EXHIBIT 7
AMENDMENT NO. 1
to
AGREEMENT AND PLAN OF MERGER
between
THERMADYNE HOLDINGS CORPORATION
and
MERCURY ACQUISITION CORPORATION
AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER (this
"Amendment"), dated as of April 22, 1998, by and between Thermadyne Holdings
Corporation, a Delaware corporation (the "Company"), and Mercury Acquisition
Corporation, a Delaware corporation ("MergerSub").
WITNESSETH:
WHEREAS, MergerSub and the Company are parties to an Agreement
and Plan of Merger dated as of January 20, 1998 (the "Agreement"); and
WHEREAS, the parties desire to amend the Agreement in certain
respects;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein and in the Agreement, the parties hereto agree as
follows:
1. Section 1.07(a) is hereby amended by deleting the opening
clause "Except as set forth on Schedule 1.07(a)," so that Section 1.07(a) now
commences with the word "Immediately."
2. Schedule 1.07(a) is hereby deleted in its entirety.
3. Section 1.07(b) is renumbered 1.07(c) and the reference
therein to Section 1.07(a) is hereby amended to refer to Sections 1.07(a) and
1.07(b), and a new Section 1.07(b) is hereby inserted as follows:
(b) At the Effective Time, each outstanding right to purchase
Shares with previously held funds under the Employee Stock
Purchase Plan (the "ESPP") shall be canceled. In lieu
thereof, as soon as reasonably practicable as of or after
the Effective Time, the holders of such purchase rights
shall receive a cash payment from the Company equal to the
product of (i) the total number of Shares of Company Common
Stock subject to such purchase rights immediately prior to
the Effective Time and (ii) $34.50. All funds previously
withheld under the ESPP will become assets of the Company.
4. Section 5.08 is hereby amended to read as follows:
"[intentionally omitted]."
5. Section 8.02(f) of the Agreement is hereby deleted in its
entirety, and Section 8.02(g) is renumbered 8.02(f).
6. Exhibit A of the Agreement is hereby amended to read in its
entirety as follows:
"SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF THE
SURVIVING CORPORATION
*****
As of the Effective Time, the Certificate of Incorporation of
the Surviving Corporation, as amended and restated hereby, shall, upon its
filing with the Secretary of State of the State of Delaware, read in its
entirety as follows:
FIRST: The name of the Corporation is Thermadyne Holdings
Corporation.
SECOND: The address of its registered office in the State of
Delaware is 0000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000. The name of its
registered agent at such address is Corporation Service Company.
THIRD: The purpose of the Corporation and the nature and
objects of the business to be transacted, promoted, and carried on are to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware, as the same exists
or may hereafter be amended (the "Delaware Law").
FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is 45,000,000, consisting of
30,000,000 shares of Common Stock, par value $0.01 per share (the "Common
Stock"), and 15,000,000 shares of Preferred Stock, par value $0.01 per share
(the "Preferred Stock"), of which 2,000,000 shares have been designated 13%
Senior Exchangeable Preferred Stock (the "Senior Preferred Stock").
The designations and the powers and preferences, rights,
qualifications, limitations and restrictions of the Common Stock and the
Preferred Stock are as follows:
A. Provisions Relating to the Common Stock
Except as otherwise required by law, each holder of Common
Stock shall be entitled to one vote for each share of common stock standing in
such holder's name on the records of the Corporation on each matter submitted
to a vote of the stockholders.
The holders of the Common Stock shall be entitled to receive
when, as, and if declared by the board of directors of the Corporation, out of
funds legally available therefor, dividends payable in cash, stock, or
otherwise.
Upon any liquidation, dissolution, or winding up of the
Corporation, whether voluntary or involuntary, and after the holders of any
bonds, debentures, or other obligations of the Corporation shall have been
paid in full the amounts to which they shall be entitled (if any), or a sum
sufficient for such payment in full shall have been set aside, the remaining
net assets of the Corporation shall be distributed pro rata to the holders of
the Common Stock in accordance with their respective rights and interests, to
the exclusion of the holders of any bonds, debentures, or other obligations of
the Corporation.
The Corporation may issue shares of its Common Stock from time
to time for such consideration (in any form, but not less in value than the
par value thereof) as may be fixed by the board of directors of the
Corporation, which is expressly authorized to fix the same in its absolute and
uncontrolled discretion subject to the foregoing conditions. Shares so issued
for which the consideration shall have been paid or delivered to the
Corporation shall be deemed fully paid stock and shall not be liable to any
further call or assessment thereon, and the holders of such shares shall not
be liable for any further payments in respect of such shares. The Corporation
shall also have authority to create and issue rights and options entitling
their holders to purchase or otherwise acquire shares of Common Stock and such
rights and options shall be evidenced by instrument(s) approved by the board
of directors of the Corporation. The board of directors of the Corporation
shall be empowered to set the exercise price, duration, times for exercise,
and other terms of such options or rights; provided, however, that the
consideration to be received (which may be in any form) for any shares of
Common Stock subject thereto shall have a value not less than the par value
thereof.
B. Provisions Relating to the Preferred Stock
The Board of Directors is hereby empowered to authorize by
resolution or resolutions from time to time the issuance of one or more
classes or series of Preferred Stock and to fix the designations, powers,
preferences and relative, participating, optional or other rights, if any, and
the qualifications, limitations or restrictions thereof, if any, with respect
to each such class or series of Preferred Stock and the number of shares
constituting each such class or series, and to increase or decrease the number
of shares of any such class or series to the extent permitted by the Delaware
Law.
C. Provisions Relating to the Senior Preferred Stock
(1) Number and Designation. 2,000,000 shares of the Preferred
Stock of the Corporation shall be designated as 13% Senior Exchangeable
Preferred Stock.
