RESTATED CERTIFICATE

                                       OF

                                 INCORPORATION

                                       OF

                      UNITED STATES HOME HEALTH CARE CORP.

 

        The undersigned being the Secretary and President of United States Home

Health Care Corp. (the "Corporation") pursuant to Section 807 of the Business

Corporation Law of the State of New York, do hereby restate, certify and set

forth:

 

        1.      The name of the Corporation is United States Home Health Care

Corp. The original Certificate of Incorporation was filed with the Secretary of

State of the State of New York on November 30, 1981.

 

        2.      Pursuant to Section 807 of the Business Corporation Law of the

State of New York, this Restated Certificate of Incorporation restates and

integrates and further amends the provisions of the certificate of

incorporation of this Corporation.

 

        3.      The Certificate of Incorporation, as amended heretofore is

hereby further amended to effect the following amendments authorized by the

Business Corporation Law of the State of New York:

 

                (a)  to change the address for service of process upon the

Corporation;

 

                (b)  (1)  to change the number of issued common shares from

                          1,107,030 to 2,088,960 at the rate of 1 for 1 and

                          490,968;

                          -------

                          553,515

 

                     (2)  to change the number of unissued common shares from

                          892,970 to 7,911,034 at the rate of 8.859 for 1.

 

 

                     (3)  to create a class of 2,000,000 shares of preferred

                          stock, par value $.01 per share.

 

                (c)  to further define voting and other rights as among each

class of capital stock of the Corporation; and

 

                (d)  provide for indemnification of the Board of Directors of

the Corporation.

 

        4.      Effective upon the filing of this Restated Certificate of

Incorporation, the certificate of incorporation of this Corporation, as

heretofore amended or supplemented, shall be restated and further amended to

read in its entirety as follows:

 

                ARTICLE FIRST:  The name of the Corporation is United States

        Home Health Care Corp.

 

                ARTICLE SECOND:  The purpose of the Corporation shall be to

        engage in any lawful act or activity for which corporations may be

        organized under the Business Corporation Law of the State of New York.

        The Corporation is not formed to engage in any act or activity

        requiring the consent or approval of any state official, department,

        board, agency or other body.

 

                ARTICLE THIRD: The office of the Corporation is to be located in

        the County of Westchester, State of New York. The Secretary of State is

        designated as the agent of the Corporation upon whom process against the

        Corporation may be served. The post office address to which the

        Secretary of State shall mail a copy of any such process against the

        Corporation served upon him is c/o Leslie J. Levinson, Esq., Dow, Lohnes

        & Albertson, 437 Madison Avenue, New York, New York 10022.

 

                ARTICLE FOURTH: The total number of shares of all classes of

        capital stock which the Corporation shall have authority to issue is

        twelve million (12,000,000) shares, consisting of ten million

        (10,000,000) shares of Common Stock, par value $.01 per share (the

        "Common Stock") and two million (2,000,000) shares of Preferred Stock,

        par value $.01 per share (the "Preferred Stock").

 

                The designations, voting powers, preferences and relative

        participating, optional and other special rights, and the

        qualifications, limitations or restrictions thereof, in respect of each

        class of such stock, and the express grant of authority to the Board of

        Directors to fix by resolution the designations, voting powers,

        preferences and relative participating, optional and other special

        rights, and the qualifications, limitations or restrictions in respect

        of each series of the Preferred Stock that are not fixed shall be as

        follows:

 

                                       I.

 

                                PREFERRED STOCK

 

        The Board of Directors is authorized, subject to limitations prescribed

by law and the provisions of this Article FOURTH, to provide for the issuance

of the shares of Preferred Stock in one or more series, and by filing a

certificate pursuant to Section 502 of the Business Corporation Law of the

State of New York, to establish from time to time the number of shares to be

included in each such series, and to fix the designation, powers, preferences

and rights of the shares of each such series and the qualifications,

limitations or restrictions thereof.

 

        The authority of the Board of Directors with respect to each series of

Preferred Stock shall include, but not be limited to, the determination of the

following:

 

                (a) The number of shares constituting that series and the

distinctive designation of that series;

 

                (b) The dividend rate or rates, if any, on the shares of that

series and/or method of determining such rate or rates, whether dividends shall

be cumulative, and, if so, from which date or dates, the conditions and dates

upon which any dividends are payable, and the relative rights of priority, if

any, of payment of dividends on shares of that series;

 

                (c) Whether or not the shares of that series shall have voting

rights, in addition to any voting rights provided by law, and, if so, the terms

of such voting rights;

 

                (d) Whether or not the shares of that series shall have

conversion privileges, and, if so, the terms and conditions of such conversion,

including the price or prices or the rate or rates of conversion and any

provision for the adjustment of the conversion rate in such events as the Board

of Directors shall determine;

 

                (e) Whether or not the shares of that series shall be

redeemable, and, if so, the terms and conditions of such redemption, including

the date or dates upon or after which they shall be redeemable, and the amount

per share payable in case of redemption, which amount may vary under different

conditions and at different redemption dates;

 

                (f) Whether or not shares of that series shall have a sinking

fund for the redemption or purchase of shares of that series, and any other

requirement as to the redemption, purchase or other retirement by the

Corporation of the shares of that series, and, if so, the terms and amount of

such sinking fund or other requirement;

 

                (g) The rights of the shares of that series in the event of

voluntary or involuntary liquidation, dissolution or winding up of the

Corporation, and the relative rights of priority, if any, of payment of shares

of that series; and

 

                (h)  Any other relative rights, preferences and limitations of

        that series.

 

 

                                      II.

 

                                  COMMON STOCK

 

         1.      Dividends. Subject to the rights of the holders of any series

of Preferred Stock which may be outstanding and subject to any other provisions

of this Restated Certificate of Incorporation, as amended from time to time,

holders of Common Stock shall be entitled to receive equally on a per share

basis such dividends and other distributions in cash, stock or property of the

Corporation as may be declared thereon by the Board of Directors from time to

time out of assets or funds of the Corporation legally available therefor;

provided, however, that the Board of Directors shall declare no dividend, and no

dividend shall be paid, with respect to any outstanding share of Common Stock,

whether paid in cash or property (including, without limitation, shares of

Common Stock paid on or with respect to shares of Common stock (collectively,

"Stock Dividends")), unless, simultaneously, the same dividend (in the case of

Stock Dividends, stock of the class on or with respect to which the dividend is

paid in the same percentage, relative to the total number of shares of such

class issued and outstanding immediately prior to the payment of such dividend,

as the Stock Dividend on or with respect to the other class bears to the number

of shares of such class issued and outstanding immediately prior to the payment

of such dividend) is paid with respect to each share of Common Stock.

 

        2.      Voting.

 

                (a)  Each share of the Common Stock shall entitle the holder

thereof to one vote, in person or by proxy, at any and all meetings of the

stockholders of the Corporation on all propositions before such meetings on

which the stockholders are entitled to vote.

 

                (b)  Except as otherwise required by statute or specifically

provided by this Restated Certificate of Incorporation or resolutions providing

for the issuance of Preferred Stock, holders of the Common Stock shall have the

sole right and power to vote on all matters on which a vote

of stockholders is to be taken. The holders of Common Stock shall vote together

as a single class, subject to any votes that may be granted to holders of any

series of Preferred Stock.

 

                (c)  Notwithstanding anything in this Section 2 to the

contrary, subject to the voting rights of the holders of any series of

Preferred Stock which may be outstanding, the holders of Common Stock shall

have exclusive voting power on all matters upon which, pursuant to this Restated

Certificate of Incorporation or applicable laws, the holders of common stock

are entitled to vote.

 

        3.      Liquidation Rights.

 

        Upon any Liquidation, after payment in full of all amounts to the

holders of any series of Preferred Stock which may be outstanding, the remaining

assets and funds of the Corporation shall be divided among and paid ratably to

the holders of Common Stock.

 

 

                                      III.

 

                        GENERAL PROVISIONS WITH RESPECT

                            TO ALL CLASSES OF STOCK

 

        No holder of Preferred Stock or Common Stock shall have any right as

such holder to purchase or subscribe for any security of the Corporation now or

hereafter authorized or issued. All such securities may be issued and disposed

of by the Board of Directors to such persons, firms, corporations and

associations for such lawful considerations, and on such terms, as the Board of

Directors in its discretion may determine, without first offering the same, or

any part thereof, to the holders of Preferred Stock or Common Stock.

 

                ARTICLE FIFTH:  In furtherance and not in limitation of the

        powers conferred by statute, the Board of Directors is expressly

        authorized to make, alter or repeal the By-laws of the Corporation,

        subject to any specific limitation on such power provided by any

        By-laws adopted by the stockholders.

 

                ARTICLE SIXTH:  The Corporation is to have perpetual existence.

 

         ARTICLE SEVENTH:  The number of directors of the Corporation shall be

such as from time to time shall be fixed by, or in the manner provided in, the

By-laws of the Corporation. Election of directors need not be by written ballot

unless the By-laws so provide.

 

        ARTICLE EIGHTH:

 

        (1)  LIMITATION ON LIABILITY. A director of the Corporation shall not be

personally liable to the Corporation or its stockholders for monetary damages

for breach of fiduciary duty as a director, except for liability determined by

final judgment (i) resulting from acts committed in bad faith or involving

intentional misconduct or a knowing violation of law, (ii) whereby the director

personally gained in fact a financial profit or other advantage to which he was

not legally entitled, or (iii) whereby the director's acts violated Section 719

of the Business Corporation Law of the State of New York. If the Business

Corporation Law of the State of New York is amended to authorize corporate

action further eliminating or limiting the personal liability of directors, then

the liability of a director of the Corporation shall be eliminated or limited to

the fullest extent permitted by the Business Corporation Law of the State of New

York, as so amended. Any repeal or modification of this Section 1 by the

stockholders of the Corporation shall not adversely affect any right or

protection of a director of the Corporation existing at the time of such repeal

or modification.

 

        (2)  INDEMNIFICATION AND INSURANCE.

 

                (a)  Each person who was or is made a party or is threatened to

be made a party to or is or was involved in any action, suit or proceeding,

whether civil, criminal, administrative or investigative (hereinafter a

"proceeding"), by reason of the fact that he or she or a person of whom he or

she is the legal representative, is or was a director or officer of the

Corporation or is or was serving at the request of the Corporation as a

director, officer, employee or agent of another corporation or of a

partnership, joint venture, trust or other enterprise, including service with

respect to employee benefit plans, whether the basis of such proceeding is

alleged action in an official capacity as a director, officer, employee or

agent or in any other capacity while serving as a director, officer, employee

or agent, shall be indemnified and held harmless by the Corporation to the

fullest extent authorized by the Business Corporation Law of the State of New

York as the same exists or may hereafter be amended (but, in the case of any

such amendment, only to the extent that such amendment permits the Corporation

to provide broader indemnification rights than said law permitted the

Corporation to provide prior to such amendment), against all expense, liability

and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or

penalties and amounts paid or to be paid in settlement) reasonably incurred or

suffered by such person in connection therewith and such indemnification shall

continue as to a person who has ceased to be a director, officer, employee or

agent and shall inure to the benefit of his or her heirs, executors and

administrators; provided, however, that except as provided in subsection 2(b)

of this Article EIGHTH with respect to proceedings seeking to enforce rights to

indemnification, the Corporation shall indemnify any such person seeking

indemnification in connection with a proceeding (or part thereof) initiated by

such person only if such proceeding (or part thereof) was authorized by the

Board of Directors of the Corporation. The right to indemnification conferred

in this subsection 2 shall be a contract right and shall include the right to

be paid by the Corporation the expenses incurred in defending any such

proceeding in advance of its final disposition; provided, however, that if the

Business Corporation Law of the State of New York requires, the payment of such

expenses incurred by a director or officer in his or her capacity as a director

or officer (and not in any other capacity in which service was or is rendered

by such person while a director or officer, including, without limitation,

service to an employee benefit plan) in advance of the final disposition of a

proceeding, shall be made only upon delivery to the Corporation of an

undertaking by or on behalf of such director or officer, to repay all amounts

so advanced if it shall ultimately be determined that such director or officer

is not entitled to be indemnified under this subsection 2 or otherwise. The

Corporation may, by action of its Board of Directors, provide indemnification

to employees and agents of the Corporation with the same

scope and effect as the foregoing indemnification of directors and officers.

 

                (b)  If a claim under subsection 2(a) is not paid in full by

the Corporation within thirty days after a written claim has been received by

the Corporation, the claimant may at any time thereafter bring suit against the

Corporation to recover the unpaid amount of the claim and, if successful in

whole or in part, the claimant shall be entitled to be paid also the expenses

of prosecuting such claim. It shall be a defense to any such action (other than

an action brought to enforce a claim for expenses incurred in defending any

proceeding in advance of its final disposition where the required undertaking,

if any is required, has been tendered to the Corporation) that the claimant has

not met the applicable standard of conduct set forth in Business Corporation

Law of the State of New York for the Corporation to indemnify the claimant for

the amount claimed, but the burden of proving such defense shall be on the

Corporation. Neither the failure of the Corporation (including its Board of

Directors, independent legal counsel or stockholders) to have made a

determination prior to the commencement of such action that indemnification of

the claimant is proper in the circumstances because he or she has met the

applicable standard of conduct set forth in the Business Corporation Law of the

State of New York, nor an actual determination by the Corporation (including

its Board of Directors, independent legal counsel or stockholders) that the

claimant has not met such applicable standard of conduct, shall be a defense to

the action or create a presumption that the claimant has not met the applicable

standard of conduct.

