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
April , 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 a certain exhibit to the Agreement,
and to amend a certain condition to the obligations of MergerSub;
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 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 in the
amount equal to the product of (i) the 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 so that the first sentence of this
section is replaced by the following:
"Provided that MergerSub shall have provided to the Company reasonably
in advance of the first mailing to stockholders of the Company Proxy
Statement the terms thereof, and provided further that the stockholders
of the Company authorize the Merger and the revised Certificate of
Incorporation as provided in Exhibit A, prior to the Effective Time, the
Board of Directors of the Company shall take all necessary action to
authorize and permit the issuance in the Merger of the Mirror Preferred
Stock."
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 Delaware.
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 shares have been designated 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
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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 General Corporation Law of the State of Delaware as the same exists or
may hereafter be amended (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
Due 2010.
(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
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 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
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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
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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 Holdings Corporation, DLJ Merchant Banking Partners II,
L.P., DLJ 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:
5
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.
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(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
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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 and, if fewer than all the shares held by
such holder are to be exchanged, the number of shares to be exchanged from
such holder; (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
8
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
9
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(d) 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
form 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
10
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
11
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 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 General
Corporation 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 General Corporation 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.
12
TENTH: The Corporation expressly elects not to be governed by Section 203
of the General Corporation Law of Delaware.
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.
13
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 tenth semi-annual interest payment
period, 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 4 of the Restated
Certificate of Incorporation of the Surviving Corporation.
CHANGE OF CONTROL In the event of a Change of Control of the Corporation each holder of the Exchange Debentures
REPURCHASE RIGHT: 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."
14
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 No. 1
to the Agreement as of this day of April, 1998.
THERMADYNE HOLDINGS
CORPORATION
By:
-------------------------------
Name:
Title:
MERCURY ACQUISITION
CORPORATION
By:
-------------------------------
Name:
Title:
15