(2) Rank. The Senior Preferred Stock shall, with respect to
dividend rights and rights on liquidation, dissolution and winding up, rank
prior to all classes of or series of common stock of the Corporation,
including the Corporation's Common Stock, and each other class of capital
stock of the Corporation, the terms of which provide that such class shall
rank junior to the Senior Preferred Stock or the terms of which do not specify
any rank relative to the Senior Preferred Stock. All equity securities of the
Corporation to which the Senior Preferred Stock ranks prior (whether with
respect to dividends or upon liquidation, dissolution, winding up or
otherwise), including the Common Stock, are collectively referred to herein as
the "Junior Securities." All equity securities of the Corporation with which
the Senior Preferred Stock ranks on a parity (whether with respect to
dividends or upon liquidation, dissolution or winding up) are collectively
referred to herein as the "Parity Securities." The respective definitions
of Junior Securities and Parity Securities shall also include any rights or
options exercisable for or convertible into any of the Junior Securities
and Parity Securities, as the case may be. The Senior Preferred Stock
shall be subject to the creation of Junior Securities.
(3) Dividends. (a) (i) The holders of shares of Senior
Preferred Stock shall be entitled to receive, when, as and if declared by
the Board of Directors, out of funds legally available for the payment of
dividends, dividends (subject to Sections 3(a)(ii) and (iii) hereof) at a
rate equal to ______ [the greater of (x) 13% per annum (computed on the
basis of a 360 day year) or (y) the stated rate of interest per annum
payable on the Senior Subordinated Notes due 2008 of Thermadyne Mfg. LLC
plus 300 basis points] (the "Dividend Rate") on the Liquidation Value of
each share of Senior Preferred Stock on and as of the most recent Dividend
Payment Date (as defined below). In the event the Corporation is unable or
shall fail to discharge its obligation to redeem all outstanding shares of
Senior Preferred Stock pursuant to paragraph 5(c) or 5(d) hereof, the
Dividend Rate shall increase by .25 percent per quarter (each, a "Default
Dividend") for each quarter or portion thereof following the date on which
such redemption was required to be made until cured, provided that the
aggregate increase shall not exceed 5%. Such dividends shall be payable in
the manner set forth below in Sections 3(a)(ii) and (iii) quarterly on
March 31, June 30, September 30, and December 31 of each year (unless such
day is not a business day, in which event on the next succeeding business
day) (each of such dates being a "Dividend Payment Date" and each such
quarterly period being a "Dividend Period"). Such dividends shall be
cumulative from the date of issue, whether or not in any Dividend Period or
Periods there shall be funds of the Corporation legally available for the
payment of such dividends.
(ii) Prior to the fifth anniversary of the issuance of the
Senior Preferred Stock (the "Cash Pay Date"), dividends
shall not be payable in cash to holders of shares of Senior
Preferred Stock but shall, subject to Section 3(b) hereof,
accrete to the Liquidation Value in accordance with Section
4(a) hereof.
(iii) Following the Cash Pay Date, each such dividend shall
be payable in cash on the Liquidation Value per share of the
Senior Preferred Stock, in equal quarterly amounts (to which
the Default Dividend, if any, shall be added), to the
holders of record of shares of the Senior Preferred Stock,
as they appear on the stock records of the Corporation at
the close of business on such record dates, not more than 60
days or less than 10 days preceding the payment dates
thereof, as shall be fixed by the Board of Directors.
Accrued and unpaid dividends for any past Dividend Periods
may be declared and paid at any time, without reference to
any Dividend Payment Date, to holders of record on such
date, not more than 45 days preceding the payment date
thereof, as may be fixed by the Board of Directors.
(b) At the written request of the holders of a majority of the
shares of Senior Preferred Stock, the Corporation shall, commencing on the
first Dividend Payment Date after such request and ending on the Cash Pay
Date, be required to pay all dividends on shares of Senior Preferred Stock by
the issuance of additional shares of Senior Preferred Stock ("Additional
Shares"). The Additional Shares shall be identical to all other shares of
Senior Preferred Stock, except as set forth in Section 4. For the purposes of
determining the number of Additional Shares to be issued as dividends pursuant
to this Paragraph (b), such Additional Shares shall be valued at their
Applicable Liquidation Value as provided in Section 4(c).
(c) Holders of shares of Senior Preferred Stock shall not be
entitled to any dividends, whether payable in cash, property or stock, in
excess of the cumulative dividends, as herein provided, on the Senior
Preferred Stock. Except as provided in this Section 3, no interest, or sum of
money in lieu of interest, shall be payable in respect of any dividend payment
or payments on the Senior Preferred Stock that may be in arrears.
(d) So long as any shares of the Senior Preferred Stock are
outstanding, no dividends, except as described in the next succeeding
sentence, shall be declared or paid or set apart for payment on Parity
Securities, for any period unless (to the extent such dividends are payable in
cash) full cumulative dividends have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof set apart
for such payment on the Senior Preferred Stock for all Dividend Periods
terminating on or prior to the date of payment of the dividend on such class
or series of Parity Securities. When (to the extent such dividends are payable
in cash) dividends are not paid in full or a sum sufficient for such payment is
not set apart, as aforesaid, all dividends declared upon shares of the Senior
Preferred Stock and all dividends declared upon any other class or series of
Parity Securities shall (in each case, to the extent payable in cash) be
declared ratably in proportion to the respective amounts of dividends
accumulated and unpaid on the Senior Preferred Stock and accumulated and
unpaid on such Parity Securities.
(e) So long as any shares of the Senior Preferred Stock are
outstanding, no dividends (other than dividends or distributions paid in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, Junior Securities) shall be declared or paid or set apart for payment or
other distribution declared or made upon Junior Securities, nor shall any
Junior Securities be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of shares of Common Stock made for
purposes of an employee incentive or benefit plan of the Corporation or any
subsidiary) (all such dividends, distributions, redemptions or purchases being
hereinafter referred to as a "Junior Securities Distribution") for any
consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any shares of any such stock) by the Corporation,
directly or indirectly (except by conversion into or exchange for Junior
Securities), unless in each case (i) the full cumulative dividends on all
outstanding shares of the Senior Preferred Stock and any other Parity
Securities shall (to the extent payable in cash) have been paid or set apart
for payment for all past Dividend Periods with respect to the Senior Preferred
Stock and all past dividend periods with respect to such Parity Securities and
(ii) (to the extent payable in cash) sufficient funds shall have been paid or
set apart for the payment of the dividend for the current Dividend Period with
respect to the Senior Preferred Stock and the current dividend period with
respect to such Parity Securities.