 

                (c)  The right to indemnification and the payment of expenses

incurred in defending a proceeding in advance of its final disposition

conferred in this subsection 2 shall not be exclusive of any other right which

any person may have or hereafter acquire under any statute, provision of this

Restated Certificate of Incorporation, By-law, agreement, vote of stockholders

or disinterested directors or otherwise.

 

                (d)  The Corporation may maintain insurance, at its expense, to

protect itself and any director, officer, employee or agent of the Corporation

or another corporation, partnership, joint venture, trust or other enterprise

against any expense, liability or loss, whether or not the Corporation would

have the power to indemnify such person against such expense, liability or

loss under the Business Corporation Law of the State of New York.

 

                ARTICLE NINTH:  In addition to any other considerations which

        the Board of Directors may lawfully take into account, in determining

        whether to take or to refrain from taking corporate action on any

        matter, including proposing any matter to the stockholders of the

        Corporation, the Board of Directors may take into account the interests

        of creditors, customers, employees and other constituencies of the

        Corporation and its subsidiaries and the effect upon communities in

        which the Corporation and its subsidiaries do business.

 

                ARTICLE TENTH:  The Corporation reserves the right to amend,

        alter, change or repeal any provision contained in this Certificate of

        Incorporation; any other provisions authorized by the laws of the

        State of New York at the time in force may be added or inserted, in

        the manner now or hereafter provided herein or by statute; and all

        rights, preferences and privileges of whatsoever nature conferred upon

        stockholders, directors or any other persons whomsoever by and pursuant

        to this Restated Certificate of Incorporation in its present form or

        as amended are granted subject to the rights reserved in this Article.

 

        5.      This Restated Certificate of Incorporation has been duly

authorized by unanimous written consent of the Board of Directors and by vote

of a majority of all the outstanding shares of the Corporation entitled to vote

thereon at a meeting of shareholders.

 

        IN WITNESS WHEREOF, the undersigned have executed and verified this

Restated Certificate of Incorporation of the Corporation and do affirm the

foregoing as true under penalties of perjury this 6th day of December, 1990.

 

 

                                United States Home Health Care Corp.

 

 

                                By:  /s/ Robert Giuliano

                                     --------------------------------

                                     Robert Giuliano

                                     President

 

 

/s/ Leslie J. Levinson

- ----------------------

Leslie J. Levinson

Secretary

 

 

 

                            CERTIFICATE OF AMENDMENT

 

                                       OF

 

                          CERTIFICATE OF INCORPORATION

 

                                       OF

 

                      UNITED STATES HOME HEALTH CARE CORP.

 

               UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW

 

        WE, THE UNDERSIGNED, Gene Berger and Leslie J. Levinson, being,

respectively, the Vice President and the Secretary of United States Home Health

Care Corp. hereby certify:

 

        1.  The name of the corporation is United States Home Health Care Corp.

 

        2.  The original certificate of incorporation of said corporation was

filed by the Department of State on the 30th day of November, 1981. The

restated certificate of incorporation of said corporation was filed by the

Department of State on the 12th day of December, 1990.

 

        3.  The restated certificate of incorporation is amended as follows:

(i) to change the name of the corporation to Transworld Home HealthCare, Inc.,

(ii) to change the address for service of process upon the corporation, and

(iii) to effect a one-for-2.0914272 reverse stock split.

 

        3.  To effect the change of name of the corporation and the change of

address for service of process upon the corporation, the following Articles of the restated certificate of

incorporation of the corporation are hereby amended to read as follows:

 

                "ARTICLE FIRST:  The name of the Corporation is Transworld Home

        HealthCare, Inc.",

 

                "ARTICLE THIRD:  The office of the Corporation is to be located

        in the County of Westchester, State of New York. The Secretary of State

        is designated as the agent of the Corporation upon whom process against

        the Corporation may be served. The post office address to which the

        Secretary of State shall mail a copy of any such process against the

        corporation served upon him is c/o Leslie J. Levinson, Esq., Baer Marks

        & Upham, 805 Third Avenue, New York, New York 10022."

 

                5.  To effect the reverse split, the following paragraph is

hereby stated:

 

                Effective on the date that this Certificate of Amendment is

        filed with the Secretary of State of the State of New York, and without

        further action on the part of this corporation or the holders of its

        outstanding common stock immediately prior thereto (the "Outstanding

        Common"), each 2.0914272 shares of Outstanding Common shall be changed

        into one share of fully paid and non-assessable common stock, except

        that no fractional shares of common stock will be issued. Prior to the

        reverse split becoming effective there were 4,528,736 shares of

        Outstanding Common and 5,471,264 shares of unissued common stock, all

        shares having a par value of $.01 per share. After the reverse split,

        there will be 2,165,381 shares of Outstanding Common and 7,834,619

        shares of unissued common stock, all shares having a par value of $.01

        per share. Each holder of Outstanding Common who would be entitled to

        receive any fraction of a share of common stock as a result of the

        foregoing exchange ratio shall receive from the corporation cash for his

        fractional share interest resulting from the reverse split based on an

        amount to be determined by the Board of Directors of the

        corporation in its sole discretion. Effective on such date, each

        certificate representing shares of Outstanding Common shall be

        deemed to represent .4781424 of such shares of Outstanding Common.

        Each currently authorized but unissued share will be changed into

        1.4319578 unissued new share. After the reverse split, the corporation

        shall continue to have authority to issue ten million (10,000,000)

        shares of common stock, par value $.01 per share, and two million

        (2,000,000) shares of preferred stock, par value $.01 per share.

 

                6. Pursuant to the reverse split, as stated in paragraph five

above, the first paragraph of Article Fourth will continue to read as follows:

 

                "ARTICLE FOURTH: The total number of shares of all classes of

        capital stock which the Corporation shall have authority to issue is

        twelve million (12,000,000) shares, consisting of ten million

        (10,000,000) shares of Common Stock, par value $.01 per share (the

        "Common Stock") and two million (2,000,000) shares of Preferred Stock,

        par value $.01 per share (the "Preferred Stock")."

 

                7. The foregoing amendments of the restated certificate of

incorporation of the corporation were authorized by the unanimous written

consent of the Board of Directors of the corporation, followed by the vote of

the holders of at least a majority of all of the outstanding shares of the

corporation entitled to vote on the said amendments to the certificate of

incorporation.

 

                IN WITNESS WHEREOF, we have subscribed this instrument on the

date set forth below and do hereby affirm,

under the penalties of perjury, that the statements contained therein have been

examined by us and are true and correct.

 

Dated: August 5, 1997

 

                                /s/ Gene Berger

                                -------------------------------

                                Gene Berger, Vice President

 

                                /s/ Leslie J. Levinson

                                -------------------------------

                                Leslie J. Levinson, secretary

 

 

 

 

 

 

                            CERTIFICATE OF AMENDMENT

 

                                     OF THE

 

                          CERTIFICATE OF INCORPORATION

 

                                       OF

 

                        TRANSWORLD HOME HEALTHCARE, INC.

 

                Under Section 805 of the Business Corporation Law

 

 

It is hereby certified that:

 

 

         FIRST: The name of the corporation is Transworld Home Healthcare, Inc.

 

                     The name under which the corporation was formed is United

States Home Healthcare Corp.

 

         SECOND: The certificate of incorporation of the corporation was filed

by the Department of State on November 30, 1981.

 

         THIRD: The amendment of the certificate of incorporation effected by

this certificate of amendment is as follows:

 

                  (i) to increase the aggregate number of shares which the

corporation shall have authority to issue from twelve million (12,000,000), with

a par value of $.01 per share to thirty two million (32,000,000) by authorizing

twenty million (20,000,000) additional shares of Common Stock, with a par value

of $.01 per share.

 

         FOURTH: To accomplish the foregoing amendment of the first paragraph of

Article FOURTH of the certificate of incorporation, relating to the aggregate

number of shares which the corporation shall have authority to issue, is hereby

amended to read as follows:

 

                           "FOURTH: The aggregate number of shares of all

                  classes which the corporation shall have the authority to

                  issue is thirty two million (32,000,000) shares, divided into

                  two classes of which 30,000,000 shares shall be designated

                  Common Stock, with a par value of $.01 per share and 2,000,000

                  shares shall be designated Preferred Stock, with a par value

                  of $.01 per share."

 

         FIFTH: The foregoing amendment of the certificate of incorporation was

authorized by the consent in writing of all of the members of the Board of

Directors of the corporation followed by the consent of a majority of the

holders of all of the issued and outstanding shares of the corporation entitled

to vote on the said amendment of the certificate of incorporation.

 

                  IN WITNESS WHEREOF, the undersigned have subscribed this

document on the date set forth below and do hereby affirm, under the penalties

of perjury, that the statements contained therein have been examined by the

undersigned and are true and correct.

 

 

Dated:  June 28, 1995.

 

 

                                                 /s/ Wayne A. Palladino

                                                 -------------------------------

                                                 Wayne A. Palladino

                                                 Vice President

 

 

 

                                                 /s/ Leslie J. Levinson

                                                 -------------------------------

                                                 Leslie J. Levinson

                                                 Secretary

 

                                      

 

 

                            CERTIFICATE OF AMENDMENT

 

                                     OF THE

 

                          CERTIFICATE OF INCORPORATION

 

                                       OF

 

                        TRANSWORLD HOME HEALTHCARE, INC.

 

                Under Section 805 of the Business Corporation Law

 

 

It is hereby certified that:

 

 

         FIRST: The name of the corporation is Transworld Home Healthcare, Inc.

 

                     The name under which the corporation was formed is United

States Home Healthcare Corp.

 

         SECOND: The certificate of incorporation of the corporation was filed

by the Department of State on November 30, 1981.

 

         THIRD: The amendment of the certificate of incorporation effected by

this certificate of amendment is as follows:

 

                  to require the approval of at least 66-2/3% of the

corporation's entire board of directors for (i) any action taken by the

corporation with respect to the proposed acquisition by the corporation, whether

by purchase of stock or assets, of another corporation, and (ii) any increase in

the number of the directors of the corporation to more than seven.

 

         FOURTH: To accomplish the foregoing amendment, the following new

Article ELEVENTH, relating to the restrictions on actions by the Board of

Directors, is added to the certificate of incorporation of the corporation:

 

                  "ELEVENTH: (i) any action taken by the Corporation with

         respect to the proposed acquisition by the Corporation whether by

         purchase of stock or assets of another company or (ii) any increase in

         the number of directors of the Corporation to more than seven shall be

         approved by at least 66-2/3% of the Corporation's entire board of

         directors as then constituted, except that at the option of Paribas

         Principal, Inc. ("Paribas") until the satisfaction of certain

         conditions contained in the Shareholders Agreement between among

         others, Paribas and the Corporation dated

         August 5, 1994, Paribas shall have the right to designate one designee

         to the Corporation's Board of Directors, without such approval."

 

 

         FIFTH: The foregoing amendment of the certificate of incorporation was

authorized by the consent in writing of all of the members of the Board of

Directors of the corporation followed by the vote of a majority of the holders

of all of the issued and outstanding shares of the corporation entitled to vote

on the said amendment of the certificate of incorporation.

 

                  IN WITNESS WHEREOF, the undersigned have subscribed this

document on the date set forth below and do hereby affirm, under the penalties

of perjury, that the statements contained therein have been examined by the

undersigned and are true and correct.

 

 

Dated:  May 14, 1996

 

 

                                                 /s/ Wayne A. Palladino

                                                 -------------------------------

                                                 Wayne A. Palladino

                                                 Vice President

 

 

 

                                                 /s/ Leslie J. Levinson

                                                 -------------------------------

                                                 Leslie J. Levinson

                                                 Secretary

 

 

 

                            CERTIFICATE OF AMENDMENT

 

                                     OF THE

 

                          CERTIFICATE OF INCORPORATION

 

                                       OF

 

                        TRANSWORLD HOME HEALTHCARE, INC.

 

                Under Section 805 of the Business Corporation Law

 

 

 

It is hereby certified that:

 

 

         FIRST: The name of the corporation is Transworld Home Healthcare, Inc.

 

         The name under which the corporation was formed is United States Home

Healthcare Corp.

 

         SECOND: The certificate of incorporation of the corporation was filed

by the Department of State on November 30, 1981.

 

         THIRD: The amendment of the certificate of incorporation effected by

this certificate of amendment is as follows:

 

         To change the name of the corporation to Transworld HealthCare, Inc.

 

 

         FOURTH: To accomplish the foregoing amendment, Article FIRST of the

certificate of incorporation, relating to the name of the corporation is hereby

amended to read as follows:

 

         "FIRST: The name of the Corporation is Transworld HealthCare, Inc."

 

 

         FIFTH: The foregoing amendment of the certificate of incorporation was

authorized by the consent in writing of all of the members of the Board of

Directors of the corporation followed by the consent of a majority of the

holders of all of the issued and outstanding shares of the corporation entitled

to vote on the said amendment of the certificate of incorporation.

