii) with respect to Triumph, Triumph III Investors,
L.P. (the "Triumph Investors", Xxxxxx (English) Company Limited,
Xxx Xxxxxx, Xxxxx Xxxxx and Xxxxx Xxxxxxxxx (together with the
Triumph Investors, the "Continuing Investors"), the amount
representing accrued PIK Interest on these holders' AHG Notes
shall not be paid, but instead shall remain a liability of AHG
following the Reorganization, without any further interest
accruing thereon (the "Unpaid PIK Interest"). After the Effective
Time, each Continuing Investor shall have the assignable right,
exercisable at any time or from time to time in whole or in part
in its sole discretion, to require AHG to issue to it or its
successor(s) or assignee(s) Loan Notes in an aggregate amount
equal to its Unpaid PIK Interest. Upon exercise of such right, AHG
shall issue the required amount of Loan Notes in the name of the
Continuing Investor, or its successor(s) or assignee(s) as
instructed by the Continuing Investor, within three (3) business
days, which Loan Notes will thereupon be exchanged by TWUS for a
number of shares of TWUS Common Stock to be determined by
reference to the Valuation Matrix (it being understood and agreed
that the number of shares to be received in exchange for such Loan
Notes shall be fixed as set forth on the Valuation Matrix and
shall not increase or decrease after the Effective Time regardless
of whether the value of a share of TWUS Common Stock decreases or
increases after such date). Following such exchange, AHG will
satisfy its obligations to TWUS under the Loan Notes by the issue
of AHG ordinary shares."
2. Amendment of Section 2.1(h). Section 2.1(h) of the Agreement is
hereby amended and restated by deleting it in its entirety and substituting the
following:
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"(h) The PIK Interest with respect to the AHG Notes for all
holders of AHG Notes other than the Continuing Investors shall be
exchanged into and represent the right to receive that number of fully
paid and nonassessable shares of TWUS Common Stock set forth in
accordance with the Valuation Matrix."
3. Amendment to Section 3.1. Section 3.1 of this Agreement is hereby
amended and restated by deleting it in its entirety and substituting the
following:
"EXCHANGE OF TWUK ORDINARY SHARES FOR SHARES OF TWUS COMMON
STOCK AND PREFERRED STOCK. At or prior to the Effective Time, TWUS
shall deposit, or TWUS shall otherwise take all steps necessary to
cause to be deposited, with American Stock Transfer & Trust Co., its
transfer agent (the "Transfer Agent"), certificates representing the
shares of TWUS Common Stock and TWUS Preferred Stock to be issued
pursuant to Section 2.1 in exchange for those outstanding TWUK Ordinary
Shares, Redeemable Shares and for the PIK Interest as described in
Section 2.1."
4. Amendment to Section 8.2(d). Section 8.2(d) of the Agreement is
hereby amended and restated by deleting it in its entirety and substituting the
following:
"The Equity Warrant Holders (other than the Continuing
Investors) shall have received certificates for that number of shares
of TWUS Common Stock, in exchange for their PIK Interest, as determined
in accordance with the Valuation Matrix."
5. Amendment to Article XI. Article XI of the Agreement shall be
amended and restated by adding the following defined term thereto:
DEFINED TERM SECTION
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Continuing Investors 1.1(g)
6. Terms and Conditions. Except as specifically modified herein all
other terms and conditions of the Agreement shall remain in full force and
effect.
[Remainder of Page Intentionally Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first set forth above individually or by their duly
authorized representatives.
ALLIED HEALTHCARE INTERNATIONAL INC.
(F/K/A TRANSWORLD HEALTHCARE, INC.)
By:/s/ Xxx Xxxxxx
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Name: Xxx Xxxxxx
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Title: Chairman/CEO
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TRIUMPH PARTNERS III, L.P.
By: Triumph III Advisors, L.P.,
its general partner
By: Triumph III Advisors, Inc.,
its general partner
By:/s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
TRIUMPH III INVESTORS, L.P.
By: Triumph III Investors, Inc.,
its general partner
/s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
Title: Managing Director
The foregoing Second Amendment to the Master Reorganization Agreement is hereby
consented and agreed to:
/s/ Xxx Xxxxxx
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Xxxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
XXXXXX (ENGLISH) COMPANY
LIMITED
/s/ Xxx Xxxxxx
------------------------------------
Name: Xxx Xxxxxx
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Title: Chairman
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