(4) Liquidation Preference. (a) In the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary
or involuntary, before any payment or distribution of the assets of the
Corporation (whether capital or surplus) shall be made to or set apart for the
holders of Junior Securities, the holders of the shares of Senior Preferred
Stock shall be entitled to receive an amount equal to the Liquidation Value of
such share plus any accrued and unpaid cash dividends to the date of
distribution. "Liquidation Value" on any date means, with respect to (x) any
share of Senior Preferred Stock other than any Additional Shares, the sum of
(1) $25.00 per share and (2) the aggregate of all dividends accreted on such
share until the most recent Dividend Payment Date upon which an accretion to
Liquidation Value has occurred (or if such date is a Dividend Payment Date
upon which an accretion to Liquidation Value has occurred, such date),
provided that in the event of an actual liquidation, dissolution or winding up
of the Corporation or the redemption of any shares of Senior Preferred Stock
pursuant to Section 5 hereunder, the amount referred to in (2) shall be
calculated by including dividends accreting to the actual date of such
liquidation, dissolution or winding up or the redemption date, as the case may
be, rather than the Dividend Payment Date referred to above and provided
further that in no event will dividends accrete beyond the earlier of (i) the
Cash Pay Date and (ii) the most recent Dividend Payment Date prior to the
Dividend Payment Date on which dividends on the Senior Preferred Stock are
payable in Additional Shares and (y) any Additional Share, the Applicable
Liquidation Value. All accretions to Liquidation Value will be calculated
using compounding on a quarterly basis. Except as provided in the preceding
sentences, holders of shares of Senior Preferred Stock shall not be entitled
to any distribution in the event of liquidation, dissolution or winding up of
the affairs of the Corporation. If, upon any liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the shares of Senior Preferred
Stock shall be insufficient to pay in full the preferential amount aforesaid
and liquidating payments on any Parity Securities, then such assets, or the
proceeds thereof, shall be distributed among the holders of shares of Senior
Preferred Stock and any such other Parity Securities ratably in accordance
with the respective amounts that would be payable on such shares of Senior
Preferred Stock and any such other stock if all amounts payable thereon were
paid in full. For the purposes of this Section 4, (i) a consolidation or
merger of the Corporation with one or more corporations, or (ii) a sale or
transfer of all or substantially all of the Corporation's assets, shall not be
deemed to be a liquidation, dissolution or winding up, voluntary or
involuntary, of the Corporation.
(b) Subject to the rights of the holders of any Parity
Securities, after payment shall have been made in full to the holders of the
Senior Preferred Stock, as provided in this paragraph (4), any other series or
class or classes of Junior Securities shall, subject to the respective terms
and provisions (if any) applying thereto, be entitled to receive any and all
assets remaining to be paid or distributed, and the holders of the Senior
Preferred Stock shall not be entitled to share therein.
(c) The Applicable Liquidation Value of any Additional Shares
shall be the Liquidation Value of Senior Preferred Stock outstanding
immediately prior to the first Dividend Payment Date occurring after a request
for payment in Additional Shares has been made in accordance with Section 3(b).
(5) Redemption. (a) Redemption Upon Consummation of Public
Offering. The Corporation may, at its option, to the extent it shall have
funds legally available for such payment, redeem, prior to May 15, 2001, in
whole but not in part, shares of Senior Preferred Stock, at a redemption price
per share equal to 113% of the Liquidation Value, in cash, plus accrued and
unpaid cash dividends on such shares to the date fixed for redemption, without
interest, provided that the Corporation shall not redeem any shares of Senior
Preferred Stock pursuant to this Section 5(a) unless (i) prior to such
redemption a Public Offering shall have been consummated, and (ii) the
aggregate redemption price of the shares of Senior Preferred Stock redeemed
pursuant to this Section 5(a) does not exceed the net proceeds received by the
Corporation in such Initial Public Offering.
"Public Offering" shall mean any underwritten public offering
of Common Stock pursuant to an effective registration statement under the
Securities Act of 1933, as amended, and shall, in addition, for the purposes
of Section 5(a) hereof, include any sale, pursuant to such an underwritten
registered public offering, following the Closing Date of any common stock by
any affiliate of the Corporation, the net proceeds of which are contributed or
loaned to the Corporation in such a manner that such proceeds may lawfully be
used for the redemption of the Senior Preferred Stock.
"Closing Date" shall have the meaning ascribed to such term in
the Investors' Agreement.
"Investors' Agreement" means the Investors' Agreement dated May
__, 1998, among Thermadyne Xxxxxxxx Xxxxxxxxxxx, XXX Xxxxxxxx Xxxxxxx Xxxxxxxx
XX, X.X., XXX Merchant Banking Partners XX-X, X.X., XXX Xxxxxxxx Xxxxxxxx,
X.X., XXX Merchant Banking Funding, Inc., DLJ Offshore Partners II, C.V., DLJ
Diversified Partners, L.P., DLJ Diversified Partners-A, L.P., DLJ Millennium
Partners, L.P., DLJ Millennium-A, L.P., DLJMB Funding II, Inc., DLJ EAB
Partners, L.P., DLJ First ESC L.P., UK Investment Plan 1997 Partners, DLJ ESC
II, L.P. (collectively, the "DLJMB Funds"), and certain other stockholders
listed on the signature pages thereof.