 

                  IN WITNESS WHEREOF, the undersigned have subscribed this

document on the date set forth below and do hereby affirm, under the penalties

of perjury, that the statements contained therein have been examined by the

undersigned and are true and correct.

 

 

Dated:  May 6, 1997.

 

 

                                                      /s/ Wayne A. Palladino

                                                       -------------------------

                                                       Wayne A. Palladino

                                                       Senior Vice President

 

 

                                                       /s/ Leslie J. Levinson

                                                       -------------------------

                                                       Leslie J. Levinson

                                                       Secretary

 

 

                               CERTIFICATE OF AMENDMENT

 

                                     OF THE

 

                          CERTIFICATE OF INCORPORATION

 

                                       OF

 

                           TRANSWORLD HEALTHCARE, INC.

 

                Under Section 805 of the Business Corporation Law

 

It is hereby certified that:

 

     FIRST: The name of the corporation is Transworld HealthCare, Inc.

 

            The name under which the corporation was formed is United States

Healthcare Corp.

 

     SECOND: The certificate of incorporation of the corporation was filed by

the Department of State on November 30, 1981.

 

     THIRD: The amendments of the certificate of incorporation effected by this

certificate of amendment are as follows: (i) to change the name of the

corporation to Transworld Healthcare, Inc.; (ii) to correct a typographical

error in Article Second; and (iii) to increase the number of authorized shares

of capital stock from 32,000,000 to 42,000,000.

 

     FOURTH: Article FIRST of the certificate of incorporation, relating to the

name of the corporation, is hereby amended to read as follows:

 

         "FIRST: The name of the Corporation is Transworld Healthcare, Inc."

 

     FIFTH: Article SECOND of the certificate of incorporation, relating to the

purpose of the corporation, is hereby amended to read as follows:

 

         "SECOND: The purpose of the Corporation shall be to engage in any

     lawful act or activity for which corporations may be organized under the

     Business Corporation Law of the State of New York. The Corporation is not

     formed to engage in any act or activity requiring the consent or approval

     of any state official, department, board, agency or other body without such

     consent or approval first being obtained."

 

     SIXTH: The first paragraph of Article FOURTH of the certificate of

incorporation, relating to the aggregate number of shares which the corporation

shall have the authority to issue, is hereby amended to read as follows:

 

         "FOURTH: The aggregate number of shares of all classes which the

     corporation shall have the authority to issue is forty-two million

     (42,000,000) shares, divided into two classes, of which 40,000,000 shares

     shall be designated Common Stock, with a par value of $.01 per share and

     2,000,000 shares shall be designated Preferred Stock, with a par value of

     $.01 per share."

 

     SEVENTH: The foregoing amendments of the certificate of incorporation were

authorized by the consent in writing of all of the members of the Board of

Directors of the corporation followed by the consent of a majority of the

holders of all of the issued and outstanding shares of the corporation entitled

to vote on the said amendment of the certificate of incorporation.

 

     IN WITNESS WHEREOF, the undersigned have subscribed this document on the

date set forth below and do hereby affirm, under the penalties of perjury, that

the statements contained therein have been examined by the undersigned and are

true and correct.

 

Dated:  March 17, 1998.

 

                                               /s/ Wayne A. Palladino

                                               ---------------------------------

                                               Wayne A. Palladino

                                               Senior Vice President

 

 

                                               /s/Gregory A. Marsella

                                               ---------------------------------

                                               Gregory A. Marsella

                                               Secretary

 

 

 

                               CERTIFICATE OF AMENDMENT

                                       TO

                          CERTIFICATE OF INCORPORATION

                                       OF

                           TRANSWORLD HEALTHCARE, INC.

 

                UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW

 

         TRANSWORLD HEALTHCARE, INC., a New York corporation (the

"Corporation"), hereby certifies as follows:

 

         FIRST:  The name of the Corporation is "Transworld Healthcare, Inc."

 

         The name under which the Corporation was formed is United States Home

Health Care Corp.

 

         SECOND: The date the Corporation's certificate of incorporation was

filed with the Department of State is November 30, 1981.

 

         THIRD: The amendments of the certificate of incorporation effected by

this certificate of amendment are as follows: (i) to change the name of the

Corporation to Allied Healthcare International Inc.; (ii) to increase the number

of authorized shares of capital stock from forty-two million (42,000,000), of

which forty million (40,000,000) are designated Common Stock and two million

(2,000,000) are designated Preferred Stock, and all of which have a par value of

$.01 per share, to seventy two million (72,000,000), of which sixty two million

(62,000,000) shall be designated Common Stock and ten million (10,000,000) shall

be designated Preferred Stock, and all of which shall have a par value of $.01

per share; and (iii) to eliminate provisions of the certificate of incorporation

requiring supermajority approval by the board of directors of the Corporation

for certain actions.

 

         FOURTH: Article FIRST of the certificate of incorporation, relating to

the name of the Corporation, is hereby amended to read as follows:

 

                  "FIRST: The name of the Corporation is Allied Healthcare

         International Inc."

 

         FIFTH: The first paragraph of Article FOURTH of the certificate of

incorporation, relating to the aggregate number of shares which the Corporation

shall have authority to issue, is hereby amended to read as follows:

 

                  "FOURTH: The aggregate number of shares of all classes which

         the Corporation shall have authority to issue is 72 million shares,

         divided into two classes, of which 62 million shares shall be

         designated Common Stock, with a par value of $.01 per share, and 10

         million shares shall be designated Preferred Stock, with a par value of

         $.01 per share."

 

         SIXTH: Article ELEVENTH of the certificate of incorporation, which

requires supermajority approval by the board of directors of the Corporation for

certain actions, is hereby deleted in its entirety.

 

         SEVENTH: The foregoing amendments were authorized and approved by the

consent in writing of all of the members of the board of directors of the

Corporation followed by the vote of a majority of the holders of all of the

issued and outstanding shares of the Corporation entitled to vote on such

amendments in accordance with the provisions of Section 803(a) of the Business

Corporation Law of the State of New York.

 

         IN WITNESS WHEREOF, Transworld Healthcare, Inc. has caused this

certificate to be signed by John B. Wynne, its Vice President and Chief

Financial Officer, on the 7th day of June, 2002.

 

 

                                          TRANSWORLD HEALTHCARE, INC.

 

 

                                          By: /s/ John B. Wynne

                                              ------------------------------

                                              Name:  John B. Wynne

                                              Title: Vice President and

                                                     Chief Financial Officer

 

 

CERTIFICATE OF AMENDMENT

                       OF THE CERTIFICATE OF INCORPORATION

                                       OF

                      ALLIED HEALTHCARE INTERNATIONAL INC.

 

                          ----------------------------

 

               (UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW)

 

         ALLIED HEALTHCARE INTERNATIONAL INC., a New York Corporation ("the

Corporation") hereby certifies as follows:

 

         FIRST: The name of the Corporation is "Allied Healthcare International

Inc."

 

         The name under which the Corporation was formed is United States Home

Health Care Corp.

 

         SECOND: The date the Corporation's certificate of incorporation was

filed with the Department of State is November 30, 1981.

 

         THIRD: The amendment of the certificate of incorporation effected by

this certificate of amendment is as follows: to designate up to eight million

shares (8,000,000) of the authorized ten million shares (10,000,000) shares of

preferred stock as Series A Convertible Preferred Stock with a par value of $.01

per share.

 

         FOURTH: The first paragraph of Article FOURTH of the certificate of

incorporation, relating to the aggregate number of shares which the Corporation

shall have the authority to issue, is hereby amended to read as follows:

 

                   "FOURTH: The aggregate number of shares of all classes that

         the Corporation shall have the authority to issue is seventy-two

         million shares (72,000,000), divided into two classes, of which

         sixty-two million shares (62,000,000) shall be designated Common Stock,

         with a par value of $.01 per share, and ten million shares (10,000,000)

         shall be designated Preferred Stock, with a par value of $.01 per

         share. Eight million shares (8,000,000) of the Preferred Stock shall be

         designated as Series A Convertible Preferred Stock, with a par value of

         $.01 per share."

 

         FIFTH: Section I of Article FOURTH of the certificate of incorporation,

relating to the Preferred Stock which the Corporation shall have the authority

to issue, is hereby amended by adding the following provisions at the end

thereof:

 

                      SERIES A CONVERTIBLE PREFERRED STOCK

 

         Section 1. Designation and Amount. The 8,000,000 shares of Series A

Convertible Preferred Stock, par value $.01 per share, of the Corporation shall

be designated Series A Convertible Preferred Stock (being referred to herein as

the "Series A Preferred Stock"). Such number of shares may be increased or

decreased by resolution of the Board of Directors;

 

 

 

<PAGE>

 

 

provided, that no decrease shall reduce the number of shares of Series A

Preferred Stock to a number less than that of the shares of Series A Preferred

Stock then outstanding. The Series A Preferred Stock shall have the rights,

terms and privileges set forth below.

 

         Section 2. Dividends and Distributions.

 

              (a) The holders of shares of Series A Preferred Stock shall be

entitled to receive, when, as and if declared by the Board of Directors out of

funds legally available therefor, cumulative dividends at the per share rate of

9.375% of the Original Issue Price per annum (as adjusted for subsequent stock

dividends, stock splits, combinations, recapitalizations or the like with

respect to such share) or such higher rate provided for in Section 17 of the

Certificate of Designations in the event of a Covenant Breach from the date of

original issuance of such share (the "Closing Date") or, in the event of such

higher rate, from the date of the Covenant Breach, which dividends shall accrue

daily in arrears starting from June 18, 2002 and be compounded quarterly,

whether or not such dividends are declared by the Board of Directors or paid.

Subject to the provisions set forth below, such dividends shall be declared by

the Board of Directors and payable quarterly in cash, in arrears, on March 31,

June 30, September 30 and December 31 of each year beginning on September 30,

2002 or if any such day is not a Business Day, on the next succeeding Business

Day; provided that such payment or declaration by the Board of Directors is not

prohibited under Applicable Laws (including lack of surplus under the laws of

the State of New York) and that the Corporation has sufficient cash available to

pay the dividend, and provided that no declaration shall be required unless

there is a respective dividend payment and, notwithstanding any such non-payment

or non-declaration, dividends shall nonetheless accrue and compound as

contemplated by the previous sentence as if such dividends had been declared on

a quarterly basis; and provided further that any such accrued dividends, which,

whether or not declared, are not paid in accordance with this sentence shall be

paid upon liquidation, redemption or conversion of the Series A Preferred Stock

as set forth in Sections 4, 5, 8 and 9 of the Certificate of Designations.

After, and only after, the foregoing dividends on the Series A Preferred Stock

are paid, then the Corporation may (when, as and if declared by the Board of

Directors) declare and distribute dividends among the holders of Common Stock

pro rata based on the number of shares of Common Stock held by each, as of the

record date with respect to the declaration of such dividends.

 

              (b) Unless and until all accumulated dividends on the Series A

Preferred Stock under Section 2(a) of the Certificate of Designations have been

paid for all past dividend periods and for the then current quarterly dividend

period, the Corporation may not declare or pay any dividend, make any

distribution, or set aside any funds or assets for payment or distribution, with

regard to any Junior Stock. As used with regard to the Series A Preferred Stock,

the term "Junior Stock" means all shares of Common Stock and all shares of any

other class or series of stock of the Corporation to which the shares of Series

A Preferred Stock are prior in rank. If the Series A Preferred Stock ranks prior

to another class or series of stock as to some matters, but not as to other

matters, shares of the other class or series are "Junior Stock" with regard to

the matters as to which the Series A Preferred Stock ranks prior to the other

class or series, but not as to other matters.

 

 

 

                                       2

<PAGE>

 

              (c) Any dividend paid or other contribution made with regard to

shares of Series A Preferred Stock will be paid pro-rata on a share-by-share

basis among all such shares at the time outstanding.

 

         Section 3. Voting Rights.