(b) Redemption At the Option of the Corporation. On and after
May 15, 2003, to the extent the Corporation shall have funds legally available
for such payment, the Corporation may, at its option, redeem shares of Senior
Preferred Stock, at any time in whole but not in part, at redemption prices
per share in cash set forth in the table below, together with accrued and
unpaid cash dividends thereon to the date fixed for redemption, without
interest:
Twelve Months Beginning
May 15, Percentage of Liquidation Value
----------------------- -------------------------------
2003 106.500%
2004 104.333
2005 102.167
2006 100.000
(c) Redemption In the Event of a Change of Control. In the event of a
Change of Control, the Corporation shall, to the extent it shall have funds
legally available for such payment, offer to redeem all of the shares of
Senior Preferred Stock then outstanding, and shall redeem the shares of Senior
Preferred Stock of any holder of such shares that shall consent to such
redemption, upon a date no later than 30 days following the Change in Control,
at a redemption price per share equal to 101% of the Liquidation Value, in
cash, plus accrued and unpaid cash dividends thereon to the date fixed for
redemption, without interest.
"Change of Control" means such time as: (a) a "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended), other than any person or group comprised
solely of the Initial Investors, has become the beneficial owner, by way of
merger, consolidation or otherwise, of 30% or more of the voting power of all
classes of voting securities of the Corporation, and such person or group has
become the beneficial owner of a greater percentage of the voting power of all
classes of voting securities of the Corporation than that beneficially owned
by the Initial Investors; or (b) a sale or transfer of all or substantially
all of the assets of the Corporation to any person or group (other than any
group consisting solely of the Initial Investors or their affiliates) has been
consummated; or (c) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors of the
Corporation (together with any new directors whose election was approved by a
vote of a majority of the directors then still in office, who either were
directors at the beginning of such period or whose election or nomination for
the election was previously so approved) cease for any reason to constitute a
majority of the directors of the Corporation, then in office.
"Initial Investors" means the Stockholders (determined as of
the issuance of the Preferred Stock) and their Permitted Transferees, each as
defined in the Investors' Agreement.
(d) Mandatory Redemption. To the extent the Corporation shall
have funds legally available for such payment, on May 15, 2010, if any shares
of the Senior Preferred Stock shall be outstanding, the Corporation shall
redeem all outstanding shares of the Senior Preferred Stock, at a redemption
price equal to the aggregate Liquidation Value, in cash, together with any
accrued and unpaid cash dividends thereon to the date fixed for
redemption, without interest.
(e) Status of Redeemed Shares. Shares of Senior Preferred Stock
which have been issued and reacquired in any manner, including shares
purchased or redeemed, shall (upon compliance with any applicable provisions
of the laws of the State of Delaware) have the status of authorized and
unissued shares of the class of Preferred Stock undesignated as to series and
may be redesignated and reissued as part of any series of the Preferred Stock;
provided that no such issued and reacquired shares of Senior Preferred Stock
shall be reissued or sold as Senior Preferred Stock.
(f) Failure to Redeem. If the Corporation is unable or shall
fail to discharge its obligation to redeem all outstanding shares of Senior
Preferred Stock pursuant to paragraph (5)(c) or 5(d) (each, a "Mandatory
Redemption Obligation"), such Mandatory Redemption Obligation shall be
discharged as soon as the Corporation is able to discharge such Mandatory
Redemption Obligation. If and so long as any Mandatory Redemption Obligation
with respect to the Senior Preferred Stock shall not be fully discharged, the
Corporation shall not (i) directly or indirectly, redeem, purchase, or
otherwise acquire any Parity Security or discharge any mandatory or optional
redemption, sinking fund or other similar obligation in respect of any Parity
Securities (except in connection with a redemption, sinking fund or other
similar obligation to be satisfied pro rata with the Senior Preferred Stock)
or (ii) in accordance with paragraph 3(e), declare or make any Junior
Securities Distribution, or, directly or indirectly, discharge any mandatory
or optional redemption, sinking fund or other similar obligation in respect of
the Junior Securities.
(g) Failure to Pay Dividends. Notwithstanding the foregoing
provisions of this paragraph (5), unless full cumulative cash dividends
(whether or not declared) on all outstanding shares of Senior Preferred Stock
shall have been paid or contemporaneously are declared and paid or set apart
for payment for all dividend periods terminating on or prior to the applicable
redemption date, none of the shares of Senior Preferred Stock shall be
redeemed, and no sum shall be set aside for such redemption, unless shares of
Senior Preferred Stock are redeemed pro rata.
(6) Procedure for Redemption. (a) In the event the Corporation
shall redeem shares of Senior Preferred Stock pursuant to Sections 5(a), (b)
or (d), notice of such redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 days nor more than 60 days prior to the
redemption date, to each holder of record of the shares to be redeemed at such
holder's address as the same appears on the stock register of the Corporation;
provided that neither the failure to give such notice nor any defect therein
shall affect the validity of the giving of notice for the redemption of any
share of Senior Preferred Stock to be redeemed except as to the holder to whom
the Corporation has failed to give said notice or except as to the holder
whose notice was defective. Each such notice shall state: (i) the redemption
date; (ii) the number of shares of Senior Preferred Stock to be redeemed;
(iii) the redemption price; (iv) the place or places where certificates for
such shares are to be surrendered for payment of the redemption price; and (v)
that dividends on the shares to be redeemed will cease to accrue on such
redemption date.
(b) In the case of any redemption pursuant to Sections 5(a),
(b) or (d) hereof, notice having been mailed as provided in Section 6(a)
hereof, from and after the redemption date (unless default shall be made by
the Corporation in providing money for the payment of the redemption price of
the shares called for redemption), dividends on the shares of Senior Preferred
Stock so called for redemption shall cease to accrue, and all rights of the
holders thereof as stockholders of the Corporation (except the right to
receive from the Corporation the redemption price) shall cease. Upon surrender
in accordance with said notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state), such share shall
be redeemed by the Corporation at the redemption price aforesaid. In case
fewer than all the shares represented by any such certificate are redeemed, a
new certificate shall be issued representing the unredeemed shares without
cost to the holder thereof.
(c) In the case of a redemption pursuant to Section 5(c)
hereof, notice of such redemption shall be given by first class mail, postage
prepaid, mailed not more than 10 days following the occurrence of the Change
of Control and not less than 20 days prior to the redemption date, to each
holder of record of the shares to be redeemed at such holder's address as the
same appears on the stock register of the Corporation; provided that neither
the failure to give such notice nor any defect therein shall affect the
validity of the giving of notice for the redemption of any share of Senior
Preferred Stock to be redeemed except as to the holder to whom the Corporation
has failed to give said notice or except as to the holder whose notice was
defective. Each such notice shall state: (i) that a Change of Control has
occurred; (ii) the redemption date; (iii) the redemption price; (iv) that such
holder may elect to cause the Corporation to redeem all or any of the shares
of Senior Preferred Stock held by such holder; (v) the place or places where
certificates for such shares are to be surrendered for payment of the
redemption price; and (vi) that dividends on the shares the holder elects to
cause the Corporation to redeem will cease to accrue on such redemption date.
Upon receipt of such notice, the holder shall, within 20 days
of receipt thereof, return such notice to the Corporation indicating the
number of shares of Senior Preferred Stock such holder shall elect to cause
the Corporation to redeem, if any.
(d) In the case of a redemption pursuant to Section 5(c)
hereof, notice having been mailed as provided in Section 6(c) hereof, from and
after the redemption date (unless default shall be made by the Corporation in
providing money for the payment of the redemption price of the shares called
for redemption), dividends on such shares of Senior Preferred Stock as the
holder elects to cause the Corporation to redeem shall cease to accrue, and
all rights of the holders thereof as stockholders of the Corporation (except
the right to receive from the Corporation the redemption price) shall cease.
Upon surrender in accordance with said notice of the certificates for any
shares so redeemed (properly endorsed or assigned for transfer, if the Board
of Directors of the Corporation shall so require and the notice shall so
state), such share shall be redeemed by the Corporation at the redemption
price aforesaid. In case fewer than all the shares represented by any such
certificate are redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof.
(7) Exchange. (a) Subject to the provisions of this paragraph
(7) the Corporation may, at its option, at any time and from time to time on
any Dividend Payment Date, exchange, to the extent it is legally permitted to
do so, all, but not less than all, outstanding shares (and fractional shares)
of Senior Preferred Stock, for Exchange Debentures, provided that (i) on or
prior to the date of exchange the Corporation shall have paid to or declared
and set aside for payment to the holders of outstanding shares of Senior
Preferred Stock all accrued and unpaid cash dividends on shares of Senior
Preferred Stock through the exchange date in accordance with the next
succeeding paragraph; (ii) no event of default under the indenture (as defined
in such indenture) governing the Exchange Debentures shall have occurred and
be continuing; and (iii) no shares of Senior Preferred Stock are held on such
date by the DLJMB Funds or any of their Affiliates, or any of their Permitted
Transferees. The principal amount of Exchange Debentures deliverable upon
exchange of a share of Senior Preferred Stock, adjusted as hereinafter
provided, shall be determined in accordance with the Exchange Ratio (as
defined below).
Cash dividends on any shares of Senior Preferred Stock
exchanged for Exchange Debentures which have accrued but have not been paid as
of the date of exchange shall be paid in cash. In no event shall the
Corporation issue Exchange Debentures in denominations other than $1,000 or in
an integral multiple thereof. Cash will be paid in lieu of any such fraction
of an Exchange Debenture which would otherwise have been issued (which shall
be determined with respect to the aggregate principal amount of Exchange
Debentures to be issued to a holder upon any such exchange). Interest will
accrue on the Exchange Debentures from the date of exchange.
Prior to effecting any exchange hereunder, the Corporation
shall appoint a trustee to serve in the capacity contemplated by an indenture
between the Corporation and such trustee, containing customary terms and
conditions.
The Exchange Ratio shall be, as of any Dividend Payment Date,
$1.00 (or fraction thereof) of principal amount of Exchange Debenture for each
$1.00 of (i) Liquidation Value plus (ii) accrued and unpaid cash dividends, if
any, per share of Senior Preferred Stock held by a holder on the applicable
exchange date.
"Affiliates" shall have the meaning ascribed such term in the
Investors' Agreement.
"Exchange Debentures" means 13% Subordinated Exchange
Debentures due 2010 of the Corporation, to be issued pursuant to an indenture
between the Corporation and a trustee, containing customary terms and
conditions, in accordance with the Term Sheet attached as Exhibit A hereto.
"Permitted Transferees" shall have the meaning ascribed to such
term in the Investors' Agreement.
(b) Procedure for Exchange. (i) In the event the Corporation shall
exchange shares of Senior Preferred Stock, notice of such exchange shall be
given by first class mail, postage prepaid, mailed not less than 30 days nor
more than 60 days prior to the exchange date, to each holder of record of the
shares to be exchanged at such holder's address as the same appears on the
stock register of the Corporation; provided that neither the failure to give
such notice nor any defect therein shall affect the validity of the giving of
notice for the exchange of any share of Senior Preferred Stock to be exchanged
except as to the holder to whom the Corporation has failed to give said notice
or except as to the holder whose notice was defective. Each such notice shall
state: (A) the exchange date; (B) the number of shares of Senior Preferred
Stock to be exchanged; (C) the Exchange Ratio; (D) the place or places where
certificates for such shares are to be exchanged for notes evidencing the
Exchange Debentures to be received by the exchanging holder; and (E) that
dividends on the shares to be exchanged will cease to accrue on such exchange
date.
(ii) Prior to giving notice of intention to exchange, the
Corporation shall execute and deliver with a bank or trust
company selected by the Corporation an indenture containing
customary terms and conditions. The Corporation will cause
the Exchange Debentures to be authenticated on the Dividend
Payment Date on which the exchange is effective, and will
pay interest on the Exchange Debentures at the rate and on
the dates specified in such indenture from the exchange date.