 

              (a) Election of Directors. Subject to the terms hereof, until the

Lead Investor and its Affiliates (which, for purposes of this Section 3(a) of

the Certificate of Designations, shall include any limited partner or other

constituent owner of the Lead Investor) beneficially owns less than

fifty-percent (50%) of the shares of Series A Preferred Stock which it

beneficially owns as of the Closing Date, the holders of outstanding shares of

Series A Preferred Stock shall, voting together as a separate class, be entitled

to elect one Director of the Corporation (the "Series A Director"), which such

number may be increased as provided in Section 17 of the Certificate of

Designations. Such Series A Directors shall be elected by a plurality vote with

the elected candidates receiving the greatest number of affirmative votes (with

each holder of Series A Preferred Stock entitled to cast one vote for a

candidate for the directorships reserved for the holders of the Series A

Preferred Stock with respect to each share of Series A Preferred Stock held by

such holder) of the outstanding shares of Series A Preferred Stock, with votes

withheld having no legal effect. The holders of outstanding shares of Series A

Preferred Stock shall, voting together as a separate class, be entitled to

remove any of the Series A Directors, with or without cause. The election and

removal of such Series A Directors shall occur (i) at the annual meeting of

shareholders of the Corporation, (ii) at any special meeting of shareholders of

the Corporation, (iii) at any special meeting of holders of Series A Preferred

Stock called by holders of a majority of the outstanding shares of Series A

Preferred Stock or (iv) by the written consent of a Majority in Interest in the

manner and on the basis specified above. If, at any time when a sufficient

number of shares of Series A Preferred Stock are outstanding such that a Series

A Director is entitled to be elected pursuant to the first sentence of this

Section 3(a) of the Certificate of Designations, any such Series A Director

ceases to be a Series A Director for any reason, the vacancy shall only be

filled by the vote or written consent of the holders of a majority of the

outstanding shares of Series A Preferred Stock, voting together as a separate

class, in the manner and on the basis specified above or as otherwise provided

by law. So long as the Lead Investor and its Affiliates beneficially owns

fifty-percent (50%) or greater of the shares of Series A Preferred Stock which

it beneficially owns as of the Closing Date, the Lead Investor shall be entitled

to nominate the Series A Directors in its sole discretion. In addition to the

foregoing at all times, the holders of outstanding shares of Series A Preferred

Stock shall also be entitled to vote in the election of all other directors of

the Corporation together with holders of all other shares of the Corporation's

outstanding Capital Shares entitled to vote thereon, voting as a single class,

with each outstanding share of Series A Preferred Stock entitled to the number

of votes specified in Section 3(b) of the Certificate of Designations. The

holders of outstanding shares of Series A Preferred Stock may, in their

discretion, determine not to elect one or more Series A Directors as provided

herein from time to time, and during any such period the Board of Directors

nonetheless shall be deemed duly constituted.

 

              (b) Voting Generally. Each outstanding share of Series A Preferred

Stock shall be entitled to a number of votes equal to the number of shares of

Common Stock into which

 

 

 

                                       3

<PAGE>

 

such share of Series A Preferred Stock is then convertible pursuant to Section 5

of the Certificate of Designations as of the record date for the vote or written

consent of shareholders, as applicable. Each holder of outstanding shares of

Series A Preferred Stock shall be entitled to notice of any shareholders meeting

in accordance with the by-laws of the Corporation and shall vote with holders of

the Common Stock, voting together as single class, upon all matters submitted to

a vote of shareholders, except those matters required to be submitted to a class

or series vote pursuant to the terms hereof or by law.

 

         Section 4. Liquidation.

 

              (a) Series A Liquidation Preference. Upon any liquidation,

dissolution or winding up of the Corporation and its subsidiaries, whether

voluntary or involuntary (a "Liquidation Event"), each holder of outstanding

shares of Series A Preferred Stock shall be entitled to be paid in cash, whether

from capital, surplus or earnings, before any amount is paid or distributed to

the holders of the Common Stock or any other Junior Stock, an amount per share

of Series A Preferred Stock equal to (i) (pound)2.867 (the "Original Issue

Price") (such amount to be adjusted appropriately for stock splits, stock

dividends, recapitalizations and the like) plus (ii) any accrued or declared but

unpaid dividends on such shares of Series A Preferred Stock (the Original Issue

Price plus such accrued or declared dividends are referred to herein as the

"Series A Preference Amount"). If the amounts available for distribution by the

Corporation to holders of Series A Preferred Stock upon a Liquidation Event are

not sufficient to pay the aggregate Series A Preference Amount due to such

holders, such holders shall share ratably in any distribution in connection with

such Liquidation Event in proportion to the full respective preferential amounts

to which they are entitled.

 

         Notwithstanding the preceding paragraph, if upon such Liquidation Event

the holders of outstanding shares of Series A Preferred Stock would receive more

than the aggregate amount to be received under the preceding paragraph above in

the event all of their shares of Series A Preferred Stock were converted into

shares of Common Stock (plus the payment in cash of any accrued or declared but

unpaid dividends on such shares of Series A Preferred Stock) pursuant to the

provisions of Section 5(a) of the Certificate of Designations immediately prior

to such Liquidation Event and such shares of Common Stock received a liquidating

distribution or distributions from the Corporation, then each holder of

outstanding shares of Series A Preferred Stock in connection with such

Liquidation Event shall be entitled to be paid in cash, in lieu of the payments

described in the preceding paragraph, an amount per share of Series A Preferred

Stock equal to such amount as would have been payable in respect of each share

of Common Stock (including any fractions thereof) issuable upon conversion of

such share of Series A Preferred Stock had such share of Series A Preferred

Stock been converted to Common Stock immediately prior to such Liquidation Event

pursuant to the provisions of Section 5(a) of the Certificate of Designations

(plus the payment in cash of any accrued or declared but unpaid dividends on

such shares of Series A Preferred Stock).

 

         The provisions of this Section 4(a) of the Certificate of Designations

shall not in any way limit the right of the holders of Series A Preferred Stock

to elect to convert their shares of Series A Preferred Stock into shares of

Common Stock (plus the payment in cash of any accrued or

 

 

                                       4

<PAGE>

 

 

declared but unpaid dividends on such shares of Series A Preferred Stock)

pursuant to Section 5 of the Certificate of Designations prior to or in

connection with any Liquidation Event.

 

              (b) Remaining Assets. After the payment of all preferential

amounts required to be paid to the holders of the Series A Preferred Stock and

any other class or series of stock of the Corporation ranking on liquidation on

a parity with the Series A Preferred Stock, the remaining assets and funds of

the Corporation available for distribution to its shareholders shall be

distributed among the holders of shares of Junior Stock then outstanding.

 

         Section 5. Conversion into Common Stock. The holders of Series A

Preferred Stock shall have the following conversion rights:

 

              (a) Voluntary Conversion. Each holder of shares of Series A

Preferred Stock will have the right, upon the written election of such holder

without the payment of additional consideration, at any time on or before the

day before the date, if any, fixed for the conversion of those shares in any

notice of conversion given as provided in Section 9 of the Certificate of

Designations at the office of the Corporation or any transfer agent for those

shares, from the date of issuance until December 17, 2008, at the option of the

holder of the shares of Series A Preferred Stock, to convert some or all shares

of Series A Preferred Stock held of record by the holder into (i) such number of

fully paid and nonassessable shares of Common Stock as is determined by dividing

the Original Issue Price for each such share by the Conversion Price at the time

in effect for such Series A Preferred Stock (the "Common Conversion Rate"), and

(ii) the payment in cash of any accrued or declared but unpaid dividends on such

shares of Series A Preferred Stock. The initial "Conversion Price" per share for

shares of Series A Preferred Stock shall be the Original Issue Price, subject to

adjustment as set forth in Section 6 of the Certificate of Designations. Such

conversion may occur at any time after the date of issuance of such shares of

Series A Preferred Stock.

 

              (b) Procedure for Conversion. Upon election to convert pursuant to

Section 5(a) of the Certificate of Designations, the relevant holder or holders

of Series A Preferred Stock shall surrender the certificate or certificates

representing the Series A Preferred Stock being converted to the Corporation,

duly assigned or endorsed for transfer to the Corporation (or accompanied by

duly executed stock powers relating thereto) or if lost shall deliver to the

Corporation an affidavit of loss together with an indemnity agreement in form

reasonably satisfactory to the Corporation, at its principal executive office or

such other place as the Corporation may from time to time designate by notice to

the holders of the Series A Preferred Stock. Upon surrender of such

certificate(s) or delivery of an affidavit of loss together with an indemnity

agreement in form reasonably satisfactory to the Corporation, the Corporation

shall issue and send by hand delivery, by courier or by first class mail

(postage prepaid) to the holder thereof or to such holder's designee, at the

address designated by such holder, certificates for the number of shares of

Common Stock to which such holder shall be entitled upon conversion and shall

deliver to the holder or the holder's designee, pursuant to instructions

provided to the Corporation by the holder in immediately available funds, cash

in the amount of any accrued or declared but unpaid dividends on such shares of

Series A Preferred Stock being converted. The issuance of certificates for

Common Stock upon conversion of Series A

 

 

                                       5

<PAGE>

 

Preferred Stock shall be deemed effective as of 9:00 a.m. Eastern Time of the

date of written notice of election to convert delivered pursuant to Section 5(a)

of the Certificate of Designations together with the surrender of such Series A

Preferred Stock certificates or delivery of such affidavit of loss together with

an indemnity agreement in form reasonably satisfactory to the Corporation and

shall be made without charge to the holders of such shares for any issuance tax

in respect thereof or other costs incurred by the Corporation in connection with

such conversion and the related issuance of such stock, provided, however, that

the Corporation will not be required to pay any tax which may be payable in

respect of any transfer involved in the issue or delivery of shares of Common

Stock in a name other than that of the holder of record of the Series A

Preferred Stock to be converted and no such issue or delivery will be made

unless and until the person requesting the issue or delivery has paid to the

Corporation the amount of any such tax or has established, to the satisfaction

of the Corporation, that the tax has been paid.

 

              (c) Reservation of Stock Issuable upon Conversion. The Corporation

shall at all times reserve and keep available out of its authorized but unissued

shares of Common Stock, solely for the purpose of effecting the conversion of

the shares of Series A Preferred Stock, such number of its shares of Common

Stock as shall from time to time be sufficient to effect the conversion of all

outstanding shares of Series A Preferred Stock. If at any time the number of

authorized but unissued shares of Common Stock is not sufficient to effect the

conversion of all outstanding shares of Series A Preferred Stock, the

Corporation shall take such corporate action as may be necessary to increase the

number of its authorized but unissued shares of Common Stock to such number of

shares as are sufficient for such purpose, and to reserve the appropriate number

of shares of Common Stock for issuance upon such conversion.

 

              (d) No Closing of Transfer Books. The Corporation shall not close

its books against the transfer of shares of Series A Preferred Stock in any

manner that would interfere with the timely conversion of any shares of Series A

Preferred Stock.

 

              (e) No Fractional Shares. No fractional shares of Common Stock

will be issued upon conversion of Series A Preferred Stock. Any fractional

interest in a share of Common Stock resulting from conversion of shares of

Series A Preferred Stock will be paid in cash (computed to the nearest cent)

based on the Conversion Price on the day next preceding the day of conversion.

If more than one share of Series A Preferred Stock is surrendered for conversion

at substantially the same time by the same holder, the number of full shares of

Common Stock issuable upon the conversion will be computed on the basis of all

the shares of Series A Preferred Stock surrendered at that time by that holder.

 

              (f) Failure by Corporation to Pay Dividend Amount in Cash. In the

event that the Corporation is prohibited or prevented under Applicable Laws or

under any other contractual or other arrangement (including, without limitation,

the Credit Agreements), or other legal restriction whatsoever, directly or

indirectly (which shall be deemed to encompass a similar prohibition or

prevention upon UK Parent or TWUK or other Subsidiary of the Corporation) from

paying in cash the amount of the accrued or declared but unpaid dividends on

such shares of Series A Preferred Stock of any holder requesting a voluntary

conversion of the shares in accordance with Section 5 of the Certificate of

Designations, after the Corporation shall use all

 

 

                                       6

<PAGE>

 

reasonable endeavors to take such action as shall be necessary or appropriate to

review and promptly remove any impediment to its ability to pay such cash

amounts (including to cause UK Parent and/or TWUK to take substantially similar

actions) as contemplated in Section 5 of the Certificate of Designations, to the

extent there remains any such cash amounts which have not been so paid, such

holder may make the following election, in its sole discretion:

 

                   (i) the holder shall have the right to revoke their voluntary

         conversion exercise with respect to the applicable number of shares of

         Series A Preferred Stock with which payment of accrued or declared but

         unpaid dividends has not been provided in cash;

 

                   (ii) unless otherwise prohibited under Applicable Laws, the

         holder shall be entitled to accept from the Corporation, and the

         Corporation shall promptly issue to the holder, a demand note in the

         principal amount of the accrued or declared but unpaid dividends

         remaining unpaid in cash, which such demand note shall include interest

         provisions substantially identical to the dividend provisions of

         Section 2 of the Certificate of Designations (except that interest rate

         on the demand note shall be increased by two percent (2%)), and which

         such demand note shall otherwise be in form and substance reasonably

         satisfactory to such holder; or

 

                   (iii) the holder shall have the right to receive an

         additional number of shares of Common Stock of the Corporation equal to

         the quotient of (A) the amount of the accrued or declared but unpaid

         dividends that remain unpaid, divided by (B) the average 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 for

         the five (5) Trading Days immediately preceding the date of conversion.

         In the event that the holder elects this option (iii) the procedure for

         delivery of such shares of Common Stock shall be consistent with, and

         concurrent with, the delivery and issuance of shares of Common Stock

         pursuant to Section 5(b) and 5(e) of the Certificate of Designations.

 

         Section 6. Adjustments.