The Corporation will not give notice of its intention
to exchange under paragraph 6(b)(i) hereof unless it
shall file at the place or places (including a place in
the Borough of Manhattan, The City of New York)
maintained for such purpose an opinion of counsel (who
may be an employee of the Corporation) to the effect that
(i) the indenture has been duly authorized, executed and
delivered by the Corporation, has been duly qualified
under the Trust Indenture Act of 1939 (or that such
qualification is not necessary) and constitutes a valid
and binding instrument enforceable against the
Corporation in accordance with its terms (subject, as to
enforcement, to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or
affecting creditors' rights and to general equity
principles, and subject to such other qualifications as
are then customarily contained in opinions of counsel
experienced in such matters), (ii) the Exchange
Debentures have been duly authorized and, when executed
and authenticated in accordance with the provisions of
the indenture and delivered in exchange for the shares of
Preferred Stock, will constitute valid and binding
obligations of the Corporation entitled to the benefits
of the indenture (subject as aforesaid), (iii) neither
the execution nor delivery of the indenture or the
Exchange Debentures nor compliance with the terms,
conditions or provisions of such instruments will result
in a breach or violation of any of the terms or
provisions of, or constitute a default under, any
indenture, mortgage, deed of trust or agreement or
instrument, known to such counsel, to which the
Corporation or any of its subsidiaries is a party or by
which it or any of them is bound, or any decree,
judgment, order, rule or regulation, known to such
counsel, of any court or governmental agency or body
having jurisdiction over the Corporation and such
subsidiaries or any of their properties, (iv) the
Exchange Debentures have been duly registered for such
exchange with the Securities and Exchange Commission
under a registration statement that has become effective
under the Securities Act of 1933 (the "Act") or that the
exchange of the Exchange Debentures for the shares of
Senior Preferred Stock is exempt from registration under
the Act, and (v) the Corporation has sufficient legally
available funds for such exchange such that such exchange
is permitted under applicable law.
(iii) Notice having been mailed as aforesaid, from and
after the exchange date (unless default shall be made by the
Corporation in issuing Exchange Debentures in exchange for
the shares called for exchange), dividends on the shares of
Senior Preferred Stock so called for exchange shall cease to
accrue, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive
from the Corporation the Exchange Debentures and any rights
such holder, upon the exchange, may have as a holder of the
Exchange Debenture) shall cease. Upon surrender in
accordance with said notice of the certificates for any
shares so exchanged (properly endorsed or assigned for
transfer, if the Board of Directors of the Corporation shall
so require and the notice shall so state), such share shall
be exchanged by the Corporation for the Exchange Debentures
at the Exchange Ratio. In case fewer than all the shares
represented by any such certificate are exchanged, a new
certificate shall be issued representing the unexchanged
shares without cost to the holder thereof.
(iv) Each exchange shall be deemed to have been effected
immediately after the close of business on the relevant
Dividend Payment Date, and the person in whose name or names
any Exchange Debentures shall be issuable upon such exchange
shall be deemed to have become the holder of record of the
Exchange Debentures represented thereby at such time on such
Dividend Payment Date.
(v) Prior to the delivery of any securities which the
Corporation shall be obligated to deliver upon exchange of
the Senior Preferred Stock, the Corporation shall comply
with all applicable federal and state laws and regulations
which require action to be taken by the Corporation.
(c) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
notes evidencing Exchange Debentures on exchange of the Senior Preferred Stock
pursuant hereto; provided that the Corporation shall not be required to pay
any tax which may be payable in respect of any transfer involved in the issue
or delivery of Exchange Debentures in a name other than that of the holder of
the Senior Preferred Stock to be exchanged and no such issue or delivery shall
be made unless and until the person requesting such issue or delivery has paid
to the Corporation the amount of any such tax or has established, to the
satisfaction of the Corporation, that such tax has been paid.
(8) Voting Rights. (a) The holders of record of shares of
Senior Preferred Stock shall not be entitled to any voting rights except as
hereinafter provided in this paragraph (8), as otherwise provided by law or
as provided in the Investors' Agreement.
(b) If and whenever (i) four consecutive or six quarterly
cash dividends payable on the Senior Preferred Stock have not been paid in
full, (ii) for any reason (including the reason that funds are not legally
available for a redemption), the Corporation shall have failed to discharge
any Mandatory Redemption Obligation (including a redemption in the Event of
a Change of Control pursuant to Section 5(c) hereof), (iii) the Corporation
shall have failed to provide the notice required by Section 6(c) hereof
within the time period specified in such section or (iv) the Corporation
shall have failed to comply with Sections 3(d), 3(e) or 8(c) hereof, (1)
the number of directors then constituting the Board of Directors shall be
increased by two and the holders of a majority of the outstanding shares of
Senior Preferred Stock, together with the holders of shares of every other
series of preferred stock upon which like rights have been conferred and
are exercisable (resulting from either the failure to pay dividends or the
failure to redeem) (any such series is referred to as the "Preferred
Shares"), voting as a single class regardless of series, shall be entitled
to elect the two additional directors to serve on the Board of Directors at
any annual meeting of stockholders or special meeting held in place
thereof, or at a special meeting of the holders of the Senior Preferred
Stock and the Preferred Shares called as hereinafter provided. Whenever
(i) all arrears in cash dividends on the Senior Preferred Stock and the
Preferred Shares then outstanding shall have been paid and cash dividends
thereon for the current quarterly dividend period shall have been paid or
declared and set apart for payment, (ii) the Corporation shall have
fulfilled its Mandatory Redemption Obligation, (iii) fulfilled its
obligation to provide notice as specified in subsection (b)(iii) hereof, or
(iv) the Corporation shall have complied with Sections 3(d), 3(e), or 8(c)
hereof, as the case may be, then the right of the holders of the Senior
Preferred Stock to elect such additional two directors shall cease (but
subject always to the same provisions for the vesting of such voting rights
in the case of any similar future (i) arrearage in six consecutive
quarterly cash dividends, (ii) failure to fulfill any Mandatory Redemption
Obligation, (iii) failure to fulfill the obligation to provide the notice
required by Section 6(d) hereof within the time period specified in such
section or (iv) failure to comply with Sections 3(d), 3(e), or 8(c)) and