 

              (a) Adjustments to the Conversion Price. Except as provided in

Section 6(b) of the Certificate of Designations and except in the case of an

event described in Section 6(c) of the Certificate of Designations, if and

whenever after the date the amendment to the Certificate of Incorporation

containing the Certificate of Designations is first filed with the Department of

State of New York (the "Filing Date") the Corporation issues, sells or

exchanges, or is, in accordance with this Section 6(a) of the Certificate of

Designations, deemed to have issued or sold or exchanged, any shares of Common

Stock for a consideration per share less than the Conversion Price in effect

immediately prior to such issuance, sale or exchange, then, upon such issuance,

sale or exchange (or deemed issuance, sale or exchange), the Conversion Price

shall be reduced to the price determined by dividing (y) the sum of (A) the

Common Stock Deemed Outstanding immediately prior to such issuance, sale or

exchange (or deemed issuance, sale or exchange) multiplied by the Conversion

Price then in effect and (B) the consideration, if any, received by the

Corporation upon such issuance, sale or exchange (or deemed issuance, sale or

exchange) by (z) the Common Stock Deemed Outstanding immediately after such

issuance, sale

 

 

                                       7

<PAGE>

 

or exchange (or deemed issuance, sale or exchange). Such adjustments shall be

made successively whenever such an issuance, sale or exchange is made. For

purposes of clause (y)(B) of this Section 6(a) of the Certificate of

Designations, if applicable, "consideration" shall be denominated in sterling

converted utilizing the relevant currency exchange rate on the date of such

issuance, sale, or exchange (or deemed issuance, sale, or exchange).

 

         For purposes of this Section 6(a) of the Certificate of Designations,

the following shall also, subject to the provisions of Section 6(b) of the

Certificate of Designations, be applicable:

 

                   (i) Issuance of Rights or Options. If the Corporation, at any

         time after the Filing Date, in any manner grants (whether directly or

         by assumption in a merger or otherwise) any warrants or other rights to

         subscribe for or to purchase, or any options for the purchase of,

         Common Stock or any stock or security convertible into or exchangeable

         for Common Stock (such warrants, rights or options being called

         "Options" and such convertible or exchangeable stock or securities

         being called "Convertible Securities"), in each case for consideration

         per share (determined as provided in this paragraph and in Section

         6(a)(vi) of the Certificate of Designations less than the Conversion

         Price then in effect, whether or not such Options or the right to

         convert or exchange any such Convertible Securities are immediately

         exercisable, then the total maximum number of shares of Common Stock

         issuable upon the exercise of such Options, or upon conversion or

         exchange of the total maximum amount of such Convertible Securities

         issuable upon exercise of such Options, shall be deemed to have been

         issued as of the date of granting of such Options, at a price per share

         equal to the amount determined by dividing (A) the total amount, if

         any, received or receivable by the Corporation as consideration for the

         granting of such Options, plus the minimum aggregate amount of

         additional consideration payable to the Corporation upon the exercise

         of all such Options, plus, in the case of such Options which relate to

         Convertible Securities, the minimum aggregate amount of additional

         consideration, if any, payable upon the issuance or sale of such

         Convertible Securities and upon the conversion or exchange thereof, by

         (B) the total maximum number of shares of Common Stock deemed to have

         been so issued. Except as otherwise provided in Section 6(a)(iii) of

         the Certificate of Designations, no adjustment of the Conversion Price

         shall be made upon the actual issuance of such Common Stock or of such

         Convertible Securities upon exercise of such Options or upon the actual

         issuance of such Common Stock upon conversion or exchange of such

         Convertible Securities. To the extent that any Options or Convertible

         Securities are not so issued or expire unexercised, the Conversion

         Price then in effect shall be readjusted to the Conversion Price which

         would then be in effect if such unissued or unexercised Options or

         Convertible Securities had not been issuable.

 

                   (ii) Issuance of Convertible Securities. If the Corporation,

         at any time after the Filing Date, in any manner issues or sells any

         Convertible Securities for consideration per share (determined as

         provided in this paragraph and in Section 6(a)(vi) of the Certificate

         of Designations less than the Conversion Price then in effect, whether

         or not the rights to exchange or convert any such Convertible

         Securities are immediately exercisable, then the total maximum number

         of shares of Common Stock issuable upon

 

 

 

                                       8

<PAGE>

 

         conversion or exchange of all such Convertible Securities shall be

         deemed to have been issued as of the date of the issuance or sale of

         such Convertible Securities, at a price per share equal to the amount

         determined by dividing (A) the total amount, if any, received or

         receivable by the Corporation as consideration for the issuance or sale

         of such Convertible Securities, plus the minimum aggregate amount of

         additional consideration, if any, payable to the Corporation upon the

         conversion or exchange thereof, by (B) the total maximum number of

         shares of Common Stock deemed to have been so issued; provided, that

         (1) except as otherwise provided in Section 6(a)(iii) of the

         Certificate of Designations, no adjustment of the Conversion Price

         shall be made upon the actual issuance of such Common Stock upon

         conversion or exchange of such Convertible Securities and (2) if any

         such issuance or sale of such Convertible Securities is made upon

         exercise of any Options to purchase any such Convertible Securities, no

         further adjustment of the Conversion Price shall be made by reason of

         such issuance or sale. To the extent that any Convertible Securities

         are not so issued or expire unexercised, the Conversion Price then in

         effect shall be readjusted to the Conversion Price which would then be

         in effect if such unissued or unexercised Options or Convertible

         Securities had not been issuable.

 

                   (iii) Change in Option Price or Conversion Rate. If a change

         occurs in (A) the maximum number of shares of Common Stock issuable in

         connection with any Option referred to in Section 6(a)(i) of the

         Certificate of Designations or any Convertible Securities referred to

         in Section 6(a)(i) or (ii) of the Certificate of Designations, (B) the

         purchase price provided for in any Option referred to in Section

         6(a)(i) of the Certificate of Designations, (C) the additional

         consideration, if any, payable upon the conversion or exchange of any

         Convertible Securities referred to in Section 6(a)(i) or (ii) of the

         Certificate of Designations or (D) the rate at which Convertible

         Securities referred to in Section 6(a)(i) or (ii) of the Certificate of

         Designations are convertible into or exchangeable for Common Stock (in

         each case, other than in connection with an event described in Section

         6(b) of the Certificate of Designations), then the Conversion Price in

         effect at the time of such event shall be readjusted to the Conversion

         Price that would have been in effect at such time had such Options or

         Convertible Securities that remain outstanding provided for such

         changed maximum number of shares, purchase price, additional

         consideration or conversion rate, as the case may be, at the time

         initially granted, issued or sold, but in no circumstance shall the

         Conversion Price be increased to an amount greater than the Conversion

         Price in effect on the Filing Date. No adjustment of the Conversion

         Price shall be made under this Section 6(a)(iii) of the Certificate of

         Designations upon the issuance of any additional shares of Common Stock

         which are issued pursuant to the exercise of any Options or Convertible

         Securities if an adjustment shall previously have been made upon the

         issuance of such Options or Convertible Securities.

 

         Any adjustment of the Conversion Price pursuant to Sections 6(a)(i),

(ii) and (iii) of the Certificate of Designations shall be disregarded if, as

and when the rights to acquire shares of Common Stock upon exercise or

conversion of the Options or Convertible Securities which gave rise to such

adjustment expire or are canceled, redeemed or repurchased without having been

 

 

                                       9

<PAGE>

 

exercised, so that the Conversion Price effective immediately upon such

cancellation, redemption, repurchase or expiration shall be equal to the

Conversion Price immediate prior to the issuance of the expired, redeemed,

repurchased or cancelled Options or Convertible Securities, with such additional

adjustments as would have been made to that Conversion Price had the expired or

canceled Options or Convertible Securities not been issued.

 

                   (iv) Stock Dividends. If the Corporation declares, orders,

         pays or makes a dividend or makes any other distribution upon any stock

         of the Corporation payable in Common Stock, Options or Convertible

         Securities, any Common Stock, Options or Convertible Securities, as the

         case may be, issuable in payment of such dividend or distribution shall

         be deemed to have been issued or sold without consideration, and the

         Conversion Price shall be adjusted pursuant to this Section 6(a) of the

         Certificate of Designations; provided, that no adjustment shall be made

         to the Conversion Price as a result of such dividend or distribution if

         the holders of the shares of Series A Preferred Stock are entitled to,

         and do, receive such dividend or distribution in accordance with

         Sections 2 and 6(a)(v) of the Certificate of Designations; and,

         provided, further, that if any adjustment is made to the Conversion

         Price as a result of the declaration of a dividend and such dividend is

         not effected, the Conversion Price shall be appropriately readjusted.

 

                   (v) Other Dividends and Distributions. If the Corporation at

         any time or from time to time after the Filing Date makes, orders,

         pays, declares, or issues, or fixes a record date for the determination

         of holders of Common Stock entitled to receive, a dividend or other

         distribution (A) payable in securities or other property of the

         Corporation other than shares of Common Stock and (B) that, together

         with all such other dividends or distributions pursuant to this Section

         6(v) of the Certificate of Designations during the same fiscal year of

         the Corporation, has an aggregate Fair Value per share greater than 10%

         of the Original Issue Price (such amount to be appropriately adjusted

         for any stock split, stock dividend, recapitalization or similar

         transaction) then and in each such event provision shall be made so

         that the holders of the outstanding shares of Series A Preferred Stock

         shall receive upon conversion thereof, in addition to the number of

         shares of Common Stock receivable thereupon and the payment in cash of

         any accrued or declared but unpaid dividends on such shares of Series A

         Preferred Stock, the amount of such other securities of the Corporation

         or such other property, or an amount of cash equal to the Fair Value of

         the securities or property as of the date of such distribution that

         they would have received had the Series A Preferred Stock been

         converted into Common Stock on the date of such event and had such

         holders thereafter, during the period from the date of such event to

         and including such date of conversion, retained such securities or

         other property receivable by them during such period giving application

         to all adjustments called for during such period under Section 6 of the

         Certificate of Designations with respect to the rights of the holders

         of the outstanding shares of Series A Preferred Stock; provided,

         that in the case of a distribution or dividend in cash, the Conversion

         Price shall be reduced (without duplication) by an amount equal to the

         per share amount of the cash dividend or distribution; provided that no

         such adjustment pursuant to this Section 6(a)(v) of the Certificate of

         Designations shall be made if the

 

                                       10

<PAGE>

 

         holders of Series A Preferred Stock simultaneously receive a dividend

         or other distribution of such securities or other property in an amount

         equal to the amount of such securities or other property as they would

         have received if all outstanding shares of Series A Preferred Stock had

         been converted into Common Stock on the date of such event.

 

                   (vi) Consideration for Stock. In case any shares of Common

         Stock are issued or sold, or deemed issued or sold, for cash, the

         consideration received therefor shall be deemed to be the amount

         received or to be received by the Corporation therefor (determined with

         respect to deemed issuances and sales in connection with Options and

         Convertible Securities in accordance with clause (A) of Section 6(a)(i)

         or Section 6(a)(ii) of the Certificate of Designations, as appropriate)

         determined in the manner set forth below in this Section 6(a)(vi) of

         the Certificate of Designations. In case any shares of Common Stock are

         issued or sold, or deemed issued or sold, for a consideration other

         than cash, the amount of the consideration other than cash received by

         the Corporation shall be deemed to be the Fair Value of such

         consideration received or to be received by the Corporation (determined

         with respect to deemed issuances and sales in connection with Options

         and Convertible Securities in accordance with clause (A) of Section

         6(a)(i) or Section 6(a)(ii) of the Certificate of Designations, as

         appropriate). If any Options are issued in connection with the issuance

         and sale of other securities of the Corporation, together comprising

         one integral transaction in which no specific consideration is

         allocated to such Options by the parties thereto, such Options shall be

         deemed to have been issued for such consideration as determined in good

         faith by the Board of Directors of the Corporation.

 

                   (vii) Record Date. If the Corporation takes a record of the

         holders of its Common Stock for the purpose of entitling them (A) to

         receive a dividend or other distribution payable in Common Stock,

         Options or Convertible Securities or (B) to subscribe for or purchase

         Common Stock, Options or Convertible Securities, then such record date

         shall be deemed to be the date of the issuance or sale of the shares of

         Common Stock deemed to have been issued or sold upon the declaration of

         such dividend or the making of such other distribution or the date of

         the granting of such right of subscription or purchase, as the case may

         be.

 

                   (viii) Treasury Shares. The number of shares of Common Stock

         outstanding at any given time shall not include shares owned or held by

         or for the account of the Corporation; provided, that the disposition

         of any such shares to any third party shall be considered an issuance

         or sale of Common Stock for the purpose of this Section 6 of the

         Certificate of Designations.

 

                   (ix) Other Issuances or Sales; Indeterminable Amounts. In

         calculating any adjustment to the Conversion Price pursuant to this

         Section 6(a) of the Certificate of Designations, any Options or

         Convertible Securities that provide, as of the effective date of such

         adjustment, for the issuance upon exercise or conversion thereof of an

         indeterminable number of shares of Common Stock shall (together with

         the shares of Common Stock issuable upon exercise or conversion

         thereof) be disregarded for purposes

 

 

 

                                       11

<PAGE>

 

         of the calculation and what shares are deemed to be outstanding;

         provided, that at such time as time as a number of shares of Common

         Stock issuable upon exercise or conversion of such Options or

         Convertible Securities becomes determinable, then the Conversion Price

         shall be adjusted as provided in Section 6(a)(iii) of the Certificate

         of Designations.

 

                   (x) Common Stock Deemed Outstanding. For purposes of this

         Section 6 of the Certificate of Designations, the term "Common Stock

         Deemed Outstanding" shall mean, at any time, the sum of (A) the number

         of shares of Common Stock outstanding immediately prior to the Filing

         Date (including for this purpose all shares of Common Stock issuable

         upon exercise or conversion of any Options or Convertible Securities

         outstanding immediately prior to the Filing Date), plus (B) the number

         of shares of Common Stock issued, sold or exchanged (or deemed issued,

         sold or exchanged ) after the Filing Date, the issuance, sale or

         exchange of which resulted in an adjustment to the Conversion Price

         pursuant to Section 6(a) of the Certificate of Designations; provided,

         that Common Stock Deemed Outstanding shall not include the Series A

         Preferred Stock or any shares of Common Stock issuable upon exercise of

         the Series A Preferred Stock or any shares of Common Stock issuable

         pursuant to Section 1.1 (g)(iii) of the Master Reorganization

         Agreement.

 

              (b) Certain Issues of Common Stock Excepted. Anything herein to

the contrary notwithstanding, the Corporation shall not be required to make any

adjustment of the Conversion Price pursuant to Section 6(a) of the Certificate

of Designations in the case of the issuance from and after the Filing Date of

(i) shares of Common Stock upon conversion of shares of Series A Preferred

Stock, (ii) shares of Common Stock issued to the Investors (as such term is

defined in the Master Reorganization Agreement) as contemplated in the Master

Reorganization Agreement, (iii) up to 3,000,000, 1,394,000 and 100,000 (such

amount to be appropriately adjusted for stock splits, stock dividends,

recapitalizations and the like) shares of Common Stock or options therefore to

directors, officers, employees or consultants of the Corporation or any

Subsidiary or their retention as consultants by the Corporation or any

Subsidiary, in each case authorized by the Board of Directors and issued

pursuant to the Corporation's 2002 Stock Option Plan, 1992 Stock Option Plan and

1997 Option Plan for Non-Employee Directors, respectively; provided, however

that, except with respect to the Corporation's 2002 Stock Option Plan this

Section 6(b) of the Certificate of Designations shall not apply to any such

shares of Common Stock or options issued upon regrant of any redeemed,

cancelled, exercised or expired shares of Common Stock or options, (iv) any

issuance or sale (or deemed issuance or sale) which (A) is not otherwise

addressed by Sections 6(d) and/or 6(e) of the Certificate of Designations, (B)

involves a bona fide statutory merger or consolidation or acquisition, or a bona

fide transfer of assets, the terms of which have been negotiated on an

arm's-length basis in good faith, whereby, in whole or in part, in consideration

thereof Securities of the Corporation are issued in exchange for securities

and/or assets of another Person, (C) does not include an issuance or sale (or

deemed issuance or sale) to any Affiliate of the Corporation, and (D) would not

satisfy the definition of "Liquidity Event" if 50% were substituted for 90%

therein, or (v) any issuance or sale (or deemed issuance or sale) for a gross

consideration per share (determined consistently with the provisions of this

Section 6 of the Certificate of Designations, but inclusive of any

 

 

 

                                       12

<PAGE>

 

amounts applicable to reasonable and customary underwriting commissions and

offering expenses incurred in connection with such issuance or sale (or deemed

issuance or sale)) equal to or greater than (X) 90% of the current market price

with respect to a placement generally known as or structured substantially

similar to a "PIPE" transaction, (Y) 85% of the current market price with

respect to other private placement transactions to non-Affiliates of the

Corporation and (Z) 95% of the current market price per share otherwise. For

purposes of this Section 6(b) of the Certificate of Designations, "current

market price per share" of Common Stock shall be deemed to be the average of the

Closing Prices of the Common Stock for the 20 consecutive Trading Days ending

the earlier of (x) the date a binding agreement with respect to such issuance or

sale is entered into and (y) the date of such issuance or sale, 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.

 

              (c) Subdivision or Combination of Common Stock. If the Corporation

shall at any time after the Closing Date subdivide its outstanding shares of

Common Stock into a greater number of shares (by any stock split, stock

dividend, recapitalization or otherwise), then the Conversion Price in effect

immediately prior to such subdivision shall be proportionately reduced, and,

conversely, if the Corporation shall at any time after the Closing Date combine

or consolidates its outstanding shares of Common Stock into a smaller number of

shares (by any reverse stock split or otherwise), then the Conversion Price in

effect immediately prior to such combination shall be proportionately increased.

 

              (d) Reorganization or Reclassification. If any capital

reorganization or reclassification of the Capital Shares of the Corporation

shall be effected in such a way that holders of Common Stock shall be entitled

to receive stock, securities or assets with respect to or in exchange for Common

Stock, then, as a condition of such reorganization or reclassification, lawful

and adequate provisions shall be made whereby each holder of a share or shares

of Series A Preferred Stock shall thereupon have the right to receive, upon the

basis and upon the terms and conditions specified herein and in lieu of the

shares of Common Stock immediately theretofore receivable upon the conversion of

such share or shares of Series A Preferred Stock, as the case may be (but not in

lieu of the payment in cash of any accrued or declared but unpaid dividends on

such shares of Series A Preferred Stock), the amount (if a single amount) or the

greatest amounts (if there are alterative amounts) of such shares of stock,

securities or assets as may be issued or payable with respect to or in exchange

for a number of outstanding shares of such Common Stock equal to the number of

shares of such Common Stock immediately theretofore receivable upon such

conversion had such reorganization or reclassification not taken place, and in

any such case appropriate provisions shall be made with respect to the rights

and interests of such holder to the end that the provisions of the Certificate

of Designations (including, without limitation, provisions for adjustments of

the Conversion Price) shall thereafter be applicable, as nearly as may be, in

relation to any shares of stock, securities or assets thereafter deliverable

upon the exercise of such conversion rights.

 

              (e) Adjustment for Merger or Reorganization, etc. Upon any merger

or consolidation of the Corporation with or into another corporation, or any

sale or transfer of all or

 

 

                                       13

<PAGE>

 

substantially all of the assets of the Corporation to another corporation, each

share of Series A Preferred Stock shall thereafter be convertible (or shall be

converted into a security that shall be convertible) into the amount (if a

single amount) or the greatest amounts (if there are alternative amounts) of the

kind and amount of shares of stock or other securities or property to which a

holder of the number of shares of Common Stock of the Corporation deliverable

upon conversion of such Series A Preferred Stock would have been entitled upon

such merger, consolidation, or asset sale (plus the payment in cash of any

accrued or declared but unpaid dividends on such shares of Series A Preferred

Stock); and, in such case, appropriate adjustment (as determined in good faith

by the Board of Directors) shall be made in the application of the provisions

set forth in Section 6 of the Certificate of Designations with respect to the

rights and interests thereafter of the holders of the Series A Preferred Stock,

to the end that the provisions set forth in Section 6 of the Certificate of

Designations (including provisions with respect to changes in and other

adjustments of the Conversion Price) shall thereafter be applicable, as nearly

as practicable, in relation to any shares of stock or other property thereafter

deliverable upon the conversion of the Series A Preferred Stock.

 

              (f) Assumption of Obligations. Notwithstanding anything contained

in the Certificate of Designations to the contrary, the Corporation will not

effect any of the transactions contemplated by Section 6(d) or 6(e) of the

Certificate of Designations unless prior to the consummation thereof, each

Person (other than the Corporation) which may be required to deliver any shares,

securities, cash or property upon the conversion of the Series A Preferred Stock

as provided herein shall, by written instrument delivered to, and reasonably

satisfactory to, the holder, assume in a form reasonably satisfactory to a

Majority in Interest (a) the obligations of the Corporation under the

Certificate of Designations (and if the Corporation shall survive the

consummation of such transaction, such assumption shall be in addition to, and

shall not release the Corporation from, any continuing obligations of the

Corporation under the Certificate of Designations) or shall agree to such

alternative obligations, such that, following such assumption and agreement, the

holders will continue to have the right to achieve practical realization of the

principal benefits intended to be provided to them by the Certificate of

Designations and (b) the obligation to deliver to the holder such shares, cash

or property as, in accordance with the provisions of Sections 6(d) or 6(e) of

the Certificate of Designations the holder may be entitled to receive.

 

              (g) Notices; Adjustments.

 

                   (i) Liquidation Events, Extraordinary Transactions, Etc. In

         the event (x) the Corporation establishes a record date to determine

         the holders of any class of securities who are entitled to receive any

         dividend or other distribution or who are entitled to vote at a meeting

         (or by written consent) in connection with any of the transactions

         identified in clause (y) hereof, or (y) any Liquidation Event,

         Liquidity Event, or any public or private offering of the Corporation's

         securities becomes reasonably likely to occur, the Corporation shall

         mail or cause to be mailed by first class mail (postage prepaid) to

         each holder of Series A Preferred Stock at least thirty (30) days prior

         to such record date specified therein or the expected effective date of

         any such transaction, whichever is earlier, a notice specifying (A) the

         date of such record date for

 

 

 

                                       14

<PAGE>

 

         the purpose of such dividend or distribution or meeting or consent and

         a description of such dividend or distribution or the action to be

         taken at such meeting or by such consent, (B) the date on which any

         such Liquidation Event, Liquidity Event, or public or private offering

         is expected to become effective, and (C) the date on which the books of

         the Corporation are expected to close or a record shall be taken with

         respect to any such event. Such notice shall be accompanied by a

         certificate prepared by the chief financial officer of the Corporation

         describing in detail (1) the material facts of such transaction, (2)

         the estimated amount(s) per share of Series A Preferred Stock or Common

         Stock (and cash of any accrued or undeclared but unpaid dividends on

         such shares of Series A Preferred Stock) each holder of Series A

         Preferred Stock would be expected to receive under all elections and

         options reasonably available to holders of Series A Preferred Stock

         pursuant to the applicable provisions of the Certificate of

         Designations, and (3) the facts upon which such amounts were

         determined.

 

                   (ii) Adjustments; Calculations. Upon the occurrence of each

         adjustment or readjustment of the Conversion Price pursuant to Section

         6 of the Certificate of Designations, the Corporation at its expense

         shall promptly compute such adjustment or readjustment in accordance

         with the terms hereof and prepare and furnish to each holder of Series

         A Preferred Stock a certificate setting forth in reasonable detail (i)

         such adjustment or readjustment, (ii) the Conversion Price before and

         after such adjustment or readjustment, and (iii) the number of shares

         of Common Stock and the amount, if any, of other property which at the

         time would be received upon the conversion of such holder's shares of

         Series A Preferred Stock (including any cash of any accrued or

         undeclared but unpaid dividends on such shares of Series A Preferred

         Stock). All such calculations shall be made to the nearest cent or to

         the nearest one hundredth (1/100) of a share as the case may be.

         Notwithstanding anything to the contrary contained herein, no

         adjustment in the Conversion Price need be made until all cumulative

         adjustments amount to an adjustment to the Conversion Price of at least

         (pound).07. Any adjustments that are not made shall be carried forward

         and taken into account in any subsequent adjustment.

 

              (h) Taxes. The Corporation will pay any documentary stamp or

similar issue or transfer taxes payable in respect of the issue or delivery of

shares of Common Stock on conversion of Series A Preferred Stock; provided,

however, that the Corporation will not be required to pay any tax which may be

payable in respect of any transfer involved in the issue or delivery of shares

of Common Stock in a name other than that of the holder of record of the Series

A Preferred Stock to be converted and no such issue or delivery will be made

unless and until the person requesting the issue or delivery has paid to the

Corporation the amount of any such tax or has established, to the satisfaction

of the Corporation, that the tax has been paid.

 

              (i) Other Dilutive Events. In case any event shall occur as to

which the provisions of Section 6 of the Certificate of Designations are not

strictly applicable but the failure to make any adjustment would not, in the

reasonable opinion of the holder, fairly protect the rights represented by the

Certificate of Designations in accordance with the essential intent and

principles of such Section, then, in each such case, at the reasonable request

of the holder,

 

 

 

                                       15

<PAGE>

 

the Corporation shall appoint a firm of Independent Financial Advisors (which

shall be completely independent of the Corporation, which shall give their

opinion upon the adjustment, if any, on a basis consistent with the essential

intent and principles established in Section 6 of the Certificate of

Designations, necessary to preserve, without dilution, the rights represented by

the Certificate of Designations. Upon receipt of such opinion, the Corporation

will promptly mail a copy thereof to the Holder and shall make the adjustments

described therein.

 

              (j) Accountants' Report as to Adjustments. In each case of any

adjustment or readjustment in the Conversion Price, the Corporation will

promptly compute such adjustment or readjustment (in accordance with Section

6(g)(ii) of the Certificate of Designations). In the event of a dispute in

connection with such adjustment, the Corporation will cause independent

accountants of recognized international standing (which may be the regular

auditors of the Corporation) to verify such computation (other than any

computation of the Fair Value of property as determined in good faith by the

Board of Directors of the Corporation) and prepare a report setting forth such

adjustment or readjustment and showing in reasonable detail the method of

calculation thereof and the facts upon which such adjustment or re-adjustment is

based. The Corporation will promptly mail a copy of each such report to each

holder and will, upon the written request at any time of any holder, furnish to

such holder a like report setting forth the Conversion Price at the time in

effect and showing in reasonable detail how it was calculated. The Corporation

will also keep copies of all such reports at its registered office and will

cause the same to be available for inspection at such office during normal

business hours by the holders.