the terms of office of all persons elected as directors by the holders of
the Senior Preferred Stock shall forthwith terminate and the number of the
Board of Directors shall be reduced accordingly. At any time after such
voting power shall have been so vested in the holders of shares of Senior
Preferred Stock and the Preferred Shares, the secretary of the Corporation
may, and upon the written request of any holder of Senior Preferred Stock
(addressed to the secretary at the principal office of the Corporation)
shall, call a special meeting of the holders of the Senior Preferred Stock
and of the Preferred Shares for the election of the two directors to be
elected by them as herein provided, such call to be made by notice similar
to that provided in the Bylaws of the Corporation for a special meeting of
the stockholders or as required by law. If any such special meeting
required to be called as above provided shall not be called by the
secretary within 20 days after receipt of any such request, then any holder
of shares of Senior Preferred Stock may call such meeting, upon the notice
above provided, and for that purpose shall have access to the stock books
of the Corporation. The directors elected at any such special meeting
shall hold office until the next annual meeting of the stockholders or
special meeting held in lieu thereof if such office shall not have
previously terminated as above provided. If any vacancy shall occur among
the directors elected by the holders of the Senior Preferred Stock and the
Preferred Shares, a successor shall be elected by the Board of Directors,
upon the nomination of the then-remaining director elected by the holders
of the Senior Preferred Stock and the Preferred Shares or the successor of
such remaining director, to serve until the next annual meeting of the
stockholders or special meeting held in place thereof if such office shall
not have previously terminated as provided above.
(c) Without the written consent of a majority of the
outstanding shares of Senior Preferred Stock or the vote of holders of a
majority of the outstanding shares of Senior Preferred Stock at a meeting of
the holders of Senior Preferred Stock called for such purpose, the Corporation
will not (i) amend, alter or repeal any provision of the Certificate of
Incorporation (by merger or otherwise) so as to adversely affect the
preferences, rights or powers of the Senior Preferred Stock; provided that any
such amendment that decreases the dividend payable on or the Liquidation Value
of the Senior Preferred Stock shall require the affirmative vote of holders of
each share of Senior Preferred Stock at a meeting of holders of Senior
Preferred Stock called for such purpose or written consent of the holder of
each share of Senior Preferred Stock; or (ii) create, authorize or issue any
class of stock ranking prior to, or on a parity with, the Senior Preferred
Stock with respect to dividends or upon liquidation, dissolution, winding up
or otherwise, or increase the authorized number of shares of any such class or
series, or reclassify any authorized stock of the Corporation into any such
prior or parity shares or create, authorize or issue any obligation or security
convertible into or evidencing the right to purchase any such prior or parity
shares, except that the Corporation may, without such approval, create
authorize and issue Parity Securities for the purpose of utilizing the
proceeds from the issuance of such Parity Securities for the redemption or
repurchase of all outstanding shares of Senior Preferred Stock in accordance
with the terms hereof or of the Investors' Agreement..
(d) In exercising the voting rights set forth in this paragraph
(8), each share of Senior Preferred Stock shall have one vote per share,
except that when any other series of preferred stock shall have the right to
vote with the Senior Preferred Stock as a single class on any matter, then the
Senior Preferred Stock and such other series shall have with respect to such
matters one vote per $25 of Liquidation Value or other liquidation preference.
Except as otherwise required by applicable law or as set forth herein, the
shares of Senior Preferred Stock shall not have any relative, participating,
optional or other special voting rights and powers and the consent of the
holders thereof shall not be required for the taking of any corporate action.
(9) Reports. So long as any of the Senior Preferred Stock is
outstanding, the Corporation will furnish the holders thereof with the
quarterly and annual financial reports that the Corporation is required to
file with the Securities and Exchange Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 or, in the event the
Corporation is not required to file such reports, reports containing the same
information as would be required in such reports.
(10) General Provisions. (a) The term "Person" as used herein
means any corporation, limited liability company, partnership, trust,
organization, association, other entity or individual.
(b) The term "outstanding", when used with reference to shares
of stock, shall mean issued shares, excluding shares held by the Corporation
or a subsidiary.
(c) The headings of the paragraphs, subparagraphs, clauses and
subclauses used herein are for convenience of reference only and shall not
define, limit or affect any of the provisions hereof.
(d) Each holder of Senior Preferred Stock, by acceptance
thereof, acknowledges and agrees that payments of dividends, interest, premium
and principal on, and exchange, redemption and repurchase of, such securities
by the Corporation are subject to restrictions on the Corporation contained in
certain credit and financing agreements.
FIFTH: No contract or transaction between the Corporation and
one or more of its directors, officers, or stockholders or between the
Corporation and any person (as used herein "person" means any other
corporation, partnership, association, firm, trust, joint venture, political
subdivision, or instrumentality) or other organization in which one or more of
its directors, officers, or stockholders are directors, officers or
stockholders, or have a financial interest, shall be void or voidable solely
for this reason, or solely because the director or officer is present at or
participates in the meeting of the board or committee which authorizes the
contract or transaction, or solely because his, her, or their votes are
counted for such purpose, if: (i) the material facts as to his or her
relationship or interest and as to the contract or transaction are disclosed
or are known to the board of directors or the committee, and the board of
directors or committee in good faith authorizes the contract or transaction by
the affirmative votes of a majority of the disinterested directors, even
though the disinterested directors be less than a quorum; or (ii) the material
facts as to his or her relationship or interest and as to the contract or
transaction are disclosed or are known to the stockholders entitled to vote
thereon, and the contract or transaction is specifically approved in good
faith by vote of the stockholders; or (iii) the contract or transaction is
fair as to the Corporation as of the time it is authorized, approved, or
ratified by the board of directors, a committee thereof (to the extent
permitted by applicable law), or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting
of the board of directors or of a committee which authorizes the contract or
transaction.