 

         Section 7. No Reissuance of Series A Preferred Stock. Upon any

conversion, exchange or redemption of shares of Series A Preferred Stock, the

shares of Series A Preferred Stock which are converted, exchanged or redeemed

will be canceled, retired and eliminated from the shares the Corporation is

authorized to issue and the number of shares of Series A Preferred Stock which

the Corporation will have authority to issue will be reduced so that the shares

of Series A Preferred Stock which were converted, exchanged or redeemed may not

be re-issued.

 

         Section 8. Redemption at the Option of the Holder.

 

              (a) At the option of a Majority in Interest of the holders, the

holders of Series A Preferred Stock will have the right to require the

Corporation to redeem any or all the shares of Series A Preferred Stock owned of

record by any such electing holder at the Series A Purchase Price (the "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, the Corporation shall be

required to redeem, subject to the limitations of Section 8(d) of the

Certificate of Designations, the Mirror Preferred Stock in the manner provided

in Section 8(c) of the Certificate of Designations and shall be required to

cause, subject to the limitations of Section 8(d) of the Certificate of

 

 

 

                                       16

<PAGE>

 

Designations, UK Parent to redeem the Mirror Notes and Mirror PIK Notes, if any,

in the manner provided in Section 8(c) of the Certificate of Designations. 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 holders, (i) any

Liquidity Event or (ii) a date subsequent to 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.

 

              (b) Holders Redemption Offer Procedures. Within five (5) Business

Days after the Corporation becomes aware of the occurrence of a Redemption Event

and in any event not later than the Redemption Event Trigger Date, the

Corporation shall mail a notice (the "Holders' Redemption Offer") to each of the

holders notifying them that the shares of Series A Preferred Stock will be

purchased and redeemed, respectively, at the election of the holders in

accordance with Section 8 of the Certificate of Designations. If a Majority in

Interest of the holders elect to exercise their redemption rights pursuant to

Section 8 of the Certificate of Designations, they shall give notice to the

Corporation setting forth the number of shares of Series A Preferred Stock to be

redeemed and the purchase date shall be the earlier of (i) a date selected by

the Corporation, 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 Section 8 of the Certificate of Designations

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 holders will be entitled to

withdraw their election to tender the shares of Series A Preferred Stock by

delivering to the Corporation, for receipt not later than the close of business

on the second Business Day preceding the Holders' Redemption Purchase Date, a

facsimile transmission or letter to that effect. Upon a holder's election to

tender any shares of Series A Preferred Stock, the holder will be required to

surrender such shares of Series A Preferred Stock to the Corporation prior to

the close of business on the Business Day preceding the Holders' Redemption

Purchase Date. On the Holders' Redemption Purchase Date, the Corporation will

purchase the shares of Series A Preferred Stock tendered pursuant to Section

8(a) of the Certificate of Designations 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 the Corporation for any reason, the Corporation shall select,

on or prior to the Holders' Redemption Purchase Date, the shares of Series A

Preferred Stock (or portions thereof) to be purchased and redeemed, as the case

may be, pro rata among the holders and dividends shall continue to accrue on all

shares of Series A Preferred Stock not redeemed, provided, however, that nothing

in this Section 8 of the Certificate of Designations shall be deemed a waiver or

contractual impairment of the right of the holders to have all shares of Series

A Preferred Stock purchased and redeemed in full pursuant to Section 8(a) of the

Certificate of Designations and the Corporation shall not be relieved of its

obligations to redeem

 

 

 

                                       17

<PAGE>

 

unredeemed shares of Series A Preferred Stock in full. Promptly after the

Holders' Redemption Purchase Date, the Corporation shall, with respect to any

shares of Series A Preferred Stock not purchased or redeemed, respectively, in

whole, return to the appropriate holders, 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.

 

              (c) Mandatory Redemption of Mirror Preferred Stock. Upon written

notice to UK Parent of the Corporation's intention to purchase and redeem the

shares of Series A Preferred Stock pursuant to Section 8(a) and (b) of the

Certificate of Designations (which notice the Corporation will be required to

serve as soon as reasonably practical after notice of election is given to the

Corporation pursuant to Section 8(b) of the Certificate of Designations), and

subject to the limitations of Section 8(d) of the Certificate of Designations,

the Corporation shall cause UK Parent to, immediately prior to such purchase and

redemption by the Corporation, redeem the Mirror Preferred Stock. Concurrently,

and subject to the limitations of Section 8(d) of the Certificate of

Designations, the Corporation shall cause TWUK to immediately prior to such

purchase and redemption by UK Parent, to redeem the Mirror Notes and the Mirror

PIK Notes. The Corporation shall use the funds it receives from such redemption

of the Mirror Preferred Stock (which in turn will have been derived from funds

UK Parent receives from the redemption of the Mirror Notes and the Mirror PIK

Notes) to purchase and redeem the shares of Series A Preferred Stock tendered by

the holders and accepted for redemption by the Corporation pursuant to Section

8(b) of the Certificate of Designations.

 

              (d) Holders' Redemption Prohibited. If, at a Holders' Redemption

Purchase Date the Corporation 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, 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 TWUK's or other Subsidiary's of the

Corporation compliance with the provisions of Section 8(c) of the Certificate of

Designations), from purchasing all shares of Series A Preferred Stock for which

purchase is elected hereunder pursuant to the Holders' Redemption, then the

Corporation 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 the Corporation is not so prohibited. The Corporation 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(a)

of the Certificate of Designations, respectively (including to cause UK Parent

and/or TWUK to take substantially similar actions); 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 the Corporation

fails for any reason to purchase any shares of Series A Preferred Stock for

which purchase is required pursuant to Section 8(a) of the Certificate of

Designations, then (i) the holders shall have the right to revoke their

exercises of the Holders' Redemption at any time and (ii) if the holders do not

elect to so revoke such exercise, during the period from the applicable Holders'

Redemption Purchase Date through the date on which such shares of Series A

Preferred Stock are purchased and redeemed, the Corporation shall pay, in

addition to such amounts due pursuant to exercise of the Holders' Redemption, to

the holders an amount equal to

 

 

                                       18

<PAGE>

 

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 provided in Section 2 of the Certificate of Designations, plus two

percent (2%) per annum. Nothing in this Section 8(d) of the Certificate of

Designations shall impair or be deemed to limit, modify or affect the rights of

the holder to pursue any available remedy, at law or in equity, to enforce or

seek to enforce, in any manner whatsoever, the Corporation's obligations under

this Section 8 of the Certificate of Designations, 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 the Corporation'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 Laws to judgment

creditors in general.

 

         Section 9. Conversion at the Option of the Corporation.

 

              (a) Subject to the provisions of the Business Corporation Law of

New York and to any other applicable restrictions on the right of a corporation

to redeem its own shares, the Corporation, at the option of the Board of

Directors, may at any time or from time to time convert the outstanding Series A

Preferred Stock, in whole, but not in part, without the payment of any

additional consideration, into (i) fully paid and nonassessable shares of Common

Stock (at the Common Conversion Rate) and (ii) the payment in cash of any

accrued or declared but unpaid dividends on such shares of Series A Preferred

Stock. Notwithstanding the foregoing, the Corporation shall not have the right

to convert the shares of Series A Preferred Stock unless and until a Qualified

Public Value is achieved; provided further, that, if the Corporation converts

the shares of Series A Preferred Stock prior to December 17, 2002, for purposes

of this Section 9 of the Certificate of Designations, the cash payment required

by clause (ii) of this Section 9(a) of the Certificate of Designations shall be

increased by such amounts necessary to give effect to all accrued or declared

but unpaid dividends on such shares of Series A Preferred Stock which have not

yet accrued but will accrue assuming that such Conversion Date occurred on

December 17, 2002. In the event the Corporation elects to convert the shares of

Series A Preferred Stock pursuant to this Section 9(a) of the Certificate of

Designations, it shall promptly notify the holders in writing of such proposed

conversion. The holders will have the right (which right if exercised, will take

priority over the Corporation's right of conversion) to convert the shares of

Series A Preferred Stock, in whole or in part, at any time on or before the

Conversion Date (such date shall be referred to herein as the "Conversion Date")

of the shares of Series A Preferred Stock complying with the provisions for

voluntary conversion set forth in Section 5 of the Certificate of Designations

(the "Holders' Conversion Right"). The Corporation shall not be permitted to

exercise its conversion right pursuant to this Section 9(a) of the Certificate

of Designations unless contemporaneously with the delivery of the notice to the

holders referred to above it complies with the provisions of Section 9(c) of the

Certificate of Designations.

 

              (b) Conversion Procedures for Series A Preferred Stock. The

election of the Corporation to convert shares of Series A Preferred Stock

pursuant to Section 9(a) of the Certificate of Designations shall be evidenced

by a Board Resolution. Notice of conversion of the shares of Series A Preferred

Stock ("Conversion Securities") shall be mailed, at the

 

 

                                       19

<PAGE>

 

Corporation's expense, not less than thirty (30) nor more than sixty (60) days

prior to the Conversion Date, to each holder. All notices of conversion shall

include the following information: (1) the Conversion Date; (2) the number of

shares of Common Stock to be issued to each holder at the Common Conversion Rate

plus the amount of cash to be paid with respect to all accrued or declared but

unpaid dividends on the shares of Series A Preferred Stock; (3) the place or

places where such Conversion Securities are to be surrendered; (4) that the

holders may convert the shares of Series A Preferred Stock prior to the

Conversion Date; and (5) a copy of the Board Resolution, certified by the

Secretary of the Corporation.

 

              (c) Deposit of Dividend Amounts. Prior to any Conversion Date with

respect to the shares of Series A Preferred Stock, the Corporation shall deposit

with a paying agent, or into a segregated account of the Corporation, an amount

of money sufficient to pay the amount of accrued or declared but unpaid

dividends (as calculated pursuant to Section 9(a) of the Certificate of

Designations) on all shares of Series A Preferred Stock which are to be

converted. The holders' obligation to tender the shares of Series A Preferred

Stock called for conversion by the Corporation or the exercise of the Holders'

Conversion Right shall not arise until such time as sufficient funds have been

deposited to pay such amounts for the Conversion Securities to be redeemed.

 

              (d) Conversion Securities Payable on Conversion Date. Notice of

conversion having been given as provided in Section 9(b) of the Certificate of

Designations, the Conversion Securities to be converted on the Conversion Date,

shall be converted into shares of Common Stock (plus applicable cash in the

amount of any accrued or declared but unpaid dividends on the shares of Series A

Preferred Stock. Upon conversion in accordance with this Section 9 of the

Certificate of Designations, all rights with respect to the Series A Preferred

Stock so converted shall terminate, except the rights of the holders thereof

upon surrender of their certificate or certificates therefore or delivery of an

affidavit of loss thereof together with an indemnity agreement in form

reasonably satisfactory to the Corporation to receive certificates for the

number of shares of Common Stock (plus cash in the amount of any accrued or

declared but unpaid dividends on the shares of Series A Preferred Stock) into

which such shares of the Conversion Securities have been converted. If so

required by the Corporation, certificates surrendered for conversion shall be

endorsed or accompanied by a written instrument or instruments of transfer, in

form satisfactory to the Corporation, duly executed by the registered holder or

by an attorney-in-fact duly authorized in writing. Upon surrender of such

certificates or affidavit of loss together with an indemnity agreement in form

reasonably satisfactory to the Corporation, the Corporation shall issue and

deliver to such holder, promptly at such office and in its name as shown on such

surrendered certificate or certificates, a certificate or certificates for the

number of shares of Common Stock (plus cash in the amount of any accrued or

declared but unpaid dividends on the shares of Series A Preferred Stock) into

which the shares of the Series A Preferred Stock surrendered are convertible on

the Conversion Date. If any of the Conversion Securities called for conversion

by the Corporation shall not be paid upon surrender thereof by the holders for

the proper and correct number of shares of Common Stock (plus cash in the amount

of the accrued or declared but unpaid dividends on the shares of Series A

Preferred Stock), dividends shall continue to accrue at the rates borne by the

Conversion Securities on any amount payable thereon, the conversion of the

Series A Preferred Stock shall be deemed not to

 

 

 

                                       20

<PAGE>

 

have occurred, the shares of Series A Preferred Stock shall be deemed owned and

outstanding by the holders thereof, and any conversion of the shares of Series A

Preferred Stock by the Corporation henceforth shall comply with the provisions

of this Section 9 of the Certificate of Designations in its entirety, including

without limitation, a new notice of conversion mailing and applicable time

periods as provided in Section 9(b) of the Certificate of Designations.

 

         Section 10. Ranking. The shares of Series A Preferred Stock will, with

respect to the payment of dividends and the distribution of assets on

liquidation, dissolution or winding-up of the Corporation, unless otherwise

provided in the Corporation's Certificate of Incorporation or a certificate of

amendment setting forth the designations, rights and preferences relating to a

subsequently issued series of preference stock of the Corporation, rank (i) on a

parity with any other class or series of preferred stock issued by the

Corporation and (ii) prior to the Common Stock.

 

         Section 11. Miscellaneous.