SIXTH: The Board of Directors shall have the power to adopt,
amend or repeal the bylaws of the Corporation.
SEVENTH: Election of directors need not be by written ballot
unless the bylaws of the Corporation so provide.
EIGHTH: 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 (i) for any breach of
the director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or knowing violation of law, (iii) under Section 174 of the
Delaware Law, or (iv) for any transaction from which the director derived an
improper personal benefit. Any repeal or amendment of this Article EIGHTH by
the stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Corporation arising from an act or omission occurring prior to the time of
such repeal or amendment. In addition to the circumstances in which a
director of the Corporation is not personally liable as set forth in the
foregoing provisions of this Article EIGHTH, a director shall not be liable to
the Corporation or its stockholders to such further extent as permitted by any
law hereafter enacted, including without limitation any subsequent amendment
to the Delaware Law.
NINTH: (1) A director of the Corporation shall not be liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director to the fullest extent permitted by Delaware Law.
(2)(a) Each person (and the heirs, executors or administrators
of such person) who was or is a party or is threatened to be made a party to,
or is involved in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that such person is or was a director or officer of the
Corporation or is or was serving at the request of the Corporation as a
director or officer of another corporation, partnership, joint venture, trust
or other enterprise, shall be indemnified and held harmless by the Corporation
to the fullest extent permitted by Delaware Law. The right to indemnification
conferred in this Article NINTH shall also include the right to be paid by the
Corporation the expenses incurred in connection with any such proceeding in
advance of its final disposition to the fullest extent authorized by Delaware
Law. The right to indemnification conferred in this Article NINTH shall be a
contract right.
(b) The Corporation may, by action of its Board of Directors,
provide indemnification to such of the officers, employees and agents of the
Corporation to such extent and to such effect as the Board of Directors shall
determine to be appropriate and authorized by Delaware Law.
(3) The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss incurred by such person in any such capacity or arising out
of his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under Delaware Law.
(4) The rights and authority conferred in this Article NINTH
shall not be exclusive of any other right which any person may otherwise have
or hereafter acquire.
(5) Neither the amendment nor repeal of this Article NINTH, nor
the adoption of any provision of this Certificate of Incorporation or the
bylaws of the Corporation, nor, to the fullest extent permitted by Delaware
Law, any modification of law, shall eliminate or reduce the effect of this
Article NINTH in respect of any acts or omissions occurring prior to such
amendment, repeal, adoption or modification.
TENTH: The Corporation expressly elects not to be governed by
Section 203 of the Delaware Law.
ELEVENTH: The Corporation reserves the right to amend this
Certificate of Incorporation in any manner permitted by Delaware Law and, with
the sole exception of those rights and powers conferred under the above
Article NINTH, all rights and powers conferred herein on stockholders,
directors and officers, if any, are subject to this reserved power.
EXHIBIT A
---------
SUMMARY OF TERMS
OF INDENTURE FOR
13% SUBORDINATED EXCHANGE DEBENTURES
Parties: Thermadyne Holdings Corporation (the
"Corporation") and [ ], as trustee.
Issue: 13% Exchange Debentures (the "Exchange
Debentures") to be issued by the Corporation, at
its option, in exchange for any or all the
outstanding shares of 13% Senior Exchangeable
Preferred Stock due 2010 (the "Senior Preferred
Stock") issued on or about May 15, 1998 to DLJ
Merchant Banking Partners II, L.P. and certain of
its affiliates (the "DLJ Entities").
Maturity: May 15, 2010.
Interest: 13% annual rate, payable semi-annually.
Through the semi-annual interest payment period
ending in May 2003, semi-annual interest will
accrete on a compound basis (i.e. non-cash pay)
and increase the face amount of the Exchange
Debentures, thereafter interest will be payable in
cash.
Ranking: The Exchange Debentures will rank senior to all
other subordinated debt, preferred stock and
common equity of the Corporation.
Optional Redemption: The Exchange Debentures will be redeemable at
any time after May 15, 2003 at the option of the
Corporation, in whole or in part, at the same
redemption prices set forth in the desigination of
the Senior Preferred Stock set forth in Article
FOURTH, paragraph (c) of the Restated
Certificate of Incorporation of the Surviving
Corporation.
Change of Control In the event of a Change of Control of the
Repurchase Right: Corporation each holder of the Exchange
Debentures will have the right to require the
Corporation to repurchase all or any part of such
holder's Exchange Debentures at a purchase price
of 101% of the sum of the accreted value thereof
plus accrued and unpaid cash interest, if any, to
the repurchase date.
Covenants: The Debentures will contain covenants that are
substantially the same as the covenants contained
in the Indenture of the [ ____ Senior Discount
Debentures due 2008] of the Corporation and will
limit, among other things, the ability of the
Corporation and its subsidiaries (i) to incur
additional indebtedness, (ii) to pay dividends and
make other distributions on its capital stock, (iii)
to repurchase its capital stock or warrants,
options or other rights to acquire shares of its
capital stock or any indebtedness subordinated to
the Exchange Debentures, (iv) to make certain
other restricted payments, (v) to make certain
investments or asset sales, (vi) to engage in
transactions with affiliates, (vii) to create liens,
(viii) to permit "layering" of indebtedness and
(ix) to merge or consolidate or transfer all or
substantially all of its assets."
7. Except as specifically amended by this Amendment, the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment to the Agreement as of this 22nd day of April, 1998.
THERMADYNE HOLDINGS CORPORATION
By: /s/ XXXXXXX X. XXXXXX
---------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
MERCURY ACQUISITION CORPORATION
By: /s/ XXXXXXX X. XXXXXX, XX.
---------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: Vice President