 

              (a) Except as otherwise expressly provided in the Certificate of

Designations, whenever a notice or other communication is required or permitted

to be given to holders of shares of Series A Preferred Stock, the notice or

other communication will be deemed properly given if deposited in the United

States mail, postage prepaid, addressed to the persons shown on the books of the

Corporation as the holders of the shares at the addresses as they appear in the

books of the Corporation, as of a record date or dates determined in accordance

with the Corporation's Certificate of Incorporation and By-laws, these

resolutions and applicable law, as in effect from time to time. Such notice will

be deemed received when so deposited.

 

              (b) Except as may otherwise be required by law, shares of Series A

Preferred Stock will not have any designations, preferences, limitations or

relative rights, other than those specifically set forth in the Certificate of

Designations and in the Certificate of Incorporation.

 

              (c) The headings of the various subdivisions of the Certificate of

Designations are for convenience only and will not affect the meaning or

interpretation of any of the provisions of the Certificate of Designations.

 

              (d) (i) Except as otherwise provided in this Section 11(d) of the

Certificate of Designations, the preferences, special rights or powers of the

Series A Preferred Stock may be waived, and any of the provisions of the Series

A Preferred Stock may be amended (and any existing Covenant Breach or Insolvency

Breach or compliance with any provision of the Certificate of Designations may

be waived) only by the affirmative vote at a meeting or the written consent of a

Majority in Interest of the holders.

 

                  (ii) Without the consent of every affected holder who is a

registered owner of shares of Series A Preferred Stock with an aggregate

Original Issue Price of (pound)500,000 or more, which such consent shall be

binding upon all holders, no amendment, supplement or waiver to the Certificate

of Designations shall: (i) reduce the Original Issue Price, principal amount or

value of the Series A Preferred Stock, Mirror Preferred Stock, Mirror Note

and/or Mirror PIK Note; (ii) reduce the number of shares of Common Stock

issuable upon conversion

 

                                       21

<PAGE>

 

of any shares of Series A Preferred Stock (except pursuant to adjustment

provisions as provided herein), change the fixed maturity date of any Mirror

Note or Mirror PIK Note or alter the provisions with respect to the redemption

of the Series A Preferred Stock, Mirror Preferred Stock, Mirror Note and/or

Mirror PIK Note in a manner adverse to the holders; (iii) reduce the rate of or

change the time for payment of dividends or interest on shares of Series A

Preferred Stock, Mirror Preferred Stock, Mirror Note and/or Mirror PIK Note;

(iv) waive a Covenant Breach or Insolvency Breach in the payment of principal

of, or interest or dividends on, any share of Series A Preferred Stock, Mirror

Preferred Stock, Mirror Note or 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 (except that a

Majority in Interest of the holders may (A) rescind an Accelerated Liquidity

that resulted from a non-payment default, and (B) waive the payment default that

resulted from such Accelerated Liquidity); (v) make any share of Series A

Preferred Stock or Mirror Preferred Stock or Mirror Note or Mirror PIK Note

payable in consideration other than that stated in 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, Mirror

Note Redemption Price or Mirror PIK Note Redemption Price upon redemption or

purchase of the relevant Security; or (vii) make any change in this Section

11(d)(ii) of the Certificate of Designations.

 

                  (iii) After an amendment, supplement or waiver under this

Section 11(d) of the Certificate of Designations becomes effective, the

Corporation shall mail to the holders a notice briefly describing the amendment,

supplement or waiver. Any failure of the Corporation to mail such notice, or any

defect therein, shall not, however, in any way impair or affect the validity of

any such amendment, supplement or waiver.

 

         Section 12. Defined Terms.

 

         In addition to any terms defined elsewhere in the Certificate of

Designations, unless otherwise specifically provided herein, the following terms

shall have the following meanings for all purposes when used in the Certificate

of Designations:

 

              "Accelerated Liquidity" shall have the meaning set forth in

Section 17(c)(ii) of the Certificate of Designations.

 

              "Accrued Earnout" means, as of any date and with respect to any

Earnout , an amount equal to the greater of (a) the product of (1) the Maximum

Earnout with respect to such Earnout and (2)(A) the Actual Measure minus the

Base Measure divided by (B) the Target Measure minus the Base Measure and (b)

zero. "Actual Measure" means, with respect to any Earnout, the amount of the

financial performance measure of the acquired business or assets on which such

Earnout is based as of the end of such Company's most recently ended fiscal

quarter. "Base Measure" means, with respect to any Earnout, the amount of the

financial performance measure of the acquired business or assets on which such

Earnout is based on the date of the acquisition in connection with which such

Earnout was created. "Target Measure" means, with respect to any Earnout, the

minimum amount of the financial performance measure of the acquired business or

assets that, if attained, would result in the Maximum Earnout becoming due.

 

                                       22

<PAGE>

 

              "Acquired Person" means, with respect to any specified Person, any

other Person, or the assets of any other Person, acquired by such specified

Person, whether by acquisition, merger, consolidation, other business

combination or otherwise.

 

              "Additional Series A Director" has the meaning ascribed thereto in

Section 17(c)(i)(2) of the Certificate of Designations.

 

              "Affiliates" 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 Institutional

Investors be considered Affiliates of the Corporation for purposes of the

Certificate of Designations.

 

              "Affiliate Transaction" has the meaning ascribed thereto in

Section 13(f)(i) of the Certificate of Designations.

 

              "Applicable Laws" means, with respect to any Person, property,

transaction or event, all applicable laws (including, without, limitation,

Environmental Laws), statutes, legislation, regulations, treaties, judgments and

decrees and (whether or not having the force of law) all applicable official

directives, rules, consents, licenses, recognitions, grants, confirmations,

permissions, determinations, certifications, approvals, authorizations,

guidelines, orders and policies of any Governmental Entity having authority over

such Person.

 

              "Attributable Debt" in respect of a Sale/Leaseback Transaction

means, at the time of determination, the present value (discounted at the

average interest rate borne by the Credit Agreements, compounded annually) of

the total obligations of the lessee for rental payments during the remaining

term of the lease included in such Sale/Leaseback Transaction (including any

period for which such lease has been extended).

 

              "Bank Indebtedness" means any and all amounts payable by any of

the Group Companies under or in respect of the Credit Facility and any

Refinancing Indebtedness of any of the Group Companies with respect thereto, as

amended from time to time, including principal, premium (if any), interest

(including interest accruing on or after the filing of any Insolvency

Proceedings relating to any of the Group Companies whether or not a claim for

post-filing interest is allowed in such proceedings), fees, charges, expenses,

reimbursement obligations, guarantees and all other amounts payable thereunder

or in respect thereof.

 

              "Banks" means Paribas, as arranger of the Credit Facilities, and

Barclays Bank, as agent.

 

              "Board of Directors" or "Board" means, with respect to any Person,

the Board of Directors or other

 

 

 

                                       23

<PAGE>

 

governing body of such Person or any committee thereof duly authorized, with

respect to any particular matter, to exercise the power of the Board of

Directors or other governing body of such Person. When used without any

reference to a specific Person, the term "Board of Directors" or "Board" shall

be deemed to mean the Board of Directors of the Corporation.

 

              "Board Resolution" means a resolution of the Board of Directors of

the Corporation which has been (i) duly passed at a meeting duly convened and

held with the affirmative vote of not less than a majority of all members of the

Board of Directors then serving as such, whether or not all such directors are

present and voting at the meeting, or (ii) adopted by written consent in lieu of

a meeting of the Board of Directors signed by each of the members of the Board

of Directors then serving as such.

 

              "Breach" means any event which is, or after notice or passage of

time or both would be, an Insolvency Breach.

 

              "Breach Interest Rate" shall have the meaning set forth in Section

17(c)(i)(1) of the Certificate of Designations.

 

              "Budget" means the annual operating budget referred to in Section

14(a)(iii) of the Certificate of Designations.

 

              "Business Day" means any day other than a Legal Holiday.

 

              "Capital Shares" of any Person means any and all shares,

interests, participations, and/or other equivalents of or in (however

designated) shares or equity securities of such Person, including each class of

common stock, ordinary shares and preferred shares of such Person, and

partnership or limited liability company interests, whether general or limited,

of such Person, and including any securities convertible into or exercisable or

exchangeable for rights to subscribe for, and any options, warrants or other

rights to acquire, any such shares or equity securities of such Person,

including for the avoidance of doubt, the Series A Preferred Stock. When used

without any reference to a specific Person, the term "Capital Shares" shall be

deemed to mean the Capital Shares of the Corporation.

 

              "Certificate of Designations" means that portion of Section I of

Article Fourth of the Certificate of Incorporation of the Corporation entitled

Series A Convertible Preferred Stock.

 

              "Charter Documents" means the certificate of incorporation and

bylaws and/or other applicable constitutional documents of an entity each as

amended to date and as presently in effect.

 

              "Closing" has the meaning ascribed thereto in Section 1.2 of the

Master Reorganization Agreement.

 

              "Closing Date" has the meaning ascribed thereto in Section 2(a) of

the Certificate of Designations.

 

 

 

                                       24

<PAGE>

 

              "Closing Price" means the last sale price or the closing mid-price

(whichever shall be the usual method of reporting for the relevant market)

reported for the publicly traded shares of Common Stock on the New York Stock

Exchange, the NASDAQ National Market, the American Stock Exchange or a

Designated Offshore Securities Market, or if the context so requires, any other

established securities market including over-the-counter markets.

 

              "Code" means the Internal Revenue Code of 1986, as amended, and

any successor thereto, and any regulations promulgated thereunder.

 

              "Common Conversion Rate" shall have the meaning set forth in

Section 5(a) of the Certificate of Designations.

 

              "Common Stock" means the common stock, par value $.01 per share,

of the Corporation.

 

              "Common Stock Deemed Outstanding" shall have the meaning set forth

in Section 6(a)(x) of the Certificate of Designations.

 

              "Companies" means collectively, the Corporation, UK Parent and

TWUK considered as a single enterprise, until a successor replaces the

Corporation, UK Parent or TWUK and thereafter includes the successor or

successors, as the case may be.

 

              "Consolidated" or "consolidated", when used with reference to any

accounting term, means the amount described by such accounting term, determined

on a consolidated basis in accordance with Applicable Laws and in accordance

with accounting principles, standards and practices generally accepted at the

relevant date in the United States consistently applied, after elimination of

intercompany items.

 

              "Covenant Breach" has the meaning ascribed thereto in Section

17(a) of the Certificate of Designations.

 

              "Conversion Date" shall have the meaning set forth in Section 9(a)

of the Certificate of Designations.

 

              "Conversion Price" shall have the meaning set forth in Section

5(a) of the Certificate of Designations.

 

              "Conversion Securities" shall have the meaning set forth in

Section 9(b) of the Certificate of Designations.

 

               "Convertible Securities" shall have the meaning set forth in

Section 6(a)(i) of the Certificate of Designations.

 

               "Credit Agreements" means the Credit Facility and the Mezzanine

Facility.

 

              "Credit Facility" means the credit agreement dated as of December

17, 1999 among the Group Companies named therein, the Banks and the other

lenders, if any, parties

 

 

                                       25

<PAGE>

 

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 13(i) of the Certificate of Designations unless otherwise

agreed by a Majority in Interest of the holders).

 

              "Designated Indebtedness" means: (a) Bank Indebtedness; (b)

Mezzanine Indebtedness; or (c) Refinancing Indebtedness with respect thereto.

 

              "Designated Offshore Securities Market" means the London Stock

Exchange, the New Market of the Frankfurt Stock Exchange or, if approved in

writing by a Majority in Interest of the holders, any other recognized

investment exchange (as such term is used in the Financial Services Act of

1986).

 

              "Disposition" means, with respect to any Person, any disposal,

merger, consolidation or other business combination involving such Person

(whether or not such Person is the Surviving Person) or the sale, assignment,

transfer, lease, conveyance or other disposition, in any such case, of all or

substantially all of such Person's assets in one transaction or a series of

related transactions.

 

              "Disqualified Capital Shares" means, with respect to any Person,

any Capital Shares of such Person that, by their terms, by the terms of any

agreement related thereto or by the terms of any security into which they are

convertible or exchangeable, are, or upon the happening of an event or the

passage of time would be, required to be redeemed or repurchased by such Person

or its Subsidiaries, including at the option of the holder, in whole or in part,

or have, or upon the happening of an event or passage of time would have, a

sinking fund or similar payment due, including without limitation the Series A

Preferred Stock.

 

              "Earnout" means, with respect to any acquisition, any arrangement

pursuant to which any of the Group Companies is, or may become, obligated to

make one or more payments to the seller of an Acquired Person or acquired

Property or assets based upon the financial performance of the company, business

or assets being acquired by any of the Group Companies.

 

              "Environment" means soil, surface waters, groundwater, land,

sediments, surface or subsurface strata, air or any environmental medium.

 

              "Environmental Law(s)" means and includes any federal, state,

local, municipal or foreign statute, law (including, without limitation, common

law), ordinance, rule, regulation, code, order, writ, judgment, permit,

authorization, approval, consent, concession, grant, franchise, license,

agreement, injunction, decree or other government restriction or judicial or

agency interpretation, policy or guidance, in each case having the force of law,

relating to the Environment, pollution, chemical use, health, occupational

health, health protection, safety or natural resources.